Daiwa makes its US withdrawal

Daiwa Bank, hit by a massive bond trading scandal last year in New York, is to pull out of the US by Thursday, handing over its operations to Sumitomo Bank. Daiwa said Sumitomo Bank would pay $3.3bn (pounds 2.2bn) for the loans and transactions and an additional $65m for rights to business at 15 of Daiwa's US branches and a Daiwa trust bank unit in New York. Daiwa had a total of $4.3bn in loans and other transactions in the US. The outstanding $1bn would be transferred to Daiwa's parent body in Japan.

In November, the US authorities announced a 24-count criminal indictment against Daiwa, covering charges of conspiracy to defraud the Federal Reserve Bank, mail and wire fraud and falsifying bank records, and ordered it to close its US operations by 2 February.

Senior Daiwa officials are allegedly implicated in shifting hundreds of millions of dollars around the world to hide the $1.1bn losses run up by the bond trader Toshihide Iguchi. Daiwa has vowed to fight the charges. Sumitomo said last November that it would help Daiwa to close down its US operations, and the presidents of the two banks said they would consider a merger in the future.