Troubled Hokkaido Takushoku Bank should first look for support from local business circles in increasing its capital, the president of Asahi Mutual Life Insurance Co. said Sept. 19.
Noting that Asahi Mutual has not received a formal request from Hokkaido Takushoku to convert Asahi's loans to equities, President Yuzuru Fujita, also chairman of the Life Insurance Association of Japan, said, "There is no convincing reason to accommodate such a request because what the bank is trying to do is put a burden on life insurers to cover its losses."
Hokkaido Takushoku has reportedly asked life insurers and banks to help increase the bank's proprietary capital, expected to shrink as a result of writing off nonperforming loans worth 350 billion yen in the current fiscal year.
A merger between two Hokkaido banks, initially planned for next April, has been postponed because of a gap in their perception over Hokkaido Takushoku's bad loans.