TOKYO (Kyodo) -- Suruga Bank, caught up in an apartment loan scandal, said Tuesday its internal investigation has found that a "considerable number" of employees knew about loan screening irregularities.
The regional lender based in Shizuoka Prefecture said senior officials pressured its lending screening section to approve loans for people who had bought share houses for investment purposes.
The bank provided around 100 billion yen ($910 million) in loans to owners of women-only share houses called Kabocha no Basha (Pumpkin Carriage), operated by real estate firm Smart Days, which has gone bankrupt.
Smart Days managed the shared houses, leasing them mainly to young women and passing part of the rental income to their owners. The company halted payments to the property owners due to low occupancy rates before going bust.
It was already known that Suruga Bank falsified some information, including bank balances, to smooth loan screening for those seeking to invest in the shared house business.
Suruga Bank President Akihiro Yoneyama said in a press conference Tuesday that some senior officials pressured those who were screening loan applications to approve them.
The bank will set up a third-party panel to further investigate the matter and determine how its management should take responsibility, he said.
The bank will also strengthen the loan screening operation and increase the number of outside directors, Yoneyama said.
Suruga Bank said it had extended a total of 203.5 billion yen in loans to 1,258 shared house owners as of the end of March.
Some of the Kabocha no Basha owners could fall into bankruptcy as they become unable to pay back their loans. Lawyers representing the owners have repeatedly asked the bank to declare the loans void, but the bank has rejected the demand.