Regulators Target Japanese Banks, Nomura Net Surges

Hiruki Nakamura
29 Oct, 2013
New York City

Japanese regulators step up investigation of large banks to scrutinize lending practices and financial controls in place to prevent lending to criminal group. Regulators forced our chairman of Mizuho Bank and penalized 52 current and past executives. Nomura reported sharp jump in profit.

[R]4:30 PM Tokyo – Japanese regulators step up investigation of large banks to scrutinize lending practices and financial controls in place to prevent lending to criminal group. Regulators forced our chairman of Mizuho Bank and penalized 52 current and past executives. Nomura reported sharp jump in profit.[/R]

Market indexes in Tokyo eased and the yen hovered near recent levels against the dollar. Nomura reported better than expected sales and earnings on a sharp increase in trading profits.

Banks were in focus after financial regulator stepped up scrutiny of lending controls in place to prevent from offering loans to criminal organizations.

The Nikkei 225 Stock Average slipped 70.06 or 0.5% to 14,325.98 and the Topix fell 4.86 to 1,193.50.

The yen jumped to 97.54 against one dollar.

Stocks in Review

Toyota Motor Corp slid 40 yen to 6,270 yen and Honda Motor Co. rose 10 yen to 3,915 yen. Nissan Motor Co Ltd decreased 8 yen to 1,001 yen.

Sony slipped 18 yen to 1,892 yen and U.S.-based Tessera Technologies, Inc. reached a settlement for breach of contract in United States District Court.

Softbank Corp dropped 110 yen to 7,370 yen and Fast Retailing Co. fell 200 yen to 33,000 yen.

Kirin Holdings Company, Limited slid 0.3% to 1,439 yen after the alcohol beverages and soft drinks maker agree to buy 9.99% stake in Australia-based Warrnambool Cheese and Butter Factory Company Holdings Ltd at an average price of $9.19 per share.

The expensive but defensive move is expected to protect company’s investment in Australian cheese and dairy products distribution.

Mizuho Financial Group, Inc dropped 0.9% to 207 yen after the Japan-based bank executives were found to be negligible in ensuring against dealings with organized crime and failed to terminate loans to syndicate members for more than two years.

Mizuho President Yasuhiro Sato will forego six months of salary and Takashi Tsukamoto will resign as chairman of Mizuho Bank Ltd and take similar pay cut but retain his position at the parent company.

Regulators forced its bank chairman to resign and financial regulator plans to inspect offices of Mitsubishi UFJ Financial Group Inc and Mizuho.

Nomura Holdings, Inc slid 0.7% to 737 yen after the investment company reported total revenue in the first-half ending in September jumped 3.6% to 933.6 billion yen from 900.8 billion yen a year ago.

Net income for the period surged to 104 billion yen compared to 4.7 billion yen and diluted earnings per share soared to 27.20 yen from 1.25 yen a year earlier period.

Total assets as of September 30 were 41.9 trillion yen, an increase of 3.9 trillion yen compared to March 31.

Separately, the bank said net revenue for the second quarter declined 11.3% to 356.4 billion yen from 401.7 billion yen and net income surged since March 2003 to 38.1 billion yen compared to 2.8 billion yen and diluted earnings per share jumped to 9.99 yen from 0.74 yen a year ago quarter.