Mitsui Marine & Fire Insurance Co. announced March 13 that it has dropped a plan to take over part of failed Sanyo Securities Co. because it is unlikely the company will be able to make a profit.

The takeover attempt was seen as part of broader moves to reorganize the country's brokerage industry, as the "Big Bang" financial deregulation will knock down the walls between financial sectors.

Mitsui Marine was considering using Sanyo's retail network to enter the fund management business and sell investment trusts, known as mutual funds in the United States. "We decided to discontinue the examination because we cannot expect a certain level of profitability," said Shutaro Kubo, managing director of Mitsui Marine, at a news conference in Tokyo.

But the country's third largest nonlife insurance company will explore other means to sell investment trusts, he added. Kubo explained that Mitsui Marine only wanted Sanyo's retail network, but Sanyo's business was largely based on selling and buying of stocks. It would take time to make profits with its retail section, and Mitsui Marine cannot accept the management risk, he said.

Sanyo Securities will continue to seek other investors as it formulates its rehabilitation plan. But industry sources say that finding investors will be difficult due to the lackluster state of the securities market, adding that the Tokyo-based brokerage house will eventually have to be liquidated.

Sanyo, a second-tier brokerage house, effectively went bankrupt in November with an outstanding debt of 373.6 billion yen and filed for protection from creditors under the Corporate Rehabilitation Law. Since it submitted to Mitsui Marine a revised plan to set up a new firm in early February, the nonlife insurer was considering providing capital to the firm.

Mitsui Marine, a member of the Mitsui business group, holds a market share of about 9 percent.