Copyright 2000 Information Access Company,
a Thomson Corporation Company;
IAC (SM) Newsletter Database (TM)
Copyright 2000 Kyodo News International, Inc.
Japan Weekly Monitor
June
5, 2000
SECTION:
Pg. NA
IAC-ACC-NO:
62521327
LENGTH:
295 words
HEADLINE:
Failed Namihaya Bank to be taken over by Daiwa Bank group+.
AUTHOR-ABSTRACT:
THIS IS THE FULL TEXT: COPYRIGHT 2000 Kyodo News International, Inc.
BODY:
OSAKA, May 30 Kyodo
The government's Financial Reconstruction Commission (FRC) will formally decide Wednesday to have the Daiwa Bank group take over the operations of Namihaya Bank, a failed Osaka-based regional bank, government sources said Tuesday.
The decision will put an end to the
liquidation
of banks in the Osaka region that collapsed under the weight of bad loans they got saddled with after the burst in the early 1990s of the asset-inflated bubble economy.
The Daiwa Bank group, primarily Kinki Osaka Bank, will take over about 60 of Namihaya's 135 outlets, the sources said.
The Daiwa Bank group is planning to employ about half of Namihaya's remaining employees by hiring less than 20 from each Namihaya outlet, according to the sources.
As of the end of March, Namihaya had 2,100 employees.
Kinki Osaka Bank will apply to the FRC for public funds, as the bank's takeover of Namihaya will worsen its capital-adequacy ratio, a benchmark for the health of a bank, the sources said.
Debts in excess of assets left behind by Namihaya -- 287.4 billion yen at the end of last September -- are expected to be made up for by public funds, the sources said.
Namihaya was declared insolvent by the FRC in August last year and has since been under state control.
The Bank of Ikeda, another Osaka-based regional bank, had also hoped to take over Namihaya's operations.
The FRC and the administrators, however, favored the takeover terms offered by Daiwa, the sources said.
Daiwa Bank competed with a U.S. investment fund on the purchase of Kofuku Bank, another failed bank in the Osaka region, but the fund, led by U.S. financier Wilbur Ross, was recently chosen as the successor.
Kofuku Bank collapsed in May last year.