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 can't greatly expand lending abroad to compensate for the poor returns available in Japanese commercial banking. However, its domestic focus allows Resona to effectively escape 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. The acquisition of Kansai Urban Banking and Minato Bank in 2017 expanded Resona's assets and revenue by about 20%. We expect efficiency gains will continue as the former Kansai Urban operations are further integrated with Resona’s former Kinki Osaka operations under Kansai Mirai Bank, and as Kansai Mirai and Minato Bank further integrate their systems with the overall Resona group.