, is a Japanese
bank
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Because ...
headquartered in
Tokyo
Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, with an estimated 37.468 ...
. It is a corporation held by
Japan Post Holdings
is a Japanese publicly traded Conglomerate (company), conglomerate headquartered in Kasumigaseki, Chiyoda, Tokyo, Chiyoda, Tokyo. It is mainly engaged in postal and logistics business, financial window business, banking business and life insuran ...
, in which the government of Japan has a majority stake.
It is a major financial institution that started in 1875 as a
postal savings
Postal savings systems provide depositors who do not have access to banks a safe and convenient method to save money. Many nations have operated banking systems involving post offices to promote saving money among the poor.
History
In 1861, G ...
system, and that still today continues to operate primarily out of post office branches. It manages over ¥205 trillion of assets and offers services in almost 24,000 branches across Japan.
At times in its history, it was the largest financial institution in the world.
Since its conception, it has played a significant role in both making economic services to people in Japan and making investments towards the economic and industrial development of the country.
Throughout the vast majority of its history, Japan Post Bank had always been fully government owned and organizationally a part of the postal system. In 2007, a bill was passed to begin the privatization of Japan Post Bank and to create separate companies to handle the distinct responsibilities of
Japan Post
was a Japanese statutory corporation that existed from 2003 to 2007, offering postal and package delivery services, Retail banking, banking services, and life insurance. It's the nation's largest employer, with over 400,000 employees, and run ...
.
The government's sale of its shares in Japan Post Bank and its holding company are still ongoing.
Organizational history
The postal savings system in Japan was started in 1875 by
Maejima Hisoka, who is known as "the father of the Japanese postal system."
Before he founded the postal system as a whole four years before in 1871, Maeijima had spent time observing the postal system of the United Kingdom and was impressed by its offering of
postal savings
Postal savings systems provide depositors who do not have access to banks a safe and convenient method to save money. Many nations have operated banking systems involving post offices to promote saving money among the poor.
History
In 1861, G ...
services. Adoption by the public was rapid, with 10,000 customers within the first three years of operation.
After World War II, in 1949 the postal savings system was relaunched under the newly formed
Ministry of Posts and Telecommunications Ministry of Posts and Telecommunications may refer to:
* Ministry of Posts, Telecommunications and Information Technology, Bangladesh
* (1949–1998)
* Ministry of Posts and Telecommunications (Japan) (1946–2001)
* Ministry of Posts and Telecommu ...
. As the economy recovered, postal savings grew to tremendous sums, reaching ¥1 trillion in 1960 and ¥100 trillion in 1985.
In 2001, the postal savings system came under the jurisdiction of the Postal Services Agency, which soon reorganized into
Japan Post
was a Japanese statutory corporation that existed from 2003 to 2007, offering postal and package delivery services, Retail banking, banking services, and life insurance. It's the nation's largest employer, with over 400,000 employees, and run ...
in 2003.
Through all these organizational changes, the postal savings services were managed by a single government-owned company that also handled significant postal and insurance divisions. In 2006,
Japan Post Holdings
is a Japanese publicly traded Conglomerate (company), conglomerate headquartered in Kasumigaseki, Chiyoda, Tokyo, Chiyoda, Tokyo. It is mainly engaged in postal and logistics business, financial window business, banking business and life insuran ...
was founded as a government-owned holding company in preparation for the division of these responsibilities into separate companies with partial private ownership, a reorganization which occurred on October 1, 2007.
On November 3, 2015, the shares of Japan Post Bank Company debuted for the first time on the
Tokyo Stock Exchange
The , abbreviated as Tosho () or TSE/TYO, is a stock exchange located in Tokyo, Japan. It is the third largest stock exchange in the world by aggregate market capitalization of its listed companies, and the largest in Asia. It had 2,292 listed co ...
, with about 10% of shares listed.
Historical role in economic development
The importance of the Japanese postal banking system lies not just in providing a savings vehicle and financial services to the people of Japan, but also in the use of the saved funds to promote economic development throughout modern Japan's history.
Founding through World War II
Postal savings were first deposited in the , a private bank that issued currency, but starting in 1878 deposits were made to
Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance.
