YEREVAN, July 21. /ARKA/. Fitch says it’s cut the credit rating of three of Japan’s biggest banks over concerns about Tokyo’s ability to support the financial sector, after the nation’s sovereign debt rating was also cut, Sky News reports.
The ratings agency lowered its rating by one notch to ‘A-‘ from ‘A’ – the seventh highest on a 22-rating scale – for Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group (MHFG) and Sumitomo Mitsui Financial Group.
In the same statement, Fitch said on Friday it had also lowered its rating for Sumitomo Mitsui Trust Bank to the same level as the major banks.
‘The downgrade … reflects the government’s weakened financial ability to support the banking system as indicated by the downgrade of (Japan’s sovereign rating),’ Fitch said in a statement.
In May, the agency cut Japan’s credit rating, citing its ‘leisurely’ efforts at shrinking a massive public debt, as Tokyo struggles to kickstart the world’s third-largest economy.
The agency downgraded Japan’s long-term rating to ‘A+’ from ‘AA’, with a negative outlook, noting ‘growing risks for Japan’s sovereign credit profile as a result of high and rising public debt ratios’.
Fitch on Friday kept its outlook on the Japanese lenders at stable, which suggested it had no imminent plan to cut their ratings again.
The agency’s downgrade on the banks comes about two months after they reported across-the-board surges in annual profits, with Mitsubishi UFJ posting a 68 per cent spike on trading and one-time gains.
The trio’s combined net profits totalled nearly 2.0 trillion yen, the largest since the global financial crisis with Japanese lenders having suffered less than most of their Western counterparts. –0-
