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Aozora Falls, Paring Gains Sparked by Possible Bid From ANZ Bank

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Aug. 31 (Bloomberg) -- Aozora Bank Ltd. headed for its biggest drop in more than five months in Tokyo, paring two days of gains spurred by Australia & New Zealand Banking Group Ltd.’s interest in bidding for the Japanese lender.

Tokyo-based Aozora dropped 7.1 percent, the most since March 15, to 196 yen at the 11 a.m. trading break. The lender had risen 14 percent over the previous two days.

An assessment by ANZ Bank, Australia’s third-largest lender by market value, of Aozora is in the early stages and there’s no guarantee a deal will proceed, a person familiar with the matter said yesterday, asking not to be identified because the plans haven’t been made public. Buying Aozora may ease ANZ Bank’s reliance on overseas debt markets for funds.

“There are no further rumors out there on Aozora, so the drop may just be a reversal after the two days of huge gains,” Yoku Ihara, an analyst at Retela Crea Securities Co. in Tokyo, said by telephone.

Melbourne-based ANZ Bank’s interest in Aozora was reported by the Australian Financial Review newspaper Aug. 29. The bank has about 3 trillion yen ($39 billion) in deposits, according to data compiled by Bloomberg. It has 20 branches and a market value of about 348 billion yen.

Mike Smith, ANZ Bank’s chief executive officer, aims to double profit generated from Asia in the next seven years. The lender’s shares dropped 0.2 percent to A$20.14 in Sydney. The stock has slid 14 percent this year, while Aozora has gained 26 percent.

To contact the reporter on this story: Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net

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

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