Shinsei Bank and Aozora Bank Consider Merger

TOKYO (Reuters) – Shinsei Bank (8303.T) and Aozora Bank (8304.T) are in talks to merge in a deal that would create Japan’s sixth-largest bank by assets, two people with knowledge of the matter told Reuters.

The Nikkei business daily reported earlier on Saturday on the merger talks, saying the two banks were looking to integrate their operations in the summer of 2010.

Shinsei and Aozora have been hit hard by their exposure to the U.S. subprime crisis and other soured overseas investments, as well as suffering from the sharp downturn in the Japanese economy. (Reporting by Taro Fuse; Writing by Nathan Layne; Editing by Hugh Lawson)