Sanwa to Close Most U.S. Branches; End Overseas Loans
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TOKYO — Sanwa Bank Ltd., Japan’s fourth-largest lender, will stop extending loans to non-Japanese corporate customers overseas and close six of its 11 branches in the U.S. and Europe by March, the bank said.
In the U.S., Sanwa plans to shutter all but its New York and Los Angeles branches. The bank will keep sales offices in Houston, Chicago and San Francisco. In Europe, it will keep its London, Brussels and Dusseldorf, Germany, branches.
The move is part of a long, slow exodus for Sanwa Bank and other Japanese lenders, which lent huge sums abroad at low margins during the go-go days of the 1980s “bubble economy.” Now, they’re streamlining businesses both at home and overseas in a bid to boost capital and bottom lines.
“Our policy is to concentrate on profitable businesses,” said Haruhiko Kimura, a spokesman for the bank. Sanwa will continue to participate in structured and project finance abroad, he said.
Sanwa also is being pressured by difficulties in raising foreign currency to fund its overseas operations, Kimura said.
Many of Japan’s banks are finding it tougher to get funds abroad, as foreign lenders boost the “Japan Premium,” or the surcharge on loans to Japanese banks, following cuts in their credit ratings.
Sanwa had $11.3 billion in loans and other overseas assets as of March 31.
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