Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

Senior Bank Analyst - Japanese Banks

Windamee Research

Japanese Banks

Equity Bottom-Up

Late on Christmas Day, news leaked out into the financial media that regional bank <a href="https://www.smartkarma.com/entities/fukui-bank-ltd" target="_blank" data-smartkarma-citation="entities:9011:1" rel="noopener">Fukui Bank (8362 JP)</a> may be in advanced negotiations with unlisted secondary regional bank Fukuho Bank to take it over, initially as a majority-owned subsidiary.  Both banks are from Fukui Prefecture in the Hokuriku Region facing the Sea of Japan.  With a combined market share in Fukui Prefecture of around 36% for deposits and 49% for loans, the banks would likely need to invoke the exemptions under the recently approved law permitting banks from the same prefecture to merge without falling afoul of Japan’s anti-monopoly laws.While Fukui Bank’s share price has outperformed the Topix Banks Index in CY2020, this is damning the stock with faint praise.  Foreign investors would be well advised to steer clear.  This is not a run-of-the-mill case of a strong local bank absorbing a smaller, weaker rival.  Far from it.  Both banks have a long history of credit problems, erratic profitability and weakening performance ratios.While the takeover would no doubt have the blessing of the Suga Administration which has been actively promoting a reduction in the number of regional banks, it is difficult to see the economic rationale for the takeover.  Skeptics might suggest this is little more than an opportunity for the banks  -  should they eventually decide to go for a full merger  -  to revalue their head offices, generate one-time ‘windfall profits’ to artificially boost capital and thereby allow Fukuho Bank to repay the ¥6 billion in public funds that it still owes.  And then?  The risk for investors is a reversion by both banks to sub-par operational performance.Caveat Emptor! (May the Buyer Beware!) remains our advice to foreign investors considering investing in the Japanese banking sector in CY2021.

Late on Christmas Day, news leaked out into the financial media that regional bank Fukui Bank (8362 JP) may be in advanced negotiations with unlisted secondary regional bank Fukuho Bank to take it over, initially as a majority-owned subsidiary.  Both banks are from Fukui Prefecture in the Hokuriku Region facing the Sea of Japan.  With a combined market share in Fukui Prefecture of around 36% for deposits and 49% for loans, the banks would likely need to invoke the exemptions under the recently approved law permitting banks from the same prefecture to merge without falling afoul of Japan’s anti-monopoly laws.While Fukui Bank’s share price has outperformed the Topix Banks Index in CY2020, this is damning the stock with faint praise.  Foreign investors would be well advised to steer clear.  This is not a run-of-the-mill case of a strong local bank absorbing a smaller, weaker rival.  Far from it.  Both banks have a long history of credit problems, erratic profitability and weakening performance ratios.While the takeover would no doubt have the blessing of the Suga Administration which has been actively promoting a reduction in the number of regional banks, it is difficult to see the economic rationale for the takeover.  Skeptics might suggest this is little more than an opportunity for the banks  -  should they eventually decide to go for a full merger  -  to revalue their head offices, generate one-time ‘windfall profits’ to artificially boost capital and thereby allow Fukuho Bank to repay the ¥6 billion in public funds that it still owes.  And then?  The risk for investors is a reversion by both banks to sub-par operational performance.Caveat Emptor! (May the Buyer Beware!) remains our advice to foreign investors considering investing in the Japanese banking sector in CY2021.

Fukui Bank (8362 JP):  On Santa's List: Fukuho-Ho-Ho !

Japan

The Ehime Bank, Ltd. is a regional bank primarily operating in Ehime Prefecture. The Bank also provides computer systems management, staffing, and financial services including leasing and credit card services.

The Miyazaki Bank, Ltd. is a regional bank based in Miyazaki and Kagoshima. The Bank provides financial services such as deposits, loans, and foreign exchange transactions.  The Miyazaki Bank also provides financial services such as leasing, letters of credit, and venture capital business.

The BANK OF SAGA, LTD. is a regional bank mainly operating in Saga.  The Bank provides banking services such as deposits, loans, and foreign exchange transactions.  The Bank of Saga also provides staffing services, information processing services, leasing, venture capital, and financial services such as securities brokerage, trust banking, and credit guarantee.

