Chiba Kogyo Bank and Yachiyo Bank on Monday asked the government for a combined 95 billion yen in taxpayers’ money to bolster their fragile capital bases.

Chiba Kogyo, based in Chiba and listed on the Tokyo Stock Exchange, is seeking authorization for a 60 billion yen injection while Yachiyo, an unlisted bank based in Tokyo, is seeking 35 billion yen.

The government’s Financial Reconstruction Commission will approve the injections, and the banks are scheduled to receive the handouts Sept. 29, according to FRC officials.

In applying for the funds, the teetering banks also submitted restructuring plans.

After submitting its restructuring plan, Chiba Kogyo President Kazuhiko Asai held a news conference to express his determination to rebuild the bank and reduce staff levels.

“We would like to build a financial institution that serves the local community with a limited number of elite staff,” Asai said.

Both regional banks, however, are likely to face an uphill struggle to restructure as they are still pinned down by huge amounts of nonperforming loans. In addition, both banks operate in the fiercely competitive greater Tokyo market.

Chiba Kogyo and Yachiyo are the eighth and ninth regional banks to seek injections of public funds under the financial industry revitalization law.

After the injection, Chiba Kogyo is expected to see its capital adequacy ratio rise to more than 9.5 percent from an alarmingly low 0.45 percent at the end of March.

Fuji Bank, Yasuda Mutual Life Insurance Co. and Yasuda Fire & Marine Insurance Co. — all major investors in Chiba Kogyo — collectively bought 28 billion yen worth of newly issued shares in the bank last month.

The bank is planning to close 13 outlets and release 230 employees, or about 14 percent of its total work force, by the end of March 2003.

Yachiyo, meanwhile, is hoping to raise its capital-to-asset ratio above 8 percent with the public fund infusion. It took over some of the assets of Kokumin Bank, which collapsed in April 1999, on Aug. 14 in exchange for 183.7 billion yen from the Deposit Insurance Corp., the government’s safety net for the financial industry.

Banks are required to have a capital-to-asset ratio of at least 4 percent for domestic operations and 8 percent if they also have overseas operations.

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