Nippon Trust net-loss estimate increased

Nippon Trust Bank announced Monday it has increased its consolidated net loss estimate for fiscal 1999 from 10 billion yen to 13.5 billion yen, citing the impact of a new tax on banks and increased cost of bad loans.

For fiscal 1999, the trust bank subsidiary of the Bank of Tokyo-Mitsubishi said its group revenue is now estimated at 70.5 billion yen, up from the previous forecast of 60.5 billion yen on Nov. 22, thanks to an increased net business profit and gains from securities sales. But in the second half of the fiscal year, the Tokyo-based bank increased funds set aside for writing off bad debts to over 17 billion yen from its previously planned 10 billion yen.

Group pretax loss is now estimated at 10.5 billion yen, up from 10 billion yen. The bank also needs to factor in the impact of the new bank tax of the Tokyo metropolitan government. This will expand its loss by around 2 billion yen, the bank said.

On April 3, Sumitomo Bank also slashed its earnings estimates for fiscal 1999, citing the new bank tax.

Other major banks could also follow suit in revising down their earnings projections.