Kagoshima Bank to raise deposit interest rates to 34-year high

Kagoshima Bank has announced it will raise ordinary deposit interest rates from 0.4% to 0.5% per annum, effective November 2, 2026. This marks the highest level for the bank in 34 years, following policy rate adjustments by the Bank of Japan.

President Hiromi Ikariyama stated that the bank intends to support local businesses despite also raising interest rates for corporate loans. Ikariyama expressed concerns regarding capital outflow from the prefecture, noting that an aging population may lead to inheritance deposits moving to urban centers. Additionally, the bank faces potential competition from JR Kyushu, which plans to enter the financial services market as early as fiscal year 2027.

In Okinawa, where the bank has operated for 11 years, Branch Manager Yasuhiro Kozasa reported significant growth, with personal loans reaching approximately 160 billion yen and business loans totaling 100 billion yen as of September.