MUFG, Mizuho incur double-digit net profit falls in April-June qtr.
Japan's two top banking groups on Tuesday reported double-digit falls in net profit for the April-June period after hefty extraordinary profits booked a year earlier from the recovery of loan-loss provisions thanks to the improved business performance of corporate borrowers.
Mitsubishi UFJ Financial Group Inc., the nation's largest banking group by assets, said it posted a consolidated net profit of 151.26 billion yen in the first quarter of fiscal 2007, down 31.1 percent form a year earlier, despite an 18.2 percent increase in operating revenue to 1.55 trillion yen.
Pretax profit came to 293.05 billion yen, down 8.9 percent, MUFG said.
Mizuho Financial Group Inc. saw its group net profit fall 49.5 percent to 116.47 billion yen, although operating revenue climbed 22.6 percent to 1.05 trillion yen.
The second largest Japanese banking group also registered a 33.6 percent fall in pretax profit to 166.74 billion yen.
The substantial net profit falls are attributable to the absence of special profits related to loan-loss reserves. MUFG, for example, booked a special profit of 11.2 billion yen in the first quarter of fiscal 2006 but none in the just-ended quarter.
Both MUFG and Mizuho left their earnings projections unchanged for the full fiscal year to March 31, 2008.
MUFG is forecasting a net profit of 800 billion yen, down 9.2 percent from the previous year, and a pretax profit of 1.5 trillion yen, up 2.9 percent, on a rise in revenue of 9.9 percent to 6.7 trillion yen.
Mizuho expects its net profit to rise 20.7 percent to 750 billion yen and its pretax profit to increase 40.3 percent to 1.05 trillion yen on revenue of 4.6 trillion yen, up 12.2 percent.