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SBI Shinsei Bank

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SBI Shinsei Bank, Limited(Kabushiki gaisha SBI tân sinh ngân hàng,Kabushiki-gaisha SBI Shinsei Ginkō)is a leading diversifiedJapanesefinancial institutionthat provides a full range of financial products and services to both institutional and individual customers. It is owned bySBI Groupand headquartered inChuo,Tokyo.[5]It results from the 2000 rebranding of the formerLong-Term Credit Bank of Japan,under new ownership.

SBI Shinsei Bank, Limited
Kabushiki gaisha SBI tân sinh ngân hàng
Company typePublic(K.K)
TYO:8303
IndustryBanking
PredecessorLong-Term Credit Bank of Japan(1952-2000)
Founded2000
HeadquartersChuo, Tokyo,Japan(HQ)
Key people
Hirohumi Gomi(Chairman of the Board)[1]

Katsuya Kawashima(Representative Director, President & CEO)[2]

Yoshitaka Kitao(CEO of the SBI Group / Representative Director, Chairman, President & CEO ofSBI Holdings, Inc.)[3]
Total assets¥10,740 bn (Oct. 2021)
Owners
[4]
Number of employees
5,605 (Oct. 2021)[4]
Websiteshinseibank

History

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SBI Shinsei Bank is the successor of the Long-Term Credit Bank of Japan (LTCB), which had a government monopoly on the issuance of many long-term debt securities. Following the collapse of theJapanese asset price bubblein 1989, the bank was riddled with bad debts: the government nationalized it in 1998, and it was delisted from theTokyo Stock Exchange.After several proposed mergers with domestic banks, LTCB was sold to an international group led by US-basedRipplewood Holdingsin March 2000 for ¥121 billion ($1.2 billion U.S.), the first time in history that a Japanese bank came under foreign control.[6]InvestorChristopher Flowersalso 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.[7][8]

As part of the deal, the Japanese government insisted that LTCB maintain existing loan accounts for at least three years.[6]The final purchase agreement included a "defect warranty provision"(Tỳ vết đảm bảo điều hạng,kashi tanpo jōkō)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 affordedAozora Bank,the successor of LTCB's similarly beleaguered sister companyNippon Credit Bank.

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).[9]Shinsei continued to use the Long-Term Credit BankSWIFT 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, includingSogo(July, 2000) and theDai-Ichi Hotel.This created a furor in Japan: politicians especially criticizedGoldman Sachs,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 anIPOon 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.

TheFinancial Services Agencyissued 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 andAozora Bankhave 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 nearHibiya Parkand its operations center inMeguroin order to avoid falling below targets again due to investment writedowns during thesubprimecrisis in the United States. Shinsei moved its headquarters to theNihombashiarea ofChuo Cityin January 2011.[10]

Services

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Former head office adjacent toHibiya ParkinTokyo.The building was constructed in 1993 to house LTCB.

Shinsei Bank divides its business into three components: retail banking, institutional banking and consumer/commercial finance.[11]

Retail banking

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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 andTokyo Star BankandJibun 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. Formerlyi-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 apersonal sealin order to open an account.

Institutional banking

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Shinsei combines itscommercialandinvestment bankingoperations 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.[12]Shinsei also does considerable investment business inEuropethrough subsidiaries inLondonandFrankfurt.

Consumer and commercial finance

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Shinsei operates many of its services in this field through its subsidiariesAPLUS(consumer finance), Shinki (owner of the NoLoanconsumer financecompany),Showa Leasing(commercial and consumer leasing), Shinsei Business Finance (unsecured lending) and Shinsei Property Finance (mortgages).[13]

References

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  1. ^"Company Profile".corp.sbishinseibank.co.jp.SBI Shinsei Bank, Limited.Retrieved19 July2023.
  2. ^"Company Profile".corp.sbishinseibank.co.jp.SBI Shinsei Bank, Limited.Retrieved19 July2023.
  3. ^"Company Profile".sbigroup.co.jp/english/.SBI Holdings, Inc.Retrieved19 July2023.
  4. ^ab"Company Profile".shinseibank.Shinsei Bank, Limited.Retrieved1 January2021.
  5. ^"Branches & Annexes".Shinsei Bank.Retrieved2 August2013.
  6. ^ab"Japan's LTCB: What A Coup And What A Risk".Businessweek.10 October 1999. Archived fromthe originalon April 18, 2014.Retrieved18 April2014.
  7. ^Sender, Henny (September 26, 2017)."JC Flowers seeks buyer for its remaining stake in Shinsei Bank".The Financial Times.Archivedfrom the original on 2022-12-11.Retrieved13 January2018.
  8. ^Jiji (August 28, 2019)."Japanese government becomes top shareholder of Shinsei Bank".The Japan Times.Retrieved24 January2020.
  9. ^Dhananjaya "Jay" Dvivedi | japanincArchived2005-11-04 at theWayback Machine
  10. ^"Shinsei Bank Announces Commencement of Business at New Head Office"(PDF)(Press release). Tokyo: Shinsei Bank, Limited. January 4, 2011.Retrieved13 January2018.
  11. ^Shinsei Bank | Our Business and StrategyArchived2007-10-21 at theWayback Machine
  12. ^Shinsei Bank | Institutional – Affiliates
  13. ^Shinsei Bank | Small Business – Group Company ProfilesArchived2007-10-25 at theWayback Machine
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