Japan Post announced Wednesday it brought in a whopping net profit of 1.93 trillion yen in the fiscal year that ended March 31, up 56 percent from the year before, thanks to the robust performance of its postal savings business.
Net profit from the postal savings arm reached 1.93 trillion yen, up 59.6 percent and far more than the record profit of 1.18 trillion yen logged by Japan's largest megabank, Mitsubishi UFJ Financial Group Inc.
The performance by the postal savings arm has again fueled concerns the entity will deprive banks of business upon full privatization in 2017.
The huge profit in this sector was attributed to the rise in stock prices, which helped boost investment returns, Japan Post said.
On the other hand, net profit from Japan Post's mail delivery business plunged 99.1 percent from the year before to 200 million yen due to shrinking revenues amid intensifying competition with the private sector as well as the spread of information technology, including e-mail.
For the current business year, Japan Post forecast Wednesday its first net loss in four years, saying it expected to lose 5.6 billion yen due to costs arising from privatization.
This has raised concerns that the mail delivery business will not be profitable after privatization without raising postage rates or drastically restructuring operations by additional personnel cuts and closing unprofitable rural post offices.
Japan Post said all three of its businesses -- postal savings, mail delivery and postal life insurance -- managed to stay in the black for the third consecutive business year.
While the postal savings performance was lifted largely with the help of the rise in stock prices, President Masaharu Ikuta said Japan Post must get ready to undertake massive reform of its mail delivery arm by the October 2007 start of privatization.