"Sumitomo mitsui has that much energy?" asked Japan's startled finance minister, Masajuro Shiokawa, when told that one of the country's four biggest banks was considering buying a big stake in Aozora Bank, once called Nippon Credit Bank before it was nationalised and sold to a consortium of investors in 2000. Softbank, an Internet investment group with troubles of its own, is looking to sell its 49% stake in the bank. Why Sumitomo Mitsui―struggling, like other big Japanese banks, to find the funds to write off its bad loans―should want to buy Aozora is unclear. Some say it is to bolster capital: excluding public money and deferred taxes that can count as capital, Sumitomo Mitsui is woefully undercapitalised. Yet buying Aozora is expected to raise Sumitomo Mitsui's capital-adequacy ratio by only half a percentage point.
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