First Interstate to Sell Leasing Finance Unit : ORIX, a Japanese Firm, Will Pay $190 Million

First Interstate Bancorp said Monday that it has agreed to sell Commercial Alliance Corp., a subsidiary that finances the leasing of heavy equipment, to a Japanese firm for $190 million.

First Interstate, parent of First Interstate Bank in Los Angeles, said the unit is being sold to ORIX Corp. of Tokyo because it does not fit with its main business of consumer banking in the West. In addition, First Interstate said, the sale will improve its ratio of capital to assets.

Restructuring Strategy

Commercial Alliance, based in New York, finances equipment that is leased by builders, trucking firms, commercial printers and other users of large equipment. The unit, with $1.9 billion in assets, has been a profitable business for First Interstate, earning $14.8 million in the year ended June 30.

The move to sell the subsidiary, which operates from 23 offices throughout the country, is part of a strategy that First Interstate announced in late 1987 to restructure and put more emphasis on consumer and corporate banking. Since then, it has sold about $4 billion in assets, not counting Commercial Alliance.

First Interstate said ORIX is Japan’s biggest leasing company. The sale, which must be approved by Japan’s Ministry of Finance, is expected to be completed later this year.