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TOKYO — Major Japanese bank Mizuho Financial Group stayed in the red last quarter, posting a 4.49 billion yen ($47.3 million) loss as derivatives trading soured and bad loans surged.
Tokyo-based Mizuho said Friday it was on track to return to profit this fiscal year after booking its first annual loss in four years the previous fiscal year. It posted a 133.0 billion yen profit in the April-June first fiscal quarter of last year.
Japanese banks have weathered the U.S. subprime mortgage crisis with smaller losses then their Western counterparts, but they have been hurt by the fallout from the global slowdown.
The bank's bad loans stood at 76 billion yen during the April-June quarter, up from 4.7 billion yen a year earlier. Losses on derivatives trading totaled over 87 billion yen in the quarter.
Mizuho's April-June revenue sank 26.5 percent to 703.47 billion yen ($7.4 billion) but it noted signs the downturn may be slowing and stock prices are recovering.
All of Japan's "Big Three" banking groups, which include Mizuho, sank into losses for the fiscal year ended March 31, battered by a stock market plunge.
Ailing stock markets were devastating for Japanese banks because they own stakes in a network of companies to strengthen business ties. Japanese shares plunged last year after the financial crisis but have been recovering in recent months.
Mizuho said it will be in the black for the full fiscal year through March 2010, forecasting a 200 billion yen ($2.1 billion) profit.
Mitsubishi UFJ Financial Group is scheduled to report earnings later in the day.
On Thursday, Sumitomo Mitsui Financial Group reported a 25 percent jump in quarterly profit at 58.1 billion yen ($611.6 million) on climbing stock prices and a slowly improving economy.
