A holding company with Kumamoto Family Bank, and taking Shinwa Bank wholly in (2007)

What came before the word “pioneer”

What Bank of Fukuoka took on were two financially damaged banks in neighbouring prefectures: Kumamoto Family Bank, whose capital had been strengthened with $254.7M (¥30bn) of public funds, and Shinwa Bank, still working through bad loans. What Tani Masaaki, chairman and president, chose can be read as stepping down from the safe position of gathering nine-tenths of its deposits inside its own prefecture, and taking on other prefectures’ losses balance sheet and all, together with more than $1.5B (¥180bn) of goodwill to be amortised over twenty years.

That road was not quickly rewarded. Consolidated net profit in the first year came to only $11.6M (¥1bn), and the systems integration of the three banks was not finished until January 2010, nearly three years after the holding company was set up. More than $849.1M (¥100bn) went into rebuilding Shinwa Bank. It was some seven years after the combination that Kumamoto Bank began cutting into Higo Bank’s ground and the group came to be called the largest regional banking group in Kyushu. The effect of an integration that crosses prefectural borders shows up in the numbers not in the year it is decided, but only after the damaged assets have been worked through.