Bad loans at the nation's 121 banks ballooned by ¥889 billion to reach ¥12.294 trillion during the six-month period to Sept. 30, the Financial Services Agency said Tuesday.
It was the first time since the second half of fiscal 2001 that the banking system saw a rise in bad loans compared with six months earlier, the FSA said. The amount of bad loans were computed under bad-loan definitions in the financial system revival law.
The ratio of bad loans to the balance of loans came to 2.5 percent, an increase of 0.1 percentage point from six months earlier, according to the banking-system watchdog.
FSA officials warned the balance of bad loans may grow further during the six months to March 31, eating into the banks' profitability on the basis of greater credit costs.
Breaking down the ¥12.3 trillion bad-loan tally, the agency said bad loans at the top nine banking giants swelled ¥425 billion to ¥4.191 trillion, while those at 110 regional lenders rose ¥406.0 billion to ¥7.952 trillion.