A bank in a suburb of Osaka is investing in local development and setting a growth target for its home prefecture, offering a new model for how banks could operate under Japanese Prime Minister Yoshihide Suga’s revitalization drive.
The efforts by Nanto Bank, based in Japan’s ancient capital of Nara, come as Suga calls for regional banks to boost local economies reeling from an aging and dwindling population.
Nara’s tourism industry, for instance, is struggling to draw money from visitors, who typically flock to its World Heritage temples, but do not stay overnight.
Photo: Reuters
The COVID-19 pandemic has added pain for retailers, with Japan closing its doors to most foreign tourists.
Knowing the bank’s fate could be tied to economy of Nara Prefecture, Nanto last year set an ambitious target to boost the prefecture’s GDP by 10 percent over a decade.
“We asked ourselves whether regional banks would be around a decade from now and concluded that without a vibrant regional economy, we can’t stay relevant,” Nanto president Takashi Hashimoto said.
Helping boost tourism infrastructure was a first step, he said.
“We want to turn Nara into a place to stay for a night, rather than a place where people just stop by,” Hashimoto said
Nanto invested in a ¥1.5 billion (US$14.4 million) fund in projects that rehabilitate ancient neighborhoods and turn centuries-old buildings into boutique hotels.
One such example is Maruto Shoyu, a three-centuries-old soy sauce brewery-turned-hotel that in September opened near one of Japan’s oldest shrines worshiping Mount Miwa.
“This area may be underdeveloped, but I took that as a positive because visitors can enjoy Japan’s old, largely unscathed landscape,” Maruto owner Hiroyuki Kimura said.
Before the pandemic, Nara was one of Japan’s most popular tourist destinations and home to renowned sites such as the Great Buddha, built when the area was the Japanese capital during the eighth century.
However, the prefecture has the fewest number of hotel rooms in Japan, and tourists stay in neighboring big cities. Nanto has worked with the prefecture government and firms to create demand on its home turf.
After more than a decade of convincing, JW Marriott this year opened a hotel in Nara, becoming the first luxury foreign brand to set foot in the prefecture. About 14 more hotels have this year opened or plan to do so by 2022, prefecture officials say.
However, achieving Nanto’s GDP target, would not be easy with a tourism-reliant economy crippled by the pandemic.
There is also no guarantee that more tourists would bring in more revenue. Nanto’s investment in the rehabilitation fund is a drop in the ocean compared with total loans to corporate borrowers exceeding ¥5 trillion.
Although Nanto holds a 50 percent market share in Nara, it has for more than a decade failed to generate enough profits from core lending and fee businesses to offset costs.
That means that Nanto must accompany investment with cost cuts, including locally unpopular branch closures.
“The prime minister is prodding regional banks to become stronger,” Hashimoto said. “We’ve been trying to do that for some time. We can’t help the local economy unless we stay lean and mean.”
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure