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SBI Shinsei Bank updates on deliberations regarding repayment of public funds

Norbert Gehrke

Norbert Gehrke

— 3 min read
SBI Shinsei Bank updates on deliberations regarding repayment of public funds

SBI Shinsei Bank is working to enhance the corporate value of the SBI Shinsei Bank Group. As part of this effort, management is examining capital policies, including the repayment of public funds, which is a significant issue. Herewith, SBI Shinsei Bank is providing an update on the current status of deliberations as follows:

  • As announced by SBI Holdings in its release dated December 30, 2024, titled “Notice Concerning Acquisition of Partial Shares of SBI Shinsei Bank, Ltd.,” as of January 9, 2025, the shareholders of SBI Shinsei Bank are solely the SBI Group (SBI Holdings and SBI Regional Bank Holdings) and the Japanese government (Deposit Insurance Corporation of Japan and Resolution and Collection Corporation).
  • Based on the Agreement Regarding the Handling of Public Funds executed with SBI Holdings, Deposit Insurance Corporation of Japan, and Resolution and Collection Corporation on May 12, 2023, SBI Shinsei Bank will continue discussions with SBI Holdings and the Japanese government to reach an agreement on a specific mechanism for repaying public funds as quickly as possible.
  • Subject to the Japanese government's approval and the consent of all shareholders of SBI Shinsei Bank, SBI Shinsei Bank intends to repay JPY 100 billion, out of the current outstanding public funds balance of approximately JPY 330 billion, as soon as preparations are complete, with the goal of completing this repayment within the current fiscal year. As a funding source for the JPY 100 billion repayment, considering the current business conditions and capital adequacy of SBI Shinsei Bank, management plans to allocate JPY 50 billion from the bank's own capital reserves while securing a JPY 50 billion investment from SBI Holdings, totaling JPY 100 billion, ensuring sufficient financial soundness.
  • Further details regarding the method of repaying the initial JPY 100 billion and the remaining JPY 230 billion in public funds will be discussed in accordance with the Public Funds Agreement, aiming to reach an agreement as early as possible, without being bound by the June deadline. To ensure sufficient distributable amounts are available for prompt and smooth repayment following the agreement, SBI Shinsei Bank plans to reduce the amount of stated capital (by transferring a portion of the stated capital to other capital surplus), subject to regulatory approval.
  • After clarifying the plan for the repayment of public funds as described above, SBI Shinsei Bank will begin preparations for re-listing.

Since becoming a consolidated subsidiary of SBI Holdings in December 2021, and through the fiscal year 2023, the SBI Shinsei Bank Group has established a collaborative foundation as a core banking group within the SBI Group. With the goal of further growth, SBI Shinsei Bank is currently formulating a new three-year medium-term management plan starting from fiscal year 2025 (ending March 2026).

SBI Shinsei Bank will continue to steadily expand its earnings base and accumulate profits, and to accelerate the pace of business expansion, the bank intends to diversify its capital procurement methods, including re-listing, in addition to capital support from SBI Holdings. By completing the early repayment of public funds, SBI Shinsei Bank will resolve its most important management challenge, further enhance management flexibility, and accelerate the improvement of the SBI Shinsei Bank Group’s medium- to long-term corporate value.

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