Tokyo Star Bank debuted Tuesday on the Tokyo Stock Exchange to become the nation's second revived bank to go public.

The share price of the bank ended the day's trade at a low of 405,000, yen down 5.8 percent from the initial public offering price of 430,000 yen.

Analysts said the decline reflects concerns over the bank's future profitability.

Tokyo Star's predecessor, Tokyo Sowa Bank -- a second-tier regional -- failed in 1999. U.S. investment fund Lone Star Fund acquired the lender in 2001 for 40 billion yen and renamed it Tokyo Star Bank.

It is the first revived bank to go public since Shinsei Bank -- the successor to the failed Long-Term Credit Bank of Japan -- listed its shares on the stock exchange in February 2004.

Shinsei Bank was nationalized in 1998 and was bought by an international consortium led by the U.S. investment firm Ripplewood Holdings LLC. in March 2000.

Asked about the stock price fall, President and CEO Todd Budge said: "I think it's still early. We've seen trading for about four or five hours."

Budge said he is confident in the bank's business plan, which targets individual customers and small businesses with unique financial products.

These include mortgage loans with interest rates set according to the amounts in borrowers' accounts and value-added structured finance for small-business borrowers.

Budge also said Tokyo Star plans to expand its retail network outside Tokyo. Currently, the bank has 32 branches and 545 automated teller machines in addition to its Tokyo outlets. Some analysts said the lower share price on the first trading day means investors are critical of the bank.

"Since the branch network is mostly limited to Tokyo and surrounding areas, where competition with the megabanks is fierce, and the bank is not well known, the share price probably reflects market views on the bank's profitability," said one analyst, who declined to be named.

Resona ups estimate

Resona Holdings Inc. said Tuesday it has raised its earnings projection for the first half of the current fiscal year.

It credited strong operating profits at its subsidiary banks and a decrease in credit costs, such as those for disposing of bad loans.

In the revised group earnings estimate for the April-September period, the financial holding company said it will record 170 billion yen each in net and pretax profit and operating revenue of 500 billion yen.

Resona's earnings forecast in May put the respective projections at 110 billion, yen 120 billion yen and 470 billion yen.

Loan demand rising

Corporate demand for loans has risen sharply in the past three months, backed by growing capital investment and sales, the Bank of Japan said Tuesday.

The corporate loan demand diffusion index rose from zero in the previous quarterly survey of 50 major banks to 11 for corporate borrowers, marking the highest level since the index was developed in 2000.