Japanese Banks Booked 36% More Profits in 2011

In fiscal 2011 ending in March Japan’s five major banking groups posted net profit of 2,402.5 billion yen ($30.08 bil.), a 36.3% jump over fiscal 2010, according to earnings reports released through Tuesday.

Most of the increase in profits came from sales of government bonds while profits from core banking business suffered from lower interest rates. However, financing demand from companies has been recovering due to an accelerating pace of reconstruction work required by the March 2011 earthquake and tsunami.

Japan’s big five banking groups are Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Resona Holdings Inc. and Sumitomo Mitsui Trust Holdings Inc. Resona is the only one of the five that did not profit from government bond sales as prices for Japan’s sovereign debt were on the rise.

The group profits jumped 68.3% to 981.3 billion yen ($12.29 bil.) for Mitsubishi UFJ, the biggest of the big five, due to its acquisition of US investment bank Morgan Stanley.