Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Japanese megabanks see credit costs falling as vaccination proceeds

Stock MarketsMay 14, 2021 06:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Mizuho Financial Group logo is seen at the company's headquarters in Tokyo, Japan August 20, 2018. REUTERS/Toru Hanai

By Takashi Umekawa

TOKYO (Reuters) -Two of Japan's megabanks, Mizuho Financial Group Inc and Sumitomo Mitsui (NYSE:SMFG) Financial Group Inc (SMFG), on Friday forecast a drop in credit-related costs this year on expectations the economy will recover as vaccination proceeds.

Mizuho is predicting credit-related costs of 100 billion yen ($914.6 million) this year, while SMFG's sees costs at 300 billion yen. Both figures were smaller than those of the last financial year.

Prime Minister Yoshihide Suga promised last week to fast-track the government's inoculation efforts and said it aimed to administer 1 million shots a day.

While Japanese banks have been struggling with low interest rates and a shrinking population, they have seen an increase in lending since last year as companies rushed to borrow due to the COVID-19 pandemic.

Bank lending in Japan rose 4.8% in April from a year earlier, according to data compiled by the Bank of Japan.

Japanese bank shares have outperformed the 2.3% rise in the benchmark Nikkei index in the year to date, with Mizuho's shares up 23.7% and SMFG 25.5% higher.

"While Japan's economy is expected to recover gradually as vaccination proceeds, it's still unclear how COVID-19 would impact specific industries," SMFG's chief executive Jun Ohta told an earnings briefing.

Japan has not suffered as badly as other countries from the pandemic but its vaccination campaign has been slow. So far only around 3% of the population of about 126 million has received at least one vaccine dose, Reuters data showed.

Even though the banks expect smaller credit-related costs in this fiscal year, they need to closely monitor the costs longer term, said S&P Global (NYSE:SPGI) Ratings senior director Ryoji Yoshizawa.

"The repayment ability of some sectors such as aviation and retail is deteriorating... It's unclear whether they can bear swelling debt in the post COVID-19 era," he said

($1 = 109.3400 yen)

Japanese megabanks see credit costs falling as vaccination proceeds
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email