Why big is not beautiful for Japan's banks
The impending $29bn merger of MTFG and UFJ banks of Japan is a watershed deal by several measures. The product of the country's first contested takeover battle, it will create the world's largest bank and leave three groups dominating the Japanese industry.
The deal also suggests that, after years of struggling with the problems of the past, the bigger survivors of the sector's crisis are starting to focus on longer-term strategies. With their balance sheets cleaned up and the worst of the bad loans mess behind them, expansion is on the agenda.
However, any notion that Japan's “mega-banks” are about to bound back on to the global stage looks premature. Their size is a symptom not of strength but of weakness: as they have grown, their business has shrunk. The industry's recent consolidation has largely been dictated by that trend.
Bank lending has fallen to its lowest level since 1988. Even the economy's latest, short-lived, recovery did not stem the decline, because prime corporate customers have been repaying debt hand over fist. Meanwhile, negative real interest rates have made banks' core business barely profitable. Any increases in their net income have come from reductions in the cost of disposing of bad loans, staff cuts and sales of securities holdings. In such conditions, buying bigger shares of a stagnant market by acquiring competitors has obvious appeal.
However, the process cannot go on indefinitely. Japanese banks' most pressing challenge is to find new sources of growth. Some have sought to do so by heeding official advice to step up lending to smaller companies. But that has not compensated for
the decline in the rest of their business.
The banks' latest mantra is fee-based income. Many are seeking to generate profits by expanding into activities that include consumer finance, asset management, syndicated loans and somewhat disconcertingly derivatives. In theory, all those businesses offer superior returns.
In practice, pickings may be limited. Consumer finance, while growing fast, remains a relatively small market worth about Y10,000bn ($95.8bn), less than 3 per cent of total bank lending. Demand for asset management services is constrained by memories of the equity market's collapse from its late 1980s peak. As for derivatives, they are a notoriously risky business, to which Japanese banks bring no obvious expertise or competitive edge. They are also vulnerable to herd instinct a powerful force in banking, particularly in Japan. The returns to first movers in a market swiftly diminish as others pile in. That has already happened in consumer finance, where fiercer competition has cut lending rates. That leaves the industry three possible scenarios. The most favourable is that the government's predictions of an economic upturn later this year prove accurate. That should lead to an increase in lending volumes and, if accompanied by a gradual rise in interest rates, to fatter margins.
The second option is to venture more aggressively abroad. There should be opportunities to do so while the US economy is strong and China's expansion continues to generate growth elsewhere in Asia. Against that, the weakening of Japanese banks' ties with industry means they can no longer rely on their business to underpin foreign operations. Nor do the banks any longer enjoy the cost of capital advantage over international rivals that helped power their charge overseas in the 1980s.
The third and most worrying scenario is that banks will chase business by relaxing lending criteria. The Bank of Japan's latest survey of senior loan officers suggests that is already happening, although so far on a limited scale. But if the economy remains weak, that temptation could grow. There are risks on the upside, too. If economic recovery revives the depressed property market, another lending stampede could ensue.
These dangers are, admittedly, still remote. Memories of their last crisis are probably still recent enough to induce restraint among lenders. Furthermore, risk management techniques have been sharpened and official supervision strengthened.
Still, banks the world over have an unfortunate habit of repeating past mistakes. If that happened in Japan, corporate gigantism would be no more a guarantee against 日本“超级银行”行得通吗？
从多个角度衡量，日本三菱东京金融集团 (MTFG) 和日联控股（ UFJ ）即将展开的价值 290 亿美元的合并案，都是一个转折点。作为该国首次竞标收购的产物，这将产生世界上最大的银行，并使日本银行业为 3 家集团所垄断。
这项交易还表明，经过与老问题长达数年的斗争，日本银行业危机的大型幸存者开始注重更长期的战略。随着它们的资产负债得到整顿，最严重的坏帐问题得到解决，业务扩张也已提上日程。
不过，任何有关日本“超级银行”即将重返世界舞台的说法，似乎都言之过早。它们的规模代表着弱点而非实力：随着规模日益扩大，业务量却在缩水。该产业日前这起合并基本也未摆脱这一趋势。
银行信贷已滑落至 1988 年以来的最低点。即使该经济体最近这次短暂复苏，也未能抑制下滑势头，因为主要的公司客户一直在迅速偿还债务。与此同时，负的实际利率使银行核心业务几乎无利润可言。任何净收益的增长，都是通过减少在坏帐处理、裁员以及证券出售等方面的成本。在此情况下，通过收购竞争对手，在萧条的市场上占据更大份额的吸引力显而易见。
但这一进程不能无休止地持续下去。日本各银行最紧迫的挑战是寻找新的增长点。一些银行试图通过听从政府建议，增加对较小企业的信贷，来实现这一目标。可这仍无法弥补其他业务的减少。
这些银行最新的秘诀是基于收费的收入。很多银行试图通过向消费信贷、资产管理、银团贷款以及有些令人不安的衍生产品等领域扩展，来增加利润。从理论上说，所有这些业务都会带来超级回报。
实际上，收益或许是有限的。消费信贷尽管增长迅速，但仍然只是一个相对较小的市场，价值约 10 万亿日元（ 958 亿美元），不足银行信贷总额的 3% 。有关证券市场从上世纪 80 年代末的高峰滑落以至崩溃的回忆，遏制了人们对资产管理服务的需求。至于衍生产品，其高风险众所周知，日本各银行在此领域缺乏突出的专长或竞争优势。它们在群居本能方面也很薄弱，而这是银行业的一股强大力量，在日本尤其如此。某个市场的首位进入者的收益随着其他人的蜂拥而入而迅速减少。消费信贷市场已然出现这一局面，日益激烈的竞争导致贷款利率降低。这使该产业可能出现 3 种前景。如果经济确如政府所预测的那样在今年晚些时候反弹，那将是最有利的。这应该会使信贷额出现增长，如果再加上利率的逐渐上升，还会带来丰厚的利润。
第二个选择是冒险向海外更积极的扩张。由于美国经济保持强大，中国经济发展也继续在为其它亚洲国家带来增长，这一前景应该有机会实现。与之相比，日本各银行与产业间关系的日渐弱化，意味着它们无法再依赖其业务来支持海外运营。这些银行也不再享有资本成本优势，而这些相对国际竞争对手的优势在 80 年代协助推动了它们的海外扩张。
第三个也是最令人担忧的前景是，各银行为争取业务而放松信贷标准。日本银行（ Bank of Japan ）最近有关高级贷款官的调查结果表明，这种情况已在发生，尽管迄今为止规模有限。但如果经济继续保持疲软，其诱惑力会增大。经济反弹也会有风险。假如经济复苏使房地产市场摆脱萧条，另一股信贷热会随之出现。
诚然，这些危险仍很遥远。有关上次危机的记忆，或许仍然历历在目，足以警诫贷款人保持克制。另外，风险管理技巧已得到提高，官方监管也得到了强化。
可惜全世界的银行都有一种重蹈覆辙的习惯。如果这发生在日本，企业巨人症既非防止倒闭的保证，也不是创造某种利润的手段。
