National Tide 1980.

The Japanese financial industry during the bubble period has always been playing out plots that are more absurd than novels.

First, the madness in the securities industry is astonishing.

Nomura Securities' "VIP Fund" promises an annualized return of 30%, but its actual operation is to invest customer funds in stocks controlled by the company.

As Ning Weimin's stockbroker Kenichi Sagawa said to him, "Nomura Securities' salespeople are just like casino dealers, knowing that the dice are filled with lead, but still smiling and placing bets for gamblers."

This systematic evil reached its climax in 1989.

This year, the cross-shareholding rate of Japanese companies reached 45%, and the trading volume of the Tokyo Stock Exchange was 1.8 times that of New York, but 60% of the trading volume came from the proprietary trading of the four major securities companies.

Secondly, in order to attract customers, Japanese insurance companies have also significantly increased insurance premium rates and have been desperately promoting themselves.

In this age where making money is so easy, if the rate of return is too low, it is impossible to get an insurance policy.

Therefore, the guaranteed interest rate for new policies with a term of less than 10 years is as high as 6.25%.

In order to attract public attention, increase public confidence in themselves, and make the public subconsciously think of themselves when they have insurance needs, Japanese insurance companies are also trying hard to show off their wealth.

Not only did they advertise desperately in the streets and media in Japan, they also spent huge sums of money participating in overseas auctions, vying to buy famous Western paintings and bringing them back to Japan for exhibitions, which the Japanese people could visit for free.

Needless to say, the banking industry is no less affected.

Japanese banks are not like our country, where they rush to give eggs and rice to depositors in order to attract deposits.

The situation they are facing now is that they have too much money to lend out, and large Japanese companies are choosing the lower-cost way of issuing bonds for financing.

They are overwhelmed by the loan tasks issued by the window guidance of the Bank of Japan, so the customer base is bound to shift downward.

So in order to have a chance of survival and to win customers, the way of doing business has to undergo tremendous changes.

The Japanese banking industry began to shift from wholesale to retail, shifting the focus of lending to high-quality enterprises to lending to small companies with poorer credit, and even later directly lending to individuals.

Moreover, we can no longer just sit and wait for customers to come to us like we did in the past. We have to take the initiative to find customers in different ways and actively inspire their loan needs.

If someone is willing to lend money, they also have to help customers find ways to circumvent relevant regulatory regulations so that they can lend money to customers more easily.

For example, the bank will issue low-interest loans to customers by asking them to mortgage their houses as long as they have real estate.

After all, during the economic bubble period, the value of houses appreciated almost every day, so even if someone couldn't repay the loan and the bank confiscated the house, it would not suffer a loss.

It has to be said that as the financial industry that suffered the most during the bubble economy, Japanese banks are still very competitive.

They tried their best to reverse the situation that was unfavorable to them and ultimately did not fall behind the tide of the times.

By 1989, the balance of Japanese bank loans to the real estate industry reached 100 trillion yen. Judging from the data on the proportion of Japanese bank loans to total loans, it has soared from 1985% in 7 to 25% today, and the industry's business climate has recovered significantly.

However, this has also led to the risk control red line in the industry becoming lower and lower.

Until now, Sanhe Bank has created the "Sun Loan" - no guarantee is required, as long as the applicant can show the sun flag, the loan will be granted.

This shows how alarmingly excessive Japan's credit expansion had reached during the bubble economy.

Looking at the entire Japanese banking industry, the bank that performed the best during this period and was the profit king was Sumitomo Bank.

Even at a time when the banking industry is generally under operating pressure, they have successfully overcome most of the negative impacts of the economic bubble and are thriving.

Of course, to be honest, Sumitomo Bank's good fortune was obtained by accident.

You should know that in the second half of the 70s, Ataka Sangyo, one of the top ten trading companies in Japan at that time, was facing bankruptcy. As its main bank, Sumitomo Bank was also affected and faced the dilemma of being unable to recover bonds worth up to billion yen.

In order to cope with the crisis at that time, Sumitomo Bank's CEO Ichiro Isoda decided to hire McKinsey, the grandfather of the management consulting industry, as an economic advisor, and introduced the "headquarters system" in 1979 to carry out bold institutional reforms.

In theory, such a crisis is definitely not a good thing, but then again, crisis is crisis, but there are opportunities in crisis, and fortune and misfortune are interdependent.

