The Resolution and Collection Bank said May 26 that it has succeeded in collecting only 7.6 percent of the problem loans it has taken over from failed credit unions.
The bank, established last September to collect nonperforming loans left behind by small financial institutions that went under, released its account settlements for the year that ended in March. According to the bank, it took over more than 430.6 billion yen in such loans, including 253.7 billion yen bought from four credit unions, such as Osaka-based Kizu Credit Union, during the last reporting term.
By the end of March, it had collected only 32.6 billion yen of the loans, or 7.6 percent of the total. The bank said losses on loans it took over from the failed institutions expanded due to sluggish real estate prices, forcing the bank to write off loans worth 16.115 billion yen. The bank's accumulated losses totaled 58.6 billion yen, it said.
For the last accounting term, the bank incurred a pretax loss of 22.4 billion yen and an after-tax loss of 24.495 billion yen. It is uncertain how smoothly the bank will be able to collect loans in the year to March 1998 because it is planning to receive the assets and operations of seven more failed credit cooperatives this year, President Shigeru Mizuno said.