Resona Holdings Inc. (8308) Chairman Eiji Hosoya, who spearheaded the Japanese bank’s revival after it was bailed out by taxpayers nine years ago, has died. He was 67.
Hosoya died at his home in Tokyo on Nov. 4 following an unspecified illness, the bank said on its website yesterday.
He joined Resona, now Japan’s fifth-biggest bank by market value, in 2003 when the nation’s lenders were saddled with bad loans after an asset bubble burst in the 1990s. Tokyo-based Resona has posted profit in the past eight fiscal years by focusing on retail customers after receiving a government bailout of 1.96 trillion yen ($24 billion).
“He is the symbol of the bank’s revitalization,” said Shinichiro Nakamura, an analyst at SMBC Nikko Securities Inc. “He was a pillar of strength, encouraging employees to try harder even amid cost cuts and in difficult circumstances.”
Hosoya was brought into Resona after working on the privatization of East Japan Railway Co. (9020), the country’s largest railway. He joined JR East’s predecessor, the state-owned Japan National Railways, in 1968 after graduating from the University of Tokyo, according to Resona’s website.
Japanese banks got into financial difficulty after property prices collapsed in the early 1990s, reducing the value of collateral for loans. Stalled economic growth and deflation generated bad debts faster than banks could write them off.
Resona said in May 2003 a 838 billion yen loss reduced its capital below required levels, forcing it to seek government aid. The company was formerly known as Daiwa Bank Holdings Inc. (TBHS:US), a lending group that was formed in December 2001 in a three-way merger of Daiwa Bank Ltd., Kinki Osaka Bank Ltd. and Nara Bank Ltd. Asahi Bank Ltd. joined the group in March 2002.
Taking the post at Resona wasn’t an easy decision, Hosoya said after his appointment.
“I decided to accept the offer as I realized that stabilizing the financial system is the highest priority for the Japanese economy,” he said at a news briefing on May 30, 2003.
Resona raised 545 billion yen in January 2011 from an equity offering to fund Hosoya’s proposed purchase of 1.3 trillion yen of preferred shares from the government by 2015. The government still has 27 percent voting rights in Resona.
The shares fell 1.5 percent to 331 yen at 2:35 p.m. in Tokyo. The benchmark Topix Index lost 0.7 percent.
Hiroya Masuda, 60, recalls meeting Hosoya when they worked on the development of a local train line in Ibaraki prefecture north of Tokyo 26 years ago.
“He was a workaholic and a tough negotiator,” Masuda, a former internal affairs minister and governor of Iwate prefecture in northern Japan, said in a telephone interview today. “At Resona, he instilled an awareness that the banking business is a hospitality industry.”
Resona raised its full-year profit forecast to 230 billion yen last month on declining costs including bad-loan provisions. The bank previously projected net income of 140 billion yen for the year ending March.
Among Hosoya’s efforts to cut expenses, Resona sold its headquarters building in Otemachi, Tokyo’s financial district, in 2008 and moved to Kiba in the capital city’s eastern Koto district two years later.
He also sought to increase the number of female managers at the bank to narrow Japan’s gender gap. “Companies that don’t give women leading roles will be left behind,” Hosoya said in an interview last November.
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