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Japan Post Bank may branch out to London

Japan Post Bank is considering opening its first overseas office in London by the end of next year, aiming to obtain the latest financial information there to help diversify its asset management schemes, sources said Thursday.

Under the current postal privatization law, Japan Post Bank does not need approval from its supervisory authorities to set up an office overseas. It only has to register with the Internal Affairs and Communications Ministry and the Financial Services Agency.

Japan Post Bank has already begun consultations with the ministry and agency about establishing an office and plans to register after working out various details, the sources said. But it will not be able to conduct standard banking operations. The bank therefore plans to initially send several officials to collect information in London, one of the world's financial centers, they said.

The government wants to pass postal reform bills through the Diet soon but there is currently no prospect of the legislation going through a divided Diet. Given these circumstances, it is highly likely that Japan Post Bank will not be able to start new businesses for a while.

It is possible, however, for the bank to set up an overseas office under current law. The bank therefore intends to set up an office to prepare to diversify its asset management schemes, which are now overly concentrated on government bonds, the sources said. It would do so by such means as purchasing highly secure foreign and corporate bonds, they said.

Japan Post Bank also hopes to nurture personnel with the skills to be involved in overseas operations.

Japan Post Group member Japan Post Service Co. agreed in November to cooperate with China Post, which conducts postal services in China, to deliver parcels at low cost to Chinese consumers who purchase goods through Japanese online shopping.

It has also formed a comprehensive tie-up with France's postal service, La Poste, regarding international distribution and mail, in the hope of accelerating the group's overseas activities.

(Dec. 17, 2010)
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