TOKYO: Japan’s top three banks have posted lacklustre half-year profit figures as the impact of last year’s stock market surge faded and they struggle to boost lending at home.
Mitsubishi UFJ, the country’s biggest bank, on Friday (Nov 14) said its net profit rose to ¥578.72 billion (US$4.99 billion) in the six months to September, a nine per cent rise, but well off a more than 80 per cent on-year surge in the same period last year.
Rival Mizuho Financial Group said its earnings dropped more than 17 per cent to ¥355.29 billion for the six months, while Sumitomo Mitsui Financial Group on Thursday said its net profit shrank to ¥479.55 billion in the first half, down 5.2 per cent from a year ago.
A stock market surge saw Tokyo’s benchmark Nikkei 225 index rally 57 per cent in 2013 – its best annual performance in decades. The rise came as the yen weakened sharply on the back of Japanese Prime Minister Shinzo Abe’s policies to revive the economy, dubbed “Abenomics,” which enticed retail customers into the stock market.
Japanese banks hold vast stock holdings which benefitted when overseas investors poured billions of dollars into the long-overlooked market. But the bank’s latest results underline how Japanese lenders have relied on profits linked to securities trading and other market activities rather than bread-and-butter domestic lending, as they struggle to find borrowers despite the Bank of Japan’s efforts to pump money into the economy.
