Aozora Bank Ltd. chief executive and president Federico Sacasa stepped down Monday in the wake of the Japanese bank’s estimated annual net loss of $2.1 billion.
The mid-tier bank, majority owned by the U.S. firm Cerberus Capital Management LP, has been rocked by exposure to the subprime loan market and hedge funds.
Deputy president Brian Prince, who previously worked at Lehman Brothers in Japan and Shinsei Bank, is expected to take over as acting CEO.
“Prince is very well regarded in the market and is much more familiar with Japan than his predecessor,” James Fiorillo, of the Tokyo-based private equity firm Ottoman Capital Japan, told Bloomberg News.
The estimated $2.1 billion net loss is seven times larger than the bank estimated in November.
Aozora shares have fallen 80 percent since it went public in 2006, according to a Reuters report.
Aozora is attempting to write off bad loans, and the bank said it hopes to return to profitability by next fiscal year. The bank said it would increase domestic lending and its retail deposits in order to reduce its dependence from the wholesale debt market, according to Reuters.
Sacasa replaced Kimikazu Noumi as Aozora’s CEO in February 2008. He is the second CEO of a major Japanese bank to be replaced in the last three months, after Thierry Porte of Shinsei stepped down in November, according to Bloomberg News.