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Capital-depleted Kumamoto Family Bank formally applied Thursday to the Financial Reconstruction Commission for 30 billion yen in public funds, the bank said. The Kumamoto-based second-tier regional bank also submitted to the FRC a management improvement plan, including a 14 percent personnel cut and shutdown of 11 branches by the end of March 2003. Subject to FRC approval, the bank will receive the funds by next March by selling the government preferred stocks. It will be the sixth regional institution to get a capital injection under the government’s bank bailout program enacted in 1998. The bank said the recapitalization will raise its capital adequacy ratio from 5.5 percent to 8.5 percent — even above the 8 percent minimum standard for internationally active banks. The FRC has already given tentative approval following preliminary examinations. Bank President Fukashi Ikemitsu told a news conference, “It is desirable for the bank to maintain a capital-adequacy ratio of more than 8 percent, in view of the future course of the national and regional economies.” The bank will complete writeoffs of bad loans within the current fiscal year ending next March 31 by disposing of 60.8 billion yen in nonperforming loans, twice the amount of the previous year, the bank said.

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