An FSA review panel accepted the merger plan of two Niigata credit unions on 2 September, but its members used the hour-long session to press on branch costs, unusual metrics and the assumptions behind the plan. The minutes say those comments indicate where the authority will focus its future monitoring.
The FSA certified the plan on 29 September, and the lenders are seeking a ¥416.4mn grant. The minutes add how the panel reached its view, and the minutes themselves are marked provisional and subject to change.
What panel members pushed on
On branches, members said they could understand, for now, a regional lender's emphasis on stores. They added that keeping stores to win sticky deposits costs money, so the trade-off needs careful thought. They also said that population decline, ageing and digitalisation may one day leave customers unable to visit branches, which calls for constant review of a store-centred strategy.
On disclosure, members asked the lenders to explain their revenue structure and synergies more clearly, since metrics such as adjusted net interest income are unusual. They also asked for key assumptions on loans, rates and expenses so that the plan's feasibility can be judged. The minutes note that these requests are not limited to this case.
On products, members said that expanding sales of investment trusts and similar products, with many elderly customers, requires strong compliance and customer-protection controls.
What management told the panel
The chairs of both credit unions said the smaller partner's area has almost no branches of the larger one. They plan to take the larger lender's problem-solving sales approach and financial products there. They expect higher net interest income mainly from larger loan balances and higher loan rates, with some coming from deposits at a central institution. On deposits, they said they would run regional campaigns aimed mainly at sticky personal accounts.
They also said customers of the smaller partner welcome the merger and that no staff have left. On the branch network, they said the basic network stays while some of the smaller partner's branches move, because they see face-to-face service as a credit union's strength.
The numbers behind the caution
The plan digest, dated August 2026, targets a merger around 24 November 2026. It shows combined core financial services profit of minus ¥1.98bn in the year to March 2026. With merger synergies, the loss narrows to minus ¥850mn by March 2032, and the plan expects the deficit to continue. It credits ¥530mn of synergy by then: ¥388mn top-line and ¥142mn cost.
Branch-related measures are the largest cost item, at ¥610.4mn of ¥916.1mn in total spending, and the grant sought for them is ¥277.5mn. The measures include turning one branch into a satellite of another and moving several others. They also include a new head-office building for the smaller partner.