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Shinsei, Aozora Bank Shares Jump in Tokyo After Profits Rise

Shinsei Bank Ltd. (8303) and Aozora Bank Ltd. (8304) gained in Tokyo trading after the Japanese lenders posted first-quarter profit increases helped by one-time income from securities sale and lower credit costs.

Shares of Shinsei Bank partly owned by J. Christopher Flowers rose as much as 6.7 percent to 95 yen on the Tokyo Stock Exchange as of 9:26 a.m., the biggest gain since March 1. Aozora Bank, controlled by Cerberus Capital Management LP, climbed 2.8 percent to 182 yen.

Income from selling assets including foreign stocks, coupled with fewer credit costs and operating expenses boosted Shinsei Bank’s net income by 31 percent to 18.2 billion yen ($234 million) in the quarter ended June 30 from a year earlier, it said in an exchange filing yesterday. Japan’s bank lending decline slowed in June falling 0.6 percent from a year earlier, the smallest drop in 19 months, according to Bank of Japan data.

Shinsei Chief Executive Officer Shigeki Toma plans to expand consumer financing including uncollateralized loans given that signs of recovery in the country’s lending demand are emerging, he said in the statement.

Aozora’s first-quarter profit surged 50 percent to 11 billion yen, helped by a decline in credit costs, according to a statement filed yesterday to the exchange.

To contact the reporter on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net.

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net.

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