The recent interim earnings results for 15 regional banks that received public fund injections show their bad-loan disposal efforts lag behind those at major banking groups by a wide margin.
The regional lenders, including the insolvent Ashikaga Bank that was put under government control Monday, had a combined tally of 2.98 trillion yen in nonperforming loans as of the Sept. 30 end of the first half, down only 4 percent from March 31.
The nation's seven major banking groups posted a 13 percent fall in their combined bad loans during the period.
They are Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mitsubishi Tokyo Financial Group Inc., UFJ Holdings Inc., Resona Holdings Inc., Mitsui Trust Holdings Inc. and Sumitomo Trust & Banking Co.
The slowness at regional banks in dealing with their bad assets reflects the severity of the situation in regional economies, namely at small and midsize firms, analysts said.
Of the 15 banks, 11 reduced their bad loans during the April-September period, but the remaining four -- Gifu Bank, Wakayama Bank, Ashikaga Bank and Kyushu-Shinwa Holdings Inc. -- saw their dud loans grow.
All banks but Ashikaga, a unit of Ashikaga Financial Group Inc., Kumamoto Family Bank and Kyushu-Shinwa Holdings avoided incurring a net loss on a parent-only basis. Of the 12 banks that secured a net profit, five saw their profits fall. The five are Hokuriku Bank, Gifu Bank, Bank of the Ryukyus, Chiba Kogyo Bank and Yachiyo Bank. The remaining seven either increased their profit or regained profitability.