8 regional banks, others willing to pay 310 bil. yen to buy Ashikaga.

TOKYO, Nov. 17 Kyodo

An alliance of 21 financial institutions, led by eight regional banks, is expected to shortly notice the government it will pay 310 billion yen to acquire the temporarily nationalized Ashikaga Bank, sources familiar with the matter said Friday.

The sum includes 75 billion yen to be jointly shouldered by the eight lenders -- the Bank of Yokohama, Toho Bank, Gunma Bank, Joyo Bank, Chiba Bank, Yamanashi Chuo Bank, Hachijuni Bank and Shizuoka Bank -- and another 75 billion to 80 billion yen to be paid by Nikko Citigroup Ltd., a brokerage in a cooperative relationship with the eight, the sources said.

Six life and nonlife insurance companies are also members of the alliance.

The alliance and another Japanese consortium, led by Nomura Securities Co., are vying to become the buyer of the bank, based in Utsunomiya, Tochigi Prefecture.

The two groups are slated to submit their acquisition plans to the Financial Services Agency by Thursday. In the plans, they will state how much they will increase Ashikaga Bank's capital and how much they will pay to buy government-held Ashikaga shares.

The Nomura-led group is believed to have secured a fund exceeding 300 billion yen, the sources said.

Ashikaga Bank came under state control in 2003 when it was languishing under the weight of bad loans. The regional lender had a negative net worth of 304.8 billion yen for the business year to March 31, 2007.

The FSA is expected to decide by next spring on the buyer for the regional lender.