Japan Post Holdings is preparing to sell shares in its banking subsidiary, Japan Post Bank, in a deal that could raise approximately 600 billion yen ($4.02 billion), according to Reuters.
The sale would reduce Japan Post Holdings’ stake in the bank to below 50%, marking a significant step in loosening the ties between the two entities. The move is part of broader corporate governance reforms in Japan, where “parent-child” listings—where a parent company holds a controlling stake in a listed subsidiary—are under scrutiny.
Reducing Japan Post Holdings’ stake in Japan Post Bank would give the bank more operational freedom, as restrictions designed to protect private companies would be relaxed.
The deal could be finalised as early as this week, the sources said. Additionally, Japan Post Bank is reportedly planning to launch a share buyback programme, further signaling its efforts to enhance shareholder value.
Market reaction
Following the Reuters report, shares in Japan Post Bank fell by 4% before recovering slightly to close down 1.5%. Japan Post Holdings and Japan Post Bank issued statements confirming that they are considering various capital policy options but emphasized that no final decisions have been made.
Japan Post Holdings, along with its subsidiaries Japan Post Bank and Japan Post Insurance, went public in 2015 in what was Japan’s largest privatisation in nearly three decades. Since then, Japan Post Holdings has gradually reduced its stakes in both subsidiaries. In 2023, it lowered its ownership in Japan Post Bank to 61.5% and has already decreased its stake in Japan Post Insurance to 49.8%.
Japan Post Bank has shown strong financial performance, with net profit for the nine months ending December 2023 rising 17% to 308 billion yen. The increase was driven by higher interest rates, which boosted the bank’s profitability.
The sale of Japan Post Bank shares is expected to attract significant investor interest, given the bank’s robust financial performance and the ongoing reforms in Japan’s corporate governance landscape. By reducing its stake below 50%, Japan Post Holdings aims to align with global standards of corporate governance and improve the bank’s operational flexibility.