Lists of current ministries of finance
Named "Ministry"
* Ministry of Finance (Afghanistan)
* Ministry of Finance and Eco ...
, which became the exclusive destination for deposits in 1884.
This was during the
Meiji Restoration
The , referred to at the time as the , and also known as the Meiji Renovation, Revolution, Regeneration, Reform, or Renewal, was a political event that restored practical imperial rule to Japan in 1868 under Emperor Meiji. Although there were ...
, when the Japanese government was focused on encouraging economic and military modernization and avoid foreign debt to remain independent during a period of Western colonialism.
A particular concern was foreign debt, as observers in Japan saw indebtedness in countries like China and Egypt leading to their subordination to their creditors.
However, this transformation required large amounts of capital to finance as railways, communications systems and industrial development in a country with a low savings rate because a large majority did not see money as something to be saved and invested.
Postal banking became a success, and by 1885 it had 1.25 million depositors who could make financial transactions at around 4500 post office branches.
At the beginning, deposits were lent exclusively to the government through the purchase of
government bonds
A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments'','' and to repay the face value on the maturity date ...
.
In the 1890s, the government starting creating several banks that could offer industrial loans backed by these deposits.
However, this type of lending only became notable after 1912, and only by the 1930s did it become the type of system which would become important after the war that lent funds to specific institutions to achieve developmental objectives.
In the lead-up to and during
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, postal savings were invested in companies involved in wartime production and government bonds, which were issued in significant amounts to finance the war effort.
This period saw postal savings grow at its highest rate ever, quintupling between 1942 and 1945.
Post-war
The banking system was in complete disarray immediately after the war. The savings rate became negative as depositors withdrew money that had lost significant value during wartime inflation. Records for 52 million accounts were destroyed in war damage. Finally, ¥6 billion of investments by the postal savings system in overseas colonial territories vanished as the government struggled to control the domestic economy.
To promote savings which could be invested into rebuilding the economy, Japanese officials issued relentless statements advocating for austerity and instituted measures to restore confidence in the financial system.
From the 1950s, postal savings experienced steady growth and increased its market share relative to private banks, thanks to the huge availability of postal offices, attractive financial products offering good returns and preferential tax treatment on deposits from the government.
During the Allied
Occupation of Japan
Japan was occupied and administered by the victorious Allies of World War II from the 1945 surrender of the Empire of Japan at the end of the war until the
Treaty of San Francisco took effect in 1952. The occupation, led by the United States wi ...
, deposits into the postal savings system were allowed to be invested only in government and municipal bonds and private financial institutions were mainly responsible for issuing capital. After a revision in public financing in 1951, due to the need for funds for both rebuilding and the
Korean War
, date = {{Ubl, 25 June 1950 – 27 July 1953 (''de facto'')({{Age in years, months, weeks and days, month1=6, day1=25, year1=1950, month2=7, day2=27, year2=1953), 25 June 1950 – present (''de jure'')({{Age in years, months, weeks a ...
, funds could once again be deposited at the Ministry of Finance and invested in industry through the Fiscal Investment and Loan Program (FILP).
Financial corporations were established by the government to make loans to government and industrial bodies which contributed to rapid industrial development and economic growth.
From the 1953, the funds distributed through FILP totaled one-half to one-third of the national budget.
In 2001, amid a controversy over the privatization of Japan Post Bank and the political influence over the use of FILP funds, a reform was passed which ended the official linkage between FILP and Japan Post Bank deposits, although funds continued to flow in practice.
Privatization
In 2005, a bill to privatize the Japanese postal office was passed, which included the privatization of Japan's postal banking services as a separate company in the same ownership structure as other post office holdings. This process began in 2007.
The bill intended to make Japan Post Bank an independent entity, with the government selling off its shared by 2017, and that it would continue to operate out of post office branches of the
Japan Post Service
, is a Japanese post, logistics and courier headquartered in Tokyo. It is part of the Japan Post Holdings group.
History
Japan Post was formed on 1 October 2007 after the privatisation of its predecessor, Japan Post. On October 1, 2012, Japan ...
, the equivalent company formed for postal services.
