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Financial Results of Japan's Banks for Fiscal 2021

September 16, 2022
Financial System and Bank Examination Department
Bank of Japan

Abstract

The three main features of the financial results of Japan's banks for fiscal 2021 are as follows:

First, net income increased for all types of banks: major banks, regional banks, and shinkin banks. For all types of banks, pre-provision net revenue (PPNR) (excluding trading income), which indicates core profitability, increased, while credit costs decreased. However, at major banks and regional banks, profits were pushed down by a deterioration in realized gains/losses on bondholdings, mainly due to losses on sales of bonds that resulted from the rise in overseas interest rates through the end of the fiscal year.

Second, PPNR (excluding trading income) increased at major banks, regional banks, and shinkin banks. For all types of banks, an increase in net interest income contributed to raising PPNR (excluding trading income). PPNR was also pushed up by an increase in net non-interest income at major banks and regional banks, and a decrease in general and administrative expenses at regional banks and shinkin banks.

Third, the capital adequacy ratios remained sufficiently above the regulatory requirements for all types of banks, although the ratios declined for internationally active banks, for which unrealized gains/losses on securities holdings are included in capital.

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Inquiries

Financial Institutions Divisions 1 and 2
Financial System and Bank Examination Department

E-mail : post.fsbe2@boj.or.jp