Japanese lenders Ashikaga Holdings and Joyo Bank are in the final stage of merger talks that could create the nation’s third-largest regional banking group with combined assets of JPY15trn ($124bn).
Ashikaga Holdings, a regional banking group based in Tochigi Prefecture, includes Ashikaga Bank, which was nationalised between 2003 and 2008 for rehabilitation. Joyo Bank is based in Ibaraki Prefecture.
The two banks together operate with 331 branches in Japan, employing a workforce of over 6,500.
According to media reports, the banks are expected to reach a basic agreement in early November 2015 and eventually merge their businesses through a share swap in October 2016.
The two Japanese lenders are expected to combine under a joint holding company, the reports added.