The Bank of Iwate, Ltd. is a regional bank that mainly operates in Iwate prefecture and its surrounding area.  The Bank provides banking services such as deposits, loans, and exchange transactions.  The Bank of Iwate also provides other financial services including credit cards, leasing, and data processing.

The Akita Bank Ltd is a regional bank based in Akita.  The Bank provides general banking services including deposits, loans, foreign exchange transactions, and securities investments.  The Akita Bank also provides financial services such as letter of credit, leasing, and credit cards.

The Shikoku Bank, Ltd. is a regional bank in Kochi and Tokushima prefectures. The Bank provides banking services such as deposits, loans, and foreign exchange transaction.  The Shikoku Bank also provides financial services such as leasing and letter of credit, and operates venture capital business.

The Oita Bank, Ltd. is a regional bank based in Oita prefecture.  The Bank provides general banking services including deposits, loans, foreign exchange transactions, and securities investments.  The Oita Bank also provides leasing, credit cards, and letter of credit, systems development, and real estate management services.

Bank of The Ryukyus, Limited is a regional bank based in Okinawa Prefecture. The Bank provides general banking services including deposits, loans, exchange transactions, and corresponding banking services.  Bank of The Ryukyus also provides financial services such as securities brokerage, money trust, credit cards, and leasing.

San ju San Financial Group, Inc. offers banking services. The Company provides deposits, loans, fund management, foreign exchange, and other services. San ju San Financial Group also operates enterprise management.

The Yamanashi Chuo Bank, Ltd. is a regional bank in Yamanashi.  The Bank provides commercial banking services such as deposits, loans, foreign exchange transactions, and securities brokerage.  The Yamanashi Chuo Bank also provides financial services such as leasing, credit cards, and credit guarantee as well as invests in venture companies.

First Business Financial Services, Inc. is a bank holding company involved in the commercial banking business through offices located in Wisconsin.  The Company also provides trust and investment services, business leasing services, shareholder relations, and access to capital for its operating entities.

First Business Financial Services (FBIZ US)

West Bancorporation is the holding company for West Des Moines State Bank (West Bank).  The Bank is a full-service commercial bank serving small- to mediumsized businesses and individuals through several branches located in Des Moines and West Des Moines, Iowa.

First Bancorp, Inc. is the bank holding company for The First.  The Bank offers a wide variety of services including checking and savings accounts, consumer and commercial loans, credit cards, investment management and trust services. The First operates in coastal Maine.

Financial Institutions, Inc. is a bank holding company for several community banks based in western and central New York.  The Company, through subsidiaries, also provides brokerage services, employee benefits, and compensation consulting services.

Enterprise Bancorp Inc. is the holding company for Enterprise Bank and Trust Company. The Bank offers commercial and consumer loan and deposit products, investment management, trust and insurance services.

Bank of Marin Bancorp is a bank holding company.  The Bank specializes in serving the borrowing and depository needs of businesses and individuals and provides investment advisory and trust services.

PT Bank Rakyat Indonesia Agroniaga Tbk operates general banking activities.

PT Bank Nationalnobu Tbk operates a bank. The Company provides lines of credit to small and medium sized enterprises in Indonesia.

The First of Long Island Corporation is the holding company for The First National Bank of Long Island.  The Bank is a full-service commercial bank that provides a range of financial services to individual, professional, corporate, institutional, and government customers.

Citizens & Northern Corporation is a holding company for Citizens & Northern Bank and First State Bank.  The Banks provide a full range of banking services, including deposit and loan products for personal and commercial customers, and trust services and insurance products.  Citizens & Northern operates in north central Pennsylvania.

The Fukui Bank, Ltd. is a regional bank based in Fukui prefecture. The Bank provides banking services such as deposits, loans, foreign exchange transactions, and securities investments. The Fukui Bank also provides financial services such as leasing, credit cards, and letter of credit.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fukui Bank (8362 JP): On Santa's List: Fukuho-Ho-Ho !

On Christmas Day, it was reported that Fukui Bank (8362 JP) may be in negotiations with Fukuho Bank to take it over as a majority-owned...

J. Brian Waterhouse