Long-Term Credit Bank
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| Industry | Financial Services |
|---|---|
| Fate | Bankruptcy; acquired by Ripplewood |
| Successor | Shinsei Bank |
| Founded | 1952 |
| Defunct | 1998 (bankruptcy) 2000 (restructured) |
| Headquarters | Tokyo, Japan |
|
Key people
|
Binsuke Sugiura, President |
The Long-Term Credit Bank of Japan, Ltd. (株式会社日本長期信用銀行 Kabushiki-kaisha Nippon Chōki Shin'yō Ginkō), abbreviated LTCB in English and Chōgin (長銀) in Japanese, was founded in 1952 under the direction of the Shigeru Yoshida government to provide long-term financing to various industries in Japan. Along with the Industrial Bank of Japan and the Nippon Kangyo Bank, it was one of the major financiers of the postwar economic development of Japan. After extensive problems with bad debt in the 1990s, the bank was nationalized in 1998, and finally sold in 2000 to a group led by US-based Ripplewood Holdings in the first foreign acquisition of a Japanese bank; it is now known as Shinsei Bank.
The Diet of Japan enacted a Long-Term Credit Bank Act in June 1952 which became effective that December, and LTCB was incorporated as a stock company (kabushiki kaisha) with headquarters in the Kudan district of north-central Tokyo. It opened branches in Osaka and Sapporo in 1953, and established agencies at various regional banks. LTCB was almost immediately profitable, owing to the rapid expansion of the Japanese economy at the time. It declared its first dividend in 1954 and was listed on the in 1970.
Hayato Ikeda, then Minister of Finance, led the initiative to create LTCB as a specialty bank for the purpose of providing long-term credit to Japanese companies. Commercial banks at the time faced a mismatch between their own funding sources, which were mainly short-term demand deposits, and the needs of their customers for longer-term credit. LTCB was permitted to issue long-term bonds to fund its operations, which became popular investments in Japan due to their yield, credit rating and the fact that they were bearer bonds and therefore transferable like cash. The company moved to the Tokyo Building in Marunouchi in 1956 and established its first overseas office in New York City in 1964, followed by offices in London, Sydney, Amsterdam, Los Angeles, and other major financial centers.
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