The three banks that will form the UFJ Group in April announced Thursday they will post pretax losses of 289 billion yen for fiscal 2000 due to writing off 1.13 trillion yen in nonperforming loans, around twice the amount they had earlier predicted.
The announcement by Sanwa Bank, Tokai Bank and Toyo Trust & Banking Co. comes about two weeks before their planned merger on April 1. While the three major banks were the first leaders in the industry to announce they will go into the red for the fiscal year ending March 31, the stagnant economy and the almost universal problem of nonperforming loans facing Japan's banks will probably see others follow.
Sanwa will post an estimated 180 billion yen in pretax losses, while Tokai will go 100 billion yen in the red and Toyo Trust 9 billion yen. The three banks had initially calculated combined profits of 286 billion yen to kick off UFJ.