Never-ending story: big write-offs don't erase Japan's bad-loan problem

Article Abstract:

Japanese banks posted record operating profits of 3.5 trillion yen in the year ending March 1996, but the banks took the opportunity to write off over 6 trillion yen in bad debts dating back to the 1980s. The Japanese Ministry of Finance believes that another strong year is needed before the banks will be in good shape, but some analysts say it will be much longer. The Ministry reports that banks still hold 34.7 trillion yen in bad debts, with 8.3 trillion yen deemed unrecoverable. Private estimates of the total bad debt and of unrecoverable debts run higher.

Finance, Bad debts

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Culture shock: Sumitomo debacle shows Japan management flaw

Article Abstract:

Sumitomo's $1.8 billion loss on the activities of rogue copper trader Yasuo Hamanaka could swell further, and indicates the flaws of Japanese management in the modern era. As with Toshihide Iguchi's $1.1 billion loss for Daiwa, Hamanaka's was possible because he had too much independence and too little oversight. Several institutional and cultural problems contributed to the laxity. Copper prices fell $600 a ton within a few days of the announcement and the level they settle at will determine Sumitomo's true losses.

Primary copper, Copper, Primary Smelting and Refining of Copper, Officials and employees, Copper industry, Copper products, Industrial management, Sumitomo Corp.

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Searching for options

Article Abstract:

Japanese investors are taking a cautious attitude towards investing in the stock market. The 1995 collapse of Hyogo Bank and stories of mismanagement elsewhere has raised concerns about the solvency of many financial institutions. Most investors are keeping their funds liquid as Japan begins to recover from its longest economic downturn since World War II. Affluent individual investors are beginning to take notice of private banking services which are starting to take hold in Japan.

Asia, Private banking

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