8 November 2001, 08:44 STOCKWATCH - Japan banks mixed as Asahi plans more NPL disposals
TOKYO (AFX-ASIA) - Major banks were mixed, with some rebounding
lightly from recent sharp falls, after more news of plans to increase
non-performing loan disposals, dealers said.
At 2.20 pm, Asahi Bank was down 15 at 98 yen, a fall of 13.27 pct,
but off a low of 76 yen, after large-lot selling by foreign investors
pushed it below the key psychological level of 100 yen.
Asahi Bank president Yukio Yanase said today's sharp declines in
the bank's share price seems to be due to selling of large lots by
foreign investors, followed by further offloading by speculative
investors.
The price does not reflect the bank's real financial health, he
added.
"Considering the bank's PER (price-earnings ratio) of 7.56 times
and PBR (price-to-book ratio) of 0.28 times, our shares are oversold to
an abnormal extent," Yanase said.
"I have heard some foreign investors sold our stock in large lots,
which was followed by other speculative investors," he told a briefing
after the company's shares fell 17 to 96 yen in the morning.
"Overall, the bank sector is under pressure because the market
believes the disposal of bad loans is not going forward as expected,"
Yanase said.
"We are planning to weather the situation by announcing more
reductions in our bad loans step-by-step at the proper time though we
have already disposed of 60 bln yen in the fiscal first half," he said.
The bank will announce details of the increased disposals on Nov
26.
The news on Asahi follows reports yesterday that Mizuho will
increase year to March non-performing loan disposals to 1.8 trln yen
from the 1.0 trln forecast earlier. The reports hit the banking sector
hard.
Mizuho was up 3,000 at 318,000 yen, after yesterday's 28,000 yen
decline.
ING Baring senior financials analyst James Fiorillo said other
banks are likely to announce greater bad-loan reductions following the
reported plans by Mizuho, which is a sector leader, but this may hurt
sentiment.
"The market remains extremely sensitive to news on NPL growth and
disposal and, lacking a government plan for dealing with the NPL issue,
may not be in the mood to greet increases in credit cost forecasts
warmly," Fiorillo said.
"We expect other banks to make similar announcements and that most
of the news will be disheartening," he added.
"The main focus of first-half earnings announcements will be ...
NPL growth levels and full year earnings estimates by individual
banks."
MTFG was up 27,000 at 855,000 and UFJ down 8,000 at 453,000.
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