Company history

Resona’s main line starts in Osaka in May 1918, when Nomura Tokushichi founded Osaka Nomura Bank as the banking arm of his house. From July 1925 it also ran a trust business, which in Japan was odd: law and custom kept commercial banking and trust banking in separate boxes, and the postwar industry settled into three tiers — the big city banks, the trust banks, and the regionals. This bank sat outside that grid. Renamed Daiwa Bank in 1943 to shed its zaibatsu colour under wartime control, it listed in Tokyo and Osaka in May 1949.

The trust arm is the thing to notice, because Daiwa alone refused to give it up. When the Ministry of Finance pushed banks to separate trust operations, Terao Takeo — president for twenty-three years from 1950 — fought the ministry head-on in 1965 and never conceded; the 1966 reform of the financial system saw the other city banks spin their trust arms off while Daiwa kept combined operation. Fee income from trust covered most of the bank’s costs, and the position was strong enough that in 1989 Mitsui Bank’s president Suematsu Ken’ichi approached Daiwa’s Abekawa Sumio about a merger and was turned down. Daiwa went abroad early too, founding Perdania Bank in Jakarta in 1956 as a joint venture with Ishihara Sangyo and Indonesian capital — spared by its joint-venture form when Sukarno ordered every foreign bank closed in 1964 — and opening a New York branch in 1972. Running deposits, lending, investment trusts and securities management through one counter is the original of the “banking plus trust” model Resona still advertises.

Two other lineages were growing in the east. Kyowa Bank was constituted in April 1954 out of the wartime Nippon Savings Bank, inheriting a savings bank’s mass of household deposits; Saitama Bank was founded in April 1969 as the main bank of a commuter-belt prefecture. Both held city-bank licences but ran retail businesses — household depositors and small-business lending, not large corporates and not international. Against zaibatsu banks competing on scale and overseas reach, they were a different category with a different revenue structure: smaller than the top four, larger than a regional. A trust-and-banking hybrid in Kansai and two retail city banks in Kanto, running in parallel, is what would later make a single holding company plausible.

Kyowa and Saitama, tied together by a business alliance since 1985, merged in April 1991 into Kyowa Saitama Bank and took the name Asahi Bank in September 1992 — one of the first moves of the Heisei banking realignment, and the piece that fixed a retail city bank as the Kanto pillar of what became Resona. From here the shape is symmetrical: a trust-hybrid bank in Kansai, a retail bank in Kanto, both earning from depositors and small companies rather than from large-corporate lending and overseas business.

Then, in September 1995, the western pillar blew up. A trader at Daiwa’s New York branch had been dealing bonds without authorization and concealing the results for eleven years; the off-book losses came to about $1.1 billion. The failure was as much supervisory as criminal. Iguchi Toshihide had told the Federal Reserve Bank of New York in November 1993 that trading and custody were not separated; the Ministry of Finance’s inspection of May 1994 accepted a written assurance, never visited the downtown office, and walked past the fraud; eight US examinations over eleven years had missed it. The Justice Department indicted the bank, the Fed and the New York State Banking Department ordered it to stop operating, the ministry issued a business improvement order on 3 November — and in February 1996 Daiwa withdrew from the United States entirely.

The withdrawal did more than punish. It removed the alternative. With no overseas investment banking left to build, Daiwa had nowhere to put resources except Kansai retail, small-business lending and trust — the strategy later marketed as “the outstanding retail bank” has its root here, in a bank that could no longer choose otherwise. Asahi meanwhile had its own dead end: a 2000 plan to merge with Tokai Bank and Sanwa Bank collapsed over the form of the combination before the parties ever reached terms, leaving Asahi partnerless as the four megabank groups formed around it. Two banks left out of the consolidation now had mainly each other.

