The Dai-Ichi Bank (, ), known from its establishment in 1873 to 1896 as Dai-Ichi Kokuritsu Bank () was a major Japanese bank headquartered in

Tokyo Tokyo, officially the Tokyo Metropolis, is the capital of Japan, capital and List of cities in Japan, most populous city in Japan. With a population of over 14 million in the city proper in 2023, it is List of largest cities, one of the most ...

. Founded and developed for several decades by Shibusawa Eiichi, it expanded into

Korea Korea is a peninsular region in East Asia consisting of the Korean Peninsula, Jeju Island, and smaller islands. Since the end of World War II in 1945, it has been politically Division of Korea, divided at or near the 38th parallel north, 3 ...

as early as 1878, and became that country's dominant bank as well as its bank of issue in the early 1900s, before handing over that role to the newly established

Bank of Korea The Bank of Korea (BOK; ) is the central bank of South Korea and issuer of South Korean won. It was established on 12 June 1950 in Seoul, South Korea. The bank's primary purpose is price stability. For that, the bank inflation targeting, targ ...

in 1909. It remained one of the main Japanese banks together with

Mitsubishi Bank The was a major Japanese bank headquartered in Tokyo, founded in 1880. For much of the 20th century it was one of the largest Japanese banks, together with Dai-Ichi Bank, Mitsui Bank, Sumitomo Bank, and Yasuda / Fuji Bank. It served as the ma ...

Mitsui Bank was a major Japanese bank from 1876 to 1990. The home bank of the Mitsui conglomerate, it was one of the largest Japanese banks for much of the 20th century, together with Dai-Ichi Bank, Mitsubishi Bank, Sumitomo Bank, and Yasuda / Fuji Bank. I ...

, Sumitomo Bank, and Yasuda / Fuji Bank. In 1943, Dai-Ichi Bank merged with

to form

Teikoku Bank was a major Japanese bank from 1876 to 1990. The home bank of the Mitsui conglomerate, it was one of the largest Japanese banks for much of the 20th century, together with Dai-Ichi Bank, Mitsubishi Bank, Sumitomo Bank, and Yasuda / Fuji Bank ...

(, ). In 1948, Dai-Ichi Bank was spun off again from Teikoku, which retook the Mitsui name in 1954. In 1971, it merged with Nippon Kangyo Bank to form the Dai-Ichi Kangyo Bank, subsequently Japan's largest bank and a predecessor to

Mizuho Financial Group The , known from 2000 to 2003 as Mizuho Holdings and abbreviated as MHFG or simply Mizuho, is a Japanese banking holding company headquartered in the Ōtemachi district of Chiyoda, Tokyo, Japan. The group was formed in 2000-2002 by merger of Dai- ...

Beginnings

In 1872, the

Mitsui is a Japanese corporate group and '' keiretsu'' that traces its roots to the ''zaibatsu'' groups that were dissolved after World War II. Unlike the ''zaibatsu'' of the pre-war period, there is no controlling company with regulatory power. Ins ...

and Ōno merchant families created the Mitsui-Ōno Joint Bank as a

joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ...

between their respective financial operations. To manage it, they hired Shibusawa Eiichi, until then an official at the Ministry of Finance where he had drafter the National Banking Decree of December 1872 under the leadership of minister Ōkubo Toshimichi. In 1873, with the decree's entry into force allowing the licensing of privately owned banks of issue, Shibusawa reorganized the venture and obtained from the government a license to operate it as the first of all Japan's national banks, thus its original name ''Tokyo Dai-Ichi Kokuritsu Ginkō'' () It was also the country's first joint-stock company or

kabushiki gaisha A or ''kabushiki kaisha'', commonly abbreviated K.K. or KK, is a type of defined under the Companies Act of Japan. The term is often translated as "stock company", "joint-stock company" or "stock corporation". The term ''kabushiki gaisha'' in ...

. Dai-Ichi National Bank issued 753,195 yen in its own banknotes in 1873, and its banknote circulation peaked at over 1 million yen by mid-1874. After that, it struggled to maintain its notes in circulation because many of them were redeemed in specie. In 1875, the Ōno family was bankrupted. Mitsui Hachirōemon became the bank's dominant shareholder, but he was unwilling to use it as a vehicle for his business strategy and was further annoyed by the forced transfer of his firm's iconic building to the Dai-Ichi Bank at the instigation of the Japanese government. By end-1876, the bank was still majority-owned by the Mitsui family but it was increasingly taking an independent course under the leadership of Shibusawa who had meanwhile built up a significant minority stake. Unlike most of Japan's early joint-stock banks who were fiercely local, Dai-Ichi also managed to attract equity investors from a wide geographical area. It simultaneously diversified its deposit base from an initial heavy reliance on public funds; these represented 70 percent of all deposits in late 1875, but only 20 percent a year later. Dai-Ichi, like all other national banks, was stripped of its Japanese banknote issuance privilege in 1883, shortly after the establishment of the

Bank of Japan The is the central bank of Japan.Louis Frédéric, Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It is headquartered in Nihonbashi, Chūō, Tokyo, Chūō, Tokyo. The said bank is a corporate entity ...

