Fuji's plan: first restructure, then expand
The restructuring plan has provoked different reactions among investors, neatly divided along geographical lines. In Europe the Edinburgh leg of the roadshow for the deal was perhaps met with the most scepticism. This is understandable. UK investors have been sizeable holders of Japanese bank stocks for most of the past decade and have felt progressively betrayed as poor disclosure led time and again to upward revisions in non-performing loans. US investors were much more in favour of the deal: partly because they are more used to successful mega-mergers than their European counterparts but also because they really only recently bought into the sector to get up to weight. The recent strong rally has left them with warm feelings.
Masao Nishimura, president and CEO of the Industrial Bank of Japan Limited, is prime mover in the three-way merger. His views in general reflect those of Japan's most senior bankers and, if taken at face value, represent a paradigm shift in the way this elite intends to run the country's key institutions. Ironically, he described his vision of the new order sitting beneath an original Chagall - a reminder of a period when Japanese banks' commitment to reform and shareholder value was less than wholehearted.