Tokyo Governor Ishihara's brainchild new bank creating snowballing deficit

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Tokyo Governor Ishihara's brainchild new bank creating snowballing deficit

Deficit of ShinGinko Tokyo, Ltd., the brainchild of Tokyo Governor Ishihara Shintaro which the Tokyo Metropolitan Government provided with capital of 100 billion yen, is snowballing ever since its start in last April.

The bank has not only failed to fulfill its original task to finance small- and medium-sized companies but has been making a loss worse than it originally contemplated.

According to its half-year accounts released on November 30, the bank ran up a deficit of 15.4 billion yen, up 5.9 billion yen from the previous year. Lending to small businesses, which is supposed to be the eye-catching feature of the bank, remains at only 52 percent of its total loans.

Its equity ratio has decreased to 21 percent by nine points from the previous half year. The rate of nonperforming loans is 2.03 percent, 1.26 points up from the previous year.

Admitting that the bank is in trouble, Ishihara at a press conference on December 1 said, "I will tax my brain to put the bank right."

The Japanese Communist Party Tokyo Metropolitan Assembly members' group and the National Federation of Traders and Producers Organizations (Zenshoren)-affiliated Tokyo Federation of Traders and Producers Organization have criticized Ishihara on the grounds that the bank is useless for the small business owners really in need.
- Akahata, December 5, 2006