Expansion in Korea

The

Japan–Korea Treaty of 1876 The Japan–Korea Treaty of 1876 (also known as the Japan–Korea Treaty of Amity in Japan and the Treaty of Ganghwa Island in Korea) was made between representatives of the Empire of Japan and the Joseon, Kingdom of Joseon in 1876.Chung, Young ...

opened a period during which Japan enjoyed a near-monopoly on Korea's overseas trade, as the country's trade with Japan expanded dramatically while its trade with China collapsed. Dai-Ichi rapidly seized that opportunity and secured a dominant position in the country’s financial sector, thanks to Japanese Finance Ministry protection. It opened a first Korean branch in

Busan Busan (), officially Busan Metropolitan City, is South Korea's second list of cities in South Korea by population, most populous city after Seoul, with a population of over 3.3 million as of 2024. Formerly romanized as Pusan, it is the economi ...

in June 1878, for which the Japanese government lent it half of the 100,000 yen needed for start-up expenses. This episode has been described as the starting point both of Japanese-Korean financial relations and of modern banking in Korea. Further branches followed in

Wonsan Wonsan (), previously known as Wonsanjin (), is a port city and naval base located in Kangwon Province (North Korea), Kangwon Province, North Korea, along the eastern side of the Korean Peninsula, on the Sea of Japan and the provincial capital. ...

(May 1880),

Incheon Incheon is a city located in northwestern South Korea, bordering Seoul and Gyeonggi Province to the east. Inhabited since the Neolithic, Incheon was home to just 4,700 people when it became an international port in 1883. As of February 2020, ...

(November 1882),

Seoul Seoul, officially Seoul Special Metropolitan City, is the capital city, capital and largest city of South Korea. The broader Seoul Metropolitan Area, encompassing Seoul, Gyeonggi Province and Incheon, emerged as the world's List of cities b ...

(1888),

Mokpo Mokpo (; ) is the List of cities in South Korea, third largest and most densely populated city in South Jeolla Province, South Korea, located at the southwestern tip of the Korean Peninsula, close to Yudal mountain. Mokpo has frequent high-speed ...

(1898), and

Chinnampo Nampo (North Korean official spelling: Nampho; ), also spelled Namp'o, is a major city in North Korea which is the country's fourth-largest by population. The city is an important seaport in the country as it lies on the northern shore of the T ...

and

Gunsan Gunsan (; ), also romanized as Kunsan, is a Administrative divisions of South Korea, city in North Jeolla Province, South Korea. It is on the south bank of the Geum River just upstream from its exit into the Yellow Sea. It has emerged as a high-t ...

(1903). Tariffs were not specified in the 1876 treaty and were only agreed upon in 1883. On that occasion Paul Georg von Möllendorff, a German adviser to the Korean royal court, negotiated a $24,000 loan (denominated in Mexican silver dollars) from Dai-Ichi National Bank to finance the setup costs of the Korean Customs Service, which was collateralized with future tariff revenue. That same year, Dai-Ichi Bank received permission from the Japanese government that its bills be used to pay for customs duties in Korea's open ports. In February 1884, Dai-ichi Bank and von Möllendorff agreed that the bank's branches would collect all local customs duties on behalf of the

Joseon dynasty Joseon ( ; ; also romanized as ''Chosun''), officially Great Joseon (), was a dynastic kingdom of Korea that existed for 505 years. It was founded by Taejo of Joseon in July 1392 and replaced by the Korean Empire in October 1897. The kingdom w ...

government. Dai-Ichi Bank's $24,000 loan to the Korean government was disbursed simultaneously; it was followed by a second loan in January 1895 and a third in March 1900. In May 1886, Dai-Ichi Bank secured funding from the newly established Bank of Japan to collect

gold Gold is a chemical element; it has chemical symbol Au (from Latin ) and atomic number 79. In its pure form, it is a brightness, bright, slightly orange-yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal ...

