Fukuoka Financial Group - Company History

The Seventeenth National Bank was founded in Fukuoka in September 1877, and the group still dates itself from that year. Around it grew the other banks of the prefecture: Kaho Bank, set up in 1896 by colliery owners including the coal magnate Aso Takichi, rooted in the Chikuho coalfield around Iizuka; Chikuho Bank, formed in 1941 when eighteen farming-district banks in the south of the prefecture merged; and Fukuoka Savings Bank, created the same year out of three savings banks and the only one of its kind in Fukuoka. Wartime financial consolidation ran early here, so the ground for a single prefectural bank was prepared well before the order came.

In March 1945, under the government’s one bank per prefecture policy, those four institutions were merged into a newly incorporated Bank of Fukuoka, with ¥25 million of capital and 131 branches. It was not merely the largest bank in Kyushu; from its first day it stood first among all regional banks in Japan by deposits — an unusual position, and one it had not chosen. Fukuoka Prefecture held the steel and coal that drove postwar reconstruction, and the bank grew with them, opening offices outside the prefecture in quick succession: Tokyo in 1948, Shimonoseki and Osaka in 1951, Sasebo in 1952, Kumamoto, Hitoyoshi and Ube in 1953, Nagasaki and Kanda in 1954.

The turn came in 1953. In July the bank was hit by what is remembered as the first strike in the history of Japanese banking, and at the same time coal — the core of the prefectural economy — began its decline in the energy revolution. Fukuoka lost the top deposit ranking it had been handed eight years earlier. The franchise that policy had dealt it did not come with protection against a change in industry, and the scale that had been its distinction became, within a decade, its burden.

To settle the labour dispute and steady the bank, Arikawa Gojiro, an examiner at the Bank of Japan, was brought in as president in May 1955. He was the first of four consecutive presidents sent from the central bank, a line that ran for forty-five years — as late as 1995 the president, Tsukuda Ryoji, was a former BOJ executive director and head of its business department. Labour and management reached an accord in 1957, and the bank was run thereafter by plan: a three-year performance programme, a second long-term plan, a third from 1967, each of them shaving down the surplus staff and the oversized branch network inherited from the forced merger. Deposits grew from ¥68 billion to ¥317.3 billion over that stretch.

The rebuilding ran on three tracks at once through the 1960s and 1970s: consolidating branches inside Fukuoka, reaching Tokyo through stepping-stone offices in Hiroshima and Nagoya, and completing a Kyushu-wide network with branches in the prefectural capitals of Oita, Saga, Kagoshima and Miyazaki. In April 1964 it became the designated financial institution for Fukuoka Prefecture and for the cities of Fukuoka, Kitakyushu and Kurume, which fixed it as the settlement bank of local government across the region; a Kitakyushu headquarters followed in August 1971, after that city was made a government-designated city.

The modernisation investments then came in a five-year burst. A new head office of eleven storeys opened in central Fukuoka in August 1975, an integrated online system went live across every branch in the prefecture in June 1977, and in October 1978 the shares moved to the second sections of the Tokyo and Osaka exchanges — the first step away from the Fukuoka-only listing the bank had held since 1949.

In September 1980 the bank was promoted to the first sections of the Tokyo and Osaka exchanges. New head office, online banking and a national listing inside five years gave the leading bank of Kyushu both the form and the substance of one.

From the 1980s its growth axis moved offshore, and unusually for a Japanese regional bank it moved toward Asia. Representative offices opened in London (1982), Hong Kong (1985) and New York (1986), each later upgraded to a branch; Hong Kong became a branch in 1987 with a local subsidiary alongside it and the hub of a network that extended to Seoul (1991), Bangkok (1993) and Shanghai (1995). A Frankfurt office opened in 1990 and was closed once its purpose had been served — the network was pruned as well as built. The stated point was to follow local customers abroad, and the footprint is still the base of the group’s overseas strategy today.

Closer to home, the bank marked its fiftieth anniversary in 1995 with “OH! Hawks”, a fixed deposit that paid an extra 0.5% if the Fukuoka Daiei Hawks won the league — a piece of local-attachment product design that pulled in new customers. But the disposal of bad loans after the bubble and the end of convoy-style regulation were pressing every regional bank toward consolidation, and Fukuoka concluded that overseas expansion by a single bank could not carry its earnings base. The contest in regional banking was shifting from the individual bank to the wide-area group.

In April 2007 Fukuoka Financial Group was established as a holding company over Bank of Fukuoka, Kumamoto Family Bank and Shinwa Bank, with Tani Masaaki as its first president — the first regional banking group built deliberately across prefectural borders. The logic was that in a shrinking, low-rate local market the only way to carry systems investment and head-office functions was to share them. The first full year, to March 2008, produced ordinary income of $2.7B (¥278bn) and net profit of about $12.1M (¥1bn), and the group absorbed the earnings shock of the financial crisis inside the combination.

Shibato Takashige became the second president in June 2014, adding the chairmanship in 2019, and pushed efficiency while looking for new sources of income; he argued that what does not change in banking is the relation between people, and built his case for the bank around human capital. The arithmetic argued otherwise: under the Bank of Japan’s negative-rate policy the year to March 2017 produced an ordinary loss of $306.7M (¥34bn) and a net loss of $484.1M (¥54bn), before a recovery to $446.6M (¥49bn) of net profit the following year. In parallel the group pursued Eighteenth Bank of Nagasaki, agreed in February 2016 — and spent more than two years in antitrust review, because Eighteenth plus the group’s own Shinwa Bank would have held roughly 70% of small-business lending in Nagasaki Prefecture. Only after transferring just under $905.8M (¥100bn) of loans to other lenders did it clear the Fair Trade Commission in August 2018; Eighteenth became a wholly owned subsidiary in April 2019 and merged with Shinwa into Juhachi-Shinwa Bank in October 2020. The deadlock did more than delay one deal — it drove the special antitrust exemption law for regional banks enacted in May 2020.

In May 2021 the group opened Minna Bank, Japan’s first digital-native bank, built on Bank of Fukuoka: account opening and transactions complete inside a smartphone app, and a banking-as-a-service model that embeds banking functions in other companies’ products. Its revenue was framed around three pillars — selling the system to other banks, providing BaaS, and retail — though the retail economics turned out to rest on lending rather than the deposits and payments originally assumed. Goto Hisashi became the third president in April 2022 and redefined the group’s portfolio and stated purpose, arguing that a bank should supply social as well as economic value, and setting a target of doubling business scope, technical expertise and customer base simultaneously — eight times the scale — with a shift from generalist bankers to deep specialists to match. Group ordinary income rose from $2.1B (¥236bn) in the year to March 2017 to $3.0B (¥456bn) in the year to March 2025, and net profit attributable to owners reached $481.8M (¥72bn). Yet the digital bank still runs on front-loaded investment, and group net profit fell from $411.8M (¥54bn) to $221.3M (¥31bn) in a single year: the balance between a digital bank and the real one remains the group’s central management question.