Fuji Bank
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Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
's major bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s during the post-World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
era. It combined with Dai-Ichi Kangyo Bank
Dai-Ichi Kangyo Bank
The , abbreviated as , was one of the largest banks in the world during the latter half of the 20th century. It combined with Fuji Bank and the Industrial Bank of Japan in 2000 to form Mizuho Financial Group....
and the Industrial Bank of Japan
Industrial Bank of Japan
The , based in Tokyo, Japan, was one of the largest banks in the world during the latter half of the 20th century.It combined with Dai-Ichi Kangyo Bank and Fuji Bank in 2002 to form Mizuho Financial Group.- History :...
in 2000 to form Mizuho Financial Group
Mizuho Financial Group
, abbreviated as MHFG, or simply called Mizuho is a banking holding company headquartered in the Ōtemachi district of Chiyoda, Tokyo, Japan...
, and changed its name to Mizuho Corporate Bank
Mizuho Corporate Bank
, or MHCB, is the corporate and investment banking subsidiary of Mizuho Financial Group, the second-biggest Japanese financial services conglomerate...
in 2002 after transferring its retail banking operations to Mizuho Bank
Mizuho Bank
is the core retail banking unit of Mizuho Financial Group, which is the second-largest financial services company in Japan and one of the three so-called Japanese "megabanks"...
.
Foundation and development
Fuji Bank traces its history as far back as the old Yasuda zaibatsu.Zenjiro Yasuda, a migrant from Toyama
Toyama, Toyama
is the capital city of Toyama Prefecture, Japan, located on the coast of the Sea of Japan in the Chūbu region on central Honshū, about 200 km north of the city of Nagoya and 300 km northwest of Tokyo....
, opened a dry goods store in the Nihonbashi
Nihonbashi
, or Nihombashi, is a business district of Chūō, Tokyo, Japan which grew up around the bridge of the same name which has linked two sides of the Nihonbashi River at this site since the 17th century. The first wooden bridge was completed in 1603, and the current bridge made of stone dates from 1911...
area of Edo
Edo
, also romanized as Yedo or Yeddo, is the former name of the Japanese capital Tokyo, and was the seat of power for the Tokugawa shogunate which ruled Japan from 1603 to 1868...
in 1864, known as Yasuda-ya (lit. House of Yasuda). After the Meiji Restoration
Meiji Restoration
The , also known as the Meiji Ishin, Revolution, Reform or Renewal, was a chain of events that restored imperial rule to Japan in 1868...
in 1869, the company underwrote bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
s for the Japanese government
Government of Japan
The government of Japan is a constitutional monarchy where the power of the Emperor is very limited. As a ceremonial figurehead, he is defined by the 1947 constitution as "the symbol of the state and of the unity of the people". Power is held chiefly by the Prime Minister of Japan and other elected...
, whose credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
standing was low then, and financed many public works
Public works
Public works are a broad category of projects, financed and constructed by the government, for recreational, employment, and health and safety uses in the greater community...
such as railroads
Rail transport
Rail transport is a means of conveyance of passengers and goods by way of wheeled vehicles running on rail tracks. In contrast to road transport, where vehicles merely run on a prepared surface, rail vehicles are also directionally guided by the tracks they run on...
, harbor
Harbor
A harbor or harbour , or haven, is a place where ships, boats, and barges can seek shelter from stormy weather, or else are stored for future use. Harbors can be natural or artificial...
constructions, and so forth. The company was incorporated
Incorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
in 1880 with a share capital
Share capital
Share capital or issued capital or capital stock refers to the portion of a company's equity that has been obtained by trading stock to a shareholder for cash or an equivalent item of capital value...
of 10 million yen
Japanese yen
The is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
, and changed its name to Yasuda Bank.
In the Taishō period
Taisho period
The , or Taishō era, is a period in the history of Japan dating from July 30, 1912 to December 25, 1926, coinciding with the reign of the Taishō Emperor. The health of the new emperor was weak, which prompted the shift in political power from the old oligarchic group of elder statesmen to the Diet...
