Suruga Bank rebuilt around outside sponsors after the FSA froze its core lending in 2018

Suruga Bank, a regional lender based in Numazu, Shizuoka, had built one of the more profitable niches in Japanese retail banking: high-yield loans to individual landlords buying apartment blocks and share houses. Ordinary profit peaked at ¥58.2bn in the year to March 2017. In 2018 that model collapsed when falsified deposit balances, income documents and duplicate sales contracts surfaced in its lending files.

On 5 October 2018 the Financial Services Agency issued a business improvement order under Article 26 of the Banking Act. It stopped all new investment-property lending from 12 October 2018 to 12 April 2019, plus new housing loans where the borrower's own occupancy was below 50% of the building. It ordered every employee to be taken off normal duties for compliance training, an improvement plan by end-November, and progress reports every three months.

The order also required the bank to clarify management responsibility, to cut rates and restructure repayments for affected borrowers — including partial principal reduction through financial ADR — and to build controls over the founding family's affiliated companies. A month earlier, founder-family chairman Mitsuki Okano and president Akihiro Yoneyama had resigned along with three other directors, and board member Mitsuchika Arikuni took the top job promising reform that would break the family's hold.

With its signature product frozen, Suruga went looking for a partner. Electronics retailer Nojima signed a capital and business tie-up in May 2020; the pairing produced little and was dissolved in March 2022, leaving Suruga holding roughly 18.8% of its own shares as treasury stock. In May 2023 it placed them with Crédit Saison: ¥17.1bn for 15.12% of Suruga, against Suruga's ¥15.5bn for 4.44% of Saison.

Still listed and independent: ordinary profit of ¥13.2bn in FY3/2023, and Crédit Saison paid ¥17.1bn for 15.12% of the bank in 2023.

The suspension hit the only product that made Suruga unusually profitable, so cost cutting alone could not replace ¥58.2bn of ordinary profit; it needed a new revenue engine.

The FSA tied resumption of lending to governance rather than capital: outside verification, staff-wide retraining and a filed improvement plan were conditions of the order.

Saison wanted a bank licence and a customer base as it pushed beyond credit cards; Suruga wanted distribution it could not build alone. Each held what the other needed.

Buying back Nojima's stake as treasury stock preserved option value, letting Suruga hand 15.12% to the next sponsor without issuing new, dilutive shares.

A regulator can confiscate a business model overnight. Survival then depends on rebuilding the revenue engine with partners who need your licence as much as you need their capital.

By the year to March 2023 ordinary profit stood at ¥13.2bn — a fraction of the 2017 peak, but earned on a restructured balance sheet instead of the frozen owner-lending line. Accountability arrived through the courts rather than the boardroom: on 31 October 2025 the Shizuoka District Court ordered former executives to pay about ¥1.3bn in damages over the improper lending. Suruga still operates as an independent listed regional bank, with Crédit Saison its largest shareholder.