2ND LD: 4 Sumitomo Mitsui group credit firms to integrate in 2009.
(EDS: ADDING 9TH-13TH GRAFS)
Sumitomo Mitsui Financial Group Inc. plans to consolidate four consumer credit firms -- Sumitomo Mitsui Card Co., OMC Card Inc., Central Finance Co. and Quoq Inc. -- under its wing around the spring of 2009, informed sources said Thursday.
The aim is to reduce costs and improve competitiveness by banding the firms together to form one of Japan's largest consumer credit firms, the sources added.
The deal is expected to be announced Friday.
Plans call for OMC Card, Central Finance and Quoq to first combine their operations, after which Sumitomo Mitsui Card is expected to join them, according to the sources.
In May last year, Sumitomo Mitsui Financial bought into Central Finance, as a result of which the former group firm of Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui's rival banking group, joined Sumitomo Mitsui's fold.
Central Finance and Quoq, another Sumitomo Mitsui group firm, had earlier decided to merge their businesses by April 2009.
Last summer, Sumitomo Mitsui Financial purchased about 30 percent of outstanding shares in OMC Card from major retailer Daiei Inc.
Merger discussions then arose between OMC Card, Central Finance and Quoq, the sources said.
Consumer credit companies are struggling amid tighter regulations and their customers' demand for refunds over the so-called ''gray zone'' interest between two legal caps on lending rates.
The Supreme Court ruled the gray zone above the lower cap of 20 percent as illegal in early 2006 and the Diet enacted a bill later in the year to unify the lending rate caps into the lower one in a few years.
Megabank groups including Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group as well as Sumitomo Mitsui have been trying to turn around their consumer credit operations.
Mizuho Bank has cemented its ties with credit card issuer Credit Saison Co. by signing a broad-based tie-up deal.
Earlier this month, Mitsubishi UFJ announced that it will become the leading shareholder in Jaccs Co. by boosting its interest in the consumer finance firm to 20.00 percent from 4.66 percent as of Sept. 30. It also plans to turn credit card company Mitsubishi UFJ Nicos Co. into a wholly owned subsidiary later this year.
|Printer friendly Cite/link Email Feedback|
|Publication:||Japan Weekly Monitor|
|Date:||Mar 2, 2008|
|Previous Article:||Tokyo Stock Exchange closing indexes.|
|Next Article:||LEAD: Tokyo stocks slump on weak Japan industrial data, stronger yen.|