An ancient pond; a frog jumps in; the splash of water. You don’t have to study the expansive haiku of Matsuo Basho to appreciate that things happen slowly in Japan. According to dealReporter data, the typical gap in Japan between confirmation of M&A discussions and confirmation of terms is about 150 days – three times Asia’s average.

Investors were braced for a similarly leisurely timetable from Sumitomo Trust & Banking and Chuo Mitsui Trust, the country’s number five and eight banks by market capitalisation, which confirmed reports of merger talks on Friday. The combined operation would become Japan’s largest trust bank, with $2,000bn of assets under custody, and its largest asset manager. But even by Japan’s standards, this will be a painstaking affair: the two sides are giving themselves 18 months to form a holding company, into which they will merge the businesses by April 2012. Synergies could amount to $600m, assuming the removal of 15 per cent of joint costs, but investors seem unwilling, or unable, to look that far ahead. STB’s shares barely twitched, while smaller, less profitable CMT – almost certain to be the junior partner in any permutation – slipped 2 per cent.

But even if the destination is a long way off, the pair are on the right track. In this bloated sector, with six big trust banks and at least a dozen second-tier outfits, both STB and CMT have done things they have regretted in pursuit of higher returns. STB had exposure to foreign structured products equivalent to more than a third of tier one capital in March, for example – the highest among the leading banks – and has $100m of loans to Aiful, the wobbling consumer lender. If regulators insist on higher capital ratios, the surest way to improve profits is to merge and cut costs. However long it takes.

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