The commission had postponed the sale for a month after politicians objected to a government promise to buy back any NCB loans that had fallen by one-fifth or more in value over three years. Public outrage at a similar provision in the sale of another failed bank triggered the collapse last month of department store operator Sogo Co Ltd, Japan's second-biggest corporate bankruptcy. That bank, resuscitated as the foreign-owned Shinsei Bank, refused to forgive loans to Sogo, prompting an abortive government bailout.

The NCB takeover is expected to set the stage for a dramatic shift in financial services from "old Japan" banks to innovative and more nimble outsiders, although questions are looming over how the costly venture will fit in with Softbank's Internet strategy.

The Softbank consortium also includes leading non-life insurer Tokio Marine & Fire Insurance Co and leasing company Orix Corp. Kyodo news agency said later on Wednesday that nearly one- third of the problem loans owed to NCB that were cleared for sale to third parties by the FRC in 1999 did not meet FRC loan sales standards because the corporate borrowers had liabilities in excess of assets, or were bankrupt or in danger of going bankrupt. Loans to Sogo were among those cleared for sale, despite the fact that the FRC had judged the department store to have liabilities in excess of assets, Kyodo said, adding that the report stated that Sogo was expected to be propped up by its main creditor bank.

-- (The Wall Street Journal)