For immediate release

The Federal Reserve Board today announced its approval of the proposal of The Sanwa Bank, Limited, Osaka, Japan, to retain up to 32 percent of the voting shares of The Toyo Trust and Banking Company, Limited, Tokyo, Japan, and thereby retain control of Toyo Trust Company of New York, New York, New York. Attached is the Board's Order relating to this action.

FEDERAL RESERVE SYSTEM The Sanwa Bank, Limited Osaka, Japan Order Approving the Acquisition of a Bank Holding Company

The Sanwa Bank, Limited ("Sanwa"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to retain up to 32 percent of the voting shares of The Toyo Trust and Banking Company, Limited, Tokyo, Japan ("Toyo"), and thereby retain control of Toyo's wholly owned U.S. subsidiary bank, Toyo Trust Company of New York, New York, New York ("Toyo Bank").1 Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (64 Federal Register 25,041 (1999)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act. Sanwa, with total consolidated assets of approximately $418 billion, is the 4th largest banking organization in Japan.2 In the United States, Sanwa owns Sanwa Bank California, San Francisco, California ("Sanwa Bank"), a state-chartered commercial bank. In addition, Sanwa operates branches in New York, New York, Chicago, Illinois, and San Francisco and Los Angeles, California; and representative offices in Houston, Texas, and New York, New York. Sanwa also engages in a broad range of permissible nonbanking activities in the United States through subsidiaries, including underwriting and dealing in debt and equity securities to a limited extent. Toyo, with total consolidated assets of approximately $66 billion, is the 19th largest banking organization in Japan. Toyo controls Toyo Bank and operates a branch in New York, New York. Interstate Analysis Section 3(d) of the BHC Act allows the Board to approve an application by a bank holding company to acquire control of a bank located in a state other than the home state of the bank holding company if certain conditions are met. For purposes of the BHC Act, the home state of Sanwa is California,3 and Toyo Bank is located in New York. All the conditions for an interstate acquisition enumerated in section 3(d) are met in this case.4 In light of all the facts of record, the Board is permitted to approve the proposal under section 3(d) of the BHC Act. Competitive Considerations Sanwa and Toyo compete directly in the New York/New Jersey Metropolitan banking market ("New York banking market").5 Sanwa's New York branch controls deposits representing less than 1 percent of the deposits in the market. Toyo, through its New York branch and Toyo Bank, also controls deposits representing less than 1 percent of the deposits in the market.6 On consummation of the proposal, numerous competitors would remain in the market, and the market would remain unconcentrated. Based on these and all other facts of record, the Board concludes that consummation of the proposal would not result in any significantly adverse effects on competition or on the concentration of banking resources in the New York banking market or any other relevant banking market. Certain Supervisory Considerations Under section 3 of the BHC Act, the Board may not approve an application involving a foreign bank unless the bank is "subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities in the bank's home country."7 The Board previously has determined, in applications under the International Banking Act (12 U.S.C. § 3101 et seq.) ("IBA") and the BHC Act, that certain Japanese commercial banks were subject to comprehensive consolidated supervision by their home country supervisor.8 In this case, the Board has determined that Sanwa is supervised on substantially the same terms and conditions as the other Japanese banks. Based on all the facts of record, the Board has concluded that Sanwa is subject to comprehensive supervision and regulation on a consolidated basis by its home country supervisor. The BHC Act also requires the Board to determine that the foreign bank has provided adequate assurances that it will make available to the Board such information on its operations and activities and those of its affiliates that the Board deems appropriate to determine and enforce compliance with the BHC Act. The Board has reviewed the restrictions on disclosure in jurisdictions where Sanwa has material operations and has communicated with relevant government authorities concerning access to information. Sanwa has committed that, to the extent not prohibited by applicable law, it will make available to the Board such information on the operations of Sanwa and any of its affiliates that the Board deems necessary to determine and enforce compliance with the BHC Act, the IBA, and other applicable federal law. Sanwa also has committed to cooperate with the Board to obtain any waivers or exemptions that may be necessary in order to enable Sanwa to make any such information available to the Board. In light of these commitments and other facts of record, the Board has concluded that Sanwa has provided adequate assurances of access to any appropriate information the Board may request. For these reasons, and based on all the facts of record, the Board has concluded that the supervisory factors it is required to consider under section 3(c)(3) of the BHC Act are consistent with approval. Financial, Managerial, and Convenience and Needs Considerations The Board also has carefully considered the financial and managerial resources and future prospects of Sanwa, Toyo, and their respective subsidiaries, and the effect the proposal would have on such resources. The Board notes that the proposal is incidental to a corporate restructuring of Japanese banking organizations that is intended to enhance the overall financial strength and future prospects of both organizations. Sanwa's reported capital levels exceed the minimum levels that would be required under the Basle Capital Accord, and its capital levels are considered equivalent to the capital levels that would be required of a U.S. banking organization under similar circumstances. The Board notes, moreover, that the proposal does not involve any expansion of the banking or nonbanking activities of Toyo, and that Sanwa's investment in Toyo has strengthened Toyo's capital position and made additional financial resources available to Toyo Bank. In addition, the Board has reviewed supervisory information from the home country authorities responsible for supervising Sanwa and Toyo concerning the proposal and the condition of the parties, confidential financial information from Sanwa and Toyo, and reports of examination from the appropriate federal and state supervisors of the affected organizations assessing the financial and managerial resources of the organizations. Based on all the facts of record, the Board has concluded that the financial and managerial resources and future prospects of the organizations involved in the proposal are consistent with approval. Sanwa Bank received an "outstanding" performance rating at its most recent examination under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA") by the Federal Deposit Insurance Corporation ("FDIC"), as of August 24, 1998. Toyo Bank also received an "outstanding" CRA performance rating from the FDIC at its most recent examination, as of June 8, 1998. In light of all the facts of record, the Board has concluded that considerations relating to the convenience and needs of the communities to be served, including the records of performance of the relevant depository institutions under the CRA, are consistent with approval. Conclusion Based on the foregoing and all the facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by Sanwa with all the commitments made in connection with the application and on the Board receiving access to information on the operations or activities of Sanwa and any of its affiliates that the Board determines to be appropriate to determine and enforce compliance by Sanwa and its affiliates with applicable federal statutes. The commitments and conditions relied on by the Board in reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. By order of the Board of Governors,9 effective November 24, 1999. (signed) Robert deV. Frierson Associate Secretary of the Board

