Mitsubishi Tokyo Financial Group (MTFG), Bank of Tokyo-Mitsubishi holding company, has further reduced non-performing loans (NPLs) as a proportion of total assets, from 5.34 % to 2.93 % (the industry average of the seven main banking groups in Japan is 5.2 %). In addition, the bank has increased its BIS risk-adjusted capital ratio from 10.84 % to 12.95%
MTFG says it had already achieved the target set by the Japanese government to half its non-performing loans ratio 18 months ahead of the September 2003 deadline, and that these latest figures further reduce the level of bad loans. With MTFG not required to allocate as much reserve for unrecoverable loans as was initially assumed, the moves have helped raise net profits to record levels.
In a press conference, Shigemitsu Miki, President of MTFG, said that the bank had now solved its non-performing loan problem. He also emphasized that the capital ratio has cleared 10% even without including the controversial deferred tax assets.