UFJ Bank said Tuesday it and the Merrill Lynch group will create a fund of up to 100 billion yen to purchase loans to ailing small and midsize enterprises.
The bank, owned by UFJ Holdings Inc., will hold a 30 percent stake in the Genesis Fund, while the U.S. financial group will hold the remaining 70 percent, UFJ said.
They will also set up a company to manage the fund.
UFJ Bank said it plans to exploit the Genesis Fund and UFJ Strategic Partner Co., another UFJ-Merrill Lynch joint firm founded earlier for business turnaround services, to step up disposals of the bank's nonperforming loans.
The bank said it plans to cut its balance of nonperforming loans by 2.3 trillion yen by the end of March 2005.