OSAKA -- Daiwa Bank said Friday that it expects to post unconsolidated net losses of 8 billion yen for fiscal 2000, which ends March 31, due to unrecoverable funds extended to the failed Tokyo Mutual Life Insurance Co.
Daiwa Bank made the announcement after the midsize life insurer filed for court protection from creditors earlier in the day.
A total of 32 billion yen, consisting of 12 billion yen in foundation funds to the insurer, the equivalent of a stock company's capital, and 20 billion yen in subordinated loans, is probably unrecoverable, the bank said.
Daiwa Bank will write off total losses of 32 billion yen for fiscal 2000, marking its first net loss since fiscal 1998.
"It's not Tokyo Mutual's fault or the fault of the foreign companies (who decided against a tieup)," said Yasuhiko Matsuzawa of Daiwa's Planning Division. "Given the falls in share prices and the subsequent large latent losses, none of the rehabilitation schemes worked out."
Matsuzawa said the decision to end assistance to Tokyo Mutual had nothing to do with the ongoing push to cut nonperforming loans from banks' balance sheets.
Daiwa officials, however, emphasized the bank's sound management and said it will still have a well-established capital base after writing off the losses.
The bank also said its unconsolidated operating revenues for fiscal 2000 are unchanged from the 440 billion yen projected in November.
The newly projected pretax profits were revised to zero from the earlier projected 54.5 billion yen, it said.
The bank revised downward its consolidated net profit from net profits of 28 billion yen to net losses of 18 billion yen.