Struggling regional lender Suruga Bank is seeking support from Shinsei Bank, according to sources with knowledge of the matter.
A comprehensive tie-up between the two, including a capital partnership, will be announced as soon as Wednesday, the sources said Monday.
The tie-up is expected to help Suruga make progress in its business reconstruction, after public trust in the lender was tarnished by its involvement in fraudulent loans for real estate investment, analysts said.
Electronics retailer Nojima Corp., which has recently acquired an equity stake of slightly less than 5 percent in Suruga, has offered to back up the struggling bank.
Suruga apparently aims to map out a concrete business reconstruction plan by the time it holds a general shareholders meeting in late June.
Also on Wednesday, Suruga is set to release its earnings for the business year to March and the results of its full-scale investigations into the issue of fraudulent loans.
The bank, based in Numazu, Shizuoka Prefecture, is considering receiving fresh capital from Shinsei Bank and forming a broad tie-up on services for individuals, including housing loans, the sources said.
Shinsei, which has been strengthening its retail operations, believes it can enjoy synergy benefits from tying up with Suruga, the sources said.
Nojima has strength in sales of digital home appliances. By working with Suruga, the electronics retailer hopes to expand its “fintech” (financial technology) operations.
Following the revelations last year of a series of irregularities related to loans for investment in shared houses and other real estate, Suruga was ordered by the Financial Services Agency to suspend some of its operations for the half-year through last month.