ID :
57500
Sun, 04/26/2009 - 06:16
Auther :
Shortlink :
https://oananews.org//node/57500
The shortlink copeid
Shinsei, Aozora banks in merger talks+
TOKYO, April 25 Kyodo - Shinsei Bank and Aozora Bank are in talks for a merger, eyeing the establishment of a joint holding company in summer 2010, a move that would create the sixth biggest bank in Japan in terms of assets, sources familiar with the matter said Saturday.
The two banks were formerly providers of long-term credit to businesses and are
currently owned chiefly by U.S. investment companies. J.C. Flowers & Co. owns a
major stake in Shinsei, while Cerberus Capital Management L.P. is a principal
shareholder in Aozora.
The two banks are also negotiating business integration, with the possibility
of applying for a public fund injection under a new financial stabilization law
in sight after realizing the merger, the sources said.
Behind the envisioned merger and public fund infusion is the Financial Services
Agency's strategy to restore the health of financial institutions, they added.
Given both banks are also said to be considering linking up with other
financial institutions, what these U.S. shareholders decide is expected to
determine the outcome of the ongoing talks.
Both banks are strong on corporate financing and operations for corporate
rehabilitation. A merger will likely help them create economies of scale and
therefore reinforce their competitive edge.
An integration of the two banks would create an institution with more than 18
trillion yen in assets, the sixth largest among Japanese commercial banks,
larger than Chuo Mitsui Trust Holdings Inc.
Shinsei and Aozora were both temporarily brought under state control in 1998.
After they were once again brought largely under private ownership in 2000,
they have been revamping operations under the guidance of the U.S. shareholders
and others. They are also still owned in part by the Japanese government.
Both banks are anticipating chalking up net losses in the year ended March
after generating huge losses on overseas investments in the global financial
crisis and economic recession since last fall.
The government's Financial Services Agency has been paying close attention to
the banks' earnings and asset status and is believed to be calling on them to
take radical steps to improve operations including the option of partaking in
industry restructuring.
==Kyodo
The two banks were formerly providers of long-term credit to businesses and are
currently owned chiefly by U.S. investment companies. J.C. Flowers & Co. owns a
major stake in Shinsei, while Cerberus Capital Management L.P. is a principal
shareholder in Aozora.
The two banks are also negotiating business integration, with the possibility
of applying for a public fund injection under a new financial stabilization law
in sight after realizing the merger, the sources said.
Behind the envisioned merger and public fund infusion is the Financial Services
Agency's strategy to restore the health of financial institutions, they added.
Given both banks are also said to be considering linking up with other
financial institutions, what these U.S. shareholders decide is expected to
determine the outcome of the ongoing talks.
Both banks are strong on corporate financing and operations for corporate
rehabilitation. A merger will likely help them create economies of scale and
therefore reinforce their competitive edge.
An integration of the two banks would create an institution with more than 18
trillion yen in assets, the sixth largest among Japanese commercial banks,
larger than Chuo Mitsui Trust Holdings Inc.
Shinsei and Aozora were both temporarily brought under state control in 1998.
After they were once again brought largely under private ownership in 2000,
they have been revamping operations under the guidance of the U.S. shareholders
and others. They are also still owned in part by the Japanese government.
Both banks are anticipating chalking up net losses in the year ended March
after generating huge losses on overseas investments in the global financial
crisis and economic recession since last fall.
The government's Financial Services Agency has been paying close attention to
the banks' earnings and asset status and is believed to be calling on them to
take radical steps to improve operations including the option of partaking in
industry restructuring.
==Kyodo
