Japan Post eyeing over 200 direct outlets of postal savings bank

Japan Post Corp., the company formed in January to prepare for the privatization of Japan’s postal system, are looking into setting up more than 200 outlets under direct management by a postal savings bank, one of the four new companies to be established in the course of the privatization from October 2007, sources familiar with the matter said Monday.

Japan Post is also considering setting up some 80 outlets to be directly managed by a postal insurance company, another of the four new entities, they said.

The move is expected to draw strong opposition from private financial institutions on the grounds that the postal savings and insurance companies would eat into their business turfs on the back of the government’s partial ownership.

Japan Post was earlier expected to farm out most of postal savings and insurance operations to a new company that will manage the nationwide network of some 24,700 post offices. In the case of the postal savings bank, one outlet under direct management was expected to be set up in each of the 47 prefectures.

But Japan Post has begun considering large networks of business offices under the postal savings and insurance entities’ direct management because President Yoshifumi Nishikawa, former president of Sumitomo Mitsui Banking Corp., stresses the strategic importance of branch operations, according to analysts.

Japan Post intends to announce the number of such outlets in a privatization execution plan to be compiled by July.