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Japan 5 major banks results
bad loans and capital ratios

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5 Major Banks Results as of March 31, 2004  
Billion Yen Outstanding
Bad Loans
March 31
2004
Change
from
March 31 2003
Bad loans
ratio
March 31
2004
Bad loans
ratio
March 31
2003
Net Profit
FY 2003
Capital
Adequacy
Ratio
March 2004
Capital
Adequacy
Ratio
March 2003
Mizuho Group 3191.0 -26.4% 4.4% 6.2% 407.0 11.3% 9.5%
SMBC 3336.2 -25.1% 5.0% 4.0% 330.4 11.4% 10.1%
MTFG 1419.1 -23.6% 2.9% 5.3% 560.8 12.9% 10.8%
UFJ 3949.4 6.5% 8.5% 8.7% -402.8 9.2% 9.9%
Resona 1884.1 -41.0% 6.7% 9.3% -1664.0 7.7% 3.7%
Total 13779.8       -768.6    
SMBC attempts hostile merger on UFJ (August 1)

Our take:
This mark the first instance of takeover battle in the Japanese financial establishment. Hostiles bids seems (at last) to become accepted in Japan.
This is positive progress.

UFJ attempts merger with MTFG (July 15)

Our take:
UFJ attempt to merge with MTFG is further proof that the real situation of bad loans is worse than announced and that UFJ does not have enough reserve (capital adequacy ratio had fallen to 9.2%) to write off its most obvious bad loans such as loans to Daiei.

Japan bad loans at 4 major banking groups have declined to 14TY on March 2004 or 6.8TY less than a year earlier. Meanwhile, bad loan ratio fell from 7.2% to 5.2% (May 25)

Our take:
As expected, major banking groups have followed Ministry instructions and reduced their official bad loan figure. We remain convinced that many more "hidden" bad loans remain on banks balance sheet.

 
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