Japan’s megabanks stockpile $5.48b in provisions despite record earnings

MUFG tripled its loan-loss provisions whilst Mizuho’s more than doubled.

Japan’s three megabanks raised their loan loss provisions amidst a prolonged US-Israel war with Iran, according to S&P.

The aggregate loan loss provisions of Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG), and Mizuho Financial Group totaled $5.48b (JPY877.4b) in the fiscal year ended on 31 March 2026, according to calculations by S&P Global Market Intelligence.

MUFG more than tripled its loan-loss provision year on year to $2.22b (JPY355.89b) in the fiscal year through March. Mizuho's loan-loss provision more than doubled to $831.77m (JPY133.07b) from $322.53m (JPY51.6b).

SMFG's provisions increased to $2.43b (JPY388.44b) from $2.15b (JPY344.55b) over the same period.

"Overall, we're coming under negative pressure" from the Middle East conflict,” said SMFG CEO Toru Nakashima during the bank’s earnings press conference in May, according to S&P.

Japan, along with the rest of the world, faces inflationary pressures from the war, which has pushed up global oil prices, S&P noted.

The megabanks posted record-high earnings in the fiscal year that ended on 31 March 2026.

(US$1 = JPY 159.98)