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Japan’s leading banks post record profits

Two of Japan's top banks, Mitsubishi UFJ Financial Group and Mizuho Financial Group, posted positive results indicating a recovery from the previous downturn in the country's economy.

An upturn in the Japanese economy along with a decline in bad loan write-off costs have been signposted as significant in the encouraging results.

The Financial Times reported rising share prices as being vital to the upturn. Mitsubishi UFJ recorded net income of Y1,180 billion, a record for a Japanese lender, the report stated.

The Mitsubishi group was formed in October 2005 following the merger of Mitsubishi Tokyo Financial Group and UFJ Holdings, creating the world’s largest banking group in terms of assets.

Mizuho recorded a 3.6% gain in annual profits to Y650 billion, with Japan’s fifth largest bank, Sumitomo Trust & Banking, seeing profits rise 3.3% and the sixth largest, Mitsui Trust Holdings, saw profits rise by 27%.

Non-interest income, including those from investment trusts and syndicated lending, accounted for about 37% of the total profit, Terunobu Maeda, Mizuho Financial president and CEO, told Forbes.com.

Going forward, we are hoping to raise this portion to about 50%, he added.