Japan Post Holdings to cut stake in Japan Post Bank
The Postal Service Privatization Act requires that Japan Post Holdings dispose of its shares in Japan Post Bank and Japan Post Holdings within the earliest possible timeframe, with the aim of disposing of its shares in its entirety, in light of business conditions of the two financial companies and any impact on the ability to fulfill the obligations to ensure universal services.
Further, Japan Post Holdings announced in the “Public Offerings of Three Japan Post Group Companies” published in December 2014 that it intended to sell shares of the two financial companies incrementally so that its ownership ratio will be around 50%, with a goal of, among other considerations, increasing the management flexibility of the two financial companies, securing the Japan Post Group’s unity and demonstrating the Japan Post Group’s comprehensive capabilities.
To meet this goal, Japan Post Holdings announced in Japan Post Group’s medium-term management plan entitled “JP Vision 2025+” in May 2024 that it aims to lower the holding ratio of its equity interest in each of the two financial companies to 50% or less by the fiscal year ending March 31, 2026.
At this time, in light of the above policy, Japan Post Holdings has determined to conduct the offering considering the stock price of Japan Post Bank, the funding needs of Japan Post Holdings, the possible effects on consolidated operating results of Japan Post Holdings, and other factors.
Japan Post Holdings intends to utilize funds procured by the sale of the shares of common stock of Japan Post Bank for growth investments in industries such as logistics, and also for enhancement of shareholder returns and improvement of capital efficiency, and thereby enhance the Japan Post Holdings' corporate value.
After the offering, the sale of a portion of the shares of common stock of Japan Post Bank held by Japan Post Holdings in response to the Off-Auction Share Repurchase, and the contribution by Japan Post Holdings to the Trust of shares of common stock of Japan Post Bank, it is expected that the percentage of voting rights in Japan Post Bank held by Japan Post Holdings will decrease to about 49.90% (before the offering: 61.5%).
Even if the ratio of voting rights held by Japan Post Holdings in Japan Post Bank falls below 50%, Japan Post Bank will still remain a consolidated subsidiary of Japan Post Holdings according to the effective control standard. Japan Post Bank will also remain an important company of Japan Post Holdings, operating its banking business.
After Japan Post Holdings contributes shares of common stock of Japan Post Bank to the Trust such that the ratio of voting rights held by Japan Post Holdings in Japan Post Bank decreases to about 49.90%, Japan Post Holdings will notify the Minister for Internal Affairs and Communications of the disposal of one half or more of its holding of shares in Japan Post Bank pursuant to Article 62, Paragraph (2) of the Postal Service Privatization Act.
From the date on which Japan Post Holdings notifies the Minister for Internal Affairs and Communications, Japan Post Bank will, pursuant to Article 110-2 of the Postal Service Privatization Act, no longer be required to obtain authorization under Article 110 of the Postal Service Privatization Act.
Instead, if Japan Post Bank intends to engage in new businesses or other businesses prescribed in Article 110 of the Postal Service Privatization Act, Japan Post Holdings will be required to determine the details of such business and notify the Prime Minister and the Minister for Internal Affairs and Communications.
At the same time, Japan Post Holdings will, with its ratio of voting rights in Japan Post Bank having fallen below 50%, no longer be a holding company whose subsidiary companies include a bank (bank holding company) as provided in the Banking Act.
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