Mitsubishi UFJ Financial's First-Quarter Profit Hit by Negative Rates
August 01 2016 - 5:50AM
Dow Jones News
Japan's largest bank, Mitsubishi UFJ Financial Group Inc., said
its first-quarter net profit tumbled as the country's negative
interest rates ate into the bank's profits from lending.
Net profit declined 32% to ¥ 188.92 billion ($ 1.8 billion) in
the April-June period compared with the same period last year. The
Tokyo lender said first-quarter net interest income from lending
came to ¥ 502 billion, down 8% from a year earlier.
The weak performance highlights the challenges that lenders are
facing now—a painful combination of ultrathin loan spreads, weak
loan demand and lower economic growth.
Last Friday, Mizuho Financial Group Inc., Japan's second-largest
lender by assets, reported a 16% decline in net profit in the
April-June period from a year earlier.
Negative rates are squeezing banks' margins because the banks
have to reduce rates charged to corporate borrowers but have yet to
lower rates on depositors' accounts below zero.
In overseas operations, Mitsubishi UFJ said it also saw a drop
in lending.
MUFG booked a loss of ¥ 6.5 billion from its 20% stake in Morgan
Stanley.
Write to Atsuko Fukase at atsuko.fukase@wsj.com
(END) Dow Jones Newswires
August 01, 2016 05:35 ET (09:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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