Resona Holdings

Resona Holdings is a Japanese financial holding company and the parent of the Resona Group. Its principal operating institutions are Resona Bank, a nationwide commercial and retail bank headquartered in Osaka, and Saitama Resona Bank, which concentrates on customers and businesses in Saitama Prefecture. The group also has a history of operating trust-banking and regional-bank subsidiaries, including Kinki Osaka Bank and Resona Trust & Banking. Its core activities include retail deposits and lending, corporate finance, payments, housing finance, asset management, trust-related services and other banking products for individuals, small and medium-sized enterprises, large corporations and public-sector customers. The group’s institutional history is rooted mainly in Daiwa Bank and Asahi Bank. Daiwa’s lineage reaches back to Osaka Nomura Bank, established in 1918 as the financing arm of the Nomura business group. Its securities-brokerage operations separated in 1925 and became Nomura Securities. The bank adopted the Daiwa name after the postwar dissolution of the Nomura zaibatsu and remained distinctive among major Japanese banks for combining ordinary banking with trust services. Asahi Bank descended from Japan Saving Bank, created in 1945 through the consolidation of nine savings banks, and later from Kyowa Bank and Kyowa Saitama Bank. Daiwa created Daiwa Bank Holdings in December 2001. The holding company subsequently agreed to acquire Asahi Bank through a share exchange, creating a major banking group and adopting the Resona Holdings name on 1 October 2002. On 1 March 2003, Daiwa Bank and Asahi Bank consolidated most of their operations into Resona Bank. Selected Asahi branches in Saitama and Tokyo were separated into Saitama Resona Bank, giving the combined group both a nationwide banking platform and a specially focused Saitama franchise. The new group immediately faced a severe capital and confidence crisis. In 2003, Resona’s capital adequacy position deteriorated after its auditor refused to recognize deferred tax assets that management had relied upon in its financial statements. Without those assets, the bank was effectively insolvent and its weakness threatened broader financial-system stability because other Japanese banks also depended on similar accounting treatment. On 17 May 2003, the Japanese government approved a public-capital injection of ¥1.96 trillion into Resona Bank. Through the associated share exchange, the state obtained a majority voting position in the holding company and existing shareholders were heavily diluted. The incumbent management was removed and a new leadership team was installed. Former chairman Eiji Hosoya became closely associated with the recovery effort. Under the reconstituted management, Resona worked to reduce non-performing loans, restore profitability and repay public support. The group reported a profit of ¥386 billion in 2004 and announced a ten-year plan to return ¥868 billion of the ¥3 trillion in public funds it had received. The bailout and subsequent restructuring made Resona a prominent example of Japanese banking-sector reform during the early 2000s. Resona’s present identity is therefore shaped by consolidation, public-sector stabilization and a focus on domestic banking. Unlike a globally diversified universal bank, its principal franchise is Japan-based and combines large-city banking, regional banking and trust-related capabilities. In 2015, the group also introduced two full-time career tracks intended to address workplace practices in Japanese banking: a no-overtime path for employees seeking improved work-life balance and a path for employees wishing to remain in one position throughout their careers. These measures were presented as distinctive personnel policies at the time. Resona Holdings continues to operate as the listed parent of the Resona Group, with Resona Bank and Saitama Resona Bank as its main banking businesses.

