Lending by Japan’s regional banks grew at triple the pace of the nation’s megabanks as Prime Minister Shinzo Abe acted to rejuvenate areas outside of Tokyo.
Loans by the smaller lenders increased 3.6 percent from a year earlier to 215 trillion yen ($2 trillion) in September, while those by city banks including Mitsubishi UFJ Financial Group Inc. (8306) and Sumitomo Mitsui Financial Group Inc. rose 1.2 percent to 201 trillion yen, according to Bank of Japan data. The gap in funds extended was the largest on record since regional banks overtook city lenders in July 2011.
Abe submitted legislation this month to create jobs outside of Tokyo, aiding regional lenders who need to boost their profitability as local populations shrink, according to Dai-ichi Life Research Institute Inc. Megabanks are looking elsewhere for growth with interest rates near zero, expanding overseas loans while cutting domestic mortgages.
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