April 17 (Bloomberg) -- Shares of Aiful Corp., Japan's biggest consumer lender, fell to a two-year low after regulators slapped the firm with a business suspension, prompting investor concern profit may decline. Rival lenders also dropped.

Shares of Kyoto-based Aiful fell as much as 13 percent to 6,240 yen, their lowest since May 2004 and the biggest percentage decline on the MSCI World Index. Aiful shares were 7.8 percent lower at 6,640 as of 10:15 a.m. in Tokyo.

Nomura Holdings' analyst Shinichi Iimura today cut his rating on Aiful to ``3'' from ``2,'' on expectations share performance will worsen. He also trimmed his profit estimate for the lender to 86.1 billion yen ($729 million) from 95.8 billion yen for the year ending March 2007, saying Aiful will probably find it harder to attract new customers after the suspension and the firm's retreat from advertising.

Japan's Financial Services Agency on Friday ordered Aiful to close all branches for three days, and some for as long as 25 days, as punishment for intimidation and other unacceptable collection tactics. It was the first such shutdown of a listed financial company.

JPMorgan Chase & Co. analyst Natsumu Tsujino reiterated a 'neutral' rating on Aiful, in a Friday report, while Merrill Lynch & Co. consumer finance analyst Norimasa Ejiri downgraded Aiful to ``sell'' from ``buy'' the same day.

Shares in Aiful's three biggest rivals also declined, with Acom Co. down as much as 4.4 percent, Promise Co. 5.4 percent lower and Takefuji Corp. off 4.5 percent.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

Last Updated: April 16, 2006 21:37 EDT