Eight of the nation's 17 major banks released their fiscal 1999 midterm earnings reports Friday in which all posted both pretax and after-tax profits at the end of September.

The results were a striking contrast to the dire results at the end of fiscal 1998 when most major banks registered huge losses due to bad-loan disposals.

This time, many banks were helped by widened spreads between lending rates and fundraising rates, as well as by improved profitability as a result of their cost-cutting efforts, according to the reports.

On an unconsolidated basis, Sumitomo Bank posted the biggest pretax profit at 90.8 billion yen, up 45.4 percent from the same period last year. The figure was followed by Fuji Bank's 78.7 billion yen and Dai-Ichi Kangyo Bank's 76.3 billion yen.

The eight banks registered net profits, ranging from 3.5 billion yen for Yasuda Trust & Banking Co., a Fuji Bank subsidiary, to 46 billion yen for Fuji.

All of these banks received capital injections of public funds in March. Using the public funds, the banks wrote off a significant portion of their bad loans at the end of fiscal 1998, saying their bad loan woes would be over.

But Friday's reports revealed that many were forced to write off more bad loans in the six months thereafter. They cited a fall in collateral values and worsened financial conditions of their borrowers as reasons.

As a result, the eight wrote off a total of an unconsolidated 776.4 billion yen by padding up loan-loss reserves.

The banks also sold a significant portion of bad loans through bulk sales, a process that goes beyond mere writing off. The book value for loans put to bulk sales totaled 445.4 billion yen.

As banks have recently come under fire for lending money to to "shoko" moneylenders such as Nichiei Co. and Shohkoh Fund Co., all eight banks vowed that they will either refrain from extending fresh loans or will "react prudently" in the future.

The eight banks are under a mandate to increase their lending volume to small and midsize businesses -- a condition imposed when they accepted the public injections in March. Some banks, however, are lagging behind the targeted pace of lending to such firms.

Fuji Bank, for example, had earlier vowed to increase the volume of such lending by 540 billion yen during the current fiscal year, which ends next March. But it suffered about a 167 billion yen fall in the outstanding loan volume between March and September.

Fuji officials said the bank is not tightening credit to small and midsize firms but that their fundraising needs remain low.