Resona Holdings was created from the consolidation of banking businesses associated primarily with Daiwa Bank and Asahi Bank. Daiwa’s history began with Osaka Nomura Bank, founded in 1918 as the banking arm of the Nomura business group. Its securities business separated in 1925 to form Nomura Securities, and the bank was renamed Nomura Bank in 1927. After World War II and the dissolution of the Nomura zaibatsu, the institution became The Daiwa Bank in 1948. Daiwa was unusual among Japan’s major banks because it combined ordinary banking with trust-banking activities. Asahi Bank’s predecessor history followed a different route. Japan Saving Bank was formed in May 1945 by merging nine savings banks serving Japanese individuals. It was converted into an ordinary bank called Kyowa Bank in 1948. Kyowa Bank merged with Saitama Bank in 1991 to form Kyowa Saitama Bank, which adopted the Asahi Bank name in 1992. Asahi later explored a three-way combination with Sanwa Bank and Tokai Bank. Asahi withdrew from those discussions in 2001, while Sanwa and Tokai ultimately combined into UFJ Bank. Daiwa established Daiwa Bank Holdings in December 2001 as a parent company for Daiwa Bank, Kinki Osaka Bank and Nara Bank. The holding company then announced a share-exchange acquisition of Asahi Bank. The new parent was renamed Resona Holdings on 1 October 2002. On 1 March 2003, Daiwa and Asahi consolidated most of their operations into Resona Bank. One hundred Asahi branches in Saitama and three in Tokyo were assigned to a separate institution, Saitama Resona Bank, allowing the group to preserve a distinct Saitama-focused business. The formation coincided with a major crisis. In early 2003, Resona’s capital adequacy ratio declined to a dangerously weak level. Management had sought to count deferred tax assets toward regulatory capital, but the auditor refused to certify the accounts on that basis because the bank’s future profitability was too uncertain. Excluding those assets left the institution effectively insolvent. The issue had systemic significance because other Japanese banks also depended on deferred tax assets in their capital calculations. On 17 May 2003, the Japanese government decided to inject ¥1.96 trillion in public funds through Resona Bank. The accompanying share exchange made the state the majority voting shareholder of the holding company, with 68.25% of voting rights, while existing shareholders were substantially diluted. Resona’s previous management was dismissed and replaced. Eiji Hosoya, a former chairman, became identified with the recovery and accepted the leadership role while describing financial-system stabilization as a national priority. The new management concentrated on reducing non-performing loans, restoring earnings and returning public support. In 2004, Resona achieved a profit of ¥386 billion. Management announced a ten-year plan to repay ¥868 billion of the ¥3 trillion in public funds received. The episode became one of the defining cases of Japan’s banking-sector restructuring in the early 2000s. The wider Daiwa legacy also included a serious 1995 incident involving Toshihide Iguchi, a New York-based Daiwa bond trader who incurred approximately $1.1 billion in losses through unauthorized bond-market speculation and falsified bank records. Daiwa was criminally indicted, ordered to leave the United States and closed its U.S. operations in 1996 before withdrawing from overseas banking more broadly by 1998. This event predates Resona Holdings but forms part of the history of one of its principal predecessor institutions. Following stabilization, Resona developed as a domestic banking group centered on Resona Bank and Saitama Resona Bank, with additional trust and regional-banking capabilities. In 2015, it introduced two unusual full-time employee tracks: one designed for staff seeking a no-overtime work pattern and another for people wishing to remain in a single role over their careers. These initiatives reflected an attempt to address work-life balance and career diversity within Japanese banking. Resona Holdings remains the listed parent of the Resona Group.

• 2015

  Alternative employee career tracks introduced

  [1]Resona Holdingsen.wikipedia.org

  Resona creates a no-overtime track and a single-position career track for full-time employees.

• 2004

  Recovery produces a major profit

  [1]Resona Holdingsen.wikipedia.org

  Resona reports a profit of ¥386 billion during its post-bailout restructuring.

• 2003

  Operating-bank consolidation and public rescue

  [1]Resona Holdingsen.wikipedia.org

  Daiwa and Asahi operations are consolidated into Resona Bank, while the government provides ¥1.96 trillion in public funds after a capital crisis.

• 2002

  Resona Holdings name begins

  [1]Resona Holdingsen.wikipedia.org

  Daiwa Bank Holdings is renamed Resona Holdings on 1 October.

• 2001

  Daiwa Bank Holdings is formed

  [1]Resona Holdingsen.wikipedia.org

  Daiwa establishes a holding company for Daiwa Bank and related banking subsidiaries and announces the planned acquisition of Asahi Bank.

