Shinsei Bank is expected to post a sizable consolidated net loss in the year through March, its second in a row, instead of an earlier projected profit of ¥10 billion, sources said Wednesday.
The loss could be as huge as ¥100 billion due to problem loans to real estate firms and an increase in loan-loss reserves set aside for the bank’s nonbank affiliate.
President and Chairman Masamoto Yashiro intends to resign following the shareholders meeting in late June, the sources said, adding the bank is looking for his successor mainly among former Finance Ministry and major bank officials.
Meanwhile, tough negotiations continue between Shinsei and Aozora Bank, dimming the prospects of their planned merger in October. The two have differed over key issues, including how to integrate their computer systems and choice of core operations for the merged bank.
Adding to Shinsei’s red ink was its nonbank affiliate, for which the Financial Services Agency called for an increase in loan-loss reserves in light of tougher regulations on interest rates such lending entities can charge, the sources said.
The estimated loss comes after the ¥143 billion loss in fiscal 2008 but is unlikely to deal too serious a blow to the bank.
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