The Long-Term Credit Bank of Japan hastily moved to assure investors of its creditworthiness on Tuesday after its share price plunged to its lowest level since the burst of the bubble economy.
LTCB Vice President Masami Suda told a news conference that there was no truth to market rumors that its strategic business alliance with Swiss Bank Corp. — announced last July — was endangered. “This is totally groundless and there is not an ounce of truth” to the rumor, he said, reading a statement released by the bank.
The bank promptly asked the Securities and Exchange Surveillance Commission to look into the market talk, believing the situation was a case of rumors being spread with the knowledge they are false, which is banned by the Securities and Exchange Law, Suda said.
The LTCB-SBC alliance has already spawned two joint ventures between them, LTCB UBS Brinson and LTCB Warburg Securities Ltd., and another joint venture to set up a private bank later this year is under negotiation. The two banks already have a 1 percent equity stake in each other, Suda said.
During morning trading on the Tokyo Stock Exchange, the share price for LTCB temporarily fell 41 yen to 140 yen. It closed the day at 167 yen. The previous postbubble low was 147 yen, marked in November after a wave of financial failures.
LTCB is the second-largest of the nation’s three long-term credit banks, but has been dogged by concerns regarding its soundness. Its tieup with SBC was seen as an effort to dispel such doubts. Last week, a magazine reported on LTCB’s financial woes, prompting the bank to sue the publisher for libel.
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