Japan Megabanks See Challenging Year as Profit Drivers Wane
- Lenders’ earnings projections are lower than analysts expected
- Business environment is ‘tougher,’ Sumitomo Mitsui chief says
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Japan’s biggest banks have warned investors of a tough year ahead.
The nation’s three megabanks have been relying on the healthy status of borrowers and sales of so-called cross-shareholdings for earnings as rock-bottom interest rates crimp lending profitability. Results on Wednesday showed they are losing those benefits at a time when the economy is weakening, trade tensions are escalating and the Bank of Japan’s extraordinary monetary easing looks set to stay.