Mitsui Sumitomo Insurance Co. and Sumitomo Mitsui Banking Corp. said Monday they will set up a fund in September with an investment firm affiliated with Daiwa Securities SMBC Co. to purchase bad loans from financial institutions.
The 10 billion yen Daystar Fund is designed to help indebted companies fix finances and financial institutions dispose of bad loans in a bid to make the nation's economy sound, they said.
Mitsui Sumitomo Insurance and SMBC said they will extend their information about a wide range of customers and financial knowhow, while Daiwa Securities SMBC Principal Investments Co. will offer its expertise on corporate rehabilitation.
While the fund will initially purchase bad loans mainly from SMBC, it would consider buying sour loans from regional banks if requested, SMBC officials said.
The fund will be owned 30 percent each by SMBC and Mitsui Sumitomo Insurance and 40 percent by Daiwa Securities SMBC Principal Investments, the three parties said.