Japan’s largest and third-largest banks by market
capitalisation, Mitsubishi UFJ (MUFG) and Mizuho, have slashed
their profit forecasts for the current fiscal year by 66 percent
and 55 percent respectively, citing rising bad loan
costs.
And the country’s fourth-largest lender, Resona, added to the
gloom by cutting its earnings forecast for the year from ¥150
billion ($1.51 billion) to ¥85 billion, citing rising credit costs
and the economic downturn.
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MUFG has also confirmed it will raise up to $10.6 billion to
boost its capital base following the $9 billion investment in
Morgan Stanley last month.
It now expects to report a group net profit of ¥220 billion in
the year to March, compared to its previous forecast of ¥640
billion yen.
Mizuho is now predicting net profit of ¥250 billion compared to
its previous estimate of ¥560 billion and said it had suffered ¥130
billion of bad-loan costs in the first half of the fiscal year.
Adding to the sense of gloom, the country’s central bank cut
interest rates for the first time in seven years at the end of
October.
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