The government's Resolution and Collection Corp. said Monday it has bought bad loans worth 530 billion yen from two failed small savings institutions for 160 billion yen.
The operations of Kyoto Miyako Shinkin Bank and Minami Kyoto Shinkin Bank will be transferred to Kyoto Chuo Shinkin Bank in January.
The RCC said it paid 110 billion yen for Kyoto Miyako's bad loans with a face value of 340 billion yen, and 50 billion yen for Minami Kyoto's 190 billion yen in bad loans.
The loans of both institutions were extended mainly to the construction and real estate sectors, with Minami Kyoto having lent more to large companies, RCC officials said.
The RCC will try to recover the loans in the future, and it will also investigate whether the former management can be held legally responsible for the failure of the institutions.