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Saturday, May 16, 2009

Mizuho, Sumitomo see red; Resona turns profit

Staff writer

Three major banking groups announced their business results Friday for the year to March, with Mizuho Financial Group Inc. and Sumitomo Mitsui Banking Corp. falling into the red, while Resona Holdings Inc. managed to stay in the black.

Mizuho booked a group net loss of ¥588.8 billion in business 2008 due to the deteriorating economy and financial market turmoil. The loss compares with a net profit of ¥311.2 billion in business 2007.

To shore up its capital base, Mizuho said it will raise up to ¥600 billion by selling new shares. Combined with another ¥200 billion it plans to raise in preferred securities, the total worth of the capital boost may reach ¥800 billion.

The additional capital "is aimed at fostering sufficient capital strength ahead of further deterioration of the business environment in the current uncertain economic situation," Mizuho President and Chief Executive Officer Takashi Tsukamoto told a news conference in Tokyo.

Sumitomo Mitsui said the banking unit booked a net loss of ¥301.1 billion, compared with a profit of ¥205.7 billion the year before, as it disposed of bad assets and suffered losses on its stock holdings.

"As a group, our company will strive to achieve a recovery from this business year," Sumitomo Mitsui's chairman, Teisuke Kitayama, told a separate news conference.

Among the three banking groups that announced their business 2008 results Friday, only Resona managed to turn a profit.

It booked a group net profit of ¥123.9 billion in the year, down 59.1 percent from the year before, indicating the bank has not been immune to the recession, either.

"The result represented our strategies to simply and honestly implement what is taken for granted," Resona Chairman Eiji Hosoya said.

Resona is in the process of financial reconstruction. From around 1999 to 2003, the government injected some ¥3 trillion worth of taxpayer money into the lender to help bolster its crumbling capital base — a move that effectively nationalized the bank.

As of the end of March, Resona still had about ¥2.1 trillion in public funds to repay.

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The Japan Times

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