Japan's biggest banks may need to accept funds from the government as bad debts increase and investors demand higher capital standards, according to Fitch Ratings Ltd.
"Capital pressures are growing," David Marshall, a managing director at Fitch in Hong Kong, said Wednesday on Bloomberg Television. Capital weakness and loan losses "might even pressure some of the bigger Japanese banks eventually to have to turn to the government," he added. "That's something they'll resist as long as they can to avoid that stigma."
The global economic slump has forced Japanese banks to write down the value of their investments and raise about ¥4.5 trillion since November to restore balance sheets. Marshall said investors are increasingly focusing on core capital, or common equity, among the three biggest lenders — Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc.