Hiroshi Iwama and Mitsunori Watanabe used to joke about merging their banks in central Japan. When the Bank of Japan introduced negative interest rates last year, things got serious.
The two golfing buddies run Mie Bank Ltd. and Daisan Bank Ltd., two of Japan's roughly 100 regional lenders. For years, these banks dotted around the nation have faced headwinds as rural areas emptied and aged. With the monetary-policy shift, their plight became acute.
"It changed from being something we might have to think about someday to something we had to think about now," Daisan President Iwama, 62, said in an interview. Daisan and Mie, led by Watanabe, also 62, announced plans to merge in February.
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