Japan’s major banks begin to show sub-prime losses

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

TOKYO, April 5, 2008 (AFP) – Combined net profit at Japan’s six major banks is estimated to have dropped more than 40 percent for the year to March 2008, weighed down by losses related to US subprime mortgages, a daily said Saturday.

The six banks are Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Resona Holdings Inc., Chuo Mitsui Trust Holdings Inc. and Sumitomo Trust and Banking Co.

The Nikkei business daily forecast that their aggregate group net profit fell to about 1.5 trillion yen (14.8 billion dollars) for the year ended on Monday from 2.8 trillion yen a year earlier.

It was the lowest in three years and far below their earlier combined estimate of 2.5 trillion yen, the newspaper said.

The earnings decline is mainly due to the impact of persistent financial market turmoil as their subprime losses have probably expanded to a total of 700-800 billion yen, it said.

At Mizuho, losses related to US subprime mortgages are estimated at 400 billion yen, incurred mainly by Mizuho Securities Co., Nikkei said, adding that the bank was expected to miss its most recent net profit projection of 480 billion yen.

The stock price plunge is also forcing the t