Sapporo Hokuyo Seeks Public Funds on Credit Crisis, Nikkei Says

By Megumi Yamanaka and Hikeki Sagiike

Jan. 18 (Bloomberg) -- Sapporo Hokuyo Holdings Inc., a regional bank based in Japan’s northern Hokkaido island, may receive public funds by March as the credit crisis widens its losses, the Nikkei newspaper reported.

The bank will likely apply at the end of this month, the newspaper reported today, without saying where it got the information. That would make Sapporo Hokuyo the first Japanese bank in two years to receive public funds.

The application is a preventative measure under a regulation set in December that allows local banks to receive public funds so that they can continue lending to small and medium-sized companies, the report said.

As of now, no decision has been made on the financing matter reported today, Sapporo Hokuyo said in a statement to the Tokyo Stock Exchange. Calls to Japan’s Financial Services Agency weren’t answered on a Sunday.

Sapporo Hokuyo in November forecast a net loss of 27.5 billion yen for the year ending March, shifting from a previously projected profit of 20 billion yen, because of bad debt and loss from securities investments.

To contact the reporter on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.