and

silver Silver is a chemical element; it has Symbol (chemistry), symbol Ag () and atomic number 47. A soft, whitish-gray, lustrous transition metal, it exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. ...

in Korea for the benefit of Japan, which at the time still lacked sources of precious metals. Purchases of gold became an important component of Dai-Ichi Bank's Korean business, with yearly volumes fluctuating between 2,400 and 3,600 tons between 1901 and 1907. Towards the end of the 19th century, Dai-Ichi Bank's near-monopoly on banking activities in Korea had been eroded by the belated entry of other Japanese banks, such as the Eighteenth Bank from 1890 onwards, and also by the gradual appearance of homegrown Korean banks such as Hanseong Bank, established in 1897. Instead, Dai-Ichi Bank played an increasingly central role in the reform of Korea's monetary system, for which the Korean government became acutely dependent on Japanese actions.. In mid-1898, Shibusawa traveled to Korea to negotiate the revocation of an earlier prohibition by the newly proclaimed

Korean Empire The Korean Empire, officially the Empire of Korea or Imperial Korea, was a Korean monarchical state proclaimed in October 1897 by King Gojong of the Joseon dynasty. The empire lasted until the Japanese annexation of Korea in August 1910. Dur ...

of using stamped silver yen coins that had become important for the bank's business. At the turn of the century, Dai-Ichi Bank started to issue sight bills to facilitate its collection of customs duties, and in October 1901 applied for permission from the Japanese Finance Ministry for its Korean branches to issue yen-denominated banknotes, which the ministry granted in May 1902. Meanwhile, Dai-Ichi Bank remained the dominant financier of the Korean government, despite

Emperor Gojong Gojong (; 8 September 1852 – 21 January 1919), personal name Yi Myeongbok (), later Yi Hui (), also known as the Gwangmu Emperor (), was the penultimate List of monarchs of Korea, Korean monarch. He ruled Korea for 43 years, from 1864 to 19 ...

's attempt to foster an alternative system with the foundation of Daehan Cheon-il Bank in early 1899. In the autumn of 1900, difficult loan negotiations with the Korean government required another trip to Korea by Shibusawa; Dai-Ichi Bank made more loans to the Korean Empire in the early 1900s. In total, the share of Korea in the bank's total loan book rose from 2 percent in 1879 to over 15 percent by in 1905, and its share of Dai-Ichi Bank's total profits reached 29 percent in 1905. Attempts by the embattled Korean state to resist Dai-Ichi's monetary role in Korea proved futile, and crumbled as the

Russo-Japanese War The Russo-Japanese War (8 February 1904 – 5 September 1905) was fought between the Russian Empire and the Empire of Japan over rival imperial ambitions in Manchuria and the Korean Empire. The major land battles of the war were fought on the ...

resulted in the elimination of the last check against Japanese dominant influence in the country. In early 1903, officials in the Korean capital attempted to prohibit the use by Koreans of Dai-Ichi's banknotes, but had to rescind the order after a fortnight. In January 1905, the Korean authorities conceded unlimited circulation of Dai-Ichi banknotes in exchange for another loan, which practically designated Dai-Ichi Bank as the

central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

of the Korean Empire. Dai-Ichi's banknote issuance expanded rapidly, from a total under 5 million years over the three years 1902–1904 to over 8 million in 1905 alone, then gradually increasing to reach nearly 12 million yen in 1909. Following the Japan–Korea Treaty of 1905 which reduced the Korean Empire to a Japanese protectorate, the dominant status of Dai-Ichi Bank in Korea became a matter of renewed debate, this time among Japanese. In August 1907, Japan's Resident-General

Itō Hirobumi Kazoku, Prince , born , was a Japanese statesman who served as the first prime minister of Japan from 1885 to 1888, and later from 1892 to 1896, in 1898, and from 1900 to 1901. He was a leading member of the ''genrō'', a group of senior state ...

and Shibusawa agreed that Dai-Ichi's operations should be eventually transferred to a dedicated central bank for the territory. A debate ensued between Itō and the Japanese finance ministry, with the latter favoring the creation of a Korean branch of the Bank of Japan over that of a stand-alone colonial institution over which Tokyo would have less direct control. Eventually Itō's position won the debate, and the finance ministry rationalized the decision as preferable to preserve financial stability. The new institution, originally named the Bank of Korea (, ), was created by Japanese law of July 1909, largely modelled on the

Bank of Taiwan The Bank of Taiwan (BOT; ) is a commercial bank headquartered in Taipei, Taiwan. It was established in 1897-1899 as a Japanese policy institution or "special bank", similarly as the Nippon Kangyo Bank (est. 1897), Hokkaido Takushoku Bank (est. ...

