The capital deficit of Nippon Credit Bank, which is currently under state control, for the year that ended in March increased by some 50.7 billion yen over levels reported in September, the bank’s earnings report showed Friday.
As a result, NCB’s capital deficit came to 3.24 trillion yen at the end of March, leading to a considerable rise in the amount of tax money required to cover the losses of the troubled long-term credit bank.
The capital deficit increase was attributed to the decreasing value of collateral on its loans due to falling land prices, as well as the collapse of more of its clients.
According to data released in accordance with disclosure laws, NCB had 1.16 trillion yen in bad loans as of the end of March, down 2.83 trillion yen from the previous year thanks to the transfer of many of the loans to the Resolution and Collection Corp.
Its parent-only pretax losses narrowed to 113.7 billion yen from 3.56 trillion yen in the previous year.
The lender had net business profits of 31 billion yen, a sharp turnaround from losses of 345 billion yen the year before. Revenues fell 46.3 percent to 219.95 billion yen.
On a consolidated basis, NCB posted net profits of 112 million yen as opposed to losses of 469.25 billion yen the previous year.
Pretax losses dwindled to 112.59 billion yen from 3.52 trillion yen. Revenues were down 50.8 percent at 223.9 billion yen.
NCB is still looking for a buyer because a consortium of companies led by Softbank Corp., previously selected as the most preferred bidder by the Financial Supervisory Agency, missed the Wednesday deadline for sealing a deal.
NCB has been under special state control since its collapse in December 1998. On Friday, Sadakazu Tanigaki, Cabinet minister for financial reconstruction, stated his determination to find a buyer for NCB while he is in office.
“It is my responsibility to deal with the matter while I am still (in this position),” Tanigaki told a regular news conference. His comments were taken to indicate NCB would be sold by the time a new Cabinet is selected following the June 25 Lower House election.
Tanigaki also hinted that the Softbank-led group remains a likely buyer, adding that negotiations between financial authorities and the group are ongoing.