World Economy

Japan Banks See Gloom

Japan Banks  See GloomJapan Banks  See Gloom

Japan’s three biggest banks are likely to flag lackluster earnings for the current business year when they release forecasts this month, with loan income depressed by an economic stimulus policy that charges lenders to store money at the central bank, Reuters reported. Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc have booked mixed earnings in recent years, with bumper stock gains offsetting weak core domestic lending. Bank of Japan action has increasingly forced lenders to charge less for loans and yet has failed to stimulate demand, so its decision last week not to expand its negative benchmark interest rate policy offers respite for the year ahead. For the year ending March 2017, net profit is likely to fall 8.8% at Mizuho and 3.6% at SMFG, according to the averages of analyst estimates compiled by Thomson Reuters. Profit at MUFG, the least dependent on domestic lending, is likely to be roughly the same as the previous year.