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BANK OF TOKYO LONG-TERM BANK STRUCTURED TRANSACTIONS RATING LOWERED TO 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Jan. 18 /PRNewswire/ -- The Bank of Tokyo Ltd.'s long-term bank rating for structured transactions is lowered to A+' from AA-' by Fitch. The downgrade is based on continued earnings and capital pressures along with the risk of further asset quality deterioration overseas. The short-term F-1+'rating is affirmed in light of Bank of Tokyo's solid funding capabilities and good access to global capital markets. With a broad international profile, domestic loan quality is stronger than most other large Japanese banks. The ratings are removed from FitchAlert.
 Improved funding conditions, particularly in the U.S. markets, have been offset by rising domestic loan loss provisions and the inability to realize equity gains. For the first half of the fiscal year ending March 31, 1993, pretax income fell to 0.27 percent of average assets from 0.32 percent in fiscal 1991 and 0.28 percent in fiscal 1990. Transfers to the special loan loss reserve rose to 38.2 billion yen during 1992's first half, compared to 14 billion yen in both fiscal year 1990 and 1991. Unlike other large Japanese city and long-term credit banks, Bank of Tokyo did not realize its equity losses of 45 billion yen at Sept. 30.
 An important consideration in lowering the rating was the continued vulnerability of Bank of Tokyo's capital base. Although Tier 1 capital rose to 4.86 percent of risk assets at Sept. 30, the capital base is vulnerable to further declines in the Nikkei average and an appreciation of the U.S. dollar. Like other Japanese banks, Bank of Tokyo will be unable to issue equity capital in the foreseeable future. However, the bank has minimized its sensitivity to the risk of yen depreciation by increasing U.S. dollar Tier 2 capital. During the first half of the 1992 fiscal year, Bank of Tokyo and its subsidiaries issued subordinated debt and preferred equity of $735 million.
 Because of lower exposure to companies in bankruptcy or reorganization, Bank of Tokyo's domestic loan quality should hold up better than most other Japanese banks. Longstanding lesser developed country (LDC) loan problems have abated as the bank set aside provisions of more than $1.6 billion for LDC loans since 1987. However, higher provisions may be necessary for bad real estate loans in the U.S. At Bank of Tokyo Trust Co., nonperforming loans including foreclosed properties rose to 9.78 percent of loans as of Sept. 30 from 3.68 percent at year-end 1989.
 Despite the lack of a large domestic retail funding base, Bank of Tokyo's funding capabilities are broader than other large Japanese banks. Deposit deregulation is also expected to affect the bank less than city banks whose funding costs are not fully liberalized.
 -0- 1/18/93
 /CONTACT: Ricardo Kleinbaum of Fitch, 212-908-0525/


CO: Bank of Tokyo, Ltd. ST: IN: FIN SU: RTG

WB -- NY061 -- 5968 01/18/93 15:23 EST
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Date:Jan 18, 1993
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