Yashiro was previously appointed president and chief executive of the bank after it was bought by a consortium including US firm Ripplewood and investor Christopher Flowers in 2000; Shinsei had risen two years before that from the ashes of the crippled Long Term Credit Bank of Japan. The bank’s subsequent recapitalization and reinvention led to its being lauded in the media, with Euromoneyacclaiming it best bank in Japan in 2006. However, Shinsei failed to convert the promise of innovation symbolized by its 24-hour ATMs and slick web presence into a profitable retail operation and has struggled to make money throughout the past two years. The bank, which has not yet paid back the government money that bailed it out of the 1998 crisis, sold its headquarters in March this year to help cover a $300 million loss on poorly performing investments in the US.
Porte, a former debt origination banker at Morgan Stanley, might not be alone in losing his job at the top of one of Japan’s mid-sized banks. Shinsei’s competitor, Aozora, has also had a hard time lately, announcing on November 14 that it had made a loss for the fiscal half and would probably not make a profit by the end of the year.