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Aiful Surges In Tokyo After Lender Revises First-Half Forecast to Profit

Aiful Corp., Japan’s third-biggest consumer lender, surged the most in more than a year in Tokyo after reporting a swing to profit on higher loan interest income.

Aiful rose 32 percent to 66 yen at the 3 p.m. close of trading on the Tokyo Stock Exchange, the biggest increase since March 23, 2009. The gain pared its slump this year to 50 percent.

Kyoto-based Aiful and its rivals are trying to endure a government crackdown that has forced them to cap interest rates and limit loans to protect low-income borrowers. Takefuji Corp. went bankrupt in September, Promise Co. last week posted a loss in the fiscal first half, and Acom Co. today cut its full-year forecast to a loss.

Aiful posted net income of 3.4 billion yen ($42 million) in the six months ended Sept. 30, compared with its earlier forecast of a 3.2 billion yen loss, according to a preliminary earnings statement released yesterday. The increase in interest income exceeded expectations, it said. Operating expenses dropped by about 3 billion yen as bad-loan costs fell.

The consumer lender retracted its previous full-year earnings projection amid “uncertain elements” that may affect its business. Aiful had previously forecast net income of 2.82 billion yen for the year ending March 31.

Acom, meanwhile, lowered its projection for the year ending March 31 to a net loss of 50.9 billion yen from profit of 26.2 billion yen, citing higher provisions for interest repayments. The announcement came after the close of trading in Tokyo.

Takefuji’s collapse in September spurred an increase in customer inquiries to the country’s consumer lenders about overcharged interest repayments. The government tightened credit rules in June, capping interest rates at 20 percent and limiting loans to a third of a borrower’s annual income.

Aiful, which unlike bigger rivals Promise and Acom isn’t backed by a major bank, avoided bankruptcy last December when it reached an agreement with creditors to defer loan repayments.

The company’s 50 percent decline on the Tokyo Stock Exchange this year is bigger than Promise’s 39 percent and Acom’s 41 percent.

To contact the reporter on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Shingo Kawamoto at skawamoto2@bloomberg.net.

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net.

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