P. M. BRIEFING : Profits Drop at Japanese Banks
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TOKYO — Japan’s five major city banks, the biggest in the world in terms of assets, all reported lower interim profits today because of rising interest rates that increased their borrowing costs.
The Big Five banks--Sumitomo, Fuji, Mitsubishi, Dai-Ichi Kangyo and Sanwa--also said they expected to announce lower profits for the full year to March 31.
“Interest rates basically explain everything,” said industry analyst Roger Gough at Baring Securities (Japan) Ltd. “Looking at interest rates this year, it’s a pretty disastrous situation for them.”
Short-term interest rates in Japan have climbed to 6.5% from around 4.5% at the beginning of the year, adding to the banks’ cost of doing business.
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