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Banking industry in Japan - statistics & facts

The Japanese banking industry is among one of the largest in the world. In 2019, banks held more than 18 trillion U.S. dollars worth of assets and the banking industry’s ordinary profits amounted to more than four trillion Japanese yen. Due to an ongoing low interest environment and the demographic shift, banks are under pressure to reduce costs, a development that has been further accelerated by the coronavirus pandemic.

Different types of banks and their functions

Commercial banks are regulated under the banking act and supervised by Japan’s primary financial regulator, the Financial Services Agency (FSA). They are commonly divided into city banks, trust banks, regional banks and regional banks II, foreign banks, or other banks.
City banks, which include the three megabanks, MUFG Bank, Sumitomo Banking Corporation, and Mizuho Bank, are the largest banks in Japan. Along with Japan Post Bank, the megabanks are among the leading banks globally by assets. Trust banks offer trust and investment-related services in addition to ordinary banking services. For historical reasons, regional banks are divided into regional banks of the first and second-tier, although performing the same functions. They provide banking services to residents and local small and medium-sized businesses. In addition, there are a large number of regional cooperative financial institutions such as shinkin banks, agricultural cooperatives, and credit unions.

Recent development of the banking sector

The low interest rate policy pursued by the Bank of Japan and declining demand for loans due to the aging population have resulted in falling profits of the banking industry over the past years. Regional banks are particularly affected by the demographic changes and declining economic activity in rural areas and the government has called for consolidations of regional banks to increase their profitability. Prime Minister Suga also addressed the large number of regional banks before taking office in 2020. As of 2021, there were around 100 different regional banks in Japan.
The impact of the coronavirus (Covid-19) pandemic is accelerating the pressure on banks to cut down on costs. Next to expanding overseas, many banks have begun to initiate cost-cutting measures for the coming years to compensate for the decline in revenues. These measures include a restructuring of business operations, a reduction in the number of branches, downsizing, and promoting services online.

Interesting statistics

In the following 7 chapters, you will quickly find the 40 most important statistics relating to "Banking industry in Japan".


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