Shinsei Bank

Shinsei Bank is a commercial bank in Tokyo, specializing in retail and institutional banking, as well as commercial finance. Its predecessor was created in 1952 under the title Long-Term Credit Bank of Japan (LTCB). After the price bubble in 1989, the structure ran a lot of bad debts. The Japanese government undertook nationalization in 1998, and LTCB fell from the Tokyo Stock Exchange list. An international conglomerate, fronted by Ripplewood Holdings, bought LTCB in 2000, making it the first foreign-controlled bank in the country. The after-buyout name “Shinsei” means “newborn”. Major shareholder is Christopher Flowers, and most of the managerial staff has experience in international leading companies like Morgan Stanley and Citibank. During the clean-up of bad debts owed to the former LTCB, several companies went bankrupt, which created political turmoil and caused the government to blame Goldman Sachs for ill-advice.

Shinsei’s flotation in 2004 generated 230 billion yen, which meant more than 100 billion profit in four years. Since that year, Shinsei has been listed on the Tokyo Stock Exchange. However, continuing government criticism escalated and the bank’s credit bank license was swapped for a standard commercial banking license. Because of low revenues, the bank was issued an improvement order by the Financial Services Agency. The recent economic crisis hit Japan unexpectedly hard and this translated into respective losses for Shinsei. To deal with the problem, the management concentrated on improving risk management and efficiency of operations. The growth for the fiscal year, ending in March 2008, was 28.5%. In March 2009, the bank received an award “Best Retail Bank in Japan” award from The Asian Banker. As of that month its total assets add up to 11, 950 billion yen. In April, Shinsei commenced negotiations with Aozora Bank for integration of operations. There is a possibility for merger, effective 2010. Most recently, Shinsei targeted the developing asset market in India, starting mutual fund operations there in August.

With its “PowerFlex” saving account, the bank offers ATM service in metro stations and stores, “cash back” from withdrawals made abroad, long office hours to accommodate customers, foreign currency deposits, and quick card issuance for new accounts. They facilitate foreigners, offering online banking in English. Also, a personal seal is not required to permit the opening of a new account. Shinsei’s institutional banking operations take in commercial lending and equity investment, in association with subsidiaries, including such in London and Frankfurt.

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