Japan megabanks' $6.7 billion stock losses seen spurring selloff
News On Japan via BusinessWeek -- Nov 15
Japan's biggest banks are poised to accelerate sales of their stock holdings after 534 billion yen ($6.7 billion) in equity investment losses eroded profit.
Combined losses from shareholdings of Mitsubishi UFJ Financial Group Inc. (8306), Sumitomo Mitsui Financial Group Inc. (8316) and Mizuho Financial Group Inc. (8411) more than tripled in the six months ended Sept. 30 from 170 billion yen a year earlier, earnings statements from the Tokyo-based companies showed yesterday.
Mizuho Chief Executive Officer Yasuhiro Sato said his bank may speed up a reduction of stakes in companies and has set up a panel to tackle the issue. Sumitomo Mitsui President Koichi Miyata said he will further reduce the lender's shareholdings.
The banks have been paring stock investments over the past 15 years to reduce their vulnerability to financial markets as Japan's Nikkei 225 Stock Average (NKY) remains 78 percent below its 1989 peak. The faster they cut, the more disruptive the selloff may be for the world's third-largest economy, which is shrinking as companies from Sharp Corp. (6753) to Panasonic Corp. forecast losses.
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