Japan Post Bank — BrandWiki

Japan Post Bank

Overview

Japan Post Bank Co., Ltd.

type	Subsidiary
traded as	tyo: 7182
foundation	September 1, 2006
location city	Chiyoda, Tokyo
location country	Japan
key people	Norito Ikeda (president and Representative Executive Officer), Susumu Tanaka (Representative Executive Vice President)‡R1R‡
industry	Financial services
products	Asset management Banking Commodities Credit cards Equities trading Insurance Investment management Mortgage loans Mutual funds Exchange-traded funds Index funds Private equity Risk management Wealth management
parent	Japan Post Holdings (61.50%)
revenue	¥1.85 trillion (2019)
net income	¥266 billion (2019)
aum	‡R2R‡
assets	¥205 trillion (2019)
num employees	12,800 (2019)
homepage	www.jp-bank.japanpost.jp

Japan Post Bank Co., Ltd. (株式会社ゆうちょ銀行) is a Japanese bank headquartered in Tokyo. It is a corporation held by Japan Post Holdings, in which the government of Japan has a majority stake.

It is a major financial institution that started in 1875 as a postal savings system, and that still today continues to operate primarily out of post office branches. It manages over ¥205 trillion of assets and offers services in almost 24,000 branches across Japan. At times in its history, it was the largest financial institution in the world. Since its conception, it has played a significant role in both making economic services to people in Japan and making investments towards the economic and industrial development of the country.

Throughout the vast majority of its history, Japan Post Bank had always been fully government owned and organizationally a part of the postal system. In 2007, a bill was passed to begin the privatization of Japan Post Bank and to create separate companies to handle the distinct responsibilities of Japan Post. The government's sale of its shares in Japan Post Bank and its holding company are still ongoing.

Organizational history

The postal savings system in Japan was started in 1875 by Maejima Hisoka, who is known as "the father of the Japanese postal system."[3]

Historical role in economic development

The importance of the Japanese postal banking system lies not just in providing a savings vehicle and financial services to the people of Japan, but also in the use of the saved funds to promote economic development throughout modern Japan's history.

Founding through World War II

Postal savings were first deposited at Dai-Ichi National Bank, a private bank of issue, but starting in 1878 deposits were made to Ministry of Finance, which became the exclusive destination for deposits in 1884.[6]

This was during the Meiji era, when the Japanese government was focused on encouraging economic and military modernization and avoid foreign debt to remain independent during a period of Western colonialism.[3] A particular concern was foreign debt, as observers in Japan saw indebtedness in countries like China and Egypt leading to their subordination to their creditors.[7]

However, this transformation required large amounts of capital to finance as railways, communications systems and industrial development in a country with a low savings rate because a large majority did not see money as something to be saved and invested.[3][8] Postal banking became a success, and by 1885 it had 1.25 million depositors who could make financial transactions at around 4500 post office branches.[3]

At the beginning, deposits were lent exclusively to the government through the purchase of government bonds.[6] In the 1890s, the government starting creating several banks that could offer industrial loans backed by these deposits.[3][6] However, this type of lending only became notable after 1912, and only by the 1930s did it become the type of system which would become important after the war that lent funds to specific institutions to achieve developmental objectives.[6]

In the lead-up to and during World War II, postal savings were invested in companies involved in wartime production and government bonds, which were issued in significant amounts to finance the war effort.[3][8] This period saw postal savings grow at its highest rate ever, quintupling between 1942 and 1945.[6]

Post-war

The banking system was in complete disarray immediately after the war. The savings rate became negative as depositors withdrew money that had lost significant value during wartime inflation. Records for 52 million accounts were destroyed in war damage. Finally, ¥6 billion of investments by the postal savings system in overseas colonial territories vanished as the government struggled to control the domestic economy.[9]

To promote savings which could be invested into rebuilding the economy, Japanese officials issued relentless statements advocating for austerity and instituted measures to restore confidence in the financial system.[6][9] From the 1950s, postal savings experienced steady growth and increased its market share relative to private banks, thanks to the huge availability of postal offices, attractive financial products offering good returns and preferential tax treatment on deposits from the government.[8][9]