OSAKA -- Namihaya Bank, the first merged firm born under the revised Deposit Insurance Law, started operations Thursday after integrating operations of the ailing Fukutoku and Naniwa banks.The two Osaka-based regional banks, saddled with mounting bad loans, were merged under the revised law, which allows a deposit insurance fund to support a new financial institution created as a result of the merger of two or more ailing banks.Namihaya Bank, with total deposits of 1.56 trillion yen and total loans of 1.18 trillion yen, operates 146 branches in Osaka prefecture and is now the third-largest regional bank there.President Shinji Yoshida said the first priority for the bank is to deliver dividends to its shareholders. He said the bank will care for local customers and try to operate as transparently as possible.The Resolution and Collection Bank Ltd. bought a total of 301.8 billion yen in bad loans from the two ailing banks. As a result, Namihaya's bad loans occupy just 4 percent of its total loans, a figure that would have been 12 percent otherwise. However, Namihaya's self-owned capital ratio is still less than 4 percent with current capital of 11.6 billion yen and a 4 billion yen capital increase scheduled before the end of the year.The new bank plans to reduce its workforce from 2,300 employees to 1,800 by the end of fiscal 2001, saving 4.7 billion yen annually, and the number of branches to 111 by the end of fiscal 2002.