The Tokyo Metropolitan Government is in talks with Paribas International SA over the purchase of the French financial group's Japanese trust bank, Gov. Shintaro Ishihara announced Friday.

Ishihara told a regular news conference that the metro government is trying to purchase BNP Paribas Private Bank (Japan) Ltd.

By purchasing the unit, the metro government could realize its goal of creating a bank specifically to finance small and midsize companies without obtaining a new bank license, Ishihara stressed.

"BNP Paribas Bank is suitable for creating a new bank due to size, expected purchasing price and the business," Ishihara said.

Ishihara added that the bank's financial situation is more transparent than that of many Japanese banks, which means the metro government would face fewer risks in terms of inheriting hidden bad assets.

"We would establish a new type of bank featuring a small number of workers and branches by using the latest IT technology," he said.

The metro government plans to reach a basic agreement with the financial group by the end of the year, after the plan is endorsed by the Tokyo Metropolitan Assembly on Dec. 2.

The trust bank, which was established by the BNP Paribas International financial group in April 1999, is capitalized at 5.3 billion yen.

The metro government is planning to invest 100 billion yen in the bank bank, which is expected to be capitalized at 200 billion yen. The remainder of the capital is expected to come from private sector investment.

Tokyo would become the first local government to establish a bank.

Ishihara promised to establish a bank while campaigning before his re-election in April. He announced the outline of the bank in May.