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UFJ down again on risk report
TOKYO, Japan -- Shares in Japanese bank UFJ Holdings are down another 8 percent to a record low of 90,900 yen in early trade Tuesday after a report it planned to step up its risk-reduction plan. UFJ is regarded as the weakest of Japan's big four banks, behind Mitsubishi Tokyo Financial Group, Sumitomo Mitsui Banking Corp. and Mizuho Holdings. Shares of all of the banks have taken a battering recently on concerns about their bad-loan problems and the government's plans to fix the situation. According to a report in the Tokyo Shimbun newspaper, UFJ will raise its target for reducing problem loans from the original plan of four trillion yen ($33 billion) to between six and eight trillion yen ($50-$66 billion). No time frameThe Tokyo Shimbun did not give any time frame for the disposal. The UFJ group held about 51 trillion yen ($425 billion) in risky assets at the end of March, the newspaper said, without citing any sources. If the reduction of such assets goes according to plan, UFJ will be able to boost its capital-to-assets ratio by 1.5 or 2.0 percentage points from the 11 percent level measured at the end of September, the paper said. UFJ officials were not immediately available for comment, Reuters reported. UFJ Holdings has seen its shares plunge to a succession of record lows in recent days on concerns that tough government action to get banks to reduce their bad loans could hit its balance sheet. The Bank of Japan is expected to support the government's action when it concludes a two-day policy meeting later Tuesday. On Monday the BOJ said it would start its plan to buy stocks from commercial banks on November 29. The central bank said in September it would stocks directly from banks to help reduce their vulnerability to stock market fluctuations. (Full story) The broader Japanese stock market, measured by the Topix, is down about 0.8 percent in mid-morning trade Tuesday. The Nikkei 225 is off 0.09 percent. Reuters contributed to this report.
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