Aozora likely to see group net loss

Aozora Bank will probably suffer several billion yen in consolidated net losses this business year after getting burned by overseas investments that went awry due to the global financial crisis, sources said Thursday.

Aozora, the first major Japanese bank to expect a net loss for fiscal 2008 due to the crisis, initially predicted a net profit of ¥44 billion for the year.

It later slashed the estimate to ¥15 billion after its finances took a turn for the worse.

The bank incurred massive losses on an investment in GMAC Financial Services, the auto financing arm of General Motors Corp., and saw its problem loan disposal losses increase.

Aozora has received financial assistance from the government. If it plunges into the red, it will fail to meet the goals set forth in its business turnaround plan for the second consecutive year.