Overheating Risk Makes Japanese Banks Wary of Property Lending
- Tokyo Star Bank wants to boost ratio of short-term loans
- Sumitomo Mitsui Trust sees increased downside market risks
Commercial and residential buildings stand at dusk in Tokyo.
Photographer: Tomohiro Ohsumi/BloombergJapanese banks are reining in their exposure to the property market on concern the central bank’s negative-rate policy is fueling overheating.
Tokyo Star Bank Ltd., whose predecessor was sold to Lone Star in 2001 after it failed following the burst of Japan’s asset bubble, wants to cut the average length of property loans in its portfolio, said Michiya Fujii, head of the real estate finance department. Sumitomo Mitsui Trust Holdings Inc., the largest publicly-traded trust bank, says downside risks to prices have increased. Sumitomo Mitsui Financial Group Inc., the second-biggest lender, said last month that “an overheating in the real estate market” is one of the credit risks it’s concerned about.