GIFU – Juroku Bank, a regional bank based in the city of Gifu, absorbed troubled wholly owned unit Gifu Bank on Tuesday.
Thirty-nine branches of Gifu Bank in Gifu and Aichi prefectures and Tokyo were closed, while nine others in Aichi and neighboring Mie Prefecture will continue operating as Juroku Bank branches.
Juroku Bank President Hakumi Horie said all executives and employees of the bank need to be able to provide the highest-quality banking services in the Tokai region, including Gifu and Aichi.
As of the end of March, the combined balance of deposits at the two banks stood at ¥4.9169 trillion, the 14th-largest among Japan’s 64 regional banks.
Gifu Bank received ¥12 billion in public funds from the government for recapitalization in 2001. But it was unable to repay the money on its own, mainly due to the economic downturn that followed the collapse of U.S. investment bank Lehman Brothers in 2008.
The bank became a wholly owned subsidiary of Juroku Bank through equity swaps in December 2010. The move allowed Gifu Bank to fully repay the public funds.