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-JCR raises Gifu Bank's senior debt rating to A.

M2 EQUITYBITES-August 1, 2011--JCR raises Gifu Bank's senior debt rating to A(C)2011 M2 COMMUNICATIONS

1 August 2011 - JCR lifted on Monday to A from A- the rating on the senior debts of Japanese Gifu Bank Ltd (NAG:8528).

The outlook is "stable".

Gifu Bank, a second regional bank headquartered in city of Gifu, Gifu prefecture, was acquired by Juroke Bank in December 2010. The banks are due to merge their operations in September 2012. In the fiscal year to 31 March 2011, Gifu posted a net loss of JPY12.3bn (USD158.4m/EUR110m) due to higher credit costs, impairment loss on fixed assets and reversal of the entire amount of deferred tax assets. In addition, the bank repaid in full public funds amounting to JPY12bn.

Gifu obtained a JPY30bn capital assistance from The Bank of Tokyo-Mitsubishi UFJ Ltd (BTMU) in the form of preferred stock at the time when Juroke Bank bought the lender. As a result, it secured a good level of consolidated Tier 1 capital ratio, which was 8.90% at the end of March 2011.

JCR's upward revision of Gifu's rating has been prompted by improvement in the agency's assessment for Juroke.

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Publication:M2 EquityBites (EQB)
Date:Aug 1, 2011
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