Daiwa Bank in $3b sale

Daiwa Bank in $3b sale

TOKYO (Reuter): Japan's Daiwa Bank announced the sale of more than US$3 billion worth of its U.S. business assets yesterday, just days before a deadline set for it to quit the United States following a scandal over huge trading losses.

The buyer is another of Japan's big city banks, Sumitomo Bank Ltd.

The two banks said they had agreed Daiwa would transfer loans and related business assets worth $3.3 billion from its U.S. branches and New York-based trust bank unit to Sumitomo by Friday.

Sumitomo would also pay Daiwa $65 million for rights to the business at 15 of its U.S. branches and its trust bank arm, a Daiwa spokesman said. He said he did not know when payment would be made.

Daiwa has a total 17 branches in the United States, two of which would close, the spokesman said.

Analysts in Tokyo said the banks' decision had been widely expected and came as no surprise to the market.

"The deal is unlikely to give much benefit to Sumitomo or boost its earnings," said Nozomu Kunishige, assistant general manager at Kleinwort Benson International. "It's just aimed at helping out Daiwa."