TOKYO (Standard&Poor's) May 28, 2007--Japan's six major bank groups faced challenges in generating profits during fiscal 2006 (ended March 31, 2007), Standard&Poor's said in a report published today. The six bank groups collectively recorded a total net profit of ¥2.82 trillion in fiscal 2006, down from ¥3.12 trillion in fiscal 2005 due mainly to reported losses on equity-method investments in affiliated nonbank companies, additional credit costs stemming from the nonbank companies, and a decrease in the reversal of loan loss provisions at overall lending operations. At the same time, the bank groups reported a 3% decrease in aggregated core profitability year on year, due to an increase in expenses that outpaced growth in gross operating profits.
