Following the collapse of the Japanese asset price bubble in 1989, the bank was riddled with bad debts: the government nationalized it in 1998, and it was delisted from the Tokyo Stock Exchange.

[6] Investor Christopher Flowers also played a major role in the buyout syndicate and remained a key shareholder of the company until August 2019, when the Japanese government acquired the shares held by his fund.

Many of Shinsei's managers had previous experience working for foreign financial institutions in Japan, such as CEO Thierry Porte (formerly of Morgan Stanley) and CIO Jay Dvivedi (formerly of Citibank).

This created a furor in Japan: politicians especially criticized Goldman Sachs, which advised on the sale of LTCB, for not warning the government of the risks inherent in the defect security provision.

In 2010, the bank sold its headquarters building near Hibiya Park and its operations center in Meguro in order to avoid falling below targets again due to investment writedowns during the subprime crisis in the United States.

Shinsei also gears many of its services toward resident foreigners in Japan, with English-language online banking and telephone support, as well as no requirement for a personal seal in order to open an account.