Ashikaga's capital adequacy ratio, a measure of a bank's financial health, had fallen to minus 3.7 percent at the end of September, Takenaka said. The minister said no other Japanese bank is currently insolvent.
The lender requested assistance because it was unable to repay its debts, Koizumi said in a statement yesterday. The bank was concerned it didn't have sufficient funds to cover deposits held by companies and individuals, Koizumi said. The group holds about 40 percent of deposits in Tochigi Prefecture, north of Tokyo.
"I would like to minimize the negative impact on the local economy," Koizumi said at a press conference.
The Utsunomiya City-based lender has 3,000 employees and 170 branches, offering banking, credit card and leasing services. Ashikaga Financial president Yoshiaki Higano yesterday told a press conference in the city he will step down.
The lending group was formed on March 12 through a combination of Ashikaga Bank and Kita Kanto Lease Co, a Tochigi-based leasing company of machineries and cars.
Ashikaga Bank will be removed from the holding company and taken over by the government.
The lender may be sold to the private sector after its finances improve, the newspaper said yesterday.
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