Some 38 of 87 listed regional banks are expected to fall into the red in the year to March due to losses from stock falls and the hefty cost of disposing of bad loans.

This was revealed by their earnings forecasts that were recently unveiled in the release of their April-December financial results.

The projection means the number of banks incurring net losses in fiscal 2008 would rise sharply from just four in the previous year.

The total net profit of the 87 regional lenders is estimated at ¥107 billion in fiscal 2008, down 83.4 percent from the previous year, amid the global economic downturn.

The 87 regional banks chalked up a total of ¥275.1 billion in losses in connection with equity price falls in the first nine months of the current business year.