Bailed-out banking group Resona Holdings Inc. said Friday it expects a group net loss of 1.71 trillion yen for the year to March 31, reversing its June estimate of a 63.5 billion yen profit.
The nation's fifth-largest banking group also unveiled a new business-turnaround plan featuring 4,000 job cuts by March 2005.
"The first order of business is to make sure we make profitability next year," Resona chairman Eiji Hosoya told a Tokyo news conference. The bank will not be able to present a repayment schedule for public funds until fall next year, he said.
The bank received 1.96 trillion yen of public funds after the government decided to rescue it in May.
Resona will need a year to try out new business models to get itself on a track to profitability, Hosoya said.
As part of the job-reduction program, Resona will encourage some 1,500 middle managers to seek early retirement this business year, and book 21 billion yen for severance packages. It will further seek to cut pension payments to former retirees.
Resona aims to return to profit in fiscal 2004 and has targeted a group net profit of 160 billion yen. It will divide its branch network into 50 blocks, giving one manager complete responsibility and decision-making power over an entire block.
The bank will also set up support centers for small and midsize businesses.
"We want to cultivate our brand value as a strong bank in small and midsize business loans," Hosoya said.