, the Japanese banking community was thrown into financial difficulties because of World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
and the 1923 Great Kanto earthquake
1923 Great Kanto earthquake
The struck the Kantō plain on the Japanese main island of Honshū at 11:58:44 am JST on September 1, 1923. Varied accounts hold that the duration of the earthquake was between 4 and 10 minutes...
. In the immediate wake of the earthquake, Yasuda absorbed ten smaller regional banks which lacked a sufficient financial base to cover their deposits. This merger made Yasuda Bank the largest in Japan by several measures, with share capital of 150 million yen, deposits of 542 million yen, loans of 521 million yen, 211 branches and 3,700 employees.
After World War II
Following World War IIWorld War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, the Yasuda zaibatsu was dissolved by the Supreme Commander of the Allied Powers
Supreme Commander of the Allied Powers
Supreme Commander of the Allied Powers was the title held by General Douglas MacArthur during the Occupation of Japan following World War II...
. On October 1, 1948, Yasuda Bank changed its name to The Fuji Bank, Limited, named after Mount Fuji
Mount Fuji
is the highest mountain in Japan at . An active stratovolcano that last erupted in 1707–08, Mount Fuji lies about south-west of Tokyo, and can be seen from there on a clear day. Mount Fuji's exceptionally symmetrical cone is a well-known symbol of Japan and it is frequently depicted in art and...
. Fuji formed the Fuyo Group
Fuyo Group
is a Japanese keiretsu.The group emerged after World War II as a continuation of the Yasuda zaibatsu. It coalesced around Fuji Bank, and group presidents began meeting regularly in 1964...
, one of the largest keiretsu
Keiretsu
A is a set of companies with interlocking business relationships and shareholdings. It is a type of business group. The keiretsu has maintained dominance over the Japanese economy for the greater half of the twentieth century....
, together with other former Yasuda zaibatsu companies.
As the Japanese economy
Economy of Japan
The economy of Japan, a free market economy, is the third largest in the world after the United States and the People's Republic of China, and ahead of Germany at 4th...
was rebuilt after the war, Fuji Bank expanded its business in syndicated lending, corporate banking, public money management, mortgages and retail financial services. However, the formation of Dai-Ichi Kangyo Bank
Dai-Ichi Kangyo Bank
The , abbreviated as , was one of the largest banks in the world during the latter half of the 20th century. It combined with Fuji Bank and the Industrial Bank of Japan in 2000 to form Mizuho Financial Group....
(DKB) in 1971 dethroned Fuji from its top status in the Japanese banking industry. In an attempt to restore its preeminence, Fuji agreed to merge with Osaka-based Sanwa Bank in the late 1970s, but failed to win approval from the Ministry of Finance. Sumitomo Bank also rose as an intense competitor to Fuji in the 1980s, and both banks aggressively courted similar corporate banking clients, growing their loan portfolios dramatically with what would later become non-performing loan
Non-performing loan
A Non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms....
s.
Fuji Capital Markets Corp. was founded in New York in 1990 going on to become one of the lead players in the swaps market. FCMC went on to open an offices in London in 1992 and Hong Kong in 1994 which still exist as Mizuho Capital Markets Corp. FCMC was noted at the time for its relatively advanced technology, and was one of the first Japanese Banks to connect to the internet, registering the fcmc.com domain in 1993.
However, following the collapse of the Japanese asset price bubble
Japanese asset price bubble
The was an economic bubble in Japan from 1986 to 1991, in which real estate and stock prices were greatly inflated. The bubble's collapse lasted for more than a decade with stock prices initially bottoming in 2003, although they would descend even further amidst the global crisis in 2008. The...
in the early 1990s, Fuji and other Japanese banks were increasingly troubled by bad loans and inadequate back-office systems. Fuji attempted to diversify its domestic services, establishing Fuji Securities and Fuji Trust & Banking Co. in 1994, but neither subsidiary was able to make substantial profits.
On November 24, 1997, Yamaichi
Yamaichi Securities
was a Japanese securities trading firm. The company announced it would cease operations on November 24, 1997 and was declared bankrupt by the Tokyo District Court on June 2, 1999.- History :...
