Hokkaido Bank, the second largest lender in the northern prefecture, formally asked the Financial Reconstruction Commission on Friday for some 45 billion yen in public funds to shore up its capital base, the bank said.
The expected capital injection will bring the bank's capital adequacy ratio from 5.68 percent as of September to 8.18 percent at the end of March -- above the 8-percent minimum standard for internationally active banks, it said.
In filing the application, the bank submitted a management improvement plan that includes a 13 percent personnel cut by fiscal 2002 compared with fiscal 1998.
The bank 's capital adequacy ratio dipped below 4 percent, the minimum bar for non-international banks, in the fiscal year that ended March 31, 1999. But it later raised capital to the current level by selling new shares to business allies.
Asked why the bank wants its capital adequacy ratio above 8 percent, President Tsuneo Fujita said, "We would be labeled as weak under 8 percent," noting its current capital ratio is the lowest among 64 regional banks.
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