Sumitomo Mitsui Trust Holdings Inc. and Mizuho Financial Group Inc. have signed a memorandum of understanding to prepare for a merger of their trust bank units, Trust & Custody Services Bank Ltd. and Japan Trustee Services Bank Ltd.
Resona Bank Ltd. and Dai-ichi Life Insurance Co. Ltd., being shareholders of the units, have also signed the memorandum of understanding.
An interim holding company will be established as the wholly owning parent company of the two trust banks. Following the completion of the preparations for the merger, the interim holding company and the two trust banks will merge and undergo final management integration.
The merged entity will have the benefit of scale as it will become the largest asset administration service provider in Japan, the companies said. It will also aim to be the top trust bank specializing in asset administration services in the country.
The companies plan to execute a final agreement in the latter half of fiscal 2017. The deal is subject to regulatory approvals.
Sumitomo Mitsui Trust holds a 66.6% stake in Japan Trustee Services Bank, while Resona Bank holds a 33.3% stake. Mizuho Financial holds a 54% stake in Trust & Custody Services Bank, while Dai-ichi Life holds a 16% stake.