, Fuji Bank's affiliated securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
firm, announced it would cease operations and was declared bankrupt by the Tokyo District Court
Tokyo District Court
is a district court located at 1-1-4 Kasumigaseki, Chiyoda, Tokyo, Japan. -References:...
. Fuji's inability to support Yamaichi led to a rapid fall in Fuji's stock price on the Tokyo Stock Exchange
Tokyo Stock Exchange
The , called or TSE for short, is located in Tokyo, Japan and is the third largest stock exchange in the world by aggregate market capitalization of its listed companies...
. Between 1998 and 2000, Fuji laid off thousands of employees and borrowed one trillion yen of public funds.
Yasuda Trust & Banking, Fuji's affiliated trust company
Trust company
A trust company is a corporation, especially a commercial bank, organized to perform the fiduciary of trusts and agencies. It is normally owned by one of three types of structures: an independent partnership, a bank, or a law firm, each of which specializes in being a trustee of various kinds of...
, entered severe financial difficulties in 1999 and sought an additional capital injection from Fuji. Fuji was still experiencing its own difficulties and could not afford to rescue Yasuda. However, Fuji and DKB were able to negotiate a three-party transaction in which Fuji and DKB merged their respective trust banks, and the merged company acquired the corporate and pension divisions of Yasuda Trust.
Merger
On September 29, 2000, all shares of Fuji, DKB and the Industrial Bank of JapanIndustrial Bank of Japan
The , based in Tokyo, Japan, was one of the largest banks in the world during the latter half of the 20th century.It combined with Dai-Ichi Kangyo Bank and Fuji Bank in 2002 to form Mizuho Financial Group.- History :...
were acquired by a newly formed Mizuho Holdings. The three banks continued to operate separately pending their final legal merger.
During the September 11, 2001 attacks
September 11, 2001 attacks
The September 11 attacks The September 11 attacks The September 11 attacks (also referred to as September 11, September 11th or 9/119/11 is pronounced "nine eleven". The slash is not part of the pronunciation...
on New York's
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
World Trade Center
World Trade Center
The original World Trade Center was a complex with seven buildings featuring landmark twin towers in Lower Manhattan, New York City, United States. The complex opened on April 4, 1973, and was destroyed in 2001 during the September 11 attacks. The site is currently being rebuilt with five new...
, Fuji Bank's United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
offices were located at the impact zone of United Airlines Flight 175
United Airlines Flight 175
United Airlines Flight 175 was United Airlines' daily scheduled morning transcontinental flight, from Logan International Airport in Boston, Massachusetts, to Los Angeles International Airport in Los Angeles, California...
in 2 World Trade Center (the South Tower) occupying the office space on the 79th through 82nd floors. After the North Tower was hit, the managers rushed to evacuate their employees. Within fifteen minutes, the managers had successfully evacuated 120 employees. Unfortunately, 23 Fuji Bank employees died in the attack. Fuji Bank employee Stanley Praimnath
Stanley Praimnath
Stanley Praimnath is a survivor of the attack on the World Trade Center on September 11th, 2001. Praimnath worked as an executive for Fuji Bank on the 81st floor of the South Tower, the second to be attacked...
was one of only four remaining people located above the South Tower's collision zone to survive. DKB's offices were located in the North Tower.
On April 1, 2002, Fuji acquired the corporate banking operations of DKB and absorbed all operations of IBJ, renaming itself Mizuho Corporate Bank
Mizuho Corporate Bank
, or MHCB, is the corporate and investment banking subsidiary of Mizuho Financial Group, the second-biggest Japanese financial services conglomerate...
. DKB simultaneously acquired the individual banking operations of Fuji and renamed itself Mizuho Bank
Mizuho Bank
is the core retail banking unit of Mizuho Financial Group, which is the second-largest financial services company in Japan and one of the three so-called Japanese "megabanks"...
. Both banks became wholly owned subsidiaries of Mizuho Financial Group. The legal merger of Mizuho Corporate Bank with Mizuho Bank is scheduled to take place in 2013, at which time the legal entity formerly known as Fuji Bank will cease to exist.