The plan for privatization did not proceed smoothly. In 2009, in response to the
financial crisis
A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and man ...
, privatization was halted and savings were encouraged to fund
stimulus spending.
In 2011, after the
Great East Japan Earthquake
Great may refer to: Descriptions or measurements
* Great, a relative measurement in physical space, see Size
* Greatness, being divine, majestic, superior, majestic, or transcendent
People
* List of people known as "the Great"
*Artel Great (born ...
, shares of the postal bank were once again permitted to be sold to help finance rebuilding after the disaster.
In 2015, Japan Post Bank had its shares offered for sale in the Tokyo Stock Exchange for the first time, with about 10% of its shares offered.
Progress towards privatization is still ongoing. At the end of 2019, the government had a 57% ownership stake in Japan Post Holdings,
which owns 90% of Japan Post Bank.
Current operations
![JP Bank 863000-Akita branch 20190707](https://upload.wikimedia.org/wikipedia/commons/6/60/JP_Bank_863000-Akita_branch_20190707.jpg)
In 2019, Japan Post Bank was managing ¥205 trillion of assets. It oversaw approximately 120 million customer accounts, who had access to services in almost 24,000 branches across Japan, most of which are contracted post offices officially belonging to the
Japan Post Service
, is a Japanese post, logistics and courier headquartered in Tokyo. It is part of the Japan Post Holdings group.
History
Japan Post was formed on 1 October 2007 after the privatisation of its predecessor, Japan Post. On October 1, 2012, Japan ...
.
The bank offers a variety of financial products, including deposit accounts, credit cards and loans, investment products, time deposits, and pension accounts.
The bank also provides an important social benefit through making financial services available to rural areas. In parts of Japan where the population is shrinking or has a high proportion of elderly people, Japan Post Bank operating out of a post office may be the only financial institution available.
The bank also manages almost 30,000 ATMs across Japan.
Since many transactions in Japan are still conducted with cash, Japan Post Bank also plays an important role in making ATMs available where other bank branches are encouraging cashless payment or reducing their ATM numbers.
In May 2019, Japan Post Bank launched Yucho Pay, a
smartphone
A smartphone is a portable computer device that combines mobile telephone and computing functions into one unit. They are distinguished from feature phones by their stronger hardware capabilities and extensive mobile operating systems, whic ...
-based payment service that pays a participating store directly from the user's bank account. The service initially launched with approximately 10,000 customers, and also allows for payment or withdrawals through scanning
QR codes
A QR code (an initialism for quick response code) is a type of matrix barcode (or two-dimensional barcode) invented in 1994 by the Japanese company Denso Wave. A barcode is a machine-readable optical label that can contain information about the ...
.
In March 2021, Japan Post announced it would invest ¥150bn ($1.4bn) to acquire a 8.3 percent stake in
Rakuten
() is a Japanese technology conglomerate based in Tokyo, founded by Hiroshi Mikitani in 1997. Centered around Rakuten Ichiba, its businesses include financial services utilizing financial technology, as well as digital content and communicati ...
in order to create a partnership dealing in logistics, mobile and payments businesses.
Controversies
In 2019, an internal investigation revealed thousands of instances where investment products were sold improperly, with 90% of 230 directly managed Japan Post Bank outlets involved. It found that products were sold to elderly customers without confirming their full understanding of the product.
This resulted in an investigation by the
Financial Services Agency
The is a Japanese government agency and an integrated financial regulator responsible for overseeing banking, securities and exchange, and insurance sectors in order to ensure the stability of the financial system of Japan. The agency operates w ...
and a temporary suspension of its sales and marketing for insurance and financial products.
See also
*
Yucho
is an interbank network in Japan, owned and operated by the postal savings division of Japan Post Bank. It counts some 26,519 ATMs, of which 23,500 are at post offices and 2,869 are away from post offices. The number of ATMs correspond to abo ...
Notes
References
External links
Japan Post Bank
{{Authority control
Banks of Japan
Japan Post Holdings
Banks established in 2006
Japanese companies established in 2006
Government-owned companies based in Tokyo
Financial services companies based in Tokyo
Japanese brands
2015 initial public offerings
Postal savings system