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TOKYO, Feb 20 (Reuters) - Sumitomo Mitsui Financial Group (SMFG) and Resona Holdings Inc are in talks to merge their regional banks, sources with knowledge of the deal said on Monday.
Japan's third-largest lender SMFG and fifth-largest Resona own small regional banks catering to the city of Osaka and its neighbouring markets.
The two are in talks to combine SMFG's Kansai Urban Banking Corp and Minato Bank Ltd with Resona's Kinki Osaka Bank, said the sources, who did not want to be named as they were not authorised to discuss the matter publicly.
The total assets of the three units slated to be combined stand at about 11.8 trillion yen ($104.30 billion).
The Nikkei business daily reported that SMFG and Resona would create a joint holding company that will own the three regional banks.
But the sources told Reuters the structure of the merger had not been decided.
Officials at SMFG and Resona were not immediately available for comment. ($1 = 113.1300 yen) (Reporting by Taro Fuse and Taiga Uranaka; Editing by Himani Sarkar)