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No. 357, June 1999

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American Companies in Japan


FINANCIAL SERVICES

Longtime partners CIGNA CORP. and YASUDA FIRE & MARINE INSURANCE CO., LTD. have finalized a previously announced agreement to provide pension and Japanese-style mutual fund products to businesses and individuals (see Japan-U.S. Business Report No. 352, January 1999, p. 15). Equally owned YASUDA KASAI-CIGNA SECURITIES CO., LTD. will begin operations in October, leveraging the distribution network of the country's number-two property and casualty insurer and CIGNA's experience in retirement and investment plans. The joint venture's ultimate goal is to serve Japan's defined contribution pension market. Legislation authorizing this form of retirement system is expected to pass in FY 2000. Meanwhile, Yasuda Kasai-CIGNA Securities clients will be able to make post-tax investments in mutual funds run by asset management subsidiaries of CIGNA and Yasuda Fire & Marine as well as in funds offered by independent asset managers.

Taking advantage of a December 1998 change in Japan's financial regulatory framework, the securities subsidiary of MORGAN STANLEY DEAN WITTER & CO. registered as a lender to corporate and institutional clients. The first such company to do so, it now is positioned to provide a broader and more flexible range of services to its big customers.

BEAR STERNS COS. INC. will advise TOKYO SOWA BANK, LTD. how to tap foreign money to boost its capital/asset ratio. The midsized regional bank, which operates in the Tokyo area, now has a capital/asset ratio of just 2.4 percent, well below the 4 percent minimum required for domestically focused banks. With the help of the New York City investment bank, however, Tokyo Sowa Bank hopes to raise this figure above the threshold.

An exchange rate of ¥122=$1.00 was used in this report.aaaaaa

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