Nippon Credit Bank, currently under state control, has selected U.S. investment bank Morgan Stanley as its financial adviser, NCB President Takuya Fujii said Tuesday.

Fujii told a news conference that the bank made a financial advisory contract with the U.S. company on Monday after screening applications from 17 firms. Morgan Stanley will act as a go-between in the bank's efforts to seek companies willing to buy its good assets.

Bad assets, consisting mostly of nonperforming loans, will be sold to the Resolution and Collection Corp., a state-backed debt-collection body.

Fujii refused to disclose details concerning the bank's contract with Morgan Stanley but did say it includes "incentives" for the firm to find a buyer for the bank as early as possible — implying that the firm will be rewarded if it lands a deal within a certain period.

In choosing a financial adviser, NCB looked to several factors, such as whether the adviser can help the bank maintain its relationships with small and middle-size corporate clients, and whether the firm is capable of coming up with various fundraising schemes.

The bank also announced its fiscal 1998 earnings report.

NCB, which was declared insolvent and placed under state control in December, estimates that it will receive 3.09 trillion yen in public funds to make up for losses resulting mainly from the boosting of its bad-loan writeoffs.

It also had a total of some 4 trillion yen in nonperforming loans at the March 31 end of fiscal 1998. The bank covered 99.7 percent of such loans with collateral and loan-loss reserves, bank officials said.