The repercussions of Resona's partial nationalisation are likely to be felt throughout Japan's regional economies, where the bank had built its foundations. Resona's biggest business in the regions was providing small- and medium-sized companies (SMEs) with loans. In January, Lehman Brothers securitised Y28.8bn (US$247m) in loans made by the bank to 483 Osaka SMEs.
Analysts said the hardest-hit region will be Kansai, an area that encompasses Kobe, Osaka and Kyoto, due to Resona's overwhelming presence there, with about 330 branches.
Economists said Resona's financial distress would likely put more downward pressure on the Kansai economy, already reeling from a decline in manufacturing. According to a government survey conducted in September 2002, unemployment in Osaka was 8.5 per cent, compared with a national average of 5.4 per cent.
