Banks must increase profitability -- rather than merely their size -- in order to survive, the chairman and chief executive officer of the newly-privatized Long-Term Credit Bank of Japan said Wednesday.

After a speech at the Foreign Correspondents' Club of Japan, Masamoto Yashiro commented on the industry trend toward megamerger, emphasizing that "size is not the only measure" of a financial institution's success.

While reluctant to comment on specific deals agreed upon over the past year, Yashiro said the LTCB -- whose assets of 10 trillion yen are dwarfed by the planned megabanks' assets of 100 trillion yen or more -- can succeed by increasing profitability.