The failed Nippon Credit Bank Ltd. was reborn Monday under the new ownership of a Softbank Corp-led consortium after its troubled sale by the state went through.
"Operations have begun after our bank transferred" to the consortium on Friday for 101 billion yen ($944 million), a spokesman for NCB said.
"We will hold a board meeting this afternoon to appoint our new administration," he said.
The new management plans to rename NCB Aozora ("Blue Sky") Bank and Tadayo Homma, a former executive director of the Bank of Japan, is expected to be named president, the spokesman added.
The government completed the sale to the consortium, which includes Japan's top Internet investor along with Tokio Marine and Fire Insurance Co. Ltd. and leasing firm Orix Corp., after saying it would inject a huge amount of cash.
Moody's Investors Service said it was upgrading NCB's financial strength rating to E-plus from E after the sale went through.
The improvement reflected NCB's "improved economic capitalization, which incorporates unrealized gains in investment securities, despite the planned large capital injection from the government," Moody's said.
The Financial Reconstruction Commission (FRC) agreed to plough 3,071.5 billion yen into NCB to cover its massive liabilities and let the sale proceed.
But Moody's added that the reborn bank's new owners had their work cut out "to transform an obsolete long-credit bank model into a competitive and profitable institution under intensifying competition."
The sale of NCB, which fell victim to a mountain of bad loans in December 1998, became embroiled in controversy after retailer Sogo Co. Ltd. collapsed in July.
The sale was originally scheduled for August 1, but it was delayed by a month to give the government time to explain its abortive use of taxpayers' money to bail out Sogo.
It had inherited Sogo debt under the terms of its sale of another failed lender, Long-Term Credit Bank of Japan Ltd., which was reborn in July as Shinsei Bank after being taken over by a US-led investment group.
The same Shinsei sale clause, guaranteeing the state would buy back bank loans that lost at least 20 percent of their value, was included in the NCB sale deal. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
