Two Japanese trust banks to merge

TOKYO (AFP) - – Sumitomo Trust & Banking Co. and Chuo Mitsui Trust Holdings announced Friday they had agreed on a merger to create Japan's largest trust bank sitting on assets of two trillion dollars.

The deal is the latest attempt by Japan's financial firms to adapt to a tough outlook due to the weak economy, ageing society and shrinking population.

The two banks have reached a basic agreement to integrate their management in April 2011 and merge their operations into a single trust bank the following year. The merger ratio was not announced.

Together they would have assets under under custody of 181 trillion yen (2.0 trillion dollars).

The financial crisis "has led to major structural changes in the global economy and society and has made clients face more advanced and complex issues in managing their assets," they said in a joint statement.

"Japans low birthrate and ageing society, as well as the maturing of the economy, make it a pressing challenge to facilitate the flow of Japans abundant personal financial assets, pensions and other funds to promising fields and to realise sustainable economic growth."