http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060410:MTFH68257_2006-04-10_05-20-10_T284842&symbol=AAPL.O&rpc=44 Japan bank turns to Apple for pre-IPO makeover Mon Apr 10, 2006 1:20 AM ET By Jonathan Soble TOKYO, April 10 (Reuters) - On the 16th floor of a central Tokyo office tower, rows of workers sit perched behind the cool white lines of Apple Computer Inc.'s (AAPL.O: Quote, Profile, Research) Macintosh desktop machines. This isn't a graphic design firm or a publishing house -- usually among the few businesses to favour Macs over PCs that run Microsoft Corp.'s (MSFT.O: Quote, Profile, Research) ubiquitous Windows operating system. This is the headquarters of Aozora Bank, one of three Japanese lenders snapped up by foreign investors after collapsing in the late 1990s. Now majority-owned by U.S. buyout fund Cerberus, Aozora is sprucing up ahead of a widely expected share listing, and it has asked Apple to outfit 2,500 work stations at its main office, data centre and 17 branches. The order has made Aozora the iPod-maker's biggest financial industry client worldwide. "The question for us was how to simplify the environment and bring it forward 15 years in one jump," said Bill Chute, Aozora's chief technology officer and a former tech executive at Citibank (C.N: Quote, Profile, Research). The Mac's ease of use, reputation for security and flexible UNIX-based platform prompted the switch from Windows, he said. But equally, Chute hopes some of Apple's trend-setting lustre will rub off on Aozora, whose corporate mindset has its roots in the bank's hidebound and eventually defunct predecessor, Nippon Credit Bank (NCB). "These are guys who went through failure and nationalisation and shame," he said, referring to the many employees who are holdovers from NCB. "The whole culture has to be brought back to life." For Apple, Aozora could foreshadow a more aggressive push to recruit business clients, something analysts say will be made easier by the roll-out last week of software allowing Mac users to run Windows on their machines. "It has attracted a whole new set of customers that we'd never really talked to before," Brian Croll, a senior marketing director at Apple, said of Apple's adoption of the UNIX standard several years ago, a key step to making Macs more compatible with other systems. "We're dealing with government agencies, science and technology firms, even trucking companies." CATCH-UP EFFORT Aozora's switch to Apple symbolises a broader turnaround for the bank -- though one that hasn't always been smooth. Aozora returned to profit quickly following its relaunch, helped by an agreement with Japan's government that let it shift NCB's worst-performing loans to the state. But it has lagged the two other banks that collapsed around the same time and were also rebuilt by foreigners, Shinsei Bank (8303.T: Quote, Profile, Research) and Tokyo Star Bank (8384.T: Quote, Profile, Research), in rebuilding its infrastructure and pursuing retail customers. "Shinsei revamped its technology very quickly, and that was a big part of its success," said Neil Katkov of Celent, a financial services consultancy. "Aozora has been slower." Both Shinsei and Tokyo Star have since gone public, generating windfall gains for their owners, while an unstable ownership situation at Aozora -- Cerberus only took control in 2003 after beginning with a 5 percent stake -- led it to put off an initial plan to list its shares by March this year. Bankers and analysts now expect a listing later this year, and Aozora's catch-up effort is in full swing. "You can see a lot of duct tape hanging out around the place," Chute said. The bank will use Macs mostly for "front-end" tasks -- document and data processing, e-mail, video-conferencing and the like. The system's underlying servers come from both Apple and other vendors, while specialised functions such as foreign exchange trading and complex risk assessments are performed on separate platforms. BRANDING OPPORTUNITY The new set-up marks a stark change from NCB, which stopped spending on technology when financial problems emerged in the early 1990s, leaving Aozora saddled with obsolete mainframes feeding a hodgepodge of mismatched systems. It has also given the one-third of Aozora's offices that have completed the switch to Macs a strikingly different image from the dowdy, paper-clogged spaces synonymous with Japanese banks. Although Chute said technological concerns rather than Apple's trendy image motivated his choice of systems -- customers will only know the bank uses Macs if they peer over a teller's counter -- the move could well improve Aozora's profile. "Certain brands have attraction, and therefore have a kind of halo effect," said Alex Lopez, president of Beacon Communications, a Tokyo marketing firm. Beacon advised Shinsei, which achieved a similar effect by hosting Starbucks (SBUX.O: Quote, Profile, Research) (2712.OJ: Quote, Profile, Research) kiosks at its branches. "Mac stands for 'We are not the same as everyone else,'" Lopez said. "It makes (Aozora) look young, it makes them look hip, it makes them look like a challenger brand."
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