TOKYO, Oct. 1 (Xinhuanet) -- Mitsubishi Tokyo Financial Group Inc. (MTFG) and UFJ Holdings Inc. merged on Saturday, creating Mitsubishi UFJ Financial Group Inc. (MUFJ), the world's largest with total assets of 190 trillion yen (about 1.7 trillion US dollars).

    The new financial group also aims to become one of the top five global financial groups in terms of market capitalization by March 2009, the end of fiscal 2008.

    According to the Financial Services Agency, domestically in Japan, Mizuho Financial Group Inc. now ranks second with assets of 135 trillion yen, and Sumitomo Mitsui Financial Group Inc. third with 100 trillion yen.

    With the integration of the two holdings firms, the number of Japan's major banking groups was reduced from four to three. Some analysts say the launch of MUFG is the last phase of a series of mergers involving major banks, while others predict more mergers to come.

    Subsidiaries of MTFG and UFJ Holdings -- Mitsubishi Trust and Banking Corp. and UFJ Trust Bank as well as Mitsubishi Securities Co. and UFJ Tsubasa Securities Co. -- were also integrated the same day.

    The newly born trust bank is Mitsubishi UFJ Trust and Banking Corp., and the merger between the two securities firms produced Mitsubishi UFJ Securities Co.

    The merger of the two banking groups comes at a time when the Japanese economy has begun a full-fledged recovery, with the average daily balance of the nation's bank lending growing for the first time since 1988 on a special-factor adjusted basis. Enditem