Aozora/Shinsei: Combination Belies Broader Malaise

On June 25, Japanese banks Aozora Bank and Shinsei Bank confirmed that they are in talks to merge, after months of speculation. The combination of the two banks would create Japan's sixth-largest bank with assets of about JPY18,000 (US$199.7bn). Good news? Not necessarily - both banks have been hit by losses from toxic assets, with Shinsei Bank and Aozora Bank reporting a record annual net loss of JPY143bn (US$1.49bn) and an annual net loss of JPY242.6bn (US$2.50bn) in FY2008 respectively, and have been bailed out by the Japanese government.

To read the full article, please choose one of the following options: