Shinsei Bank slashes profit forecast


TOKYO: Japan's Shinsei Bank said it will fall more than 70% short of its full-year profit forecast due to widening subprime losses, and will sell its Tokyo headquarters to Morgan Stanley to help offset the damage. 

Shinsei, which still owes the government more than 200 billion yen (US$2bil) from a bailout in the 1990s, has been one of the Japanese banks hit hardest by the subprime crisis. 

The mid-sized lender has also wrestled with losses from its consumer finance business and criticism that it has been too slow in repaying public money. 

A man enters the headquarters Shinsei Bank in central Tokyo. — AFP

Shinsei shares finished the morning session down 5%, compared with a 4.7% loss in Tokyo's index of bank stocks. The counter has lost about a third of its value over the past 12 months. 

“From an investment standpoint, Shinsei has very little to offer,” said Koichi Ogawa, chief portfolio officer at Daiwa SB Investments. “Their business is not going well.” 

Shinsei said it now expected recurring profit for the year ending this month to total 20 billion yen, well below the 74 billion yen it had originally forecast. This is the third time Shinsei has cut its forecast for the current business year. 

The bank also said it would sell its Tokyo headquarters to a fund managed by Morgan Stanley for 118 billion yen, from which it expects a profit of 56 billion yen. 

The bank said that would lift its net profit for the year to 65 billion yen, up from 50 billion it had previously forecast. – Reuters  

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

FBM KLCI fails to extend bounce
ADB lowers growth outlook for developing Asia as Covid weighs
Kenanga projects gradual recovery for KESM
Trading ideas: Southern Steel, Tanco, Bina Darulaman
China Evergrande inches close to default deadline, investors wait
US agency confirms air bag safety probe into 30 million vehicles
India's summer grains output seen at record 150.50 mln tonnes in 2021/22
Stocks steady as markets calm after Evergrande-led slide
Oil edges up, as investors worry about global demand
Vibrant capital market in the works

Stories You'll Enjoy


Vouchers