Another Japanese bank has found in its profitable U.S. commercial finance unit a way to raise money to cover the write-off of bad loans. SANWA BANK, LTD. has agreed to sell its wholly owned SANWA BUSINESS CREDIT CORP. to FLEET FINANCIAL GROUP, INC. The deal's terms were not disclosed, but insiders said that the bank did not get as much money for the Chicago company as it had hoped. Estimates put the sale price between $700 million and $750 million. Sanwa Bank acquired what became SBCC in 1984. The company provides equipment leasing and secured lending to businesses, with about a third of its receivables coming from vendor financing. SBCC controls assets worth $6.4 billion. Boston-based Fleet's commercial finance unit, FLEET CAPITAL CORP., has assets of $9 billion. Both FUJI BANK, LTD. and DAI-ICHI KANGYO BANK, LTD. have used their American commercial finance units to generate funds to take care of problems at home (see Japan-U.S. Business Report No. 341, February 1998, p. 4, and No. 350, November 1998, p. 5).
An exchange rate of ¥121=$1.00 was used in this report.