LEAD: Major Japanese banks see 990 bil. yen loss in stock investments

TOKYO, Feb. 6 Kyodo -
(EDS: ADDING INFO)
Japan's six major banking groups incurred a combined loss of 991.3 billion yen
(about $10.8 billion) in their stock investments in the nine months through
December amid the global financial turmoil, their earnings reports released by
Friday showed.
Also affected by the growing cost of bad-loan disposal, their total group net
profit plunged 89.9 percent in the period from a year earlier to 135 billion
yen, with Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc.
falling into the red.
The six groups also include Sumitomo Mitsui Financial Group Inc., Resona
Holdings Inc., Chuo Mitsui Trust Holdings Inc. and Sumitomo Trust & Banking Co.
The financial strength of major banks is under strong pressure from rising
loan-loss provisions and other credit costs, said Shinichi Ina, banking analyst
at Credit Suisse in Japan.
The groups expect a net profit for all of fiscal 2008 ending March 31. However,
Ina said a ''sense of discomfort'' remains as some ''could log a net loss even
in the year, depending on share prices at the end of March.''
The bad-loan disposal costs of the six totaled about 950 billion yen in the
nine-month period, almost 1.7 times the amount recorded a year before, as many
of their borrowers went bankrupt given the country's recession.
Mitsubishi UFJ, the largest among the six, said it fell into the red with a
group net loss of 42 billion yen, compared with 314.6 billion yen in net profit
marked in the same period a year before.
Operating profit from the group's two core banking units fell 6.2 percent to
638.2 billion yen due partly to a slump in sales of investment trusts. Its
bad-loan disposal cost increased nearly 1.6 times to 291.6 billion yen.
Mizuho recorded a group net loss of 50.5 billion yen. Only Sumitomo Mitsui saw
a net profit among the country's three mega-banking groups but said the profit
plunged 73.9 percent to 83.4 billion yen.
With the sharp deterioration in its balance sheet, Mitsubishi UFJ downgraded
its earnings estimate for fiscal 2008, expecting a net profit of 50 billion
yen, down 92.1 percent from the previous year and compared with an earlier
projected 220 billion yen.
The six groups projected a combined net profit of some 550 billion yen for the
12 months, almost a third the level seen in the previous year.
Mizuho expects its group net profit to fall 67.8 percent to 100 billion yen.
Sumitomo Mitsui projects a 61 percent fall to 180 billion yen.
Resona, Sumitomo Trust and Chuo Mitsui forecast a slide of 47.1 percent, 63.6
percent and 58.2 percent, respectively.
==Kyodo