October 5, 2018 / 9:27 AM / 14 days ago

Japan bank shares rise on hopes for smoother mergers of regional lenders

TOKYO, Oct 5 (Reuters) - Shares in Japanese banks jumped on Friday on expectations that smaller lenders would be able to merge more easily, after the government said it would rethink how it applies antimonopoly laws to mergers in the sector.

The news followed a spat between the antitrust watchdog and financial regulators after a drawn-out review of the merger of Fukuoka Financial and Eighteenth Bank sparked concern that consolidation had become too tough.

But the government is keen for regional banks to merge, in order to survive a declining population and falling earnings.

Shares of Chiba Bank Ltd, 77 Bank Ltd and Shizuoka Bank Ltd rose about 3 percent, helping to make the Topix banking subindex the best sectoral performer. The broader market fell 0.5 percent.

Friday’s news was part of a draft plan aimed at achieving Prime Minister Shinzo Abe’s last major economic reforms during his final term in office, which include boosting companies’ productivity.

The Financial Services Agency has been a vocal supporter of consolidation among regional banks, while the Fair Trade Commission (FTC) has said bank mergers could undermine competition. (Reporting by Junko Fujita; Editing by Chris Gallagher and Clarence Fernandez)

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