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Wednesday February 13, 10:44 PMJapanese banks' subprime losses hit 5.6 bln dollars: government
The financial institutions' actual losses on securities backed by troubled US mortgages rose to 442 billion yen (4.1 billion dollars) at the end of December from 141 billion yen in September, the Financial Services Agency said. Their appraisal losses on such investments grew 17 percent over the quarter to 158 billion yen, giving total losses of 600 billion yen (5.6 billion dollars), up from 276 billion in September, the agency said. Last month, Japan's second-largest bank Mizuho Financial said it had lost 345 billion yen from the subprime crisis, which was sparked by a wave of defaults on risky US mortgages that were often bundled up and resold. Other Japanese banks have also reported subprime-related losses although so far on a smaller scale than many of their overseas peers. Japan's largest bank Mitsubishi UFJ Financial Group Inc. (MUFG) said last month it had recorded a loss of about 55 billion yen on subprime loan-related investments in the nine months to December. Third ranked Sumitomo Mitsui Financial Group Inc. reported subprime-related losses of 99 billion yen for the same period. Subprime loans flourished in the US during the last part of the housing boom, providing mortgages to people with poor credit histories, often allowing them to buy homes beyond their means. Higher repayment costs are now causing rising delinquencies and investors are reassessing their exposure to risky assets such as mortgage-backed securities. |
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