Norinchukin Bank CEO to Resign Over Foreign Bond Losses
Norinchukin Bank's CEO, Kazuto Oku, plans to step down due to massive losses from incorrect foreign bond trades. Oku, 65, will resign in March, with Managing Executive Officer Taro Kitabayashi set to take his place on April 1.
Norinchukin's losses stem from rising US interest rates, decreasing foreign bond values, and higher dollar-funding costs. Its first-nine-month loss reached ¥1.4 trillion, close to its projected annual loss of ¥1.5 trillion. Paper losses on bond holdings amounted to ¥1.57 trillion.
Market observers have been monitoring Norinchukin's situation to gauge its ability to control losses. The bank has increased investments in leveraged loans and raised additional capital.
A government panel has recommended diversifying the bond-heavy portfolio and hiring external talent. Norinchukin plans to invest in bonds, stocks, project finance, and securitized products.