Mitsubishi Tokyo Financial Group Inc. said Friday it will post a first-half group net loss of 70 billion yen for the period to Sept. 30.

The revision represents a sharp decline from the 150 billion yen profit projected in May.

The lower figure is largely due to an appraisal loss of 417 billion yen on stockholdings for the April-September period, the group said.

MTFG, like other banks, remains over-burdened with enormous stockholdings, a byproduct of the nation's crumbling "convoy" system in which banks and corporations used to buy huge chunks of one another's shares as protection against market pressures.

"We are forced to accept that having this level of cross-held shares exposes us to risk," said Tadahiko Fujino, senior managing director of MTFG.

MTFG unloaded 250 billion yen of its shareholdings in the past six months, he said, and plans to sell a further 1.3 trillion yen of its shareholdings in three years -- resulting in further downward pressure on the stock market.

"We cannot afford to say for much longer that we can't unload our shareholdings because the prices are low," said Kyota Ohmori, director and general manager of the Bank of Tokyo-Mitsubishi's corporate planning office.

Fujino said that MTFG may speed up the pace of its sale of cross-held shares in the next six months.

For the full fiscal year to March, MTFG expects a group net profit of 20 billion yen, down 91.7 percent from its originally planned 240 billion yen, assuming that share prices remain at current levels.

The benchmark Nikkei index of 225 stocks closed at 9.774.68 Friday -- down about 25 percent compared to levels six months ago.

MTFG further said that it plans to take loan-loss charges of 450 billion yen for the full fiscal year, up 50 billion yen from projections made in May.