The Industrial Bank of Japan said Thursday it expects to go into the red during the current fiscal year after writing off 400 billion yen worth of bad loans.
Pretax losses in fiscal 1997 are expected to reach 250 billion yen, the long-term credit bank said in its midterm earnings report. In the April-September period, the bank logged pretax profits of 23.12 billion yen, down 64 percent from the same period last year. Its net interim profits fell to 22.22 billion yen.
The accelerated disposal of nonperforming loans reflects the bank's efforts to clear the loans before April, when more stringent benchmarks for checking credit-worthiness will be introduced. The bank intends to increase reserve funds to cover the sour loans as much as possible, Takeo Sekihara, an IBJ director, told reporters. "We are going to have few bad loans left, if any" by the end of the fiscal year, he said.