The country's 16 major banks are believed to have disposed of a combined 4 trillion yen in bad loans in the business year to March 31, industry sources said Saturday. The banks disposed of 4.5 trillion yen in fiscal 1999.

Sanwa Bank, Tokai Bank and Toyo Trust & Banking Co., which on April 1 joined to form United Financial of Japan, previously said they would dispose of bad loans worth about 1.13 trillion yen in fiscal 2000, taking a 223 billion yen loss.

The Mitsubishi Tokyo Financial Group -- formed on April 1 by the Bank of Tokyo-Mitsubishi, Mitsubishi Trust & Banking Co. and Nippon Trust & Banking Co. -- is believed to have written off 741 billion yen in bad loans in the business year. Despite this, the level of their bad loans is not expected to have decreased.

The former Sumitomo Bank is believed to have written off loans totaling 550 billion yen and the former Sakura Bank is expected to have taken a 260 billion yen loss. The two launched Sumitomo Mitsui Banking Corp. on April 1.

Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan, which formed the Mizuho Financial Group in September, are thought to have written off more than 600 billion yen, up from an earlier projection of 430 billion yen.

Asahi Bank reportedly disposed of 310 billion yen, up 110 billion yen from an earlier forecast. The bank will implement drastic restructuring measures including a withdrawal from overseas businesses.

The net operating profit of the 16 is projected to have totaled about 3 trillion yen, about 1 trillion yen less than the amount of loans disposed of. Consequently, six banks, including the Bank of Tokyo-Mitsubishi, will report losses for the year. As a whole, dud loans are increasing despite the massive writeoffs. The banks' recovery will depend on the effect of the government emergency economic rescue package released Friday.