• 1992

  Asahi Bank name is adopted

  [1]Resona Holdingsen.wikipedia.org

  Kyowa Saitama Bank changes its name to Asahi Bank.

• 1991

  Kyowa Bank merges with Saitama Bank

  [1]Resona Holdingsen.wikipedia.org

  The merger creates Kyowa Saitama Bank, a predecessor of Asahi Bank and ultimately Saitama Resona Bank.

• 1948

  Daiwa Bank name is adopted

  [1]Resona Holdingsen.wikipedia.org

  The postwar successor to Nomura Bank is renamed The Daiwa Bank.

• 1925

  Securities business separates from the bank

  [1]Resona Holdingsen.wikipedia.org

  The bank’s securities-brokerage operation becomes Nomura Securities.

• 1918

  Osaka Nomura Bank is established

  [1]Resona Holdingsen.wikipedia.org

  The institution that later became part of the Resona lineage is founded as the financing arm of the Nomura business group.

A major Japan-focused banking group combining nationwide corporate and retail banking with regional banking and trust capabilities.

• Commercial and retail banking · 2003

  Resona Bank

  Resona Bank is the group’s principal nationwide operating bank. It serves individuals, small and medium-sized enterprises, large corporations and public-sector customers through retail deposits, payments, lending, housing finance, corporate finance and related banking services. Its operations combine the main banking businesses inherited from Daiwa Bank and Asahi Bank after their 2003 consolidation.

• Regional retail and commercial banking · 2003

  Saitama Resona Bank

  Saitama Resona Bank is the group’s Saitama-focused banking institution. It was created when selected Asahi Bank branches in Saitama and Tokyo were separated during the 2003 consolidation. Its franchise is principally concentrated in Saitama Prefecture and provides regional customers with deposits, payments, loans and other standard banking services.

• Trust and asset-related financial services

  Trust banking services

  Trust-related services are part of the group’s historical and operating scope. The Daiwa predecessor was one of Japan’s major banks to combine ordinary banking and trust functions, and the Resona Group has retained trust-banking capabilities alongside its commercial and retail banking operations.

• 1995

  Daiwa Bank New York trading-loss scandal

  Toshihide Iguchi, a Daiwa bond trader in New York, generated approximately $1.1 billion in unauthorized bond-market losses and falsified bank records. Daiwa was criminally indicted, ordered to leave the U.S. market and closed its American operations in 1996. The incident predates Resona Holdings but concerns a principal predecessor institution.

  Source

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• 2015

  Alternative full-time career tracksStrategy

  Background

  Resona sought to offer more varied employment patterns and improve work-life balance within the traditionally demanding Japanese banking industry.

  Action taken

  The group introduced a no-overtime career track and a career track for employees wishing to stay in a single position throughout their working lives.

  Aftermath

  The policies were described as unusual among Japanese banks when introduced.

  Source

• 2003

  Government-backed recapitalization and management replacementStrategy

  Background

  Resona’s auditor would not accept deferred tax assets needed to support its reported capital position, leaving the bank effectively insolvent and raising concerns about systemic financial stability.

  Action taken

  The Japanese government injected ¥1.96 trillion in public funds. Existing management was dismissed, new management was installed and the state acquired 68.25% of the holding company’s voting rights.

  Aftermath

  Resona reduced non-performing loans, returned to profitability and announced a plan to repay ¥868 billion of the ¥3 trillion in public funds it had received.

  Public capital injection. ¥1.96 trillion (17 May 2003)

  Source

• 2001

  Daiwa Bank Holdings agrees to acquire Asahi BankM&A

  Background

  Japanese banks were consolidating in response to intense competitive and balance-sheet pressures. Daiwa sought to combine with Asahi and create a larger banking group.

  Action taken

  Daiwa Bank Holdings announced a share-exchange acquisition of Asahi Bank and expanded its role as the parent organization.

  Aftermath

  The holding company was renamed Resona Holdings in 2002, and the banks’ operations were consolidated in 2003.

  Source

1. 1Resona Holdingsen.wikipedia.org