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SBI Holdings invests ¥2.5B in Shimane Bank

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SBI Holdings invests ¥2.5B in Shimane Bank

SBI Holdings Inc. and Shimane Bank Ltd. forged a capital and business partnership that will see SBI invest about ¥2.5 billion in the regional lender.

Under the agreement, Shimane Bank will raise funds through a third-party allocation of shares, of which SBI and a regional bank revitalization fund run by its unit, SBI Asset Management Co. Ltd., will take a stake of about 34%.

SBI will send two executives to Shimane Bank to oversee the alliance. SBI said it aims to enhance Shimane Bank with its investment knowledge, global network and financial technologies, as well as offer a range of financial services to the regional bank's customers.

The partnership is part of SBI's strategy to form a network of capital alliances with local lenders, aiming to inject life into Japan's ailing regional banking sector. Regional banks have been hit hard by ultra-low interest rates and depopulation, and are undergoing a wave of consolidation.

Shimane Bank is expected to book a ¥1.9 billion loss in the quarter ending September 30 quarter, The Nikkei reported Sept. 6.

As of Sept. 6, US$1 was equivalent to ¥106.80.