(est. 1898) but with a greater role for Itō in its governance than in the Taiwanese precedent. Dai-Ichi Bank kept branches in Seoul and Busan but later in 1909 transferred all its other Korean branches and offices to the Bank of Korea, totalling 220 regular employees and 121 support staff, in Chinnampo, Gunsan, Incheon, Mokpo and Wonsan (see above) plus those established in the meantime in

Daegu Daegu (; ), formerly spelled Taegu and officially Daegu Metropolitan City (), is a city in southeastern South Korea. It is the third-largest urban agglomeration in South Korea after Seoul and Busan; the fourth-largest List of provincial-level ci ...

Hamhung Hamhŭng (''Hamhŭng-si''; ) is North Korea's List of cities in North Korea, second-most populous city, the capital of South Hamgyong, South Hamgyŏng Province and the 16th largest city in the Korea, Korean Peninsula. Located in the southern part ...

Kaesong Kaesong (, ; ) is a special city in the southern part of North Korea (formerly in North Hwanghae Province), and the capital of Korea during the Taebong kingdom and subsequent Goryeo dynasty. The city is near the Kaesong Industrial Region cl ...

, Kyongsong,

Masan Masan () is an administrative region of Changwon, a city of South Gyeongsang Province, South Korea. It was formerly an independent city from 1949 until 30 June 2010, when it was absorbed to Changwon along with Jinhae District, Jinhae. Masan was ...

Pyongyang Pyongyang () is the Capital city, capital and largest city of North Korea, where it is sometimes labeled as the "Capital of the Revolution" (). Pyongyang is located on the Taedong River about upstream from its mouth on the Yellow Sea. Accordi ...

Songjin Kimch'aek (), formerly Sŏngjin (Chosŏn'gŭl: 성진, Hancha: 城津), is a city in North Hamgyong Province, North Korea. It was an open port in 1899. It has a population of 207,699. Etymology The city received its current name in 1951 during ...

, and across the

Yalu River The Yalu River () or Amnok River () is a river on the border between China and North Korea. Together with the Tumen River to its east, and a small portion of Paektu Mountain, the Yalu forms the border between China and North Korea. Its valle ...

Andong Andong () is a Administrative divisions of South Korea, city in South Korea, and the capital of North Gyeongsang Province. It is the largest city in the northern part of the province with a population of 167,821 as of October 2010. The Nakdong Ri ...

. The transfer also included the new building initially planned by Dai-Ichi Bank for itself in Seoul, then still under construction and which became the Bank of Korea's head office. Following the

Japan–Korea Treaty of 1910 The Japan–Korea Treaty of 1910, also known as the Japan–Korea Annexation Treaty, was made by representatives of the Empire of Japan and the Korean Empire on 22 August 1910. In this treaty, Japan formally annexed Korea following the J ...

and full annexation, the Bank of Korea was renamed the Bank of Chōsen in 1911. It was the direct predecessor of today's

. Overall, Dai-Ichi Bank's actions in the three decades following its first Busan establishment in 1878 have led to its depiction as the "primary agent of Japanese financial imperialism" in Korea.

Later developments

In 1943, Dai-ichi Bank and

, a

zaibatsu is a Japanese language, Japanese term referring to industrial and financial vertical integration, vertically integrated business conglomerate (company), conglomerates in the Empire of Japan, whose influence and size allowed control over signifi ...

company, merged to form

(lit. Imperial Bank of Japan). Teikoku Bank was the largest bank in Japan in terms of

assets In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...

when it was inaugurated. Teikoku Bank, however, could not expand its business freely due to Japan's involvement in

World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...

. Furthermore, former Dai-ichi employees and Mitsui employees did not get along well because of the difference in

corporate culture Organizational culture encompasses the shared norms, values, corporate language and behaviors - observed in schools, universities, not-for-profit groups, government agencies, and businesses - reflecting their core values and strategic direction. ...

between them. As a result of deteriorating performance, Teikoku Bank was divided into two banks, the new Dai-Ichi Bank and the new Teikoku Bank in 1948. Dai-Ichi grew dynamically in Japan's rapid postwar economic expansion, and eventually merged in 1971 with Nippon Kangyo Bank to form Dai-Ichi Kangyo Bank.

