The nation's three giant banking groups posted drastic gains in the first half of fiscal 2005 after unloading many of the bad loans that undermined their strength and threatened the financial system for more than a decade.

During the six-month period through Sept. 30, Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. further slashed their bad-loan ratios.

Surging stock prices were also a major factor in their record earnings.