Aozora Bank
Encyclopedia
is a Japan
ese commercial bank
that offers service in 19 branches in Japan and in 5 overseas representative offices.
(LTCB), based on the assets of Bank of Joseon
in Japan. In December 1998, NCB was brought under government control in order to deal with its extraordinary amount of bad debt left over from the crash of the Japanese asset price bubble
in the early 1990s: at the time, the bank was approximately ¥270 billion in debt.
An investor group led by Softbank
, Orix
and Tokio Marine & Fire Insurance Co. purchased NCB in 2000 for ¥80 billion. As part of this deal, the government included a to the effect that NCB could demand within the next three years that the government purchase any claims which had fallen by twenty percent or more from value. A similar provision had controversially been offered to the purchasers of LTCB, which had recently been similarly purchased from the government and renamed Shinsei Bank
.
Aozora applied this provision conservatively in order to write off ¥400 billion in bad debts owed by about 100 companies, in contrast to Shinsei Bank
, the contemporaneous successor of the Long-Term Credit Bank, which wrote off nearly three times as much and was criticized in political circles for doing so.
The sale of NCB to Softbank was viewed as a precedent for the licensing of Sony Bank
, Seven Bank
and other new banking platforms in Japan.
The bank was renamed "Aozora" in 2001. Softbank initially planned to make Aozora an investment bank for internet
-related companies. However, Softbank was unsuccessful in obtaining the cooperation of the Financial Services Agency, and sold its 49% stake to Cerberus Capital Management
in September 2003 for ¥101 billion. Aozora launched operations as a retail bank on April 1, 2006, and opened its first new branch in Nihonbashi
on November 20.
Aozora Bank was listed as the No.1 unsecured creditor to Lehman Brothers
with about $463 million USD in bank loans to the investment bank as it filled for Chapter 11 bankruptcy in Sept. 2008. By comparison, the second largest unsecured creditor was Mizuho Bank
with $289 million, and third largest Citibank
(Hong Kong branch) with $275 million.
In 2008 at the 2008 ALB Japan Law Awards, Aozora Bank was crowned:
On December 16, 2008, Aozora Bank announced that it had 12.4 billion yen exposure to the Bernard L. Madoff ponzi scheme.
On April 25, 2009, Aozora Bank and Shinsei Bank
announced negotiations to integrate their operations in the summer of 2010, with an eye toward an eventual merger. Banks had been hit by losses in the US subprime market. The talks collapsed in May 2010 amid disputes over capitalization and business strategy, as well as the abatement of the 2008 financial crisis.
, Tokyo
, near Yasukuni Shrine
.
The bank has retail branches in Chiba, Fukuoka, Hiroshima, Kanazawa, Kyoto, Nagoya, Osaka (Namba and Umeda), Sapporo, Sendai, Takamatsu, Tokyo (Ikebukuro, Nihonbashi, Shibuya, Shinjuku and Ueno) and Yokohama.
Aozora also has representative office
s in New York
, Singapore
, Seoul
, Jakarta
and Shanghai
, and financing subsidiaries in the Cayman Islands
, Hong Kong
, Luxembourg
, the United Kingdom
and the United States
.
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...
that offers service in 19 branches in Japan and in 5 overseas representative offices.
History
Aozora Bank is the successor of the Nippon Credit Bank (NCB), which was founded in 1957 under a special government trust banking license alongside the Long-Term Credit Bank of JapanLong-Term Credit Bank of Japan
, abbreviated LTCB in English and in Japanese, was founded in 1952 under the direction of the Shigeru Yoshida government to provide long-term financing to various industries in Japan. Along with the Industrial Bank of Japan and the Nippon Kangyo Bank, it was one of the major financiers of the...
(LTCB), based on the assets of Bank of Joseon
Bank of Joseon
The Bank of Joseon or Bank of Chosen was the central bank of Korea under Japanese rule, and of South Korea under American occupation. The bank issued the Korean yen from 1910 to 1945 and the won from 1945 to 1950.-History and background:...
in Japan. In December 1998, NCB was brought under government control in order to deal with its extraordinary amount of bad debt left over from the crash of the Japanese asset price bubble
Japanese asset price bubble
The was an economic bubble in Japan from 1986 to 1991, in which real estate and stock prices were greatly inflated. The bubble's collapse lasted for more than a decade with stock prices initially bottoming in 2003, although they would descend even further amidst the global crisis in 2008. The...
in the early 1990s: at the time, the bank was approximately ¥270 billion in debt.
An investor group led by Softbank
SoftBank
is a Japanese telecommunications and internet corporation, with operations in broadband, fixed-line telecommunications, e-Commerce, Internet, broadmedia, technology services, finance, media and marketing, and other businesses....
, Orix
ORIX
is a financial services group established 17 April 1964 as Orient Leasing Co., Ltd.. The company's name was changed to ORIX Corporation in 1989...
and Tokio Marine & Fire Insurance Co. purchased NCB in 2000 for ¥80 billion. As part of this deal, the government included a to the effect that NCB could demand within the next three years that the government purchase any claims which had fallen by twenty percent or more from value. A similar provision had controversially been offered to the purchasers of LTCB, which had recently been similarly purchased from the government and renamed Shinsei Bank
Shinsei Bank
is a Japanese commercial bank headquartered in Chiyoda, Tokyo.-History:Shinsei Bank is the successor of a trust bank, the Long-Term Credit Bank of Japan, which had a government monopoly on the issuance of many long-term debt securities...
