Japan Post Bank Sees Investment Returns Combating Negative Ratesby and
New president pledges to continue boosting alternative assets
Sees impact on company's profit at less than 20 billion yen
Japan Post Bank Co., the nation’s biggest holder of deposits, will boost investments in alternative assets and cut costs to counter the impact of the central bank’s negative interest-rate policy, President Norito Ikeda said.
The recently listed postal bank also aims to increase fee income by selling investment products to individuals, Ikeda, 68, told a group of reporters in Tokyo on Tuesday, echoing remarks made by parent company chief Masatsugu Nagato last month.
Japan Post Bank, one of the largest holders of the country’s bonds, had been diversifying its 205.5 trillion yen ($1.9 trillion) of investments to boost returns even before the negative-rate policy introduced this year sent yields on most government notes below zero. The bank now has about 60 trillion yen in a portfolio that seeks to earn higher returns by investing in assets such as private equity and real estate, Ikeda said.
Negative rates are “certainly not a plus,” said Ikeda, who estimates their impact on Japan Post Bank’s earnings to be less than 20 billion yen. He declined to comment further on the central bank’s policy, saying he wasn’t in a position to criticize it like Mitsubishi UFJ Financial Group Ltd. President Nobuyuki Hirano did in a speech last month.
Ikeda, a former executive at Bank of Yokohama Ltd., joined the postal bank on April 1 when predecessor Nagato became president of Japan Post Holdings Co.