SAN FRANCISCO -- Badly battered by the California recession, Japanese-owned banks here are rebuilding profits and consolidating their market position. Although the going is still not easy, bankers say the outlook is brighter than it has been for several years.

"These days, it's quite different from what it was like a year ago;' says Kanetaka Yoshida, president and chief executive of Union Bank, a unit of the Bank of Tokyo and the largest Japanese banking subsidiary in California with $16.3 billion of assets. "A year ago, the main question was how to deal with nonperforming assets."

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