The government's Financial Reconstruction Commission on Wednesday decided to sell the collapsed Namihaya Bank to the Daiwa Bank group, commission sources said.
The bank group based in western Japan is expected to take over some 60 of Namihaya Bank's 135 outlets and hire about half of its employees, who numbered around 2,100 at the end of March, the sources said.
Kinki Osaka Bank, an affiliate of Daiwa Bank, will be in charge of the takeover. It is planning to seek public funds to maintain its capital adequacy, which may be diluted by the takeover, industry sources said.
Namihaya Bank, a small regional bank based in Osaka, collapsed in August due to heavy debts and was put under FRC control.
In Osaka, Daiwa Bank President Takashi Kaiho told a news conference that the Daiwa group made the bid in the hopes of contributing to the stabilization of the financial sector in the Kansai area.
Kaiho also said that the group wants to strengthen its business operations and meet the needs of Namihaya's customers.
"Namihaya's customers -- individuals and small and midsize companies -- are also important for the Daiwa group as it aims to become a major regional bank in the Kansai area," Kaiho said.