Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and six regional banks reduced their lending to small and midsize firms in fiscal 2002, despite pledging to increase such lending in exchange for receiving public fund injections, the Financial Services Agency said Thursday.

All eight banks have received public funds in the past to shore up their capital. Increasing loans to small and midsize companies was among key pledges made by the banks in order to receive injections of public money.

The FSA said it will ask the banks why such lending decreased and what kind of measures they will take to increase it. The agency will also intensify monitoring of Mizuho and SMFG.

Mizuho cut lending to small and midsize companies by 5.63 trillion yen and SMFG did so by 729.7 billion yen, the FSA said.

The six local lenders, including Hiroshima-based Momiji Holdings Inc. and Hokkaido Bank, cut such lending by a combined 152.9 billion yen.

In contrast, four other major banking groups or banks that have also received public funds increased their lending to small and midsize firms.

UFJ Holdings Inc. increased such lending by 401.4 billion yen, Resona Holdings Inc. by 235.1 billion yen, Mitsui Trust Holdings Inc. by 41 billion yen and Sumitomo Trust & Banking Co. by 20.9 billion yen.

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