Chiba Kogyo Bank, a troubled midsize regional bank, announced Friday that it will apply for a government injection of roughly 60 billion yen in taxpayers’ money.
The request came after the Financial Supervisory Agency ordered the Chiba-based bank, which is overburdened by a huge amount of nonperforming loans, to take prompt corrective action.
Chiba Kogyo also plans to issue 25 billion yen in new shares to Fuji Bank, a major commercial bank and its top shareholder.
Chiba Kogyo will also cut 230 workers over the next three years as part of a restructuring plan.
In order to cover losses incurred in the year that ended in March 2000, Chiba Kogyo also plans to draw on its capital.
As a result of these measures, the bank says, its capital adequacy, measured as a percentage of capital against assets, should rise above 9.5 percent by the end of September, up from the 0.45 percent estimated March 31.
The Finance Ministry requires capital adequacy of at least 4 percent for a domestically operating bank. After the planned share issue, Chiba Kogyo will be 20 percent controlled by Fuji Bank. which will create one of the world’s biggest financial groups with the Industrial Bank of Japan and Dai-Ichi Kangyo Bank in September.