Tokyo Kiraboshi to consolidate consulting and systems divisions

Tokyo Kiraboshi Financial Group is planning to streamline its operations by merging its consulting and systems divisions, according to the group's president, Hisanobu Watanabe. The regional banking conglomerate seeks to boost efficiency and enhance customer service by consolidating these functions that are currently dispersed among various subsidiaries. Watanabe emphasized that offering a comprehensive range of services would better serve their clientele.

Notably, Tokyo Kiraboshi recently repaid a ¥40 billion loan to the Tokyo government ahead of schedule in May. This repayment came ahead of the group's financial obligations and Watanabe noted that a strategic growth plan is necessary to boost the group's capital adequacy ratio. The group's capital adequacy ratio has declined recently due to the repayment of preferred shares that were previously allocated to the Tokyo government in exchange for public funds.

Tokyo Kiraboshi, which is the parent company of Kiraboshi Bank and UI Bank (a digital bank), intends to integrate these changes into its next medium-term business program, starting in April 2027. The program aims to consolidate the group's deposit and housing loan operations under UI Bank, allowing Kiraboshi Bank to concentrate on providing services to corporate clients, such as assistance with business succession and international expansion.

Watanabe expects UI Bank to be able to provide competitive interest rates due to its substantially lower operational costs compared to Kiraboshi Bank. The president also highlighted the significance of accelerating integration moves among regional banks in Japan, stating that now that the public funds have been repaid, the group should explore collaboration with various companies.

Ariake Capital, a Japanese investment fund with a significant stake in Tokyo Kiraboshi, sees this consolidation as a positive sign, reflecting their expectations for the group. However, Watanabe reiterated that improving corporate value is the primary mission for all stakeholders in the group.