Japan's biggest banks on track to meet profit goals: report

MUFG, SMFG, and Mizuho Financial Group’s net profits totaled $3.7b in Q1.

Although it may be too early to say, Japan’s biggest banks are broadly on course to meet their modest profit goals this fiscal year after bad-loan costs remained within their expectations in Q1, reports Bloomberg.

Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group all saw quarterly profit decline after increasing provisions for soured debts during Japan’s pandemic-fueled recession. Their net income totaled $3.7b (¥392b) in the three months that ended in 30 June, representing 31% of the banks’ combined full-year target.

Meanwhile, the lenders’ credit costs jumped to $2.83b (¥299b) over the same period—about 27% of their combined forecast for full-year outlays.

But it remains unclear whether they can keep impairments in check throughout 2020, as a recent surge in coronavirus cases puts a renewed strain on the economy.

The three banks are expecting credit costs to almost double to $10.42b (¥1.1t) in the year ending March, the highest aggregate amount in 11 years; whilst net income will total almost $12.32b (¥1.3t), the lowest over the same period, according to forecasts given by the lenders in May.

Here’s more from Bloomberg.