A self-assessment by the Long-Term Credit Bank of Japan puts the bank’s risky assets at 2.824 trillion yen, including “second category” loans of more than 2.379 trillion yen, at the end of March, according to a document disclosed to lawmakers Tuesday.
The Financial Supervisory Agency presented the document to executive members of the Lower House’s special committee on financial stabilization, which convened in the afternoon. According to the document, the LTCB judged that it held 18.7354 trillion yen in outstanding assets at the end of March, of which 15.9114 trillion yen was in “first category” loans, which are considered risk free.
The second category covers a broad range of loans that could go bad; “third category” assets are those the bank believes to be nearly irrecoverable. The LTCB judged that its third-category assets stood at 444.4 billion yen.
It said it had no “fourth category” loans, or those that are irrecoverable.
This is the first time that financial watchdog authorities have disclosed figures based on an individual bank’s self assessment. The LTCB had earlier disclosed that the amount of nonperforming loans, based on a government standard rather than its own, amounted to 1.379 trillion yen.
Individual banks’ gauge for risky assets tends to cover a wider range of loans than does those regarded as nonperforming loans by the government standard.
The FSA’s document also shows that five executives who retired from the LTCB during fiscal 1997 received a total of 223 million yen, or an average of 44.6 million yen each, in lump-sum retirement grants. Seven executives who left the bank in fiscal 1992, around the time the economic bubble burst, received a total of 1.496 billion yen, or an average of 213.7 million yen each.
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