Shinsei Bank, the first Japanese lender acquired by foreign investors, agreed to sell its head office in central Tokyo on Thursday as it struggles to stay out of the red amid losses from the U.S. subprime mortgage loan crisis.

The bank said it will sell its headquarters, a modern building with 62,400 sq. meters of floor space overlooking Hibiya Park in Chiyoda Ward, for ¥118 billion to a real estate fund affiliated with Morgan Stanley, realizing a profit of ¥56 billion from the sale.

"This more than balanced the increased costs related to our exposure to the U.S. residential mortgage market and other factors, such as the impact from recent turmoil in overseas credit markets," the bank said in a statement released Thursday.

Shinsei Bank, formerly Long-Term Credit Bank of Japan, which went through a high-profile nationalization in 1998 and then was privatized two years later, said it had received several sales offers.

The bank said the same day that it has raised its forecast for the current fiscal year from ¥43 billion to ¥50 billion in net profit thanks to the sale of its head office.

Without the ¥56 billion in cash from the sale, Shinsei Bank would have dipped into the red — a scenario the bank's management apparently wanted to avoid.

According to a Financial Services Agency regulation, the management of a bank injected with public funds may be asked to step down if profit forecasts are missed by more than 30 percent for two straight years.

The bank missed its forecast last year when it posted a group net loss of ¥60.9 billion for fiscal 2006. The FSA issued a business improvement order in June.

On a consolidated basis, the bank's pretax profit will fall to ¥20 billion for the current fiscal year, down from the previous forecast of ¥60 billion, while group net profit will rise to ¥65 billion thanks to the office sale.

Shinsei Bank shares plunged 5.21 percent to ¥400 at Thursday's close.

The bank plans to move its headquarters in Tokyo's prime Uchisaiwaicho district to a different Tokyo location within three years from the sale, although it will rent its current main office building for the time being, bank officials said.