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23rd August 2011

Japanese Bank lending falls slightly.

Bank lending in Japan FELL by 0.17% to ¥1.5tr (€105bn £91bn $150bn Y962bn) during the financial year ending March 31st 2011 based on the Financial Reconstruction Act analysis. The Financial Services Agency provided the following breakdown of the change:


Change
%
Total bank lending change -0.2

(Of which,) Special attention loans: +0.4
[Increase factors]
Newly issued loans due to weakened business activities: +0.9
Upgrading from lower categories:
Improvement of business conditions of borrowers: +0.1
Establishment of restructuring plans: +0.0

[Decrease factors]
Return to normal claims:
Improvement of business conditions of borrowers: -0.3
Establishment of restructuring plans: -0.2
Downgrading to lower categories -0.3
Repayment, etc. +0.1

(Of which,) Doubtful and bankrupt/de facto bankrupt: -0.6
[Increase factors]
Newly issued loans due to weakened business activities: +2.8
Downgrading from upper categories: +0.3

[Decrease factor]
Removal from B/S, etc:
(Liquidation of claims credit, etc: -2.8
Upgrading to higher categories: -0.8


Specific provisions fell from ¥2.7tr in the year to March 2010 down to ¥2.4tr (€21.8bn £19.0bn $31.4bn Y200.7bn). Write-offs fell from 1.7tr to ¥1tr (€9.1bn £7.9bn $13.1bn Y83.6bn). It is notable that City Banks, The Former Long-term Credit Banks and Trust Banks showed a much sharper fall than above during the first half of the financial year followed by some recovery during the second half. The smaller banks did not show the same second half recovery.