(Bloomberg) -- A growing number of investors are betting on a further rout in Japanese lender Aozora Bank Ltd., even after its shares crashed last week on losses tied to US commercial real estate.

Short interest in Aozora as a percentage of its free float continued to climb after the stock’s two-day, 34% drop that wiped out a third of its value, according to IHS Markit data. The ratio stood at 25% as of Wednesday, overtaking loss-making steelmaker Pacific Metals Co. as the most shorted stock on the Nikkei 225 Stock Average.

A short position of about 4.8 million shares was attributed in exchange filings to Morgan Stanley on Monday, though it’s unclear how much if any of that was held on the bank’s own books and how much was held on behalf of clients. Short positions attributed to Goldman Sachs Group Inc. and JPMorgan Chase & Co. also increased.

Goldman Sachs, whose representative declined to comment on the matter, noted in its filing that the position includes those related to hedging by its clients. A Morgan Stanley spokesperson also did not comment, while JPMorgan didn’t immediately respond to Bloomberg’s query. 

Short positions are probably because “it’s not clear what will happen to banks’ earnings going forward, and there’s uncertainty about dividends for the next fiscal year,” said Hajime Sakai, chief fund manager at Mito Securities Co.

Tokyo-based Aozora, which expanded aggressively overseas as it lacked the size of Japan’s major banks and the customer base of regional lenders, predicted a loss and canceled its dividend last week. It also ratcheted up provisions for loans tied to commercial property in the US, sparking concern that the trouble there will reverberate in other markets.

JPMorgan cut its price target on the stock to ¥1,600 on Monday, representing a 27% drop from Thursday’s close. That’s the lowest among all the price targets of the bank tracked by Bloomberg. Aozora Bank shares have climbed about 1.6% since Friday, but remain near a three-year low.

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