Mergers fail to dent bear outlook for banks sector

Fund managers are bearish on the fundamentals of Japanese banks despite merger activity in the sector. Last week a merger between Sanwa, Tokai and Asahi banks fell through. Although Sanwa and Tokai said they would still go ahead with the merger, Asahi is searching for different partners. Philip Whittome, head of Investec Guinness Flight's Japan desk, says he does not know what the banks expect to get out of these mergers but there has been growing investor disappointment. He adds the three-way merger between the Dai-Ichi Kangyo Bank (DKB), Fuji Bank, and Industrial Bank of Japan (IBJ) i...