.
Aozora applied this provision conservatively in order to write off ¥400 billion in bad debts owed by about 100 companies, in contrast to Shinsei Bank
Shinsei Bank
is a Japanese commercial bank headquartered in Chiyoda, Tokyo.-History:Shinsei Bank is the successor of a trust bank, the Long-Term Credit Bank of Japan, which had a government monopoly on the issuance of many long-term debt securities...
, the contemporaneous successor of the Long-Term Credit Bank, which wrote off nearly three times as much and was criticized in political circles for doing so.
The sale of NCB to Softbank was viewed as a precedent for the licensing of Sony Bank
Sony Bank
Sony Bank is a Japanese commercial bank established in April 2001. It has no real branches or ATMs; all procedures are done online or by telephone. It is a subsidiary of Sony Financial Holdings and a member of the Sony Group...
, Seven Bank
Seven Bank
is a Japanese bank. It is a subsidiary of the Ito-Yokado, along with Seven & I Holdings Co., Ltd. . Until October 11, 2005, it was , taking its initials from Ito Yokado...
and other new banking platforms in Japan.
The bank was renamed "Aozora" in 2001. Softbank initially planned to make Aozora an investment bank for internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
-related companies. However, Softbank was unsuccessful in obtaining the cooperation of the Financial Services Agency, and sold its 49% stake to Cerberus Capital Management
Cerberus Capital Management
Cerberus Capital Management, L.P. is one of the largest private equity investment firms in the United States. The firm is based in New York City, and run by -year-old financier Steve Feinberg. Former U.S...
in September 2003 for ¥101 billion. Aozora launched operations as a retail bank on April 1, 2006, and opened its first new branch in Nihonbashi
Nihonbashi
, or Nihombashi, is a business district of Chūō, Tokyo, Japan which grew up around the bridge of the same name which has linked two sides of the Nihonbashi River at this site since the 17th century. The first wooden bridge was completed in 1603, and the current bridge made of stone dates from 1911...
on November 20.
Aozora Bank was listed as the No.1 unsecured creditor to Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
with about $463 million USD in bank loans to the investment bank as it filled for Chapter 11 bankruptcy in Sept. 2008. By comparison, the second largest unsecured creditor was Mizuho Bank
Mizuho Bank
is the core retail banking unit of Mizuho Financial Group, which is the second-largest financial services company in Japan and one of the three so-called Japanese "megabanks"...
with $289 million, and third largest Citibank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
(Hong Kong branch) with $275 million.
In 2008 at the 2008 ALB Japan Law Awards, Aozora Bank was crowned:
- In-House of the Year - Banking & Financial Services In-House Team of the Year
- In-House of the Year - Japan In-House Team of the Year
On December 16, 2008, Aozora Bank announced that it had 12.4 billion yen exposure to the Bernard L. Madoff ponzi scheme.
On April 25, 2009, Aozora Bank and Shinsei Bank
Shinsei Bank
is a Japanese commercial bank headquartered in Chiyoda, Tokyo.-History:Shinsei Bank is the successor of a trust bank, the Long-Term Credit Bank of Japan, which had a government monopoly on the issuance of many long-term debt securities...
announced negotiations to integrate their operations in the summer of 2010, with an eye toward an eventual merger. Banks had been hit by losses in the US subprime market. The talks collapsed in May 2010 amid disputes over capitalization and business strategy, as well as the abatement of the 2008 financial crisis.
Locations
Aozora's head office is located in the Kudan area of Chiyoda CityChiyoda, Tokyo
is one of the 23 special wards in central Tokyo, Japan. In English, it is called Chiyoda ward. As of October 2007, the ward has an estimated population of 45,543 and a population density of 3,912 people per km², making it by far the least populated of the special wards...
, Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
, near Yasukuni Shrine
Yasukuni Shrine
is a Shinto shrine located in Chiyoda, Tokyo, Japan. It is dedicated to the soldiers and others who died fighting on behalf of the Emperor of Japan. Currently, its Symbolic Registry of Divinities lists the names of over 2,466,000 enshrined men and women whose lives were dedicated to the service of...
.
The bank has retail branches in Chiba, Fukuoka, Hiroshima, Kanazawa, Kyoto, Nagoya, Osaka (Namba and Umeda), Sapporo, Sendai, Takamatsu, Tokyo (Ikebukuro, Nihonbashi, Shibuya, Shinjuku and Ueno) and Yokohama.
Aozora also has representative office
Representative office
A representative office is an office established by a company to conduct marketing and other non-transactional operations, generally in a foreign country where a branch office or subsidiary is not warranted. Representative offices are generally easier to establish than a branch or subsidiary, as...
s in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Seoul
Seoul
Seoul , officially the Seoul Special City, is the capital and largest metropolis of South Korea. A megacity with a population of over 10 million, it is the largest city proper in the OECD developed world...
, Jakarta
Jakarta
Jakarta is the capital and largest city of Indonesia. Officially known as the Special Capital Territory of Jakarta, it is located on the northwest coast of Java, has an area of , and a population of 9,580,000. Jakarta is the country's economic, cultural and political centre...
and Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
, and financing subsidiaries in the Cayman Islands
Cayman Islands
The Cayman Islands is a British Overseas Territory and overseas territory of the European Union located in the western Caribbean Sea. The territory comprises the three islands of Grand Cayman, Cayman Brac, and Little Cayman, located south of Cuba and northwest of Jamaica...
, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
, Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
, the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.