Bank of Kyoto Ltd. is one of a few regional lenders weighing additional investments in real estate investment trusts as low interest rates limit returns on government bonds.
The bank said it will consider boosting purchases of so-called J-REITs during the year ending in March, according to a Bloomberg News survey of 11 local lenders. Bank of Yokohama Ltd. and Bank of Fukuoka Ltd. said they may buy more of the securities, without specifying when. Eight respondents said they will keep their J-REIT investment policies unchanged.
Regional banks are divided on whether to turn to J-REITs in search of higher returns as the Bank of Japan steps up bond purchases to lower interest rates and lead Prime Minister Shinzo Abe's deflation-fighting campaign. An index of J-REITs has a dividend yield of more than 3 percent, while benchmark 10-year notes have been hovering at around 1 percent.
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