Higashi-Nippon Bank, a Tokyo-based regional bank that has taken over four Tokyo and Saitama branches of the failed Niigata Chuo Bank, plans to apply for an infusion of public money in order to boost its capital base, sources close to the bank said Friday.
The bank signed a contract with Niigata Chuo to take over 36 billion yen worth of Niigata Chuo assets.
The sources said the takeover diluted Higashi-Nippon's capital-to-asset ratio from the 7 percent range at the end of September to the upper range of 6 percent.
The bank will hold talks with government finance officials on the exact amount of capital infusion needed. To meet the 8 percent international capital-to-asset standard, Higashi-Nippon will probably need 15 billion yen from the government.
The application may come at the start of next year.
Banks in need of capital injection from the state have until early next year to file their applications, as the capital-injection program is slated to terminate on March 31.