Reportedly, the bank has been paring back its investments in overseas securities and focusing on its domestic lending business after realizing a loss of JPY143bn in 2008.
Masamoto Yashiro, CEO of Shinsei Bank, said: “I want to clean up all our negative legacy assets by the end of March. It’s important to do this conservatively.”
However, Shinsei reported a net income of JPY11.2bn for the three months ended December 31, 2009, compared with a loss of JPY12.8bn in 2009. Shinsei left unchanged its full-year profit forecast of JPY10 billion yen, citing the potential for impairments and charges on real estate, consumer lending and other assets.
Kristine Li, a Singapore-based credit analyst at Royal Bank of Scotland, said: “If the charges are big enough, Shinsei may have to book a loss for the full year. If the losses hurt their capital, this may affect the merger. They may have to re-negotiate the merger ratio.”
Aozora Bank is controlled by New York-based private equity firm, Cerberus Capital Management, whereas Shinsei Bank is backed by billionaire Christopher Flowers.
