Japanese banks’ securities purchases hit a record high in fiscal 2011, reflecting a jump in their holdings of Japanese government bonds, a private survey said.
The ratio of combined securities investment to total deposits at 117 banks rose 2.0 points from a year earlier to 41.8 percent as of the March 2012, the highest since Tokyo Shoko Research Ltd. began holding the survey in fiscal 2005.
A rise in the securities investment-to-deposit ratio generally means a fall in bank lending. The combined balance of deposits at the banks rose 3.0 percent to ¥663.812 trillion.
Outpacing the deposit increase was securities investment, which expanded 8.2 percent to a record high of ¥277.767 trillion, with JGB holdings jumping 10.2 percent to ¥166.433 trillion, or 60 percent of the total.
The securities investment-to-deposit ratio and the ratio of JGB holdings to overall securities investment began to rise in fiscal 2008, when the global financial system froze up..
For the April-June quarter, the nation’s five major banking groups logged a combined profit of ¥460.2 billion from JGB trade, up 2.7 fold from a year before.