PREVIEW-Japan's big banks to post bleak Q3 earnings

martes 27 de enero de 2009 05:49 CET

* What: Big Japanese banks' third-quarter (Oct-Dec) results

* When: Sumitomo Mitsui Jan 28, Mizuho Jan 30, Mitsubishi UFJ Feb 6

* Mitsubishi UFJ and Mizuho may post net losses, Sumitomo Mitsui may see 97 percent profit decline

By David Dolan

TOKYO, Jan 27 (Reuters) - Japan's big banks are likely to post a sharp drop in quarterly earnings, with Mitsubishi UFJ Financial Group (8306.T: Cotización) and Mizuho Financial Group (8411.T: Cotización) tumbling into the red, hurt by losses on their stock holdings and a sputtering economy.

Although Tokyo's largest lenders have so far avoided the massive credit losses that toppled Lehman Brothers and threaten Citigroup (C.N: Cotización), the Japanese banking tradition of taking shares in corporate clients has become their Achilles' heel.

Because of those stock portfolios, banks are unlikely to cut their full-year earnings estimates further in the coming week, as they wait to see how the market performs in the last quarter of their financial year.

"Don't focus on earnings. No matter what they are, they are going to be bad," said Ismael Pili, banking analyst at Macquarie Capital Securities in Tokyo.

"You focus on any incremental operational improvement ... we're potentially seeing better domestic loan volume and expansion in spreads."   Continuación...