Tokyo Kiraboshi Financial Group plans to realign the functions of its group companies, its president, Hisanobu Watanabe, said in a recent interview.

The regional banking group aims to improve its operational efficiency by consolidating its consulting and systems divisions that are currently scattered across subsidiaries. ¡°Comprehensively offering services will be more beneficial to our customers,¡± Watanabe said.

In May, Tokyo Kiraboshi fully repaid ?40 billion in public funds to the Tokyo Metropolitan Government ahead of schedule.

¡°A growth strategy to raise the group¡¯s capital adequacy ratio, which has fallen following the redemption of preferred shares (that had been allotted to the Tokyo government in exchange for the public funds) is required,¡± Watanabe said.

Tokyo Kiraboshi, the parent of Kiraboshi Bank and UI Bank, a digital bank, will consider including the planned realignment of group firms¡¯ functions in its next medium-term business program from fiscal 2027, starting next April.

The medium-term program is expected to call for concentrating the group¡¯s deposit and housing loan operations into UI Bank and allowing Kiraboshi Bank to focus on services for corporate clients, such as support for business succession and overseas expansion.

UI Bank ¡°will be able to offer competitive interest rates,¡± Watanabe said, pointing to its substantially lower operating costs compared with Kiraboshi Bank.

On accelerating business integration moves among regional banks in Japan, Watanabe said, ¡°Now that we have finished repaying public funds, we are now at a stage where we should study collaboration with various companies.¡±

Japanese investment fund Ariake Capital, which targets regional banks, holds an equity stake of nearly 8% in Tokyo Kiraboshi. Watanabe said: ¡°I think this reflects (the fund¡¯s) expectations for us. But improving corporate value is our mission to all stakeholders.¡±