Two of Japan’s leading regional maritime lenders are joining forces to create a banking group with more than ¥2.1trn ($12.8bn) in ship and maritime loans.

Iyogin Holdings and Ehime Bank, both based in Matsuyama, signed a basic agreement on Friday to move toward a business integration. The transaction is scheduled to take effect on April 1 next year, subject to shareholder and regulatory approval.

Under the proposed structure, Iyogin will become the parent company and Ehime Bank will become a wholly owned subsidiary through a share exchange. The group said it plans to keep Iyo Bank and Ehime Bank as separate brands operating on a single platform. Together, the two groups hold assets of about ¥12.6trn.

The merger is especially important for shipping finance because both lenders sit at the center of a niche financing market that supports Japan’s coastal and export-linked maritime sector. Iyo Bank has around ¥1.6trn in lending to maritime companies, equal to roughly one-quarter of its total loan book, while Ehime Bank has about ¥500bn of shipping exposure. Although the two banks use slightly different reporting definitions, their combined portfolios exceed ¥2.1trn.

According to figures included in the merger presentation, Iyo Bank is Japan’s third-largest ship finance lender and the 10th largest globally. Ehime Bank is ranked 12th in Japan and 37th worldwide.

Both lenders are central to the Ehime maritime cluster, which has a dense concentration of shipowners, shipyards and equipment manufacturers centered around Imabari. Keeping the two brands in place while linking them on a single platform suggests the group is aiming to preserve local relationships and specialized lending expertise as it brings the businesses together.