is a leading diversified
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
ese
financial institution
Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial inst ...
that provides a full range of financial products and services to both institutional and individual customers. It is owned by
SBI Group
SBI Holdings, sometimes referred to as Strategic Business Innovator Group, () is a financial services company group based in Tokyo, Japan. The group's businesses and companies are held primarily at SBI Holdings. The company provides financial ser ...
and headquartered in
Chuo,
Tokyo
Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, with an estimated 37.468 ...
.
History
SBI Shinsei Bank is the successor of the
Long-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 Kang ...
, which had a government monopoly on the issuance of many long-term debt securities. Following the collapse of the
Japanese asset price bubble
The was an economic bubble in Japan from 1986 to 1991 in which real estate and stock market prices were greatly inflated. In early 1992, this price bubble burst and Japan's economy stagnated. The bubble was characterized by rapid acceleration ...
in 1989, the bank was riddled with bad debts: the government nationalized it in 1998, and it was delisted from the
Tokyo Stock Exchange
The , abbreviated as Tosho () or TSE/TYO, is a stock exchange located in Tokyo, Japan. It is the third largest stock exchange in the world by aggregate market capitalization of its listed companies, and the largest in Asia. It had 2,292 listed co ...
. After several proposed mergers with domestic banks, LTCB was sold to an international group led by US-based
Ripplewood Holdings
Ripplewood is an American private equity firm based in New York City that focuses on leveraged buyouts, late stage venture, growth capital, management buyouts, leveraged recapitalizations and other illiquid investments.
Ripplewood was founded ...
in March 2000 for ¥121 billion ($1.2 billion U.S.), the first time in history that a Japanese bank came under foreign control.
Investor
Christopher Flowers also played a major role in the buyout syndicate and remained a key shareholder of the company until August 2019, when the Japanese government acquired the shares held by his fund.
As part of the deal, the Japanese government insisted that LTCB maintain existing loan accounts for at least three years.
The final purchase agreement included a to the effect that Shinsei could demand within the next three years that the government purchase any claims which had fallen by twenty percent or more from book value. A similar provision was afforded
Aozora Bank, the successor of LTCB's similarly beleaguered sister company
Nippon Credit Bank
is a Japanese commercial bank that offers service in 19 branches in Japan and in 2 overseas representative offices (as of July 2012).
History
Aozora Bank is the successor of the Nippon Credit Bank (NCB), which was founded in 1957 as the Nippon ...
.
LTCB was relaunched as "Shinsei Bank" (literally "Newborn" or "New Life" Bank) in June 2000, with new management and services. Many of Shinsei's managers had previous experience working for foreign financial institutions in Japan, such as CEO Thierry Porte (formerly of Morgan Stanley) and CIO Jay Dvivedi (formerly of Citibank). Shinsei continued to use the Long-Term Credit Bank
SWIFT code
ISO 9362 is an international standard for Business Identifier Codes (BIC), a unique identifier for business institutions, approved by the International Organization for Standardization (ISO). BIC is also known as SWIFT-BIC, SWIFT ID, or SWIFT code, ...
(LTCBJPJT).
SBI Shinsei used the defect warranty provision to dispose of all the worst debts owed to the bank. Several companies which had used LTCB as their primary bank went bankrupt as a result, including
Sogo (July, 2000) and the
Dai-Ichi Hotel
(第一) is a compound modifier phrase of Japanese origin, meaning ''number one'', or ''first''. In kanji, "dai" ("number") is 第Nakao, Seigo''Random House Japanese-English English-Japanese Dictionary'' via Google Books, p. 39. Retrieved 2011-0 ...
. This created a furor in Japan: politicians especially criticized
Goldman Sachs
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
, which advised on the sale of LTCB, for not warning the government of the risks inherent in the defect security provision.
SBI Shinsei then raised ¥230 billion in an
IPO
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
on February 20, 2004. The purchase of Shinsei thus turned a profit of over ¥100 billion within four years. The success of the IPO intensified criticism of Shinsei, however: the government was estimated to have lost ¥4-5 trillion on the deal between lost investments and forced purchases of bad debt, and the profits from the deal even escaped Japanese taxation through the use of a foreign investment partnership. In April 2004, the bank exchanged its long-term credit banking license for a standard commercial banking license.
