(Bloomberg) — SBI Holdings Inc. Chief Executive Officer Yoshitaka Kitao said Japan’s largest online brokerage, in conjunction with the government, has the option to delist Shinsei Bank Ltd. in order to pay back funds the lender owes to taxpayers.
“I totally agree” with that way of thinking, Kitao said at a press conference, reciting remarks made recently to a local newspaper by a government official. “I feel it is not right to keep linking 7,450 yen and 350 billion yen.”
Shinsei owes 350 billion yen ($3.1 billion) of public money, following a 1998 bailout of its predecessor, the Long-Term Credit Bank of Japan Ltd. The government needs to sell its 21.8% stake at about 7,500 yen a share to recoup that amount. Earlier this month SBI raised its position in Shinsei to around 48%, giving it effective control.
“It’s difficult, it isn’t easy, to make the stock price rise sharply,” Kitao said, mentioning Shinsei shares’ limited liquidity and institutional investors’ general tendency to avoid purchasing such securities.
Read how Kitao is trying to shake up Japan’s finance sector
SBI will need to discuss with the government on how to pay back the public money, but once delisted, Shinsei would have the option of issuing preferred stocks, Kitao said.
Surplus Capital
Kitao, who said he may stay on as CEO for three more years or so, also indicated his support for using the bank’s surplus capital to undertake mergers and acquisitions outside of Japan for growth.
Shinsei shares rose 7.8% to 1,940 yen as of 12:31 p.m. in Tokyo, while SBI held about 2.5% higher.
SBI will open an equity-business hub in London and expand services for corporate clients, Kitao also said.
(Updates with Kitao comments from second paragraph)
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