Mizuho's profits plunged 83% to $877m.
Reuters reports that Japan's three mega-banks all reported lower annual profits, highlighting the challenges in navigating through the ultra-low interest rate environment engineered by the central bank.
MUFG saw annual profits fall 12% YoY as lending margins continue to remain under pressure in addition to one-time charge the bank bore from the suspension of a new system development at a credit unit. “Our core profit fell for a fourth straight year. We had expected this, but the environment is very tough,” Kantesugu Mike, the chief executive of MUFG, told a media briefing.
Mizuho saw profits plunge 83% YoY to $877.22m (JPY96.6b) in the year through March 2019 which marks its weakest performance since 2008.
The ultra-low rates engineered by the BoJ have been eating away at the profitability of its lenders who struggle to turn a profit from their significant loan balances.
Banks in the country are also grappling with a shrinking customer base as the country rapidly ages. The proportion of the population aged 65 and above set to account for a third of the population by 2030, according to UN projections. A rapidly ageing country presents a challenge to banks as retirees tend to draw down in savings and less risky investment products unlike younger populations that use more expensive banking products.
Here's more from Reuters:
Do you know more about this story? Contact us anonymously through this link.