Banking on Growth

Japan Post is banking on its customers for its future growth. Literally.

Japan Post Bank Co, LTD is a wholly owned subsidiary of Japan Post Holdings, LTD. It began operations as a bank on Sep. 1, 2006 and offers more than just standard savings accounts. Japan Post Bank provides a variety of banking services including housing loans, card loans, credit cards and retirement planning. They also offer investment products designed for low cost, long-term holding, encouraging people to save for their future.

Is the banking industry worth getting into with so much competition already out there? Let’s delve into the numbers and find out.

After tax net income for Japan Post Bank for the fiscal year ending March 31, 2012 was 334,850 million yen. That’s the equivalent of $4.181 billion in U.S. dollars. That’s quite a hefty sum after being in operation for less than six years.

Dr. Sheldon Garon, professor of History and East Asian Studies atPrincetonUniversity, stated that such additional services could increase revenue during a time when the Postal Service is facing declining mail volume. Such “creative” ideas could be a way for the organization to experience greater revenues.

Japan Post banked on their customer loyalty to gain market share in the financial services industry, and that gamble paid off. Do you think USPS would have similar success if it did the same?

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3 Comments

  1. Grannybunny

     /  September 4, 2012

    I believe banking is an area that USPS should seriously consider reentering. When I was a child, I had a small savings account through the Postal Service. Postal employees would come to our school once a week to accept our tiny deposits and update our bank books. In order to instill a life-long habit of saving, you need to reach children at a young age. It benefitted us — the schoolchildren — and USPS.

  2. I think a better question to ask, is whether the current banking industry would stand for competition from the US Gov’t. Realistically, there wouldn’t be any growth of the industry – any business we draw would take away from another bank or credit union; there’s no niche yet to be discovered. I believe their lobbyists would ensure that idea met with a quick demise.

    • Grannybunny

       /  September 5, 2012

      I’m not sure that Postal banking would take business away from established banks. There are alot of people who are “unbanked,” who stash money under their mattresses and operate on a cash basis because they have had bad experiences with commercial banks, don’t like their outrageous fees and/or simply don’t trust them. USPS is the most trusted government agency and has higher approval ratings than many private-sector entities. I think it’s worth a try.

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