Footnotes 1 On March 30, 1999, Sanwa acquired newly issued shares of Toyo that, when aggregated with the 4.9 percent of Toyo's voting shares previously held by Sanwa, represented approximately 32 percent of Toyo's voting shares. This investment was part of a plan to increase Toyo's capital, which was approved by the Japanese government. On consummation of the investment, Sanwa placed the newly acquired Toyo voting shares in a voting trust that does not permit Sanwa to vote such shares until U.S. regulators act on Sanwa's proposed acquisition of control of Toyo. Under the terms of the trust agreement, the voting trust terminates if the Board and the New York State Banking Department ("Department") approve Sanwa's retention of its ownership interest in Toyo. The Department approved Sanwa's application to acquire control of Toyo on April 8, 1999. 2 Asset data are as of March 31, 1999, and are based on exchange rates then applicable. Ranking data are as of December 31, 1998. 3 A bank holding company's home state is that state in which the total deposits of all banking subsidiaries of such company were the largest on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). 4 Sanwa is adequately capitalized and adequately managed, as defined by applicable law. 12 U.S.C. § 1842(d)(1)(A). Toyo Bank has been in existence and operated continuously for at least the period of time required by New York state banking law. See 12 U.S.C. § 1842(d)(1)(B); N.Y. Banking Law § 142-a (1998). On consummation of the proposal, Sanwa and its affiliates would control less than 10 percent of the total amount of deposits of insured depository institutions in the United States. 12 U.S.C. § 1842(d)(2). All other requirements of section 3(d) of the BHC Act would be met on consummation of the proposal. 5 The New York banking market includes New York City; Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, and Westchester Counties in New York; Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren, and a portion of Mercer Counties in New Jersey; Pike County in Pennsylvania; and portions of Fairfield and Litchfield Counties in Connecticut. 6 Deposit data are as of June 30, 1998. 7 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the Board determines whether a foreign bank is subject to consolidated home country supervision under the standards set forth in Regulation K. 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign bank may be considered subject to consolidated supervision if the Board determines that the bank is supervised or regulated in such a manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign bank, including the relationships of the bank to its affiliates, to assess the foreign bank's overall financial condition and compliance with law and regulation. 12 C.F.R. 211.24(c)(1)(ii). 8 See The Fuji Bank, Limited, 85 Federal Reserve Bulletin 338 (1999); and The Mitsubishi Bank, Limited, 82 Federal Reserve Bulletin 436 (1996). 9 Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.

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1999 Orders on banking applications