The Financial Services Agency on Friday approved the merger of Resona Bank and Nara Bank, both of which operate under the wing of Resona Holdings Inc.
Resona Bank said the merger, slated for Jan. 1, will allow it to boost its competitiveness in the Nara area and promote streamlining operations.
The banks' main computer systems will be integrated via the merger.
The government injected the cash-strapped Resona group with E.532 trillion in public funds in June 2003.
Resona Holdings, based in Osaka, swung back into the black and posted a record net profit of E65.59 billion in fiscal 2004 as it completed balance sheet adjustments and pushed ahead with restructuring measures.
Apart from Resona Bank and Nara Bank, Resona Holdings also controls Saitama Resona Bank, Kinki Osaka Bank and Resona Trust & Banking Co.