Financial services race to grow on Japan Post privatization: S&P
Standard & Poor’s Ratings Services predicted Wednesday that financial services competition in Japan could intensify if Japan Post expands its banking operations after its privatization starting in October 2007.
The postal system will be divided into four entities — mail delivery services, post office network, savings and insurance firms — under a holding company upon the privatization.
The savings firm, though starting as the world’s largest bank with assets totaling 227 trillion yen, is not expected to expand its share of the savings and lending markets over the coming few years, S&P said.
But competition is expected to intensify in sales of financial instruments and other fee-generating services, which have been a strategic focus for Japanese banks and provide a great growth potential for the postal savings firm, the U.S. rating agency said.
In response to the postal savings firm’s possible foray into such services, commercial banks will seek to maintain competitive advantages in product lineups and consulting services, it said.
Another option for them would be to ally with the postal savings firm to utilize a nationwide network of post offices, S&P said, noting that some trust banks are reportedly considering cooperation with post offices in trust banking services.
