Aozora Bank,cut its profit forecast heavily for the second time this year, citing further deterioration in its overseas portfolio investments because of the US subprime crisis.

Aozora, nearly 46 per cent owned by Cerberus, the US private equity group, said the revised forecasts stemmed from a provision of Y14.8bn ($143m) to reflect a deterioration in its investment in FIM, the 51 per cent owner of GMAC, the former financial services arm of General Motors.