Sumitomo Trust & Banking Co. and Chuo Mitsui Trust Holdings Inc. agreed to merge to create Japan's fifth-largest bank as they seek to boost profit and brace for tougher capital requirements.

The lenders plan to set up a listed holding company in April 2011, under which Osaka-based Sumitomo Trust and Tokyo-based Chuo Mitsui will place their operations, they said in a statement Friday. They haven't determined a merger ratio.

The transaction, creating a bank with assets of ¥36.3 trillion based on figures as of June 30, will be nation's largest banking merger since the creation of Mitsubishi UFJ Financial Group Inc. in 2005.

Six regional banks have agreed to merge in Japan since 2008 in an economy forecast to shrink 5.7 percent this year.

"It's hard to see a growth story here," said Yuichi Chiguchi, who helps manage about $8.6 billion at Diam Co. in Tokyo. "If the banks undertake aggressive restructuring or cost-cutting to clean up their balance sheets, they may be able to secure a higher capital ratio, but that seems unlikely."

The combined company will be called Sumitomo Mitsui Trust Holdings Inc. and be listed on the Tokyo Stock Exchange, the Osaka Securities Exchange and the Nagoya Stock Exchange, according to Friday's statement.

The company's chairman will come from Sumitomo Trust and the president from Chuo Mitsui.

Sumitomo Trust had a Tier 1 capital ratio of 8.47 percent at the end of June, based on international banking standards. Chuo Mitsui's stood at 9.31 percent, based on domestic standards used by the company. Citigroup Inc. had a Tier 1 capital ratio of 12.7 percent at the end of September.

Financial services minister Shizuka Kamei said in October that Japanese banks need to strengthen their capital, while a month earlier global leaders at the G20 Pittsburgh Summit said they'll require lenders to hold more capital by the end of 2012.