The head of Aozora Bank Ltd. resigned Tuesday as the midsize Japanese lender apologized for a 196 billion yen ($2.15 billion) loss expected this fiscal year.
Federico Sacasa, 58, will be replaced by Deputy President Brian Prince, who will serve as acting president and chief executive officer until shareholder approval in June, Aozora said.
Aozora _ whose top shareholder is U.S. private-equity fund Cerberus Capital Management _ blamed losses tied to GMAC LLC, Madoff Securities, Lehman Brothers and hedge funds for a poor third quarter and its worsening outlook in the fiscal period through March 31.
Lehman Brothers filed for bankruptcy in mid-September, while Madoff was arrested in December after reportedly telling investigators he lost as much as $50 billion of investors' money in a giant Ponzi scheme.
In its previous forecast in November, the Tokyo-based bank had predicted a 27 billion yen loss for the fiscal year.
For the April-December period, the bank reported a net loss of 109.4 billion yen compared with 24.9 billion yen the previous year. Operating revenue fell 2.1 percent to 155.5 billion yen.
"We would like to offer our sincere apologies to all of our stakeholders, including our customers and shareholders, for the extremely disappointing full-year forecasts and third quarter results," the bank said in a statement.
Prince, 45, is now charged with turning around a bank that was struggling even before the global financial crisis hit.
The Japanese government bailed out its predecessor, Nippon Credit Bank, during Japan's last banking crisis in the 1990s and Aozora has yet to repay the public funds it received.
The bank said it would continue to shed money-losing assets and shift its focus to domestic operations as part of measures to return to profitability next fiscal year and redefine itself amid stiff competition.
Helping Aozora's efforts will be its healthy capital adequacy ratio of 13.7 percent, among the highest in Japan, and a liquidity buffer of more than 1 trillion yen.
