Lower core lending and fees hit Japanese regional banks' profits

Japan’s rapidly ageing population is eliminating opportunities for banks to grow their loan portfolios.

CNBC reports that mid- and small-sized lenders in Japan are struggling to stay afloat as the country’s rapidly ageing population limits opportunities to grow loan portfolios thus resulting in lower core lending and income fees.

More than half of regional banks reported massive losses on that segment last March 2017 as their margins are also squeezed by the Bank of Japan's long-running negative interest rate policy.

Regional lenders, which together account for around 40 percent of Japan's outstanding loans, have turned to other businesses such as securities trading to boost their bottom lines. That could expose Japan's financial sector to new risks, noted Harumi Taguchi, principal economist at IHS Markit.

Here’s more from CNBC.

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