Shinsei Bank on Tuesday revamped its management lineup, nearly two months after a successful tender offer by online financial group SBI Holdings Inc., with a former SBI vice president now at the bank's helm.

Following an approval at the bank's extraordinary shareholders meeting, former Senior Executive Vice President Katsuya Kawashima replaced Hideyuki Kudo as Shinsei president. Kawashima will be tasked under the SBI-led leadership with paving the way to repay the public funds injected into the bank in the wake of Japan's financial crisis in the late 1990s.

During the meeting, Kawashima pledged to boost the corporate value of Shinsei Bank.

Hirofumi Gomi, a former head of the Financial Services Agency, was also approved by the shareholders to join the new Shinsei board as chairman. Together with Kawashima and the new management, he will aid in improving the profitability of the bank, which has strengths in the consumer loan and credit card businesses.

The new management will serve until June, when the bank holds its regular shareholders' meeting.

About 350 billion yen ($3 billion) of the 370 billion yen injected by the government following the collapse in 1998 of the bank's predecessor, the Long-Term Credit Bank of Japan, has yet to be repaid.

The departure of the majority of the current Shinsei management -- blamed by SBI for failing to improve profitability and repay public funds -- comes after SBI's takeover attempt that had at one point turned hostile.

Shinsei has joined the financial group following alliances SBI has formed with regional banks to achieve its ultimate goal of becoming the fourth Japanese megabank.

Many regional banks have been facing tough times under the Bank of Japan's negative interest rate policy amid the nation's shrinking population.

In December last year, SBI boosted its stake in Shinsei to nearly 48 percent from around 20 percent through a tender offer to make the bank its subsidiary, ending a three-month takeover drama.

In September last year, SBI launched a tender offer to make Shinsei Bank a subsidiary.

Shinsei Bank once rejected SBI's offer and sought approval to introduce defensive measures, in a case that came under the spotlight as hostile takeovers in Japan's banking industry are rare.

==Kyodo

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