Japanese Regional Banks Plunged into Deeper Financial Woes

Economy

Tokyo, Nov. 22 (Jiji Press)--Japanese regional banks were plunged into deeper financial difficulty in their fiscal first half by prolonged low interest rates and higher credit costs.

Excluding Suruga Bank <8358>, which was hit by a lending scandal, 66 of the country's 102 regional banks reported lower net profits for the six months ended in September while five posted losses.

The 102 banks saw their combined net profit fall 13.8 pct year on year to 435.5 billion yen as their credit costs, or the amount of provisions set aside for potential loan losses, doubled to 106.7 billion yen.

Including Suruga, the 103 regional banks saw their net interest income drop 4.1 pct to 1,788.2 billion yen as the central bank's monetary easing cut into lending margins.

Their net profit from core banking operations grew 6.8 pct to 652.3 billion yen thanks to gains from bond sales.

[Copyright The Jiji Press, Ltd.]

Jiji Press