Profits Drop at over Half of Regional Banks in April-June

Jiji Press

17:34 JST, August 15, 2023

TOKYO (Jiji Press) — Over half of Japan’s 74 listed regional banks suffered group net profit falls in April-June, according to their earnings reports released by Monday.

The drops can be traced to bond investment losses caused by rising interest rates.

The reports showed that 39 of the regional financial groups saw the bottom line deteriorate from a year earlier.

The 72 groups’ combined net profit also dropped, by 11.4% to ¥310.4 billion.

On an unconsolidated basis, 90 banks’ total net profits shrank 9.2% to ¥317.4 billion. Of them, 49 posted lower net profits and 56 booked bond investment-linked losses amid higher interest rates brought on by, among other things, speculation about the Bank of Japan’s modification of its super-easy monetary policy.

Although the number of bond loss-suffering regional banks fell from 66 in the same period last year, the latest data made it clear that falling bond prices continued to weigh on their earnings, people familiar with the matter said. Bond prices and yields, or interest rates, move in the opposite direction.