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More Japanese banks reveal heavy losses on bad loans

Lea Paterson
Friday 22 May 1998 23:02 BST
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ANOTHER six big Japanese banks have unveiled substantial losses after making heavy provisions for loans made in the troubled South-east Asia region.

Bank of Tokyo-Mitsubishi (BTM), Japan's leading bank and one of the largest banks in the world, said it had taken a 1.4 trillion yen (pounds 6bn) bad debt charge, and that its parent company had lost 918 billion yen (pounds 4bn) in the year to March.

A bank spokesperson said he expected further bad debt charges to be made during the current financial year. "The economic situation in Japan remains tough", he said. However, the spokesperson said BTM's parent company should go back into the black in 1998/9. He predicted a parent group profit of 150 billion yen (pounds 675m).

Five other Japanese banks - Dai-Ichi Kangyo Bank, Sanwa Bank, Fuji Bank, Tokai Bank and Asahi Bank - also posted large losses yesterday. On Thursday, Sumitomo Bank and Daiwa Bank admitted to substantial losses.

All the Japanese banks appear confident that last year's heavy bad loan provisions would be sufficient to see them through the region's financial crisis, and most were predicting they would return to profitability this year.

Analysts, though, were more sceptical, believing Japanese banks would need at least three years to restore their financial health.

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