In December 2001 Daiwa Bank Holdings was formed over Daiwa, Kinki Osaka and Nara banks; Asahi joined by share exchange in March 2002; in October the company renamed itself Resona Holdings. In March 2003 Daiwa and Asahi were split and recombined into Resona Bank and Saitama Resona Bank. The design was deliberately not the full merger the four megabanks had performed: separate banks kept their own names and customer bases under one holding company, so that Kansai and the Tokyo–Saitama belt could be run from a single head office without erasing either. A “fifth megabank” — in effect a super-regional — had its outline.

It almost did not survive its first year. Closing the year to March 2003, a disagreement with the auditors over how much deferred tax asset could be recognized forced a partial write-down. Deferred tax assets, which assume future taxable income, were a principal component of Japanese bank capital, so cutting them cut the capital ratio directly. On 17 May 2003 the government injected about $16.9B (¥1.96tn) under Article 102(1) of the Deposit Insurance Act — the article’s first use, the largest bank rescue of the postwar era, and effectively nationalization. The old board resigned. In June, Hosoya Eiji, vice president of JR East, arrived as chairman: the first outsider, and the first non-banker, to run a Japanese megabank.

Hosoya’s premise was that a bank is a service business. Branches stayed open until seven, waiting times were attacked as a campaign, credit decisions were made quicker, ATM fees were rewritten — and the whole was labelled “the outstanding retail bank,” a public commitment to the opposite of what the other megabanks were doing as they expanded abroad and into investment banking. Constraint and strategy happened to coincide: a bank with almost no foreign exposure saw net profit fall only to ¥123.9 billion in the year to March 2009, when the global crisis cost its rivals far more. Repayment began in 2007; under Higashi Kazuhiro, president from June 2012, the last of the public money was repaid in June 2015 — about $25.6B (¥3.1tn) including interest, twelve years after the injection.

The Bank of Japan’s negative interest rate policy of 2016 hit Resona where it was strongest. Sticky household deposits are supposed to be an advantage because they are cheap; when yields on everything the bank could buy fell to nothing, the deposit spread closed and the advantage inverted. From the year to March 2017 through the year to March 2022, net profit sat between ¥100 billion and ¥150 billion, and there were no overseas earnings to plug the gap — the cost of specialization, showing up all at once. What the bank could control it did: costs, fee income, a review of cross-shareholdings. Minami Masahiro, CEO from June 2019, spent the flat years building the digital base — a retail app past ten million downloads, mortgages applied for and drawn down online, consulting-style corporate coverage reaching 68,000 main-bank relationships — while insisting that branches and digital had to advance together rather than one replacing the other. The Kansai network was thickened in parallel: Kansai Mirai Financial Group, formed in 2018 out of Kinki Osaka, Kansai Urban and Minato banks, was taken fully in-house in 2021 and absorbed into the holding company in 2024.

The pivot came in 2022. At March that year, loans and securities together covered only 77% of deposits; five years had added roughly ¥10 trillion of deposits with nowhere to put them, so they sat at the central bank. As the yield curve steepened late in the year, Resona began what it calls active balance-sheet management: moving the roughly $137.0B (¥18tn) parked at the Bank of Japan into loans and securities. Alongside it came a plan to cut more than two-thirds of the book value of policy shareholdings between April 2024 and March 2030, and a ¥26.0 billion loss taken deliberately to replace bonds — capital discipline and portfolio repositioning run as one exercise, in preparation for a world with interest rates in it.

The year to March 2025 paid it back: record net profit of ¥213.3 billion against ¥158.9 billion a year earlier, ordinary income of ¥1,117.4 billion and ordinary profit of ¥292.1 billion, with fee income setting a fourth consecutive record. The mechanism is the deposit base that had been the burden — ordinary deposits passed through only 40% of the 0.25-point rise in the policy rate, while loan and securities yields tracked it, so the spread widened. Minami has since set an overhead ratio in the 40s as a management target, arguing that the retail model’s productivity, not its scale, is the next lever. Twenty-two years after the injection, the case for going the other way from the megabanks was finally being made in numbers.