Aozora sees private bank unearthing gold in Japan

By Alison Tudor

TOKYO (Reuters) - Japanese lender Aozora Bank Ltd (8304.T: Quote, Profile, Research, Stock Buzz) plans to use its private banking arm to cement ties with Japanese companies, by helping executives nurture their nest eggs.

Aozora's private banking business provides a fraction of the group's funding, but is seen as important for the long-term relationships it forges with its 2,500 corporate clients.

"One of the great opportunities in Japan is going to be the creation of wealth from small and medium-sized companies," Federico Sacasa, president of Aozora, told the Reuters Wealth Management Summit in Tokyo on Wednesday.

"We are targeting the owner-operators for private banking."

Capital can be released from financially conservative Japanese businesses as corporate advisers introduce such ideas as a stock market listing, selling real estate or raising debt.

To meld corporate advisory and wealth management functions, Aozora has started to supplement its 50-strong private banking team with corporate bankers -- a task made easier by the changing perception of wealth management in Japan.

"When I was younger, if you went into private banking it was because you had failed," he said. "That is not the case now. Now it's real money."

WOOING THE WEALTHY

A wave of retirements by Japanese baby-boomers starting this year has bankers jockeying to manage their savings.

Many foreign banks are looking for ways to reach Japanese clients without rolling out the expensive infrastructure of a private bank or investing the time to build relationships from scratch.

"You have to come into this market with a long-term view," Sacasa said. "Flashy products and high-power sales don't work."

Aozora can act as an intermediary between the foreigners and Japanese regional banks whose clients are becoming more interested in international financial products.

Sacasa said one such foreign institution could potentially be GMAC, formerly the finance arm of General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz). Aozora invested $500 million in GMAC last year, alongside its own largest shareholder, U.S. private equity firm Cerberus CBS.UL.

The 50-year-old Aozora Bank has relationships with more than 500 Japanese regional banks, many of which were clients of its predecessor, Nippon Credit Bank, a long-term credit bank that was nationalized in December 1998, during Japan's banking crisis.

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