Four major banks that released their fiscal 1999 earning reports Tuesday returned to the black after at least a year of losses.
On an unconsolidated basis, Mitsubishi Trust & Banking Corp. logged 126.4 billion yen in pretax profits, compared to the 193.7 billion yen loss reported the year before.
Sumitomo Trust & Banking Co. reported 76.7 billion yen in pretax profits, coming back from the 187.4 billion yen loss in fiscal 1998, while Daiwa Bank posted 37.6 billion yen in pretax profits and Toyo Trust & Banking Co. logged 29.4 billion yen.
The net business profit — the most important measurement of performance for Japanese banks — were 151.4 billion yen for Mitsubishi Trust, 97.2 billion yen for Sumitomo Trust, 75.7 billion yen for Daiwa and 12.4 billion yen for Toyo Trust.
The banks all scaled back their bad-loan writeoffs from the year before, when they wrote off huge portions of their bad loans with public funds and said the bad loan woes would be over.
As it turned out, however, the banks wrote off more problem loans than their original estimate for fiscal 1999, due to the continuing deterioration in the condition of borrowers. Toyo Trust wrote off 169 billion yen in fiscal 1999, followed by Daiwa’s 163.6 billion yen, Sumitomo Trust’s 150 billion yen and Mitsubishi Trust’s 147.9 billion yen.
The banks also said that the new tax, introduced by the Tokyo Metropolitan Government from the current business year, will weigh heavily on earnings.
The tax will put an expected five-year burden on the banks ranging from 10 billion yen for Daiwa and Toyo Trust to 15 billion yen for Mitsubishi Trust and Sumitomo Trust.
Yokohama Bank up, too
Yokohama Bank posted 51.1 billion yen in unconsolidated pretax profits in fiscal 1999, coming back from a loss of 183.8 billion yen the year before, according to the bank’s earnings reports released Tuesday.
The bank posted 86.5 billion yen in net business profits in fiscal 1999, twice the previous year’s figure, helped in part by fewer bad-loan writeoffs, the results show.
The bank officials also told reporters that the bank is being asked by the struggling department store operator group Sogo Co. to forgive about 20 percent of the group’s outstanding debt of 20 billion yen. The officials said they are currently considering the request.