Support for ailing Nippon Credit Bank, which is expected to unveil a sweeping restructuring program soon, is imperative for maintaining financial stability both at home and abroad, Finance Minister Hiroshi Mitsuzuka said Mar. 28.
Speaking at a news conference, Mitsuzuka said the Finance Ministry and the Bank of Japan are together working to take every measure to assist the bank’s own restructuring efforts. “I’ve said all along that all-out restructuring to transform (NCB) into a new bank equipped to operate in a market liberalized by the (planned) Big Bang financial deregulation should be the first step,” Mitsuzuka said.
On Mar. 27, industry sources said the bank, long rumored to be in dire straits, has mapped out a package of overhaul measures which, in addition to a retreat from overseas operations, also includes the sale of property such as its Tokyo head office and liquidation of its affiliate nonbanks. The bank hopes to regain public confidence by becoming a purely domestic business, which would give it more relaxed capital adequacy requirements.
Its six overseas branches, including those in New York and London, would be closed, and eight representative offices would be shut down, sources said. On Mar. 27, NCB Managing Director Tadao Iwaki, however, said news reports that the bank would take such restructuring actions are only speculative, stressing that no part of the upcoming plan has been formally agreed upon.
Iwaki said he is confident his bank could clear the 8 percent capital adequacy required by the Bank for International Settlements.