ID :
30340
Sat, 11/15/2008 - 14:03
Auther :
Shortlink :
https://oananews.org//node/30340
The shortlink copeid
Credit turmoil causes 1 tril. yen loss for Japan's leading banks+
TOKYO, Nov. 14 Kyodo - Japan's six largest banking groups suffered a total loss of 1.03 trillion yen for the six months through September due to the global financial turmoil with their combined net profit more than halved to 406 billion yen from a year earlier, their earnings results and estimates showed Friday.
While incurring significant losses on stock investments, they have also been
under pressure from the growing cost of bad-loan disposal, which totaled 729.7
billion yen in the first half of fiscal 2008, up 87 percent.
Five of the six groups had published their midterm results by Friday.
Mitsubishi UFJ Financial Group Inc., which is the largest among them and has
downgraded its estimates, will release its April to September earnings on
Tuesday.
The groups saw sharp declines in profits from their core banking businesses due
partly to slumping sales of investment trusts as investors scrambled to
withdraw their money from stock markets, where share prices have plunged amid
the worldwide credit crisis.
A significant proportion of their investments and loans have turned sour as an
increasing number of companies have gone bankrupt especially in the
construction and real estate industries amid the fallout from U.S. subprime
mortgage problems. They also suffered losses in connection with the bankruptcy
in September of U.S. securities firm Lehman Brother Holdings Inc.
Current conditions and gloomier prospects for the Japanese economy could force
banks to tighten their lending, analysts said.
Sumitomo Mitsui Financial Group Inc., one of Japan's three megabanks, recorded
a loss of 224.1 billion yen related to bad-loan disposal, almost double the
level in the same period a year earlier.
Similar losses at Mizuho Financial Group Inc. increased about 2.4 times to
130.4 billion yen, while Resona Holdings Inc. recorded around 9.1 times growth
to 126.5 billion yen.
For the full year, the combined cost of bad-debt write-offs among the six is
expected to top 1 trillion yen, the highest level in four years.
They booked a total of 298.3 billion yen in losses for the first six months on
their investments in stocks as well as in securitized products affected by the
meltdown of the riskier segment of the U.S. home loan market which began in
summer last year.
Group net profit of SMFG fell 51.2 percent. That of Resona slid 28.1 percent,
with Chuo Mitsui Trust Holdings Inc. marking a 61.2 percent loss and Sumitomo
Trust & Banking Co. a 24.9 percent decline. MUFG projects a 61 percent
decrease.
The six groups are expecting to book combined net profit of 930 billion yen for
the current business year through next March.
''Against the background of slowdown in the domestic and overseas economies, we
have to expect (an increase in) the cost of disposal (of bad debts),'' SMFG
President Teisuke Kitayama told reporters.
==Kyodo
While incurring significant losses on stock investments, they have also been
under pressure from the growing cost of bad-loan disposal, which totaled 729.7
billion yen in the first half of fiscal 2008, up 87 percent.
Five of the six groups had published their midterm results by Friday.
Mitsubishi UFJ Financial Group Inc., which is the largest among them and has
downgraded its estimates, will release its April to September earnings on
Tuesday.
The groups saw sharp declines in profits from their core banking businesses due
partly to slumping sales of investment trusts as investors scrambled to
withdraw their money from stock markets, where share prices have plunged amid
the worldwide credit crisis.
A significant proportion of their investments and loans have turned sour as an
increasing number of companies have gone bankrupt especially in the
construction and real estate industries amid the fallout from U.S. subprime
mortgage problems. They also suffered losses in connection with the bankruptcy
in September of U.S. securities firm Lehman Brother Holdings Inc.
Current conditions and gloomier prospects for the Japanese economy could force
banks to tighten their lending, analysts said.
Sumitomo Mitsui Financial Group Inc., one of Japan's three megabanks, recorded
a loss of 224.1 billion yen related to bad-loan disposal, almost double the
level in the same period a year earlier.
Similar losses at Mizuho Financial Group Inc. increased about 2.4 times to
130.4 billion yen, while Resona Holdings Inc. recorded around 9.1 times growth
to 126.5 billion yen.
For the full year, the combined cost of bad-debt write-offs among the six is
expected to top 1 trillion yen, the highest level in four years.
They booked a total of 298.3 billion yen in losses for the first six months on
their investments in stocks as well as in securitized products affected by the
meltdown of the riskier segment of the U.S. home loan market which began in
summer last year.
Group net profit of SMFG fell 51.2 percent. That of Resona slid 28.1 percent,
with Chuo Mitsui Trust Holdings Inc. marking a 61.2 percent loss and Sumitomo
Trust & Banking Co. a 24.9 percent decline. MUFG projects a 61 percent
decrease.
The six groups are expecting to book combined net profit of 930 billion yen for
the current business year through next March.
''Against the background of slowdown in the domestic and overseas economies, we
have to expect (an increase in) the cost of disposal (of bad debts),'' SMFG
President Teisuke Kitayama told reporters.
==Kyodo
