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Technology Stocks : Softbank Group Corp -- Ignore unavailable to you. Want to Upgrade?

To: Yamakita who wrote (5293)	6/19/2000 7:13:00 PM
From: Yamakita	Read Replies (1) \| Respond to of 6018

Son: New Nippon Credit Bank to focus on loans, investment Junko Okamoto Yomiuri Shimbun Staff Writer Softbank Corp. Chairman Masayoshi Son wants to turn the nationalized Nippon Credit Bank (NCB) into an investment bank similar to those in the United States and Europe after a consortium headed by his company purchases the bank In a recent interview with The Yomiuri Shimbun, Son said, "I would like to make the bank a new type of bank that aims at making high profits by investing capital in start-up businesses and by providing loans." Although the sale of the temporarily nationalized NCB to a Softbank-led consortium has been agreed on, the final agreement with the Financial Reconstruction Commission has not yet been reached because the parties have not resolved various issues, including how much the government should set aside to guard against irrecoverable loans. Some in the industry have expressed concern that the new NCB may become an institutional bank that will provide loans according to the dictates of the parent company. Son stressed that he would like to have Softbank subsidiaries listed on the stock market reinvest the profits in their companies and thereby improve them. Softbank served as the driving force behind the opening on Monday of a new stock market, Nasdaq Japan. However, there have been concerns that the new market will be used to list the stocks of Softbank affiliates and serve as a private stock market for the group. Softbank has also been criticized for offering the shares of its group's companies to the public. Following are excerpts from the interview: Yomiuri Shimbun: How much progress has been made toward the final agreement on the NCB deal with the Financial Reconstruction Commission? Son: We meet every day to try to reach a final agreement. Although we have to resolve various matters, including the issue of bad loans, the most important point is to ensure that failed companies who strongly resent the former NCB for leading them to bankruptcy do not transfer those feelings of enmity to us. Reserves are merely an issue of money, but a grudge can last for a century. What kind of bank do you hope to create? We will try to introduce a new type of bank in Japan that will not provide loans depending on the amount of collateral, including real estate. Instead it will decide to provide loans based on prospective borrowers' expectations of their cash flows and their plans for their businesses. We would like to receive high returns by having a stake in venture businesses through lending them money. There have been concerns that the new bank may become Softbank's own institutional bank. It is likely that such concerns will arise as many businesses will enter the banking sector and basic rules of the banking industry may be violated. However, in our case these fears are groundless. The NCB will have an independent loan assessment sector that will strictly examine each proposal. The guidelines for companies in the nonbanking sector who enter the banking business provide that the newcomers' parent companies will also be monitored. This rule is necessary to protect the banking system. It will not do us any harm. What do you think about the view that Nasdaq Japan may become your own private stock market? It would be absurd if companies in which Softbank invested a portion of its capital have their shares go public on all the markets except for Nasdaq. Companies and stockholders should decide for themselves. It will become clear in five or 10 years that our intentions are good. When do you plan to make shares of the company that operates Nasdaq available to the public? Although we have started to discuss the timing, it has not yet been decided. We are also considering issuing more shares to be bought by third parties who wish to invest in the market to boost capital. However, Softbank will still hold the vast majority of shares. It has been pointed out that offering shares of affiliated companies, including holding companies, to the public will lead to double or triple the profits. This is a misunderstanding. Even when shares of subsidiaries are listed on the stock market, the total value of the Softbank group does not change. Some investors are interested in a particular company in the group, and some are interested in the financial sector (the holding company). We try to satisfy different expectations. We hope to improve the value of subsidiary companies by investing their profits from being listed on the market in other new companies.