TOKYO - Sakura Bank Ltd., one of the top three Japanese commercial banks, said it would close seven local offices by merging them into others before the end of the fiscal year next March.
Sakura, the result of a 1990 merger of Mitsui Bank and Taiyo Kobe Bank, has 601 branches and business outlets as well as its headquarters, and 362 unstaffed, automated offices in Japan.
Since the merger, Sakura has closed 22 offices and opened 24, a bank spokesman said. He said the bank planned to continue merging offices to avoid redundancy in some areas.
Bigger Cutbacks Denied
The spokesman denied a report in the Nihon Keizai Shimbun newspaper that the $408 billion-asset bank plans to close 50 offices over the next two to three years and that it is also planning a freeze on the opening of new branches in Japan.
"We are currently working on a new long-term management policy starting next April but no such plan has been decided," he said.
Analysts said Sakura Bank, seeking economies of scale through the merger, has been intent on streamlining operations and integrating its local office network.
Dai-Ichi Kangyo Bank Ltd., the nation's largest, took a long time to consolidate its operation after Dai-Ichi Bank and Nippon Kangyo Bank merged in 1971, said Yushiro Ikuyo, director of research at Prudential Securities (Japan) Ltd,.
"The best way of increasing profitability in the Japanese banking industry is to cut the number of domestic offices, which will reduce operating expenses," he said.
But Sakura Bank is not alone in stepping up efforts to streamline domestic operations, industry sources said.
Asahi Plans Closings
Asahi Bank Ltd., formerly Kyowa Saitama Bank Ltd. and born from the April 1991 merger of Kyowa Bank and Saitama Bank, said last month it plans to double the number of local offices to be merged into others over the next four years.
Originally, it had planned to close 25 offices.
Many other big Japanese commercial banks, facing problem property-related loans, are also moving to reduce or freeze the number of new office openings as well as to consolidate their domestic offices, industry sources said.