Second Life

21 November 2007 By John Christy

Chris Flowers made a fortune in the wake of Japan’s banking crisis. Now he’s doubling down on his investment in Shinsei Bank. The shortterm outlook for Shinsei and other Japanese lenders isn’t rosy, but the Flowers group could get a bargain.

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A group of investors, led by private equity firm J.C. Flowers & Co., is offering to invest Y202bn ($1.8bn) in Japan's Shinsei Bank. If successful, Flowers and related entities, including Grupo Santander and Swiss Re will own about a third of Shinsei.

On November 13, Shinsei reported a 40% decline in firsthalf profit to Y23.1bn. It expects to earn Y62bn for the fiscal year ending March 31, 2008.

Shinsei was formerly known as the Long Term Credit Bank of Japan (LTCB). The bank was nationalized in 1998 and sold to an investor group including Ripplewood Holdings and J.C. Flowers & Co. in 2000.

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