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 Resona Holdings headquarters in Koto, Tokyo, Japan | |
Native name | 株式会社りそなホールディングス |
|---|---|
| Company type | Public (K.K) |
| TYO:8308 | |
| Industry | Banking |
| Founded | 1918; 107 years ago (1918) (as the Osaka Nomura Bank) 2002 (as Resona) |
| Headquarters | , |
| Subsidiaries | Saitama Bank |
| Website | www.resona-gr.co.jp |
Resona Holdings, Inc. (株式会社りそなホールディングス,Kabushiki-gaisha Risona Hōrudingusu) (TYO:8308) is theholding company of Resona Group (りそなグループ,Risona Gurūpu), the fifth-largest banking group inJapan as of 2012.[1] It is headquartered in the Kiba area ofKoto, Tokyo. The main operating entities of the group areResona Bank, a nationwide corporate and retail bank headquartered inOsaka, andSaitama Resona Bank, a smaller bank headquartered inSaitama City which primarily servesSaitama Prefecture, and are thus considered to be "city banks" of Japan. Most of these banks' operations are descended fromDaiwa Bank andAsahi Bank, which merged in 2003.
Resona was formed as theOsaka Nomura Bank in 1918. This entity served as the financing arm of the Nomurazaibatsu founded byTokushichi Nomura. Its securities brokerage operation separated in 1925 to formNomura Securities, now Japan's largest securities company. The bank was renamedNomura Bank in 1927 and became the main bank for theOsaka Prefecture government in 1929, immediately following the1929 stock market crash.[2]
The Nomurazaibatsu was dissolved in the wake of World War II, and the bank was renamed toThe Daiwa Bank in 1948. It was one of the only major banks that offered both banking and trust services during the postwar era.[2]
In 1995, a New York-based Daiwa bond trader,Toshihide Iguchi, lost $1.1 billion speculating in the bond market and was charged with forgery and falsification of bank records.[3] The bank was criminally indicted in November 1995 and ordered to leave the U.S. market; in the wake of this incident, there were talks of a merger between Daiwa andSumitomo Bank, which would have created the world's largest bank at the time.[4] Daiwa closed its United States operations in 1996, and eventually pulled out of overseas banking entirely in 1998.[2]
Japan Saving Bank (日本貯蓄銀行) was formed by a 9-bank merger in May 1945 to consolidate various savings banks that served Japanese individuals around the end of World War II. During the immediate postwar era, rapid inflation threatened the bank's business. In 1948, it was converted to an ordinary bank namedKyowa Bank (協和銀行). Kyowa merged withSaitama Bank (埼玉銀行) in 1991 to formKyowa Saitama Bank (協和埼玉銀行), renamedAsahi Bank (あさひ銀行) in 1992.
Asahi entered into merger talks withSanwa Bank andTokai Bank, and the three banks announced a merger in 2001. The merger would have created the third-largest bank in the world behindDeutsche Bank andMizuho Financial Group.[5] However, Asahi pulled out of these talks later that year.[6] The eventual Sanwa-Tokai merger formedUFJ Bank.
Daiwa formed abank holding company,Daiwa Bank Holdings, in December 2001 to serve as the parent entity of Daiwa, Kinki Osaka Bank and Nara Bank. Later that month, Daiwa announced that Asahi Bank would be acquired by Daiwa Bank Holdings in a share swap transaction, forming the fifth-largest banking group in Japan.[7] The company was renamedResona Holdings, Inc. on 1 October 2002.
Daiwa and Asahi consolidated operations on 1 March 2003, with most of their assets combined to form Resona Bank. 100 Asahi Bank branches in Saitama and three branches in Tokyo were moved to a separate entity, Saitama Resona Bank.[8]
In early 2003 the Resona Group's capital adequacy ratio fell dangerously low. The bank had proposed to maintain its capital adequacy ratio above the legal limit by factoring in deferred tax assets. However, the value of these deferred assets could only be claimed if the company turned a profit in the future. Because the bank's profit outlook was so dim, Resona's auditor refused to certify the company's financial statement if the deferred tax assets were included. Without being able to count the deferred tax assets, the bank was effectively insolvent.[9]
The Resona case threatened to cripple the entire country's financial system, since the other major banks were also counting on deferred tax assets to maintain their capital adequacy ratios. On 17 May 2003, the Japan government decided to inject 1.96 trillion yen in public funds into the Resona Group through Resona Bank.[10] This move, through the share exchange agreement between the bank and the holding company, effectivelynationalized the bank, since the government emerged as the company's majority shareholder, holding 68.25% ofvoting rights of the holding company,[11] while the holdings of existing shareholders were greatly diluted. The existing management was sacked and a new management was installed.
Former Resona ChairmanEiji Hosoya is credited with leading the bank's revival following the 2003 bailout.[1] Hosoya initially resisted taking the appointment to head Resona, saying in a news conference held on 30 May 2003, "I decided to accept the offer as I realized that stabilizing the financial system is the highest priority for theJapanese economy."[1] Under Hosoya, the bank's new management immediately set about to reduce Resona'snon-performing loans (NPLs). In 2004, the company managed to turn a profit of ¥386 billion. As a result, Resona's management announced a plan to, over the next 10 years, return to the government ¥868 billion of the ¥3 trillion in public funds it has received. Hosoya died in November 2012.[1]
Resona introduced two new full-time employee career tracks in 2015: one "no overtime" track for employees seeking better work-life balance, and another track for employees who wish to remain in a single position for their entire career. These policies were unique among Japanese banks at the time of their introduction.[12]
