Japan Banking Outlook: A Weaker Corporate Sector And Sluggish Loan Demand Could Strain Profits In 2012 Mar 12

Standard & Poors, March 2012

Abstract
Weak profitability may continue to dog Japanese banks, which could face higher credit costs in 2012 than they did last year. Standard & Poor's Ratings Services believes that although credit costs will remain moderate, reflecting the domestic economic recovery, they will be higher than in 2011. And these higher credit costs, combined with sluggish loan demand and low interest rates, could put pressure on banks' profitability. We view the stand-alone credit profile (SACP) of Japan's banking industry as stable, with support from its solid business position, stable risk position, and good funding and liquidity. Nevertheless, our outlook on more than half of the banks we rate is negative, reflecting our outlook on the sovereign rating on Japan: Most rated 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.

- Development Bank of Japan Inc.
- Shinsei Bank Ltd.
- UFJ Bank Ltd.
- Tokai Bank Ltd.
- Norinchukin Bank
- Aozora Bank Ltd.
- Japan Bank for International Cooperation (Old)
- Sumitomo Mitsui Trust Bank Ltd.
- Hokuriku Bank Ltd.
- Shizuoka Bank Ltd.
- Chiba Bank Ltd.
- Ashikaga Bank Ltd.
- Sakura Bank Ltd.
- Joyo Bank Ltd. (Unsolicited Ratings)
- Asahi Bank Ltd.
- Gunma Bank Ltd.
- Bank of Tokyo-Mitsubishi Ltd.
- Toho Bank Ltd.
- Iyo Bank Ltd.
- Bank of Yokohama Ltd. (Unsolicited Ratings)
- Hachijuni Bank Ltd.
- Nanto Bank Ltd.
- Daishi Bank Ltd. (Unsolicited Ratings)
- Bank of Kyoto Ltd.
- Hyakugo Bank Ltd.
- Cititrust & Banking Corp.
- NCT Trust and Banking Corp.
- Hiroshima Bank Ltd. (Unsolicited Ratings)
- Bank of Fukuoka Ltd.
- Tokyo Tomin Bank Ltd.
- 77 Bank Ltd.
- Higo Bank Ltd.
- Hokkoku Bank Ltd.
- Kagoshima Bank Ltd.
- Shiga Bank Ltd.
- Yamaguchi Bank Ltd.
- Keiyo Bank Ltd.
- UFJ Trust Bank Ltd.
- Shinkin Central Bank
- Chuo Mitsui Trust & Banking Co. Ltd.
- Bank of Iwate Ltd.
- Mizuho Trust & Banking Co. Ltd.
- Sumitomo Mitsui Banking Corp.
- Sony Bank Inc.
- Mizuho Bank Ltd.
- Mizuho Corporate Bank Ltd.
- Mitsubishi UFJ Financial Group Inc.
- Resona Bank Ltd.
- Mizuho Financial Group Inc.
- Sumitomo Mitsui Financial Group Inc.
- ShinGinko Tokyo Ltd.
- Bank of Tokyo-Mitsubishi UFJ Ltd.
- Citibank Japan Ltd.
- DB Trust Co. Ltd.
- Master Trust Bank of Japan Ltd.
- Seven Bank Ltd.
- ORIX Bank Corp.
- Citibank N.A. (Japan Branches)

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