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Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (832)	2/1/2002 10:50:03 AM
From: Don Green	Read Replies (1) \| Respond to of 49062

Bad Bank Loans Swell To Y36.8tln By Sept '01 Friday, February 1, 2002 TOKYO (Nikkei)--The balance of nonperforming loans at banks nationwide grew to 36.8 trillion yen as of the end of September 2001, up 3.1 trillion yen from six months earlier, according to figures released Friday by the Financial Services Agency. The latest data shows the highest level of bad loans at banks since the end of March 1999. The growth indicates that banks' efforts to write off bad loans are not keeping pace with the increase in the amount of loans newly classified as "at risk," as many corporate borrowers are suffering amid the deflationary spiral, observers said. The ratio of bad loans to overall loan claims at large banks rose to 6.2%, from 5.3% as of March, worse than the 5% the FSA projects will be seen by the end of fiscal 2003. "There will be no change in our policy of bringing the ratio down to a level of 3.5-4.0% by the end of fiscal 2004 through such efforts as the purchase of bad loans by the Resolution and Collection Corp. and conducting special bank inspections," an FSA official said. By category, loans requiring close monitoring, such as those whose interest payments are at least three months overdue and restructured loans, increased by 2.6 trillion yen, accounting for just over 80% of the total increase. This is primarily because major banks employed tougher loan-assessment criteria. The amount of loans to borrowers at risk of going under, effectively bankrupt borrowers and failed borrowers, increased by 600 billion yen from six months earlier. The government aims to urge lenders to attempt a final cleanup of these loans from their books in two to three years. Large banks saw their balance of bad loans rise 15% to 20.7 trillion yen, while regional banks suffered a 3% increase to 16.1 trillion. The amount of bad loans that large banks finally removed from their balance sheets during the first six months of fiscal 2001 stood at 2.5 trillion yen, a steep decline from the 4.4 trillion yen disposed of in the second half of fiscal 2000, according to FSA figures. (The Nihon Keizai Shimbun Saturday morning edition)