Japanese banks Sumitomo Trust and Chuo Mitsui Trust Holdings are in merger talks, two sources familiar with the matter said on Tuesday, bringing together two struggling trust banks to better compete in Japan's lucrative asset management industry.
Earlier this month Sumitomo Trust, Japan's fifth-largest bank, completed a deal to acquire to acquire Citigroup's Japanese asset manager Nikko Asset Management for $1.2 billion as it attempts to expand its retail business.
Its smaller rival Chuo Mitsui is about 30 percent owned by the government, which injected public money as part of a bank bailout a decade ago.
The Nikkei business daily said the presidents of Sumitomo Trust and Chuo Mitsui had met and agreed in principle they should merge in early 2011 and would officially inform regulators.
In separate statements both banks denied they had decided on a merger.
Chuo Mitsui will aim to return all of its public funds, totaling 200 billion yen ($2.17 billion), before the merger planned in the spring of 2011, the Nikkei said.