Japanese banks project better than expected year

Three of Japan "megabanks"-Mitsubishi UFJ financial group, Mizuho Financial Group and Sumitomo Mitsui Financial Group, is already expected to see heavy Bond trading gains and low levels of write-offs of bad loans, which have raised profits in recent years.
Since Japan's long battle against deflation persists, loan demand in the home is likely to remain slow, adding to pressure banks to move to expand abroad and compensate their prospects for lack of internal growth.
"We want to see if they can generate solid gains on loans under the current situation of low interest rates," says Chikako Horiuchi, Director of financial institutions of Fitch Ratings. "The driver will be overseas loans, so we must see how the banks to increase the volume in overseas loans. This will be key to determining the profit Outlook for the banks, "it added.
On Tuesday the second largest lender of Mizuho, Japan by assets, forecast net profit of ¥ 500 billion, or $ 6.26 billion, for the financial year ending in March 2013, this is well above the expected profit of 374.2 billion ¥, but to only 3.1 per cent of the year casts. The improvement is mainly due to expectations that its investment banking arm, Mizuho Securities, will swing to profit in the current year, after the loss of booking last year.
Sumitomo Mitsui expects net profit for the year, beginning on 1 April of ¥ 480 billion, down 7.4 percent last financial year, but the consensus estimates of analysts for the remuneration of 441.2 billion ¥. Mitsubishi UFJ, the largest creditor of Japan, forecast net profit of 670 billion ¥. This would represent a reduction of the rate of 31.7 of the year casts – when profit is removed from a hefty one-time accounting gain on the value of its investment in Morgan Stanley 22%-and is in line with analysts forecasts.
With limited exposure to the troubled debt of Europe Japanese banks enjoy solid income a year, which throws. Their results have been removed from trading profits of the bird Government bonds, while their large equity portfolios I have these adjustments during the January-March quarter, since the criterion high stock market index rose 19.3 percent.
Exploiting the retreat by European rivals in Asia and other markets, the Japanese banks have benefited from the sharp growth in overseas lending and an active search is based on a series of recent acquisitions. In January Sumitomo Mitsui agrees to purchase the lease of the aircraft business of the Royal Bank of Scotland, in a transaction value 7.3 billion. Mitsubishi UFTJ, whose unit is UnionBanCal says, will buy based on California Pacific, Capital Bancorp for about 1.5 billion dollars, said it may spend more than 1 trillion ¥ over the next three years, foreign acquisitions.
But forecasts for the growth of entries in the books of overseas borrowing of the largest banks in Japan is not sufficient to compensate for a fall in their home market, which still accounts for 70% to 80% of the profits. The outstanding loans of large Japanese banks fell to 30-straight month in April, down 1.3% from a year earlier, according to data from the Central Bank.