BankAmerica Corp., deeply hurt by heavy losses and bad loans, has drawn an initial positive response from some Japanese banks in its effort to raise $350 million in additional capital from Japanese banks, sources said Thursday.
Frank N. Newman, vice chairman of the No. 2 U.S. banking company, asked 23 of Japan's largest banks to purchase BankAmerica securities--$250 million in subordinated capital notes and $100 million in convertible preferred stock, said Japanese banking sources, who spoke on condition of anonymity.
The sources also said some of the Japanese banks expressed reservations about the BankAmerica proposal because it might conflict with plans to increase their own capital bases, part of a broad attempt by the international banking community to guard against exposure to bad foreign loans.
Talks to Begin
However, one high-ranking Japanese banking official said he expected at least nine of the 23 banks to make what he called a "positive" response to Newman's request for assistance.
A source at the Dai-Ichi Kangyo Bank said Japanese banks interested in purchasing BankAmerica's securities would begin negotiations on terms of the purchase.
The Dai-Ichi Kangyo source said Japanese bankers who met with Newman included representatives of Dai-Ichi Kangyo, Bank of Tokyo, Mitsui Bank, Mitsubishi Bank, Fuji Bank, Sumitomo Bank, Daiwa Bank, Sanwa Bank, Tokai Bank and Taiyo Kobe Bank.
BankAmerica officials in Tokyo would only confirm that Newman had met with an unspecified number of Japanese banking executives Wednesday and Thursday. They declined to disclose what was discussed.
Newman's mission followed a trip to Japan earlier this month by BankAmerica Chairman A. W. Clausen, who made a general pitch for help from Japanese banks in rebuilding the U.S. bank's capital base but did not make specific proposals.
BankAmerica also disclosed earlier this month that it expected a $1-billion loss for the second quarter, largely because of a $1.1-billion increase in its reserves to lessen its exposure on possibly bad loans to the Third World. The San Francisco-based banking institution also said it expected a loss for the year.
Clausen is highly regarded in Japan because of his services to the country when he was president of the World Bank.