Michael Bradfield, Esq.
Jones, Day, Reavis & Pogue
Metropolitan Square
1450 G Street, N.W.
Washington, D.C. 20005-2088

Dear Mr. Bradfield:

You have requested confirmation that The Sakura Bank, Limited, Tokyo, Japan ("Sakura"), may continue to engage in certain lending and leasing activities that the Board previously approved Sakura to conduct, after Sakura transfers the activity from Sakura's subsidiary bank to a newly formed subsidiary or to an existing nonbank subsidiary of Sakura.

By order dated May 7, 1990, Sakura received Board approval to make, acquire, and service loans and to lease personal or real property in connection with the acquisition of a 10 percent interest in Security Pacific Financial Services System, Inc. ("Security Pacific Financial"), and SPFSS Inc. ("SPFSS"), both located in San Diego, California.¹ Although Sakura ceased its joint venture with Security Pacific Financial and SPFSS, you have represented that Sakura continuously conducted the lending and leasing activities within the United States through a subsidiary of a United States bank controlled by Sakura.

The Board has previously determined that the activities of a company that have been authorized by the Board under section 4(c)(8) of the Bank Holding Company Act ("BHC Act") may be shifted in a corporate reorganization to another company within the holding company system without obtaining prior Board approval if the holding company has already obtained the Board's approval under section 4(c)(8) to conduct the activities that are to be transferred in the corporate reorganization.² Sakura obtained Board permission to conduct lending and leasing activities under section 4(c)(8) of the BHC Act.

While the vehicle for conducting these activities has changed, Sakura has continuously engaged in permissible lending and leasing activities. Accordingly, it is our opinion that Sakura may transfer these activities from its subsidiary bank to a nonbank subsidiary of Sakura. In addition, Sakura may form a new subsidiary to engage in lending and leasing. A bank holding company is not required to file an application to form a de novo subsidiary to engage in a nonbanking activity previously approved for that bank holding company, except in certain limited circumstances not relevant here.³

This opinion is based expressly on the facts and circumstances of this case as they have been described to Board staff, and any change in these facts or circumstances may result in a different opinion.

Sincerely, yours

(signed) Scott G. Alvarez

Scott G. Alvarez

Footnotes 1. See The Mitsui Taiyo Kobe Bank, Limited, 76 Federal Reserve Bulletin 563 (1990) ("1990 Order") (Mitsui Taiyo Kobe Bank, Limited, changed its name to The Sakura Bank, Limited). Return to text 2. See 12 C.F.R. � 225.123(c). Return to text 3. See 12 C.F.R. � 225.23(g)(1). Return to text