Financial Services Sector

An Expert's View about Banking, Finance and Insurance in Japan

Posted on: 15 Mar 2012

Asset management – Both Japanese individual savers and institutional investors are interested in investment products which give a respectable level of return against a moderate risk profile

Financial Services Sector in Japan Japan is one of the largest financial services markets in the world. Japan Post Bank is the world?s largest bank in deposit terms and the country is home to three of the world?s top 20 banks. Market overview ? A large market with vast accumulation of personal financial assets estimated at approximately ¥1400 trillion (USD17 trillion @ $1= ¥83.15). ? The top 50 institutional investors have over USD12 trillion worth of assets ? Japan is home to many large pension funds, e.g. Government Pension Investment Fund with USD1400 billion which is the world?s largest public pension fund. ? The deposit taking and lending market is still largely occupied by the large Japanese financial institutions. Japan Post Bank is the world?s largest deposit taking institution with a total asset of ¥226 trillion (£1.5 trillion) and Japan is home to three of the world?s top 20 banks. Most international banks have a presence in Japan, e.g. Citibank, HSBC, Barclays and UBS but their activities tend to be more corporate customer focused. Citibank and HSBC are the only foreign banks with high-street retail banking businesses. ? Japanese non-life insurance market is about USD100 billion of which more than 80% is occupied by domestic players, e.g. Tokio Marine. Key opportunities Asset management ? Both Japanese individual savers and institutional investors are interested in investment products which give a respectable level of return against a moderate risk profile. Japanese financial institutions have been entering into alliances with several well-known UK asset management companies to enhance their offering to their clients. Japanese corporate pension funds have been pioneering investment in alternative investments including hedge funds and there are several funds with over 10% of their assets allocated to alternative investment. Crossborder M&A activities ? With the saturation of the domestic market and the strength of the yen, Japanese companies are looking for growth prospects overseas and have been very active in making acquisitions. The total value of outbound M&A transactions by Japan reached ¥3 trillion between April and September 2011 alone. This trend is expected to continue and even expand into SMEs. CFD Trading ? This has been a growing area in response to some of the more finance-savvy risk taking individuals, dubbed as ?Mrs Watanabe?. It is expected to reach ¥800 billion (£6.6 billion) in 2012. Latest export opportunities ? Financial & Professional Services Latest export opportunities - Japan Getting into the market The Financial Services Agency (FSA) is Japan?s supervisory body for the industry and there are regulations governing each strand of financial services activity. Generally speaking, it is a requirement to have a Japanese incorporation and an FSA license for the specific line of business that the company wishes to engage with. However, there are ways for working in partnership arrangement with Japanese companies with legitimate licenses if you are not providing your product/service directly to the end Japanese investor. UKTI in Japan is well placed in facilitating connections with such potential Japanese partner companies. More about doing business in Japan Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ? Naomi Takegoshi, British Embassy Tokyo. Tel: +81 (0)3 5211 1156 or email: Naomi.Takegoshi@fco.gov.uk. Contact your local international trade team Major Events Asset Management Seminar, British Embassy, Tokyo, Date: November, 2012 (TBC) UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events ? Financial & Professional Services Latest events ? Japan Useful links More about OMIS and other UKTI services for exporters
Posted: 15 March 2012