This page has been archived and commenting is disabled.

Takefuji, Third Largest Japanese Consumer Lender, Halted, To File Bankruptcy

Submitted by Tyler Durden on 09/26/2010 21:28 -0400

Takefuji Corp., the third largest Japanese consumer lender, was limit down on the Nikkei, and was subsequently halted, on reports the company is preparing to file bankruptcy as reported by Nikkei newspaper earlier. The news was also confirmed by the Jiji and Kyodo news agencies. According to Reuters, "Takefuji had 430 billion yen ($5.11 billion) in liabilities as of the end of June, the Nikkei business daily reported, adding that president Akira Kiyokawa would step down." Apparently the reason is that according to Japanese "consumer protection" banks are limited to the paltry 20% they can charge for interest: "Japanese consumer lenders have been struggling to cope with regulations lowering the rates they can charge on loans as well as claims for reimbursement for past interest deemed illegally high by a court ruling in 2006. In June a new set of regulations cemented the interest rate ceiling at 20 percent, down from 29.2 percent, and limited the amount an individual can borrow." Nonetheless, the filing will likely not be a major surprise as even Moody's appears to have been on the case.

The company had $404.6 million of debts as of March [not sure how this confirm with the previous number which had the debt at about 1,000 times higher], the company said in July. Moody’s Investors Service in that month cut Takefuji’s credit rating to Ca, the second-lowest non- investment grade rating, citing its funding plans and borrowers’ claims for repayment of overcharged interest. Net income sank 32 percent to 6.3 billion yen in the three months ended June 30, from 9.3 billion yen a year earlier.

This should be a stark reminder of what happens to a financial industry which is faced with a deleveraging consumer class, coupled with an overzealous consumer protection regulator.

And just because every major media outlet in America appears to have gotten a memo to not mention the fact that America's wholesale drecit unions, we will make sure that everyone remembers all too well on Monday morning, that about 10 times the debt of Takefuji just went bankrupt in our own country last week.

- advertisements -

Sun, 09/26/2010 - 21:31 | 606283 10044

Nikkei taking the news well by being up over 1%

Are we EVER going to see a crash???

Sun, 09/26/2010 - 21:49 | 606312 suteibu

You forget that they kissed China's ass for the sake of the economy. That trumps the dying consumer lending business.

Sun, 09/26/2010 - 23:55 | 606481 FischerBlack

You're going to have to turn your charts upside down to see a crash. We used to have a 'Bernanke put' on everything, now we have a 'Bernanke bid' under everything.

Mon, 09/27/2010 - 00:08 | 606507 Fidel Sarcastro

That's the same thing.

Sun, 09/26/2010 - 21:32 | 606287 breezer1

how do you say extend and pretend in japanese?

Sun, 09/26/2010 - 21:35 | 606294 Id fight Gandhi

Pomo arigato

Sun, 09/26/2010 - 21:40 | 606300 Everyman

+100, that made me spit iced tea on the monitor.

Sun, 09/26/2010 - 23:42 | 606457 Mad Max

+101

Champion two-word response of the day.

Sun, 09/26/2010 - 22:24 | 606357 williambanzai7

+Respect

Mon, 09/27/2010 - 00:16 | 606516 Not A Pundit