Towa Bank, Ltd.

Credit card payment processor Zentoshin has commenced bankruptcy proceedings, with total liabilities reaching 11.51 billion yen. Financial creditors number 63 institutions, including regional banks, shinkin banks, and credit cooperatives that had extended large loans. The Financial Services Agency plans to launch an investigation into regional financial institutions' credit management, examining whether their screening systems and borrower management practices are appropriate. Kinki Sangyo Credit Cooperative, the largest creditor, has stated that the loan was not a one-sided large exposure to a single company, while voices within the industry are calling for reflection. Towa Bank will provision for 5.8 billion yen of its 8 billion yen in loans that are unsecured in the fiscal year ending March 2027, and the risk management framework for cross-border lending is also likely to be questioned.

Zentoshin, a credit card payment processing service that has begun bankruptcy proceedings, has 63 financial creditors, with total liabilities reaching 115.1 billion yen. This was revealed by a Tokyo Shoko Research investigation. The largest creditor is Kinki Sangyo Credit Union, at 21.9 billion yen. Next are Tokyo Star Bank and Towa Bank, each at 8 billion yen, followed by Yamaguchi Bank, a unit of Yamaguchi Financial Group, at 7.4 billion yen. Zentoshin is suspected of having engaged in window-dressing its financial statements for at least 20 years, allegedly fabricating deposits to conceal deteriorating performance.