Resona Is a Super-Regional Japanese Bank Focused on the Greater Tokyo and Osaka Areas

Resona’s lack of large overseas operations is a double-edged sword—unlike the megabanks, it cannot greatly expand lending abroad to compensate for the poor returns available in Japanese commercial banking; but on the other hand, with its domestic focus, Resona effectively escapes increasingly stringent Basel III rules on risk weightings, allowing it to act as a potential consolidator of regional banks even if doing so expands its balance sheet and lowers its capital ratios. Resona’s acquisition of Kansai Urban Banking and Kobe-based Minato Bank in 2017 expanded its assets and revenue by about 20%, and we expect efficiency gains will continue to be achieved as these two units are further integrated with Resona’s Kinki Osaka Bank under the Kansai Mirai Financial Group holding company.