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Japan's 'last banker' Yoshifumi Nishikawa dies at 82

As Sumitomo Mitsui chief, he secured capital from Goldman Sachs

Yoshifumi Nishikawa speaks to Nikkei during a 2010 interview. (Photo by Ken Kobayashi)

TOKYO -- Yoshifumi Nishikawa, who helped create one of Japan's major banking groups and earned the "last banker" moniker for surviving rounds of financial-sector reshuffling, has died, people familiar with the matter said Friday. He was 82.

Nishikawa, a former chief of Sumitomo Mitsui Financial Group, graduated from Osaka University in 1961 and joined the predecessor Sumitomo Bank. He rose through the ranks, deftly handling the break-up of failed borrowers including general trading company Ataka & Co. and specialized trader Itoman.

He took the helm at the bank in June 1997 while Japan was in the throes of a severe financial crisis. He displayed strong leadership in tackling Sumitomo Bank's bad loan problems and led the creation of Sumitomo Mitsui Banking through a merger with Sakura Bank, affiliated with the Mitsui group, in 2001. 

He was the combined bank's first leader and also became president of holding company Sumitomo Mitsui Financial Group in 2002. He tried to acquire the old UFJ Group, engaging in a fierce battle with the then-Mitsubishi Tokyo Financial Group. 

The attempt ultimately failed, but he nurtured SMFG into one of the country's three megabanks before stepping down from both positions in 2005.

Known for his strong management skills, Nishikawa was tapped for the first president of Japan Post in 2007 as it was being privatized. Under his leadership, Japan Post explored new areas, such as unit Japan Post Bank starting to offer credit card transactions. He was forced to resign, however, in 2009 when the Democratic Party of Japan took power and he clashed with the new administration.

Whether it was the Ataka and Itoman episodes or the collapse of Japan's economic bubble, the "last banker" was always at the front lines steering his organization through crises.

The nickname served as the title of his autobiography published in 2011, in which he chronicled his roles in those events. His experience and business acumen gained him extensive trust at home and abroad. 

Nishikawa's story cannot be told without mentioning his relationship with Ichiro Isoda, the one-time head of Sumitomo Bank who died in 1993. A young Nishikawa wanted to become a newspaper reporter. But Isoda, who oversaw human resources at the time, strongly recommended Nishikawa to join the bank instead.

When Ataka collapsed in 1975 under the weight of substantial losses in a U.S. oil project, Isoda recruited Nishikawa for the clean-up.

Isoda hired Nishikawa and pulled him up the ranks. But it was Nishikawa who convened an emergency meeting by department heads and compiled a letter asking Isoda to resign as Sumotomo's chairman after the Itoman financial scandal in 1990, in which the bank's ties to the company played a role.

Even so, Nishikawa continued to hold Isoda in esteem.

During a 2001 interview Nishikawa gave shortly after he took charge of the banking group, he was asked what was his ideal business leader.

"Isoda-san was an appealing figure during his first few years as the head of Sumitomo Bank," Nishikawa answered, although he requested that those words not be reported to avoid a misunderstanding.

Isoda often said "Don't be afraid of scars." Many blamed Isoda's bravado for Sumitomo Bank's excessive financing. But his protege held a positive interpretation of that credo.

"It was about overcoming the damage from Ataka's collapse and reclaiming glory," said Nishikawa.

The question that remained for the company is how it can shed the negative legacy of the bubble collapse and go on the offensive. For Nishikawa, the answer lay in the opportunity provided by the merger with Sakura Bank, an integration that straddled the former zaibatus lines.

Stock values climbed with the anticipation of the strong leadership to be had under Nishikawa, leading to the birth of the market slang "the Nishikawa premium."

But during Nishikawa's four years at the helm, most of his efforts was focused on acts of defense, such as the bad debt problem at supermarket operator Daiei, and the capital infusion from Goldman Sachs.

Nishikawa left SMFG in 2005, then later took on the position as president of Japan Post, despite warnings from his inner circle. He perhaps felt he still had energy left to spend.

His term at Japan Post was marked by the opposition to the privatization plan for the mail carrier. Nishikawa eventually stepped down in 2009. Although Nishikawa seemed to have taken step back from the spotlight in his later years, he was one of the handful of recognizable entrepreneurs that stood larger than life.

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