Japan Post Holdings is planning to sell shares in Japan Post Bank, aiming to raise approximately 600 billion yen ($4.02 billion), according to sources familiar with the matter. This move signifies a step toward reducing the ties between the two entities.
The postal corporation, with the Japanese government among its shareholders, intends to lower its ownership stake to below 50%, providing Japan Post Bank with greater autonomy in its operations by easing regulatory constraints.
This decision aligns with the ongoing corporate governance reforms in Japan, where there is a focus on scrutinizing "parent-child" listings and enhancing free-float share ratios within companies.
The sources suggest that the sale may be finalized this week, with Japan Post Bank also contemplating a share buyback. Shares in Japan Post Bank initially dropped 4% in response to the Reuters report but later recovered slightly to end the day down 1.5%.
While Japan Post entities are exploring different capital policy options, no definitive choices have been made. Japan Post, Japan Post Bank, and Japan Post Insurance entered the market in 2015 through a significant privatization initiative, with Japan Post holding a 61.5% stake in Japan Post Bank and reducing its ownership in Japan Post Insurance to 49.8%.
Notably, Japan Post Bank's net profit for the nine months ending in December increased by 17% to 308 billion yen, buoyed by higher interest rates.
($1 = 149.4300 yen)