The
Financial Services Agency
The is a Japanese government agency and an integrated financial regulator responsible for overseeing banking, securities and exchange, and insurance sectors in order to ensure the stability of the financial system of Japan. The agency operates w ...
issued an improvement order to Shinsei on June 29, 2007 after the revenues of the company fell dramatically below targets.
On April 25, 2009, it was announced that Shinsei Bank and
Aozora Bank have entered into negotiations to integrate their operations in the summer of 2010, with an eye toward an eventual merger, however the talks collapsed in May 2010 amid disputes over capitalization and business strategy, as well as the abatement of the 2008 financial crisis.
In 2010, the bank sold its headquarters building near
Hibiya Park
Hibiya Park (日比谷公園 ''Hibiya Kōen'') is a park in Chiyoda City, Tokyo, Japan. It covers an area of 161,636.66 m2 (40 acres) between the east gardens of the Imperial Palace to the north, the Shinbashi district to the southeast and the K ...
and its operations center in
Meguro
is a special ward in Tokyo, Japan. The English translation of its Japanese self-designation is Meguro City. The ward was founded on March 15, 1947.
Meguro is predominantly residential in character, but is also home to light industry, corporate ...
in order to avoid falling below targets again due to investment writedowns during the
subprime crisis in the United States. Shinsei moved its headquarters to the
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. The curren ...
area of
Chuo City in January 2011.
Services
Shinsei Bank divides its business into three components: retail banking, institutional banking and consumer/commercial finance.
Retail banking
Shinsei offers a number of unique services as part of its basic "PowerFlex" savings account, including:
* "Cash back" for any ATM fees incurred when making withdrawals overseas.
* Banking office hours until 7 PM in many locations (most Japanese banks close much earlier, often as early as 3 PM).
* Foreign currency deposits as part of the standard account package (unique to Shinsei and
Tokyo Star Bank
is a Japanese bank established on June 11, 2001 out of the reorganization of then bankrupt Tokyo Sowa Bank (founded in 1949 as Tokyo Shokusan Mujin - Mutual Loan Company) by Lone Star Funds.
In 2014, the bank was purchased by Taiwan's CTBC Fina ...
and
Jibun Bank).
* Instant cash card issuance for customers opening new accounts in person with photo ID.
The Shinsei banking system is based on the FLEXCUBE software developed by Oracle Financial Services Software Ltd. Formerly
i-flex solutions.
Shinsei also gears many of its services toward resident foreigners in Japan, with English-language online banking and telephone support, as well as no requirement for a
personal seal in order to open an account.
Institutional banking
Shinsei combines its
commercial
Commercial may refer to:
* a dose of advertising conveyed through media (such as - for example - radio or television)
** Radio advertisement
** Television advertisement
* (adjective for:) commerce, a system of voluntary exchange of products and s ...
and
investment bank
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing is ...
ing operations into an "Institutional Banking" division which engages in a broad range of commercial lending and equity investment. The IB division is affiliated with four subsidiary companies: Shinsei Investment Management, Shinsei Securities, Shinsei Servicer and Shinsei Trust and Banking. Shinsei also does considerable investment business in
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
through subsidiaries in
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
and
Frankfurt
Frankfurt, officially Frankfurt am Main (; Hessian: , "Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on its na ...
.
Consumer and commercial finance
Shinsei operates many of its services in this field through its subsidiaries
APLUS
''Aplus'' is a genus of sea snails, marine gastropod mollusks in the family Pisaniidae, .
Distribution
Mediterranean Sea.Aissaoui C., Puillandre N., Bouchet P., Fassio G., Modica M. V. & Oliverio M. (2016). "Cryptic diversity in Mediterranean ga ...
(consumer finance), Shinki (owner of the NoLoan
consumer finance
Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.
When planning personal fi ...
company),
Showa Leasing (commercial and consumer leasing), Shinsei Business Finance (unsecured lending) and Shinsei Property Finance (mortgages).
Shinsei Bank , Small Business – Group Company Profiles
References
* ''Saving the Sun : A Wall Street Gamble to Rescue Japan from Its Trillion-Dollar Meltdown'' by Gillian Tett
*
" ''Business Week'', June 13, 2005.
External links
Official English website
Official website
(Japanese)
{{Authority control
Banks of Japan
Financial services companies based in Tokyo
Private equity portfolio companies
Japanese companies established in 1952
Banks established in 1952