Central Heian Banking Corporation

Central Heian Banking Corporation (株式会社平安中央銀行; CHBC), also known commonly as Heian Chuo Bank, is a banking company headquartered in Murota, Heian, Yamatai. Heian Chuo Bank is the third-largest bank in Yamatai, after Mikogi Bank and Shinomiya-Sukimoto Bank. It is considered a systemically important bank by the Yamataian Financial Stability Board.

CHBC holds assets in excess of 213.011 trillion En through its operating subsidiary, Central Heian Bank. The company offers a range of financial services, including banking, securities, trust and asset management services, employing more than 59,132 people throughout 880 offices.

Formation
CHBC was established in 2000 by the merger of the Central Industrial Bank (Sangyo Chuo) and the First Heian Bank (Heian Daiichi). In 2008, CHBC also executed a merger with Okayama Trust and Banking, which became a subsidiary corporation.

The earliest history of the companies that formed CHBC was Yoshida Bank, which was founded as a private company in 1802. In 1852, the Heian Daiichi Bank was established by elements of the Yamatai Imperial Army under the National Bank Act of 1882. In 1905, Yoshida Bank was incorporated and absorbed the assets and businesses of 17 different banking institutions. After the Second Escar-Varunan War, Yoshida Bank emerged as one of the most important financiers for post-war Yamataian rebuilding, and eventually reorganised into the Sangyo Chuo Bank in 1952 with the acquisition of several assets in Niihama. Niihama would remain Sangyo Chuo's main stronghold for years.

Also in 1952, Heian Daiichi Bank was privatised as part of the governmental reforms carried out by Okabe Nariakira. In 1999, Heian Daiichi Bank and Sangyo Chuo Bank announced an agreement to consolidate the two banks' operations in the wake of the 1990s Yamataian financial crisis. This resulted in the establishment of the Heian Chuo Holding Corporation. In 2002, Heian Daiichi and Sangyo Chuo officially and legally combined into the Heian Chuo Bank. The merger resulted in Yamatai's first hundred trillion-En bank, with its 円138.2 trillion in assets, surpassing the next largest bank by about 円55.3 trillion. The move formed one of the first "Giga Institutions" in the financial industry, beginning a trend in the industry of large-scale bank mergers referred to as the "consolidation movement" during the 2000s. Though most other Giga Institutions were composed of a single major player and several minor ones, CHBC was composed of two relatively equal institutions in terms of their size and influence. It remained the larges mega-bank in the world until 2005.

The initial strategy of the company was to expand its lending operations with individuals and SMEs, and begin to offer fee-based services including securitizations, merger and acquisitions support, security-based investment banking, and syndicated loans. At the time, CHBC controlled about 50% of the syndicated loans market. CHBC also launched one of the first Internet-based securities products in 2000.

In 2003, Heian Chuo Banking Corporation, Inc. took over the operations of Heian Chuo Holdings. On October 1, 2005, all subsidiaries of Heian Chuo Holdings were transferred to the direct control of Heian Chuo Banking Corporation. Heian Chuo Holdings, no longer a bank holding company, was reorganised into Heian Chuo Financial Strategy, which now focuses on providing advisory services. In 2008, the ailing Okayama Trust and Banking Corporation merged with the CHBC group in the highest-profile corporate merger of that year.

2012 Nishi Satsuma Steel Scandal
In 2012, CHBC's Niihama regional headquarters in Chuo became embroiled in a major scandal involving the loss of 円500 million due to an unsecured loan to Nishi Satsuma Steel, which went bankrupt shortly after the loan. Hanzawa Naoki, then the Chief of the Loans Division in the Chuo Branch, uncovered and independently investigated the circumstances surrounding the loan. Chuo Branch Manager Asano Ishimaru was found to be involved in a tax evasion scheme with the former President of Nishi Satsuma Steel, Higashida Takashi, and was arrested after Hanzawa blew the whistle following the recovery of the 円500 million from Higashida's illegal offshore assets. The 2012 Nishi Satsuma Steel Scandal was one of the largest scandals thus far involving the financial institutions of Yamatai, and resulted in losses of almost 円305 billion for CHBC.

2014 Isejima Hotel Scandal
Despite the merger, deep internal rivalries continued between the old Sangyo Chuo and Heian Daiichi factions within the bank leadership and corporate culture. After the 2012 Nishi Satsuma Steel Scandal, the gap between the factions only widened, as the Heian Daiichi faction held the Sangyo Chuo faction accountable for the debacle in Niihama. In 2014, this rivalry came to a head in a massive scandal involving an attempt at a coup by the Sangyo Chuo faction for the position of Chairman, spearheaded by Executive Director Owada Akira.

A loan of 円20 billion was extended to the Isejima Hotel Corporation despite its imminent bankruptcy, which was suppressed by Owada in order to create a scandal that would force the chairman at the time, Isayama Taiji from the old Heian Daiichi, to resign. This was however uncovered by an unknown whistleblower, alleged by some to be Hanzawa Naoki again, and Owada and his cohorts were arrested.

The second scandal in only two years caused losses of over 円400 billion and dropped CHBC's ranking to fifth among Yamatai's top financial institutions.

Corporate restructuring
Recognising that the continued internal rivalries between the Sangy Chuo and Heian Daiichi factions were structural issues that led to the corruption scandals and losses in preceding years, in 2015 a board of directors reform and general corporate restructuring was carried out in order to streamline its corporate culture into a more of a single identity. Following this, an aggressive policy of investment in multi-national corporations and growing industries in developing countries like Dai Hoa was pursued to reverse CHBC's fortunes.

By 2020, CHBC has again become the third-largest financial institution in Yamatai.

Notable employees

 * Hanzawa Naoki, Minister of Finance