In foreign visitors, Hokkaido banks see way out of quagmire

November 21, 2017

Sapporo- Since the failure of Hokkaido Takushoku Bank in November 1997, Hokkaido, northernmost Japan, has been shrinking steadily as a market due to its falling population, leaving local bankers acutely anxious about the sustainability of their business.

Seeking a new way out, they are setting their sights on opportunities in tourism promotion, especially for visitors from abroad, with Niseko, a popular ski resort, bustling with foreign skiers and attracting related investments.

Regional banks in Hokkaido have been realigned into two groups.

North Pacific Bank based in Sapporo, capital of Hokkaido, inherited Hokkaido Takushoku Bank's business in Hokkaido. Sapporo-based Hokkaido Bank teamed up with Hokuriku Bank, in the central Japan city of Toyama, to create Hokuhoku Financial Group Inc. in a deal that crossed geographical boundaries due to Hokuriku Bank's historical links to the region of Hokkaido.

After Hokkaido Takushoku Bank went bankrupt, hit hard when excessive lending in the bubble economy period turned sour, North Pacific Bank took over the bigger rival's customers and 1,900 employees. Having also absorbed another regional lender, Sapporo Bank, North Pacific Bank currently has 8 trillion yen in deposits and 6.1 trillion yen in outstanding loans, by far the largest shares in Hokkaido.

Junji Ishii, president of North Pacific Bank, stresses his bank's community-based approach. "We are committed to growth alongside Hokkaido," he said.

The bank is careful not to repeat the mistake of Hokkaido Takushoku Bank, which suffered fatal damage after trying to ride the wave of the bubble economy by pursuing business expansion not in only Hokkaido but also in Japan's main Honshu island. Jiji Press