FILE PHOTO: Men walk toward a sign of Japan’s Financial Services Agency in Tokyo August 7, 2014. REUTERS/Toru Hanai/File Photo
October 20, 2017
TOKYO (Reuters) – Japan’s financial regulator is planning to question regional banks that are deemed to have poor business models, sources with direct knowledge of the matter said on Friday.
The Financial Services Agency is concerned some regional banks are neglecting their core lending operations to local businesses. It is worried they instead are relying heavily on securities investment and loans for apartments as rental properties, the sources said.
The agency has been urging regional banks to come up with more sustainable ways to make money as they face diminishing returns on their traditional lending business amid an aging population and ultra-low interest rates.
The sources declined to be named because they are not authorized to speak publicly on the matter.
The FSA did not immediately respond to a request for comment.
(Reporting by Taro Fuse and Takahiko Wada; Editing by Chris Gallagher)
