Little-known fees help Japan trust banks dominate

Details of the fees, including the amount and the expectation that the new bank pay, as well as Honda’s experience, are reported here for the first time.

TOKYO: When Japan’s Honda Motor Co Ltd stopped using Sumitomo Mitsui Trust Bank Ltd as its stock transfer agent last year, the lender slapped it with a roughly US$4mil termination fee, according to two people familiar with the matter.

The break fee – 2,000 yen (US$19) per shareholder – is a little-known practice among Japan’s biggest trust banks when they lose a client in the shareholder record-keeping business, multiple insiders said.