With merger, Resona Holdings draws bead on wealthy clients

Resona Holdings Inc. plans to merge its key banking subsidiary, Resona Bank, with Resona Trust & Banking Co. as early as next spring to enhance real estate management and other services for wealthy customers, sources said Thursday.

Resona Bank, which has seen slack lending to small and medium-size companies due to an economic slowdown and competition from larger and regional banks, expects real estate management services for owners of such firms may help expand its earnings and lending to them, they said.

The bank is likely to revise its earnings projections downward in response to the recent financial crisis, the sources said.

Mizuho Financial Group Inc. and other large Japanese banking groups have also moved to deepen the combination of their commercial and trust banking services.

Resona's move may motivate other banks to strengthen ties with trust banks.

Resona Holdings, the fourth-biggest banking group, will include the merger in its financial health restoration plan expected to be released soon, they said.

The plan, which the bank holding company has been required to submit and update since the government's capital injection into the group in 2003, is also expected to feature enhancing insurance and investment product sales and other services for individual customers.

Last month, Resona Holdings cut its profit forecast 36 percent to ¥160 billion for the year ending March 31, citing rising credit costs.

It reduced its estimate from ¥250 billion forecast in May.