Hokkaido Takushoku Bank

In March 1997, with bad debts at 13.4% of Takugin's bank's total lending, thought to be the largest rate of all the City Banks, along with economic uncertainty, a problem with money supply emerged. With the policy aim "don't crush the big 20", the finance ministry formed a plan to merge Takugin with Hokkaidō Bank (Dohgin), which was the second bank in Hokkaidō, and whose president was the former head of treasury bills. Since Dohgin was also in financial difficulty due to the collapse of the bubble, at the end of March 1997 an amalgamation plan was revealed under which Takugin would continue in the interim, and in April of the following year there would be an amalgamation to form a bank called the New Bank of Hokkaidō.

However, owing to mistrust over differences in perception of the bad debts, and emotional arguments based on the long-time rivalry with Takugin, the employees of Dohgin were strongly opposed to the merger. In the end, with no thawing in the antagonism of the two banks, it was announced on 12 September 1997 that there would be a half-year postponement of the merger, which in practical terms was a freeze, and it was understood that the Dohgin side had revoked the merger entirely.

With deposits peaking in 1994 at ¥8.7 trillion, increasing financial instability was causing contracts to be broken, particularly in the Honshū region, and the outflow increased. By the end of September 1997, deposits had descended to ¥5.9 trillion. After the failure of the merger, Takugin's financial insecurity increased yet again, such that its share price actually fell 100 yen below the level assigned for a bankruptcy warning. The cash flow situation was now more difficult, but Takugin was managing to put together some capital based on fixed-term loans from big lenders at relatively high interest rates, and from the "call market".