The outstanding balance of deposits and certificates of deposit at banks with nationwide branch networks — known as city banks — fell 1.6 percent in August from a year before, the first fall since March 1997, the Bank of Japan said in a preliminary report released Friday.
With the Aug. 11 termination of the central bank’s policy of guiding the unsecured overnight call money rate to near zero, major depositor financial institutions, such as life insurance companies, shifted their funds from deposit accounts at such banks to the call money market, BOJ officials said.
According to the BOJ, the daily deposit and CD balance at these banks came to 226.06 trillion yen.
The average deposit and CD balance at city banks, regional banks and second-tier regional banks fell 0.6 percent to 460 trillion yen, posting the first decline in five months.
The deposit and CD balance figures exclude unsettled checks and bills.
The balance of outstanding loans at Japanese commercial banks, meanwhile, fell 4.3 percent in August from a year earlier for the 32nd straight month of decline, the BOJ said.
The daily lending balance for August averaged 461.27 trillion yen.
Counting the loans deducted from the August figure for such reasons as loan securitization, debt waivers and allocation of loan-loss reserves, the lending balance rises roughly 11 trillion yen to 472.47 trillion yen, the BOJ said.
Still, the adjusted sum represents a 2 percent fall from a year before.
The survey, a key gauge of credit tightness, covers five categories of private-sector Japanese banks — major city banks with a nationwide presence, trust banks, long-term credit banks, regional banks and second-tier regional banks.
Before adjustments, the August balance at city banks, the largest lenders, dropped 3.3 percent to 211.42 trillion yen, while that at regional banks, the second-biggest, dipped 0.3 percent to 132.48 trillion yen.
The loan balance fell 5.2 percent to 40.72 trillion yen at major trust banks, 19.6 percent to 29.31 trillion yen at long-term credit banks and 7 percent to 47.33 trillion yen at second-tier regional banks.
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