Banks in Japan

Updated on April 4, 2024
Article byWallstreetmojo Team
Edited byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Overview of Banks in Japan

The banks in Japan operate similarly to institutions worldwide, offering regular financial services. However, with the advent of technology, Japan has progressed rapidly at the forefront of online banking services. The Bank of Japan (Central Bank) was established in 1882 to control the domestic money supply and act as a “Lender of Last Resort” for the Japanese banks.

Currently, the financial system in Japan is going through a negative interest rateNegative Interest RateWhen the interest rate falls below 0 percent, we have a negative interest scenario. This implies that banks will charge you interest for keeping your money with them. It is more common during periods of extreme deflation.read more regime whereby depositors have to save their money, and lenders are paid for borrowing money.

Structure of Banks in Japan

The banking system of Japan is classified into: –

The traditional banks in Japan were divided into clearly defined segments: –

During the 1980s, non-banking operations (consumer loansConsumer LoansA consumer loan is a type of credit given to a consumer to finance specified set of expenditures. The borrower must pledge a specific asset as collateral for the loan, or it may be unsecured depending on the loan's monetary value.read more, credit cards) had also cropped up. Then such organizations also started offering traditional functions of banks (e.g., issuing of loans). Subsequently, in 1990, the five largest banks were Japanese banks in total assets. Moreover, such banks opened branches across the globe, traded in FOREX activities, and flourished the position of the Japanese banking system on the world map.

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Digital Banking In Japan

Japan’s digital banking landscape combines traditional banking practices with technological advancements, providing secure and efficient digital banking services to customers. It is gradually evolving to embrace technological advancements. Established banks are expanding their digital services, offering online and mobile banking platforms to cater to customer demands. While the fintech sector is growing, Japan’s conservative banking culture poses challenges for new entrants. However, the country’s government initiatives to promote fintech innovation and open banking are expected to drive further progress in the digital banking sector.

List of Top 11 Banks in Japan

  1. Revolut
  2. Mitsubishi UFJ Financial Group
  3. Japan Post Bank Co., Ltd.
  4. Mizuho Financial Group
  5. Sumitomo Mitsui Financial Group
  6. Norinchukin Bank
  7. Resona Holdings
  8. Fukuoka Financial Group
  9. Chiba Bank
  10. Bank of Yokohama/Concordia Financial Group
  11. Hokuhoku Financial Group, Inc.

Let us explain each one of them in detail: –

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#1. Revolut:

Experience banking like never before with “Revolut,” the app-based solution in Japan operating under a banking license Revolut Bank UAB. It is designed for the modern world that puts control at your fingertips. Seamlessly manage your finances, make swift global money transfers, and save with ease. Enjoy fee-free currency exchange and cryptocurrency transactions. With top-notch security features and a user-friendly interface, Revolut ensures your money is safe and accessible anytime, anywhere. Join millions who trust Revolut for secure, convenient, and rewarding banking. Sign up now and unlock a world of infinite financial possibilities!

#2. Mitsubishi UFJ Financial Group

One of the leading companies of the Mitsubishi Group, this bank is Japan’s largest financial group and the world’s second-largest Bank Holding company. It is the second-largest firm in Japan regarding market capitalization Market CapitalizationMarket capitalization is the market value of a company’s outstanding shares. It is computed as the product of the total number of outstanding shares and the price of each share.read more, with its headquarters in Chiyoda, Tokyo. In addition, it functions in various businesses, such as retail banking, corporate banking, and trust assets in around 50 countries. The net operating profitsProfitsProfit refers to the earnings that an individual or business takes home after all the costs are paid. In economics, the term is associated with monetary gains. read more for 1Q17 were ¥349.0.

#3. Japan Post Bank Co., Ltd.:

Established in 2006 and headquartered in Tokyo. It is primarily a savings institution and was a part of the reorganization of Japan Post into Japan Post Holdings, which permits the wiring of funds between the post office and the banking unit. The loan facilities include the overdraftOverdraftOverdraft is a banking facility that offers short-term credit to the account holders by allowing them to withdraw money from their savings or current account even if their account balance is or below zero. Its authorized limit differs from customer to customer.read more services secured by Japanese government bondsBondsBonds refer to the debt instruments issued by governments or corporations to acquire investors’ funds for a certain period.read more and time-bound deposits. It is one of Japan’s largest deposit banks and offers nationwide services of funds withdrawal with international debitDebitDebit represents either an increase in a company’s expenses or a decline in its revenue. read more and credit cards.

The banks’ total assets were ¥205 trillion, with a total income of ¥266 billion as of 2019.

#4. Mizuho Financial Group:

Mizuho Financial Group is a public sector bank holding company with its headquarters in the Otemachi district of Chiyoda in Tokyo. Established in 2003, this group offers various banking services around the globe, such as:

  • Business and Retail Banking
  • Corporate and Institutional Company
  • Global Corporate Banking
  • Asset management services
  • Markets and Securities
  • Norinchukin Bank
  • Resona Holdings

The bank employed around 59,132 employees as of 2020 and had a net income of ¥603.54 billion as of 2017.

