The massive nonperforming assets amassed by Hokkaido Takushoku Bank were the main factor behind both its deteriorating performance and the failure of its planned merger with Hokkaido Bank, former Takushoku President Sadamasa Kawatani told the Diet on Tuesday.
During unsworn testimony before the Lower House Budget Committee, Kawatani apologized to depositors, clients and bank employees for the trouble caused by the firm's collapse last month and the negative impact it had on the creditworthiness of Japanese financial institutions in general. Kawatani resigned to take responsibility for the collapse.
Hokkaido Takushoku, based in Sapporo, was the smallest of the nation's 10 so-called city banks. It gave up restructuring efforts and announced the transfer of the bulk of its operations to Northern Pacific Bank, also known as Hokuyo Bank.