The trio is also mulling an alliance with industry leader JCB.

Three credit card affiliates of UFJ Bank and the Bank of Tokyo-Mitsubishi plan to merge as early as next October to create a credit card company with over 30 million members, officials said Friday.

UFJ affiliates Nippon Shinpan Co. and UFJ Card Co. and Bank of Tokyo-Mitsubishi affiliate DC Card Co. are also considering a tie-up with domestic industry leader JCB Co., which has close ties with UFJ Bank.

The three-way alliance, which will create the largest bank-affiliated credit card company in Japan, is part of restructuring efforts by Mitsubishi Tokyo Financial Group Inc. and UFJ Holdings Inc., which plan to merge next October.

The three affiliates are considering sharing administrative operations and some computer systems with JCB, which has 48 million members, the most among Japanese credit card firms.

Securing an alliance with JCB, the nation's only credit card brand widely accepted overseas, would give the Mitsubishi-UFJ camp an overwhelming share of the domestic credit card market.

Nippon Shinpan, known for its Nicos card brand, and UFJ Card had already agreed to merge in April into a company to be called UFJ Nicos Co. That plan has now been postponed.

Analysts say the merger of the three affiliates will serve two main purposes. The first is to shore up their competitiveness as the domestic credit card industry grows and affiliates of banks, retailers and consumer finance companies battle for greater shares of the market.

The second is to pool together resources needed to shift to integrated circuit (IC) chip-embedded credit cards.

UFJ Holdings and MTFG are also counting on the creation of a competitive credit card operator with a huge number of members to drum up business with individual clients at their group banks.(IHT/Asahi: October 30,2004) (10/30)