Suruga Bank's improper housing loans top 1 trillion yen

Japan Economic Newswire |

Suruga Bank said Wednesday it has extended over 1 trillion yen ($9.1 billion) in confirmed and suspected improper housing loans.

In an attempt to restore trust among investors and clients following the revelations last year of a spate of financing scandals, the Japanese regional lender also said it will form a business tie-up with Tokyo-based Shinsei Bank in the field of personal loans, among other services.

The bank based in Shizuoka Prefecture asked an outside lawyer in October to conduct full-fledged investigations into its loans provided for purchasers of investment-purpose real estate after it admitted to falsifying documents to smooth the process of examining customers' repayment abilities.

About 38,000 properties, including "share houses," where bathrooms, kitchens and other facilities are used in common by tenants, were subject to the probe and his team concluded that about 60 percent of the combined balance of the loans, worth 1.8 trillion yen, is suspected to be inappropriate.

"I sincerely apologize that so many cases of wrongdoing have been found," Suruga Bank President Michio Arikuni said at a press conference in the city of Numazu in the prefecture.

In addition to Shinsei Bank, the regional bank has decided to form a business alliance with electronics retailer Nojima Corp., seeking to jointly carry out credit card services.

Arikuni said Suruga Bank is open to building business partnerships with other companies.

In the business year ended in March, the bank said Wednesday it incurred a group net loss of 97.15 billion yen, compared with the previous year's profit of 6.99 billion yen.


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