Resona Holdings Inc. on Tuesday revised upward its group net profit forecast to 200 billion yen for the fiscal first half that ended Sept. 30, more than double the initial forecast.
Japan’s fifth-largest banking group, now going through rehabilitation under a public bailout scheme, had estimated a 85 billion yen net profit in May.
Resona said it expects a larger full-year net profit of 285 billion yen, against its initial forecast of 170 billion yen.
The figures would represent Resona’s first profit since it was formed in 2001 through a merger of Daiwa Bank and Asahi Bank.
The merged group received nearly 2 trillion yen in public funds last year after the government decided to rescue it.
Resona said it revised its forecast upward mainly because it expects a smaller charge to write off nonperforming loans amid a turnaround of asset deflation.
“We are able to sail before the wind, and I appreciate it. But the most important issue for us now is to improve profitability,” Resona Chairman Eiji Hosoya told a news conference.
In May, Resona racked up a 1.66 trillion yen group net loss for the year ended March 31.
Resona plans to announce a new business plan in November, in which it is expected to say it will return about 700 billion yen in public funds to the government by March 2009, Hosoya said. The 700 billion yen is part of the total of some 3 trillion yen in public funds the group has received so far.
The group plans to merge unit Nara Bank with its core Resona Bank by March 2007 to enhance operational efficiency.
It also plans to make the group’s trust bank unit, Resona Trust & Banking Co., a wholly owned subsidiary by March, Hosoya said.
He said he hopes to include the reshuffling in the new business plan to be released next month.
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