The Bank of Tokyo-Mitsubishi and Sanwa Bank both returned to profitability in fiscal 1999, due largely to fewer bad-loan writeoffs than in fiscal 1998, according to the two major banks' earnings reports, released Friday.

On an unconsolidated basis, Tokyo-Mitsubishi posted 218.9 billion yen in pretax profit in the year that ended on March 31, compared to 22.3 billion yen in losses for fiscal 1998.

Bad-loan writeoffs -- including loss reserves for risk loans and selloffs of collateralized properties to settle losses -- came to 504.5 billion yen, down 385 billion yen from the previous year.

For Tokyo-Mitsubishi, net business profit -- the most important gauge of performance for Japanese banks -- came to 394.5 billion yen, down 29 percent.

Net business profit consists of income from lending, bond dealings and other core banking operations before subtracting expenses related to loan-loss reserves and taxes.

The major commercial bank said it saw the margin on its lending business shrink and profit from bond dealing drop amid low interest rates.

Meanwhile, Sanwa's pretax profit was 175.4 billion yen, compared with losses of 653.4 billion yen at the end of fiscal 1998.

The bank wrote off 390.2 billion yen in bad loans, or 612.8 billion yen less than the previous year.

Sanwa's profit was also helped by sales of stocks -- amounting to 406.3 billion yen -- partly in order to reduce its cross-shareholding with firms in the same business group.

Sanwa posted 326.6 billion yen in net business profit, up 32 percent.

Outstanding bad loans held by the Bank of Tokyo-Mitsubishi came to 1.84 trillion yen, down from 2.16 trillion yen the previous year. Sanwa's bad loans totaled 1.3 trillion yen, down 430 billion yen.

The two banks released their earnings reports ahead of the nation's other 15 major banks.