Recent increases in stock prices raised unrealized profits on shares held by 17 big Japanese banks to 11.82 trillion yen at the end of fiscal 1999, according to an estimate released Friday by Commerz Securities (Japan) Co.
The total is up more than 6 trillion yen from six months earlier.
The Bank of Tokyo-Mitsubishi had the largest unrealized profit, of 1.88 trillion yen, as of Friday, the end of the fiscal year.
Latent profits on shareholdings top 1 trillion yen at four other banks — Sumitomo Bank, Fuji Bank, Sanwa Bank and Dai-Ichi Kangyo Bank.
Commercial banks have been unloading unprofitable shareholdings, especially since the end of the first half of fiscal 1998, when they were burdened with unrealized losses of more than 3 trillion yen as a result of stock price falls, which sent the key 225-issue Nikkei average plunging to the 13,000 level.
With the Nikkei average closing at 20,337 Friday, up from 17,605 at the end of last September, Daiwa Bank, Chuo Trust & Banking Co. and Mitsui Trust & Banking Co. have wiped out latent losses on shareholdings.
The steep rise in unrealized profits is a bonus for the 17 banks. , which are expected to realize the profits to eliminate problem loans worth more than 19 trillion yen at the end of last September.