Three banks have decided to extend uncollateralized loans to Tokyo Electric Power Co. after judging that the beleaguered utility is recovering with government support, according to sources close to the matter.

Sumitomo Mitsui Banking Corp., Bank of Tokyo-Mitsubishi UFJ, and Mitsubishi UFJ Trust and Banking Corp. will refinance for six months tens of billions of yen of Tepco borrowings that fall due at the end of the month, the sources said Wednesday.

Tepco, facing massive compensation claims and the hefty cost of decommissioning the Fukushima No. 1 nuclear plant, returned to the black on a group pretax basis in the April-June quarter for the first time in the four years since the 2011 earthquake and tsunami, due partly to cost-cutting efforts.

The banks' decision also comes after Tepco and Chubu Electric Power Co. announced earlier this week that they will form a joint venture aimed at strengthening thermal power operations to reduce fuel costs.

But Tepco is still facing a repayment deadline in December for a total of ¥150 billion in emergency loans extended by Sumitomo Mitsui, BTMU and Mizuho Bank shortly after the nuclear crisis started.

Tepco is asking to have the ¥150 billion in loans refinanced, but the three banks are taking a cautious stance over the utility's medium-term financial standing.