In fact, it was precisely during this reform brought about by the crisis that Sumitomo Bank, eager to recover as quickly as possible, was able to discover the huge profits hidden in the real estate industry before other banks.

Their sales headquarters would first innovate the real estate business, deciding to specialize real estate financing and integrating business and review functions to achieve the goal of providing services quickly.

Soon, Sumitomo Bank was no longer satisfied with just providing loans to customers for buying and building houses, but also coveted the brokerage fees.

Since relevant laws and regulations stipulate that only trust banks are allowed to engage in real estate brokerage business, Sumitomo Bank has even come up with a clever way to exploit loopholes in the rules.

They introduce clients to real estate companies without taking any commissions, and let the real estate companies deposit money in the name of cooperative deposits at low interest rates. In this way, banks can earn profits equivalent to the commissions of real estate agency business through interest.

This profit swap trick was called the "Sumitomo Method" by peers in the industry and soon brought huge profits to Sumitomo Bank.

By the mid-to-late 1980s, Japan's real estate market began to soar.

Sumitomo Bank, which already has extensive experience in real estate business, invented the more efficient "land-backed chain loan" at the right time.

They encourage companies to first use land as collateral to borrow money to buy land, and then allow the companies to use the newly purchased land as collateral to borrow money again, forming an infinite nesting credit chain.

As a result, it was this clever move that made Sumitomo Bank a bank that was able to achieve counter-attack growth in an era of low interest rates.

If for no other reason, Sumitomo Bank, which had the advantage of being the first mover, took on a large amount of business in the real estate industry, and its profits and business scale left its peers far behind from the very beginning.

As the real estate industry boomed during the bubble period, their business became unstoppable and they became the leaders in the industry.

In this way, in just a few years, Sumitomo Bank firmly grasped the real estate industry, not only successfully digested the bad debts brought by Ataka Industry, but also merged with Peace Mutual Bank with its strong financial advantages.

The ultimate result was that Sumitomo Bank's assets completely surpassed Fuji Bank, and it went from being ranked 16th among world banks to becoming the second largest commercial bank in Japan and even the world.

Such results not only shocked all shareholders of Sumitomo Bank, but also made all Japanese peers feel a chilling sense of crisis. As a result, Sumitomo Bank's business model became a model for other Japanese banks to follow, and almost all banks began to follow Sumitomo's model to do real estate business.

But the question is, no matter how fast the imitators run, how can they catch up with Sumitomo Bank, which is already far ahead?
While everyone was rushing to scramble for real estate resources, Sumitomo Bank had actually quietly expanded the scope of its marginal profits to more areas.

Stocks, art investments, and the buying and selling of golf memberships are all areas they are involved in, and they also make considerable profits.

In the financial statements in March this year, Sumitomo Bank once again became the profit king among Japan's urban banks with its excellent financial report. Even Mitsubishi Bank, which ranks first in the world and Japan, does not have a higher net profit than Sumitomo.

This is the fruit of the business reform that Sumitomo Bank's CEO Ichiro Isoda has persisted in for ten years, and it is also the product of Sumitomo Bank's transformation by the trend of the bubble economy.

Therefore, it is entirely possible to summarize Sumitomo Bank’s business strategy as profit first.

The so-called rules actually mean nothing to them, they just have to get by on the surface.

So one can imagine what kind of attitude Sumitomo Bank will have towards customers who need large loans.

Of course, they understand the importance of providing food and clothing to their parents and it is impossible for them to neglect them.

In fact, Sumitomo Bank’s special financing policy has created several well-known “bubble gentlemen” in Japan.

People like Shigeru Kobayashi, the president of Hidewa Corporation, Mitsuhiro Odani of the Koushin Group, and Kitaro Watanabe of Azabu Building, all became nouveau riche through speculation during the bubble period, thanks to the financial support of Sumitomo Bank.

Especially the first two people, their asset scale is now almost comparable to that of Takahashi Oshinori.

In fact, Sumitomo Bank has always given special care to Shigeru Kobayashi and Mitsuhiro Kodani. They don't care even if some things have reached the gray area and touched the edge of the law.

Of course, there is also Ning Weimin.

However, his loan of around 200 billion yen is not too much, but not too little either.

According to the data from the head office, his loan only ranks fourteenth. Compared with the well-known upstarts in Japan today, his loan amount is actually only slightly higher than that of Kitaro Watanabe.

Especially since I am Chinese, this is actually a major minus point.

