3 of 5 major banks see net profit falls in FY 2020 over pandemic

©Kyodo News

Three of five major Japanese banking groups saw their net profits decline in fiscal 2020 due to rising credit costs amid the prolonged coronavirus pandemic, according to earnings results released by Monday.

The costs including provisions for loan losses totaled 1.15 trillion yen ($10.5 billion) at the five lenders for the year that ended in March, up about 80 percent from the previous year. But the combined net profits of the five climbed 1.6 percent to 2.03 trillion yen.

Sumitomo Mitsui Financial Group Inc. and Sumitomo Mitsui Trust Holdings Inc. said their net profits fell 27.1 percent and 12.8 percent, respectively. Resona Holdings Inc. saw an 18.3 percent net profit drop.

Mitsubishi UFJ Financial Group Inc. said its net profit jumped 47.1 percent, in a rebound after it booked a sizable loss the previous year related to an overseas subsidiary.

Mizuho Financial Group Inc. posted a 5.0 percent gain in its net profit.

All of the five groups forecast a pickup in their earnings for the current business year through next March.

Their combined net profits are expected to rise 11.5 percent to 2.26 trillion yen, helped by improving performances at borrowing companies that have been hit by the pandemic.

Credit costs are likely to remain relatively high, especially in the food-services and tourism industries, but are also expected to decline to some extent, they said.