Japan’s top banks forecast the biggest bad-loan costs since the aftermath of the global financial crisis, joining other global lenders in bracing for the fallout from the coronavirus pandemic.
Total credit costs at Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. will almost double to ¥1.1 trillion ($10.3 billion) in the year ending March 2021, the most in 11 years, the Tokyo-based lenders forecast Friday. They expect combined net income of ¥1.3 trillion, the lowest since the year ended March 2010.
Banks worldwide are setting aside billions of dollars to prepare for a wave of defaults as the coronavirus triggers potentially the worst global recession since the Great Depression. Interest rate cuts around the world are compounding the misery for Japanese banks, which have been expanding loans abroad to make up for negative rates at home.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.