Japan's top three banks have all suffered weak profitability in the first three quarters of the fiscal year, with their sluggish performance attributed to the decline in corporate lending.
Mitsubishi UFG Financial Group, the country’s largest banking group in terms of assets, reported a 33% decline to JPY690.5 billion from JPY1.02 trillion for the first nine months. The bank pinpointed the drop in allowances for loan losses, which had accounted for a significant part of the previous year’s profits.
Mizuho Financial Group, the second largest bank in Japan, recorded a 0.2% fall in net profit to almost JPY580 billion for the first three quarters. The primary factor in its decline was attributed to the drop in its bond portfolio losses, which totaled JPY25.7 billion.
The third largest bank, Sumitomo Mitsui Financial Group (SMFG), posted the biggest fall, with a 33.9% drop in net profit to just over JPY396 billion. SMFG also claimed that the decline was due to the fall in its net business profits, which saw a 29% drop to JPY499.39 billion.
All three banks have kept the same estimate for full-year earnings, for the year ending March 31, 2007.