Financial Statement

• (1) Overview of FY 2008 Business Accounting
• (2) Income, Expenses and Profit
• (3) Non-performing Loan Problem

(1) Overview of FY 2008 Business Accounting

Japanese Bankers Association made public on June 30, 2009 the financial statements of All Banks (123 domestic banks including 6 city banks, 64 regional banks, 44 member banks of the Second Association of Regional Banks, 7 trust banks, and two other banks) for the fiscal year ending in March 2009.
Operating profits of the banks were -1,609.6 billion yen (3,449.7 billion yen in FY 2007). The decrease in operating profits, which moved from profits to losses, was due to a decrease in net business profit and an increase in credit-related expenses caused by the economic slowdown, such as the provision of allowance for loan losses and the value of loans written off. Another factor was an increase in losses on devaluation of stocks, etc. as a result of the decrease in stock prices in both domestic and overseas markets.
The breakdown shows 5 banks posting higher profits, 53 banks posting lower profits, and 65 banks posting operating losses.
Net interest income (interest income - interest expenses) of the banks increased to 8,703.7 billion yen (+111.6 billion yen, +1.3% compared with FY 2007).
Net income was -1,995.6 billion yen, the first profit in the last five years (2,124.6 billion yen in FY 2007).

Operating Profits and Net Income of All Banks

Note:

(1) Change of the number of All Banks in this period is not adjusted in the above chart.

 

(2) FY (Fiscal Year) : April 1 ~ March 31

(2) Income, Expenses and Profit

Income and Expenses of All Banks (FY 2008)　(％)

 

Financial Statements of All Banks (123 banks)

(3) Non-performing Loan Problem

Japan experienced a bubble economy in the latter half of the 1980s and the ensuing collapse of the bubble economy and prolonged economic recession in the 1990s. This process led to a rapid increase in the balance of non-performing loans resulting from a dramatic drop in the value of real estate and other assets, an increase in corporate bankruptcies and other developments.
The non-performing loan problem has proceeded to improve not only due to some policies, but also as a result of proactive measures to dispose of banks’ non-performing loans centered on the major banks as well as the economic recovery. Consequently, the objective of “halving the non-performing loan ratio at major banks by fiscal 2004” set in the Program for Financial Revival (October 2002) was met. (The non-performing loan ratio, which was approximately 8% then, fell to about 2.9% in fiscal 2004 and 1.6% in fiscal 2008.)

Governmental Measures Taken to Tackle Non-performing Loans

 

Non-performing Loans of All Banks

Note:

Due to bankruptcies or changes in definition of risk management loans, etc., statistical continuity in a strict sense is missing.

Source:

Financial Services Agency