Sumitomo Trust & Banking Co. announced April 7 that it would revise downward its earnings projections for the year ending March 1997, partly because of the losses incurred by the liquidation of three nonbanks affiliated with Nippon Credit Bank.
Bank officials said Sumitomo now expects to earn pretax profits of 12 billion yen for the year, 88 billion yen less than the 100 billion yen forecast last November. The bank said it expects to write off roughly 60 billion yen worth of its total 101.4 billion yen in outstanding loans to the three NCB nonbanks, which were officially declared bankrupt the same day, for the year ending March.
Another 10 billion yen would be written off as secondary losses expected to be incurred on the loans the bank sold to the Cooperative Credit Purchasing Co. due to a decline in collateral value, officials said. As a result, officials said they calculate that 460 billion yen worth of nonperforming loans would be written off in fiscal 1996, up from past predictions of 370 billion yen.
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