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The government-backed Deposit Insurance Corp. said Tuesday that the capital deficit of the failed Nippon Credit Bank has widened to some 3.1 trillion yen — 110 billion yen more than an earlier estimate.

This makes it almost inevitable that the temporarily nationalized bank will require more public funds than previously thought before it is sold.

DIC said NCB will sell bad assets with a book value of about 2.88 trillion yen for 298.7 billion yen to Resolution and Collection Corp., DIC’s bad-loan collection arm.

The sales figure compares with the earlier estimated 410 billion yen price tag for the bad loans, just a portion of the bank’s bad assets. The earlier estimate was based on asset prices as of December, when NCB collapsed and was placed under state control.

The deterioration of assets after the nationalization, such as through a fall in collateral values, resulted in the gap, DIC officials said.

The government had estimated NCB’s capital deficit at 3.04 trillion yen as of last December. The final figure will be determined after the remaining bad assets — valued at about 1.1 trillion yen — are sold to the RCC.

The remaining bad assets include NCB’s overseas real estate holdings and loans abroad, the officials said.

NCB is currently negotiating with private-sector institutions to sell its good assets.

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