Japan’s bankers demand Postal Bank restrictions ahead of IPO

Japan’s finance industry is demanding firm plans from the Japanese government on when Japan Post and its important banking division will be privatised.
And, bankers have demanded that Japan Post’s banking division refrain from entering new markets like the home mortgages arena prior to a share sale.

Ministers have been dithering for years over the possibility of privatising Japan Post, but recently the government has taken on the idea as a way of raising much-needed funds to help with the national recovery following last year’s devastating earthquake and tsunami.

On Friday the government confirmed it was planning on listing two thirds of Japan Post, which could bring in around $87bn USD to help reconstruction efforts.

The plan would suggest a public offering in fiscal year 2015, with Japanese media reporting that it would likely be around autumn of 2015, with shares sold in stages. It would be the second largest listing of a state-owned company after the Central Japan Railway Co in 1997.

The move to privatise has the support of Japan Post Bank, which is looking to get into new lending markets.

The Japanese Bankers Association and Institute of Regional Banks issued a statement today complaining that the government had failed to produce concrete plans for when the full privatization of the postal saving bank will happen.

The finance sector organisations have long been fighting against the significant presence of Japan Post Bank in the market, with all the benefits it enjoys from government ownership.

The trade groups said in their joint statement today that it was also “absolutely unacceptable” that the Post Bank was looking to enter the residential mortgage business ahead of plans for privatisation.

“As long as a firm plan is underway concerning the full privatization of the postal savings bank, this entry into new business is not insignificant and should not be considered at all,” it said.