Asahi Bank Ltd. and Tokai Bank Ltd. said Thursday they are accelerating their scheduled merger to October 2000, from April 2001. The move will create the nation's third-largest bank.

The announcement comes on the heels of news in August that three other leading Japanese banks would merge to create the world's largest bank in terms of assets. It reflects the increasing pressure on the nation's financial companies to stay competitive as the government deregulates the industry.

Over the next year to 18 months, analysts say, the number of major Japanese banks will be whittled down to as few as six or seven from the current 17, mainly as a result of mergers.

Tokai and Asahi had previously said they would form a joint holding company in the fiscal year starting in April 2001. Tokai president Hideo Ogasawara said the banks decided to move the merger forward because of progress made in restructuring and debt write-offs.

"We simply met the conditions we had set for ourselves when we agreed to join together last year," Ogasawara said at a press conference announcing the move.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.