Branches

Dai-Ichi Bank's first Korean branch was opened in 1878 in Chemulpo (now

). A proper branch building was erected there from 1887 to 1899, and after 1909 became the Incheon of the Bank of Chōsen, then after 1950 of the

. It then housed various government administrations before being repurposed in 2010 as the Incheon Open Port Museum. File:Hakodate City Museum of Literature01n.jpg, Former branch in

Hakodate is a Cities of Japan, city and seaports of Japan, port located in Oshima Subprefecture, Hokkaido, Japan. It is the capital city of Oshima Subprefecture. As of January 31, 2024, the city had an estimated population of 239,813 with 138,807 househol ...

, built in 1921, lately the Hakodate City Museum of Literature File:A memory of an earthquake (5517876318).jpg, Former branch in

Kobe Kobe ( ; , ), officially , is the capital city of Hyōgo Prefecture, Japan. With a population of around 1.5 million, Kobe is Japan's List of Japanese cities by population, seventh-largest city and the third-largest port city after Port of Toky ...

, partly reconstructed following the

Great Hanshin earthquake The Great Hanshin Earthquake (, ) occurred on January 17, 1995, at 05:46:53 JST in the southern part of Hyōgo Prefecture, Japan, including the region of Hanshin. It measured 6.9 on the moment magnitude scale and had a maximum intensity of 7 o ...

File:PS kumamoto-center 1.jpg, Former branch in

Kumamoto is the capital Cities of Japan, city of Kumamoto Prefecture on the island of Kyushu, Japan. , the city has an estimated population of 738,907 and a population density of 1,893 people per km2. The total area is 390.32 km2. had a populat ...

, built in 1919 File:Mizuho Bank Kyoto Chuo Branch Japan01-r.jpg, Branch in

Kyoto Kyoto ( or ; Japanese language, Japanese: , ''Kyōto'' ), officially , is the capital city of Kyoto Prefecture in the Kansai region of Japan's largest and most populous island of Honshu. , the city had a population of 1.46 million, making it t ...

, still in use by

Mizuho Bank is the integrated retail and corporate banking unit of Mizuho Financial Group (; ). It is one of the largest financial services company in Japan with total assets of approximately $1.9 trillion USD in 2023, and considered one of Japan's three ...

File:Old-Daiichi-Bank-Marutamachi-Branch-20080504.JPG, Former branch in Marutamachi, Kyoto, built 1927 and lately in use by the Kyoto Chuo Shinkin Bank File:Old-Daiichi-Bank-Nishijin-Branch-19991002.JPG, Branch in

Nishijin is a district in Kyoto spanning from Kamigyō ward to Kita ward. Though it is well known as a district, there is no administrative area called "Nishijin".(jaWhat is Nishijin?/ref> Nishijin is notable for its textile production, and is the birt ...

, Kyoto, built 1936 and still in use by Mizuho Bank File:Old Daiichi Bank Osaka Branch 1926.jpg, Branch building in

Osaka is a Cities designated by government ordinance of Japan, designated city in the Kansai region of Honshu in Japan. It is the capital of and most populous city in Osaka Prefecture, and the List of cities in Japan, third-most populous city in J ...

, built in 1926, later demolished File:220721 Former Dai-ichi Bank Otaru Branch Otaru Hokkaido Japan02s3.jpg, Former branch in

Otaru is a Cities of Japan, city and Seaports of Japan, port in Shiribeshi Subprefecture, Hokkaido, Japan, northwest of Sapporo. The city faces Ishikari Bay and the Sea of Japan, and has long served as the main port of the bay. With its many historical ...

, Hokkaido File:Seishido 2009.jpg, Former branch in

Fukaya, Saitama is a city located in Saitama Prefecture, Japan. , the city had an estimated population of 229,517 in 142,803 households in 60804 households and a population density of 1023 persons per km2. The total area of the city is . It is famous for a ...

, built in 1916 File:Sakae-Honcho-Ave. (Kitanaka-dori district) 01.JPG, Former branch in

Yokohama is the List of cities in Japan, second-largest city in Japan by population as well as by area, and the country's most populous Municipalities of Japan, municipality. It is the capital and most populous city in Kanagawa Prefecture, with a popu ...

, built 1929, lately part of the Yokohama Island Tower complex File:Incheon 1Bank.jpg, Former branch in

, built in 1899, now Open Port Museum File:旧第一銀行釜山支店.jpg, Former branch in

, kept by Dai-Ichi Bank after 1909 and until 1945, later demolished

References

{{reflist Banks established in 1873 Defunct banks of Japan

Beginnings

Expansion in Korea

Later developments

Branches

See also

References