SFCG Co., a Tokyo-based lender whose creditors include Citigroup Inc., filed for bankruptcy protection Monday, triggering a slump in financial stocks on concern the recession will cause more corporate failures.
SFCG, which focuses on lending to small businesses, listed ¥338 billion in liabilities, making it the biggest bankruptcy by a publicly traded company in almost seven years. The firm owed Citigroup ¥71 billion as of July 31, according to a filing by SFCG on Oct. 27.
"Up until now, bankruptcies were concentrated in the real estate and construction sectors, but the trend has widened to collapses across a broad range of industries," said Nobuo Tomoda, an analyst at credit and bankruptcy research firm Tokyo Shoko Research Ltd. "It's getting harder to obtain funds."