#5. Sumitomo Mitsui Financial Group:

It is a Japanese bank holding/ financial services company established in 2002 in Chiyoda, Tokyo. It holds assets worth $2.036 trillion around the world, offering services such as: –

  • Personal Banking
  • Corporate Banking
  • Investment Banking/Management
  • Wealth Management
  • Credit Cards

For 2019, it reported total assets Reported Total AssetsTotal Assets is the sum of a company's current and noncurrent assets. Total assets also equals to the sum of total liabilities and total shareholder funds. Total Assets = Liabilities + Shareholder Equityread more of $2.036 trillion and a total income of $6.47 billion. In addition, it has several subsidiaries offering professional services for respective financial products.

#6. Norinchukin Bank:

It was founded in 1923 by the Japanese government to support its agricultural prospects. It played a crucial role in rebuilding post World War II, especially with investmentsInvestmentsInvestments are typically assets bought at present with the expectation of higher returns in the future. Its consumption is foregone now for benefits that investors can reap from it later.read more in the textile industry. In addition, it is one of the largest institutional investors with an investment portfolio of over $400 billion and over $850 billion in assets. Norinchukin Bank is well known as Japan’s largest hedgeHedgeHedge refers to an investment strategy that protects traders against potential losses due to unforeseen price fluctuations in an assetread more fund, with branches in New York, London, and Singapore.

The bank invests in bonds, securitization facilities, private stock equity, real estate, forest, and fisheries. As of 2016, the bank’s total assets were $1,000 billion and a total income of $19 million.

#7. Resona Holdings:

It is the holding companyHolding CompanyA holding company is a company that owns the majority voting shares of another company (subsidiary company). This company also generally controls the management of that company, as well as directs the subsidiary's directions and policies.read more of the Resona Group (5th largest banking group) with its headquarters in Koto, Tokyo. The primary operating entities of the group are: –

  • Resona Bank (corporate and retail bank)
  • Saitama Resona Bank

The focus of the groups is to offer professional services in the following segments: –

For Q1 ’17, the net incomeNet IncomeNet income for individuals and businesses refers to the amount of money left after subtracting direct and indirect expenses, taxes, and other deductions from their gross income. The income statement typically mentions it as the last line item, reflecting the profits made by an entity.read more attributable to shareholdersShareholdersA shareholder is an individual or an institution that owns one or more shares of stock in a public or a private corporation and, therefore, are the legal owners of the company. The ownership percentage depends on the number of shares they hold against the company's total shares.read more is ¥37.2 billion and employs around 70,000 employees.

#8. Fukuoka Financial Group:

Fukuoka Financial Group is a Japanese company listed on the Nikkei, established as a financial holding with the holding of the Shinwa Bank as a wholly-owned subsidiaryWholly-owned SubsidiaryWhen a company’s almost all of the outstanding shares are owned by another company (parent) then it can be said that it is a wholly-owned subsidiary of that company and it is controlled by the parent company. For example, Walt Disney Entertainment owns 100% of Marvel Entertainment which produces movies.read more. Its headquarters is in Fukuoka (the largest city of Kyushu, located in the south of Japan). The group’s primary services are banking, which constitutes deposits, loans, and domestic and foreign exchange Foreign Exchange Foreign exchange, or Forex, is trading one currency for values equivalent to another currency.read moreservices.

Other services include guarantees, revitalization support, loans management, and collection business. In 2016, the total income of the bank was $2 billion.

#9. Chiba Bank:

This bank is the third largest of Japan’s 64 regional banks in total assets. It has headquarters in Chiba (adjacent to Tokyo) and has one of Japan’s most important industrial concentrations.

The bank’s strategy is to expand its branch network into adjacent areas along Tokyo-bound railway lines. Emphasis is also on the development of southern Chiba Prefecture as a tourist and resort area. One of the few institutions disclosing NIM (Net Interest MarginsNet Interest MarginsNet Interest Margin is a popular profitability ratio used by banks which helps them determine the success of firms in investing in comparison to the expenses on the same investments. It is calculated as Investment income minus interest expenses (this step is referred to as netting) divided by the average earning assets.read more) on their lending facilities.

#10. Bank of Yokohama/Concordia Financial Group:

It is the largest regional bank of Japan operating in southwestern Tokyo. It was formed amidst the collapse of several existing banks in the region to smoothen the financial services in the area. In 2015, the Bank of Yokohama announced a merger with Higashi-Nippon Bank to create Concordia Financial Group, Ltd. As a result, it was listed on the Nikkei 225 stock market indexMarket IndexA market index tracks the performance of a diverse selection of securities that make up a significant part of the financial market. It serves as an indicator of the overall financial market condition by listing the historical and real-time trends in different market segments. read more.

#11. Hokuhoku Financial Group

It was established in 2003 with its headquarters in Toyama. The following segments are operated in this group: –

  • Hokuriku Bank
  • Hokkaido Bank
  • Other segments

The banking segments offer financial services through banking operations. The other component handles the leasing and credit card business and non-banking subsidiaries.

The Hokuriku Bank and the Hokkaido Bank underwent management integration in 2004 to form the Hokuhoku Financial Group, Inc., which today operates as a super-regional financial network enclosing the entire Hokuriko region (Tokyo, Osaka, and Nagoya areas).

We hope you liked this guide to Banks in Japan. We provided an overview of the list of the top 11 best banks in Japan, their structure, and their financial status. If you are looking forward to making a career in banking, then you can check out some of the awesome resources: –

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