Japanese mega-bank UFJ Holdings Inc said yesterday accelerated bad loan write-offs and weak stock prices would transform its expected profit this financial year into a huge loss.
UFJ expects to incur a net loss of ¥650 billion (US$5.4 billion) in the year to March instead of a profit of ¥70 billion forecast earlier.
It also projected a recurring loss of ¥680 billion in a turnaround from a ¥40 billion profit estimated in November. Its revenue for the financial year which ends next Monday is now seen at ¥2.3 trillion, down from ¥2.4 trillion.
"Credit costs increased by ¥260 billion from an earlier estimate to ¥740 billion ... and stock-related losses are to reach ¥620 billion," the bank said in a statement.
A report said another of Japan's big four banks, Sumitomo Mitsui Financial Group Inc, would also incur a loss, meaning Japan's seven largest banks are all expecting to end the year in the red.
The Mainichi Shimbun said Sumitomo Mitsui would incur a net loss of ¥100 billion instead of the earlier projected profit of ¥30 billion. A spokesman at Sumitomo Mitsui said there was no plan to slash earnings projections at the moment.
Mizuho Financial Group Inc, the world's largest bank in terms of assets, said in January it would incur a net loss of ¥1.95 trillion in the year. It is the biggest-ever loss for a Japanese firm and almost nine times larger than the ¥220 billion loss Mizuho earlier forecast.
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