Japan's Banks Finally Over the Worst of the Bad Loan Crisis

Two of Japan’s big four banks said they had got over the worst of the bad loan problems overhanging their business and the economy but they also posted lower first-half earnings as loan demand remained soft.

“At Mizuho, we have clearly passed the peak of the bad loan problems,” declared Terunobu Maeda, president of Japan’s biggest bank, Mizuho Financial Group.

The view was echoed by Sumitomo Mitsui Financial Group president Yoshifumi Nishikawa, who said Japan’s third-largest lender “will be able to get rid of the bad loan problem in the current fiscal year (ending in March 2005).”

Mizuho said its group net profit for the six months to September came to 233.94 billion yen ($2.27 billion), down 8.4 percent from a year earlier but in line with its recently increased interim forecast.

The year-earlier net profit figure was boosted by the exceptional gain resulting from the cancellation of the Tokyo metropolitan government’s levy on bank profits, Mizuho said.

For this complete story, please visit Japan’s Banks Finally Over the Worst of the Bad Loan Crisis.