Japan Post Corp.'s sketchy road map
(From The Japan Times August 12 issue)

日本郵政会社事業計画の問題点

    In April 2003, the Postal Services Agency was converted into Japan Post, a public corporation, which took over the three services of mail delivery, postal savings and kampo life insurance from the agency.

    Last January, Japan Post created Japan Post Corp., a stock company. A 10-year process of postal-service privatization will begin Oct. 1, 2007. Japan Post Corp. will become a holding company consisting of four units: Yucho Bank, Kampo Life Insurance, a mail delivery firm and an over-the-counter services firm. The entire group will have some 253,200 employees.

    Yucho Bank's assets will total some ¥226.9 trillion. The bank will have 233 branches. Total assets of Kampo Life Insurance will be around ¥114.5 trillion. With 81 branches, it will do business at some 24,000 post offices nationwide. Yucho and Kampo will have greater asset value than the nation's leading bank group and insurance firm, Mitsubishi UFJ Financial Group Inc. and Nippon Life Insurance Co., respectively.

    The road map envisages ¥630 billion in total net profit for the four firms in fiscal 2008, their first year of business. But the forecast does not appear to be based on careful judgment and planning. The group's existing business operations are already experiencing difficulty. Hard hit by the Internet and private-sector mail services, mail delivery, for example, is expected to fall into the red this fiscal year.

    Yucho and Kampo are making profits through stock management, but funds are finding their way into other financial instruments. In fiscal 2005, Kampo suffered a loss in the number of new insurance contracts for the seventh consecutive year.

    Yucho is expected to earn net profits of ¥488 billion in fiscal 2011, excluding earnings from stock management, according to the road map. The fact that Yucho holds a large amount of national bonds may be a source of trouble for it if the interest rate of newly issued bonds rises in the future, because high interest rates would lower the market value of bonds already held by the bank. It is estimated that if the interest rate of a national bond redeemable in 10 years rises to 4 percent, net profits will drop by 88 percent from the original forecast to ¥59 billion.

    Cutting costs should be an important way of increasing profits, but the road map omits a restructuring plan, including how to reduce the number of employees.

    Under the road map, the holding company is to list shares of Yucho and Kampo four years after the privatization, at the latest, and is to sell all of its shares to private investors in the next five years. It is expected, though, that the group will not be able to generate enough profits from existing business activities alone. The road map, therefore, mentions new business activities the new firms hope to start.

    Yucho hopes to eliminate or raise the ¥10 million ceiling imposed on each depositor and to enter business lines such as credit-card services, loan services to individuals and small companies, syndicate loans and sales of other types of insurance. Kampo hopes to raise the ¥10 million ceiling on life insurance per policyholder and to enter the so-called third sector, such as health and damage-loss insurance. The group had hoped to enter the international delivery business, but negotiations on a tieup with a Dutch firm broke down.

    Although the road map presents a rough idea of the direction Japan Post Corp. will take, it is clear that the group is not endowed with people who have expert knowledge in new financial and insurance services, and it has no plans to train such experts. Unless human resources are developed, the road map may end up leading the group to an undesired destination.

    One characteristic of the road map is to concentrate business-operation bases in urban areas. About 1,000 of the 4,700 collection and delivery post offices across the nation will be abolished. Most closures will occur on the countryside.

    The branches of Yucho and Kampo will be concentrated in urban areas. Rather than aim to add a new megabank and a new mega-insurance firm, the group should make the best use of the existing national network and offer services universally to urban and countryside residents. By doing so it should supplement the services rendered by existing private firms.

The Japan Times Weekly: August 12, 2006
(C) All rights reserved

    03年に、郵便、郵便貯金、簡易保険事業を郵便事業庁から引継いで日本郵政公社が設立された。

    今年1月、公社は持株会社、日本郵政会社を設立、07年10月には郵政民営化が始まる。

    日本郵政会社はゆうちょ銀行、かんぽ生命保険、郵便局会社、郵便事業会社（従業員数計25万人）を傘下に持つ。

    ゆうちょ銀は総資産227兆円で、国内最大の金融グループ、三菱UFGフィナンシャルグループを上回る。かんぽ生保は総資産114兆円、国内最大の保険会社、日本生命をしのぐ。

    ゆうちょ銀は2011年度に、株式運用益を除き4880億円の最終利益を予想しているが、大量の国債保有が経営に影響を及ぼす可能性がある。新規発行国債の利率の上昇で、ゆうちょ銀の保有国債の市場価値が下がるおそれがある。

    ゆうちょ銀は、顧客ひとりあたり1000万円の貯金限度額を廃止または増額、クレジットカード、個人・中小企業向け融資業務に進出、かんぽ以外の保険も販売するという。かんぽ生保も、契約者ひとりあたり1000万円の生命保険契約限度額を増額、医療・損害保険などに進出する意向だ。

    ゆうちょ銀とかんぽ生保は支店を都市圏に集中する予定だが、日本郵政グループは既存の全国ネットワークを活用して都市・地方圏住民にサービスを提供すべきだ。そうすることにより、既存の民間企業を補完することができる。