TOKYO, Nov 14 (Reuters): Japan's top three banks reported profits for the first half of the year far beyond their initial estimates, as reduced credit costs made up for more muted stock gains during a period of cooling enthusiasm over "Abenomics".
Mitsubishi UFJ Financial Group Inc (MUFG), Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc (SMFG), however, continued to see paltry lending growth, highlighting the challenge faced by Japan's central bank in encouraging borrowing and spending to stimulate the economy.
The Abenomics policies of Prime Minister Shinzo Abe were so well received when he took office that there was a surge last year in the prices of shares - of which banks own considerable amounts. But as economic data faltered, so did investor optimism.
Not expecting a repeat of last year, MUFG in April forecast a 15 per cent decline in net profit for the six months through September. But lower credit costs combined with stock gains to push up first-half profit by 9 per cent to 578.72 billion yen ($4.98 billion), keeping MUFG on track for another record year.
"The biggest factor for overshooting our own first-half forecast is credit costs," President Nobuyuki Hirano told a news conference after MUFG reported earnings.
Japan banks say lower credit costs help H1 profits exceed forecasts
FE Team | Published: November 15, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
Share if you like