Japan bad-loan costs drop as bankruptcy at 25-year low

Tokyo

THE cost for Japan's biggest banks to deal with soured loans all but disappeared in the first half as bankruptcies plunged.

Mizuho Financial Group Inc's lending arms had credit costs of just 400 million yen (S$4.6 million) in the first half, down from 539.3 billion yen in the year ended March 2009 during the global financial crisis. Bad debt ratios at the main banking units of Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group fell to record lows in the six months ended Sept 30. The two lenders took the cash set aside to cover delinquencies and booked it as profit, reports showed this month.