The nation's 13 major banks are expected to book a combined 7.5 trillion yen in loan-loss charges for the business year to March 31, about 1 trillion yen more than the 6.44 trillion yen previously estimated, banking sources said Tuesday.
The banks will report larger loss charges as they had to put up more loan-loss provisions for troubled borrowers such as retailers, construction companies and nonbank finance firms following special bank inspections by the Financial Services Agency, they said.
As a result, many of the banks will probably skip or cut dividend payments on common shares, but they will pay dividends on preferred shares held by the government, the sources said.
Among the four major bank groups, Mizuho Holdings Inc. will book 2.1 trillion yen in loan-loss charges, up from the previously projected 2 trillion yen, while UFJ Holdings Inc. will report 2 trillion yen, unchanged from the earlier estimate, the sources said.
Mizuho will pay lower dividends on common shares and UFJ will skip dividend payments, the two banks said earlier.
Sumitomo Mitsui Banking Corp. will book 1.6 trillion yen in loan-loss charges, up from the previously estimated 1 trillion yen, and pay lower dividends, the sources said.
Mitsubishi Tokyo Financial Group, Inc. will report 600 billion yen in loss charges, up from 480 billion yen, they added.