ShinGinko Tokyo: the crumbling icon of imbecility

There is there a wonderful moment at the finale of V for Vendetta where the vile Mr Creedy and his crew  have just emptied their guns into V, who remains defiantly upright. "Why won't you die?", screams an enraged Creedy, the veins popping on his neck.

Well, for all you fans of ShinGinko Tokyo - the revoltingly wasteful and pointless ego-trip banking project created by the insufferably arrogant Tokyo Governor Shintaro Ishihara - that same sense of baffled frustration is here. I simply don't know why this sputtering wreck of a bank won't die.

For two years, this hapless institution - conceived in wicked deception and executed with astonishing incompetence - has squandered $1 billion of taxpayers' money. In an era where Japan's notorious pork barrel was going out of fashion, ShinGinko was its repugnant, unwanted rebirth clad in the sickening pinstripes and marble-floors of a modern service economy (or at least, Ishihara's palsied vision of same). Loaded-up with the rejects of Japan's already second-rate banking system, ShinGinko's job was to hand out loans to companies that couldn't get them from the then even more conservative megabanks. ShinGinko's credit ratings system was worthless from the start, and the bank's function, as far as I can tell, was simply to pump capital into crumbling businesses that were clearly in danger of bankruptcy when the money was lent.

It's classic pork barrel stuff. So Ishihara gets his votes from the SMEs and their employees who owe their livelihoods to the loans (most of which have now turned bad) and the slack-jawed Tokyo taxpayer watches as $1 billion is unashamedly pissed-away on this transparent political gambit. And then resoundingly votes Ishihara in for a third term.

Today, finally a glimmer of hope. ShinGinko said that it was closing down about all its ATM machines and shutting a third of its branch network. It expects to make about Y700m in cost savings by laying-off the employees at those branches. Ishihara has said he has no plans to close this monstrosity down, but then he also said in 2004 that this bank was going to be a great success...   

Comments

[COVIX LORE]

Yes, sounds like a fantastic vote-winner amongst those struggling SMEs. As you know, corporate welfare has had a storied history in Japan for many years: where better to house your oyaji cronies for a few comfy years than shiny new Shinginko offices? Scratch the surface and you will find a similar story in companies throughout the country. Just another reason for why I think the Japanese stockmarket will likely remain a punt rather than an investment for many years to come.