Therefore, compared with those local bubble gentlemen in Japan, his importance is obviously inferior.

Perhaps that is why Sumitomo Bank's Managing Director Yoshifumi Nishikawa agreed to sell out the top management of Long-Term Credit Bank of Japan and Takahashi Oshinori to save face and do something like collecting an umbrella for Ning Weimin on a rainy day.

As for Nishikawa Yoshifumi's explanation to the head office, since Ning Weimin was targeted by EIE's Takahashi Oshinori, his assets and even his wife Matsumoto Keiko's career would be in jeopardy.

Recovering the loan in advance is to help Sumitomo Bank avoid future risks, and Takahashi Osunori is also willing to borrow 50 billion yen from Sumitomo Bank in return.

On the surface, his way of thinking and the conditions given by Takahashi Oshinori seem to be reasonable and there is nothing wrong with it.

However, Nishikawa Yoshifumi's mistake was that he underestimated Ning Weimin's economic strength, his understanding of human nature, and his courage.

At the same time, they also did not take into account the courage and guts that Minister Ji Mao, whose interests were tied to Ning Weimin's, would show in order to protect himself and fight back in this situation.

So when Ning Weimin proposed to other senior executives of Sumitomo headquarters through Minister Yoshimo that he was willing to borrow an additional 200 billion yen from Sumitomo Bank and pay an annual interest rate of 5% in exchange for Sumitomo Bank's support, the matter took an additional turn.

There is no bank in the world that would refuse interest income of tens of billions of yen each year, let alone CEO Ichiro Isoda, who is known for his pragmatism and his determination to pursue profits.

What's more, even an elementary school student who can only add, subtract, multiply and divide can calculate whether it is more than 400 billion or more than 50 billion.

Ichiro Isoda would definitely understand this.

In fact, for the senior executives of Sumitomo Bank, whether to agree to Ning Weimin's request only requires considering a few simple questions.

The question is whether Ning Weimin can afford such a large loan?

If he gets a loan, will he be able to bear such a huge interest burden?
And when things came to this point, the value of Ning Weimin's personal assets became apparent.

The senior executives of Sumitomo Bank learned that all the real estate under Ning Weimin's name were land and houses in Tokyo, with high safety margins and appreciation potential.

For the Japanese who have already formed the concept that "real estate prices in Tokyo will only get higher and higher and Newton's laws are completely invalid for Tokyo's stock and property markets", there is simply no safer transaction than these plots of land and houses.

Not to mention giving Ning Weimin another 200 billion yen, even more money would not be a big deal. On the contrary, they would be more than happy to receive it.

So after a meeting with Ning Weimin, several senior executives headed by Ichiro Isoda made a choice that was more favorable to them and continued to maintain the cooperative relationship between the two parties.

They all felt that it made no sense to sacrifice their own clients' interests for the sake of Changyin's clients, especially those of such high-quality clients.

For this reason, they also characterized the words and deeds of Executive Yuan Chief Nishikawa Yoshifumi as "disorderly orders" and demanded that Nishikawa reflect on the matter.

Moreover, Ichiro Isoda apologized to Ning Weimin in person and ranked his customer level to third based on his total loan amount.

In this way, Takahashi Oshinori, who originally thought he could push Ning Weimin off the financial cliff, failed to achieve his goal.

Ning Weimin not only maintained his base, but also obtained terrible financial resources from Sumitomo Bank, which could be used for revenge.

After learning the result, Takahashi Oshinori was furious and did not even dare to take the next step - to use the media to criticize Sumitomo Bank for using such a huge amount of assets to fund a foreigner to gain benefits from Japan's capital market.

Because this is Sumitomo Bank, they also know a lot about the negative information of Long-Term Credit Bank. Fighting a public opinion war can only shake Takahashi Oshinori's own base.

There was no other way. Even if Takahashi Osawa was unwilling, he had to endure it. He could only think of other ways to make things difficult for Ning Weimin.

Of course, he couldn't possibly know that Ning Weimin had no intention of letting him go.

In fact, at this time, Ning Weimin had already used the newly opened account of Daiwa Securities to quietly absorb stocks of EIE Group and Nomura Securities.

This time, Ning Weimin planned to invest all the 200 billion yen he got from the loan into the newly opened stock market account, waiting for the right time to instruct Sagawa Kenichi to dig up Takahashi Oshinori's grave. (End of this chapter)