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Analysis of Japanese Regional Banks' Credit Quality Oct 04
Standard & Poors, Oct 2004
Abstract
Japan's regional banks saw a significant improvement in net income in fiscal 2003 (ended March 31, 2004), due mainly to reduced credit costs and equity losses. Core profits, which indicate the fundamental profitability of a bank, are also improving, although this is largely the result of cost reductions--interest income, the main source of the banks' profits, is on a declining trend. Although Japan's regional banks maintain better capitalization than the major banks, they have been slow to write off nonperforming loans (NPLs), resulting in a widening gap in the net NPL ratios of the two bank groups. Overall, the financial advantages enjoyed by regional banks over major banks are gradually being eroded. The credit quality of individual Japanese regional banks...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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