Japan’s long-suffering regional banks are facing the biggest threat to their survival since the 1990s post-bubble malaise as the coronavirus hammers their few remaining profit-drivers.
Analysts and investors are predicting some local lenders will eventually be delisted or bailed out by the government as bad loans climb and investment income evaporates in the wake of the crisis.
"I am more concerned than ever for the outlook of many regional banks,” said Shannon McConaghy, London-based portfolio manager at Horseman Capital Management Ltd., which manages about $327 million. "I fully expect some regional banks will become unviable and will be quasi-nationalized” by the deposit insurance fund, he said.