Daiwa Bank Resona was formed as the
Osaka Nomura Bank in 1918. This entity served as the financing arm of the Nomura
zaibatsu founded by
Tokushichi Nomura. Its securities brokerage operation separated in 1925 to form
Nomura Securities, now Japan's largest securities company. The bank was renamed
Nomura Bank in 1927 and became the main bank for the
Osaka Prefecture government in 1929, immediately following the
1929 stock market crash. The Nomura
zaibatsu was dissolved in the wake of World War II, and the bank was renamed to
The Daiwa Bank in 1948. It was one of the only major banks that offered both banking and trust services during the postwar era. The bank was criminally indicted in November 1995 and ordered to leave the U.S. market; in the wake of this incident, there were talks of a merger between Daiwa and
Sumitomo Bank, which would have created the world's largest bank at the time. Daiwa closed its United States operations in 1996, and eventually pulled out of overseas banking entirely in 1998. However, Asahi pulled out of these talks later that year. The eventual Sanwa-Tokai merger formed
UFJ Bank.
Resona merger Daiwa formed a
bank holding company,
Daiwa Bank Holdings, in December 2001 to serve as the parent entity of Daiwa, Kinki Osaka Bank and Nara Bank. Later that month, Daiwa announced that Asahi Bank would be acquired by Daiwa Bank Holdings in a share swap transaction, forming the fifth-largest banking group in Japan. The company was renamed
Resona Holdings, Inc. on 1 October 2002. Daiwa and Asahi consolidated operations on 1 March 2003, with most of their assets combined to form Resona Bank. 100 Asahi Bank branches in Saitama and three branches in Tokyo were moved to a separate entity, Saitama Resona Bank.
Post-merger developments In early 2003, the Resona Group's capital adequacy ratio fell dangerously low. The bank had proposed to maintain its capital adequacy ratio above the legal limit by factoring in deferred tax assets. However, the value of these deferred assets could only be claimed if the company turned a profit in the future. Due to the bank's profit outlook being so dim, Resona's auditor refused to certify the company's financial statement if the deferred tax assets were included. Without being able to count the deferred tax assets, the bank was effectively insolvent. The Resona case threatened to cripple the entire country's financial system, since the other major banks were also counting on deferred tax assets to maintain their capital adequacy ratios. On 17 May 2003, the Japan government decided to inject 1.96 trillion yen in public funds into the Resona Group through Resona Bank. This move, through the share exchange agreement between the bank and the holding company, effectively
nationalized the bank, since the government emerged as the company's majority shareholder, holding 68.25% of
voting rights of the holding company, while the holdings of existing shareholders were greatly diluted. The existing management was sacked and a new management was installed. A Former Resona Chairman,
Eiji Hosoya, is credited with leading the bank's revival following the 2003 bailout. ==Group companies==