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Sumitomo mulls Aozora Bank bid
By Alex Frew McMillan
TOKYO, Japan (CNN) -- Sumitomo Mitsui Financial Group says it is mulling a bid to buy a stake in Aozora Bank. Softbank has put its 49 percent stake in Aozora up for sale, to focus on its Internet operations, and hopes to offload it this month. (Full story) Sumitomo Mitsui has now told the watchdog Financial Services Agency (FSA) it is considering buying it. That puts it in competition with U.S. buyout fund Cerberus Group, Softbank's initial target for a sale. Finance Minister Masajuro Shiokawa has praised the possible bid, which he said would help Aozora clean up its operations and help improve the financial system in general. "A Japanese bank has shown its energy," he said, according to the Nihon Keizai Shimbun. Nationalized after collapseAozora's management has resisted a sale to an overseas owner -- a move Japanese companies often resist because they fear it will result in a loss of control and of jobs. Aozora was formerly known as Nippon Credit Bank, and was briefly nationalized after collapsing in 1998. It was privatized in 2000 and now has assets of around 5.9 trillion yen ($47.1 billion). The Nikkei said that lawmakers and officials at the FSA are also leery of selling Aozora to an overseas company. Cerberus already owns around 11.5 percent of Aozora and needs FSA approval to boost that past 20 percent. Shares in Sumitomo Mitsui Financial Group, a holding company created on Monday to take over Sumitomo Mitsui's operations, closed down 3.33 percent at 406,000 yen as most banks sold off. That was worse than the 0.89 slip in the broad Topix index. (Full story) Besides Softbank, Orix Corp., Tokio Marine & Fire Insurance Co. and a large number of regional banks own stakes in Aozora. Those banks may resist a move by competitor Sumitomo Mitsui to take it over.
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