The Bank of Tokyo-Mitsubishi UFJ, which just became the world's largest bank, opened for business Wednesday with a tape-cutting ceremony at Tokyo headquarters.
The merger of Mitsubishi Tokyo Financial Group Inc. and UFJ Holdings Inc. was completed Sunday, creating the world's largest financial group by assets at around $1.6 trillion, topping U.S.-based Citigroup Inc.'s $1.55 trillion, based on the most recent company figures.
The Japanese financial giants merged Oct. 1 to become Mitsubishi UFJ Financial Group Inc., but the merger of the group's core banks had been pushed back as engineers rushed to integrate their computer systems and automated teller machines.
The new bank was the latest development in a continuing realignment of Japan's banking sector, which has in recent years been slowly recovering from massive bad loans that had piled up during a decade-long economic slowdown.
The streamlining in the banking sector is also the result of the banks' attempts to keep up with growing international competition. The Bank of Tokyo-Mitsubishi UFJ is among the three big banks that now dominate retail banking in Japan, including Mizuho Bank and Sumitomo Mitsui Banking Corp.
Mizuho's parent group, Mizuho Financial Group Inc., was established in 2000 from the integration of the Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank, while Sumitomo is the core bank of Sumitomo Mitsui Financial Group Inc., created in 2001 through the merger of Sumitomo Bank and Sakura Bank.
Mitsubishi UFJ Financial Group posted strong earnings in November due to lower bad-loan write-off costs, and expects to earn a group net profit of $4.4 billion for the fiscal year through March 31, 2006.
Other banks are also posting healthy results, the latest indication that Japan's financial sector is on the mend after years of losses.