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Miki Shimogori
Tokyo, May 21: Without exception, leading Japanese banks on Friday unveiled steep losses for the last business year, indicating their battle to shed hefty bad loans is far from over.
They included the nation's biggest, Bank of Tokyo-Mitsubishi Ltd (BTM), which was the only one to refuse public funds under a government bank rehabilitation plan in March, opting instead to raise funds via new share issues and sales of assets including office buildings.
It took loan loss charges of 1.13 trillion yen ($9.1 billion) for the 1998-99 business year, against 1.43 trillion yen the previous year.
The bank had a parent current loss of 22.30 billion yen for1998/99 against a loss of 917.52 billion yen the previous year.
It left annual dividend payouts for 1998-99 at 8.5 yen per share, the same as the previous year. BTM's announcement came one day after another leading bank, Sanwa Bank Ltd, unveiled a steep parent current loss of 653.45 billion yen for 1998-99, also due to mopping up bad loans.
Seven other majorbanks --- Sumitomo Bank, Dai-Ichi Kangyo Bank, Sakura Bank, Tokai Bank, Asahi Bank, Fuji Bank, Bank of Yokohama -- announced similar losses after taking hefty loan loss charges.
All of them were recipients of public fund injections at the end of March, aimed at helping the banking sector unburden itself of bad loans that have hobbled it since the collapse of the late-1980s bubble of inflated asset prices.
Top banks are expected to take loan loss charges of about 10 trillion yen for 1998-99 in hopes of ending their long-running bad-loan woes and stemming fears of a corporate credit crunch.
The market remains sceptical, however, fearing bad loans could increase again if Japan's recession persists. Japan's top 15 banks are estimated to have held some 20 trillion yen in problem loans at the end of March under a stricter accounting standards set by the government late last year.
BTM said its problem loans under the new standard, including other claims such as debt guarantees, totalled 2.16 trillion yen atthe end of March.
Japan's top banks received 7.46 trillion yen in public funds in March in exchange for pledges to speed up bad loan disposals and streamline operations via job cuts and office closures under financial regulators' careful monitoring.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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