Integrating with Joyo Bank by share exchange and becoming Mebuki Financial Group (2016)

Choosing to keep two signboards

To dismiss this integration as one more scale-chasing regional bank deal is to miss the core of its design. Ashikaga Holdings and Joyo Bank did not take the road of merging into a single name; they were bound together under a holding company with both banks left standing. The modest exchange ratio — 1.17 Mebuki shares for each Joyo share — carries the same implication: this was not an integration in which one side swallowed the other. Leave untouched the signboards and the territories long rooted in Tochigi and Ibaraki, and move only the rear functions — strategy, finance, risk management — up to the holding company. The aim of the decision appears to lie exactly there: to match scale without moving the point of contact with the customer.

That said, a design that keeps two banks alive is inseparable from the fact that scale does not, by itself, erase overlap on the ground. Hence the Mebuki that emerged proceeded to unify under the “Mebuki” name, in order, those functional subsidiaries furthest from customer credit — leasing, securities and the rest — accumulating a division of labour in which the signboards number two and the substance of the business one. More than having drawn level with the largest in Japan by consolidated assets, what this decision now rests on is how the trust held in each region is protected while the substance of integration is built up.