Latest news with #NorinchukinBank
4 days ago
- Business
Norinchukin Bank Returns to Profit in April-June
News from Japan Aug 7, 2025 10:48 (JST) Tokyo, Aug. 7 (Jiji Press)--Norinchukin Bank said on Wednesday that it swung to profitability in April-June after reporting a massive net loss a year before due to losses on foreign bond investment. The Japanese lender posted a consolidated net profit of 58,299 million yen for the latest fiscal first quarter, an improvement from the year-before loss of 412,722 million yen. The turnaround came after the central bank for agricultural financial institutions across the country boosted its capital and reshuffled investment portfolios in the year ended last March. For the full year ending in March 2026, Norinchukin Bank projects a net profit of around 30 billion to 70 billion yen. In the previous year, the lender logged a record net loss of 1,807.8 billion yen as it faced widening latent losses on U.S. and European government bond holdings because of higher interest rates. [Copyright The Jiji Press, Ltd.] Jiji Press
CNA
5 days ago
- Business
- CNA
Japan's Norinchukin Bank swings to $393 million profit in first quarter
TOKYO :Japan's Norinchukin Bank booked a net profit of 58 billion yen ($393 million) for the April-June quarter, as its mass offloading of low-return foreign government bonds over the past year cut its foreign currency-denominated funding costs. The results compare to a net loss of 412 billion yen over the same period a year earlier. The bank had run up nearly 3 trillion yen of unrealised loss by 2023 on its portfolio of foreign government bonds as rising interest rates in the U.S. and Europe slashed their value. Realising this loss left the bank booking a net loss of 1.8 trillion yen for the year ended March 2025. Norinchukin retained its forecast of a net profit of 30 billion yen to 70 billion yen in this financial year. It has said it will use the proceeds from the bonds it sells to make new investments, including in Japanese government bonds, equities, real estate, private equity and infrastructure. Unlisted Norinchukin is the principal financial institution for Japan's farm, forestry and fishery cooperatives and generates returns primarily through securities investments rather than lending. It had built up enormous positions in higher-yielding foreign government bonds to eke out returns during the years of rock bottom interest rates in Japan but these unravelled as interest rates rose in the U.S. and Europe and stayed high. Norinchukin still has 1.22 trillion yen ($8.26 billion) of unrealised losses in its portfolio as of the end of June. ($1 = 147.5500 yen)
Bloomberg
5 days ago
- Business
- Bloomberg
Norinchukin Returns to Profit After Bond Investment Debacle
Norinchukin Bank swung back to profit last quarter as the Japanese firm began its long road to recovery from last year's massive losses on foreign bond investments. Net income totaled ¥58.3 billion ($395 million) in the three months ended June 30, compared with a loss of ¥412.7 billion a year earlier, the agricultural bank said in a presentation on Wednesday. It's aiming for profit of about ¥30 billion to ¥70 billion in the year ending March.
Reuters
5 days ago
- Business
- Reuters
Japan's Norinchukin Bank swings to $393 million profit in first quarter
TOKYO, Aug 6 (Reuters) - Japan's Norinchukin Bank ( booked a net profit of 58 billion yen ($393 million) for the April-June quarter, compared to a net loss of 412 billion yen over the same period a year earlier. The bank had run up nearly 3 trillion yen of unrealised loss by 2023 on its portfolio of foreign government bonds as rising interest rates in the U.S. and Europe slashed their value. Realising this loss left the bank booking a net loss of 1.8 trillion yen for the year ended March 2025. ($1 = 147.5500 yen)
Japan Times
27-05-2025
- Business
- Japan Times
Dai-Ichi Life sees falling volatility in JGB market
The surging bond yields that have saddled Japan's insurers with billions of dollars in unrealized losses will weaken because they are not supported by economic fundamentals, according to Dai-ichi Life, the country's largest listed life insurer. New buyers are entering the market for Japanese government bonds and amplifying volatility, Chief Executive Officer Tetsuya Kikuta said in an interview. Yields on 30-year JGBs jumped to a record last week. This is eroding the value of the bonds already in the insurers' portfolio. Dai-ichi's paper losses on its domestic bonds stood at about ¥2 trillion ($14 billion) as of the end of March. A rout in Japan's $7.8 trillion government bond market has spooked several firms including Nippon Life Insurance and Norinchukin Bank. The Bank of Japan is paring its holdings in the face of emerging inflation, sparking a selloff in the country's long-term debt. The current run-up in yields is a stark reversal for the companies, which until just a year ago had been suffering diminishing returns from domestic investments and desperately seeking more attractive assets overseas. "There are a very limited number of long-only JGB investors and they are being replaced by short-term players,' Kikuta said. "That's pushing up the JGB market's volatility.' While yields could jump further in the near future because of a lack of liquidity, the JGB market will likely calm down around the end of the year, Kikuta said. Swap rates are roughly 60-125 basis points lower than comparable JGB yields. "Japan's potential economic growth rate is less than 1%. And inflation only affects shorter-term interest rates. So, fundamentally, I don't think long-term rates should be where they are now,' said Kikuta. "They are just overshooting temporarily, due partly to supply and demand.' Yields on Japanese super-long bonds fell ahead of an auction Wednesday that is expected to test demand following a recent sale that sent jitters through global markets. Yields on 40-year and 30-year maturities slid 10 basis points in Tokyo on Tuesday, adding to drops in recent days. These moves followed sharp gains last week. Dai-ichi's domestic insurance unit owns ¥16.6 trillion worth of JGBs and municipal bonds as of the end of March, and more than half of the holdings have maturities of over 20 years. Japan's life insurers have traditionally been the main buyers of JGBs with maturities as long as 40 years to cover obligations spanning decades for insurance policyholders. Recently, hedge funds have been increasing their trading of Japanese bond futures and yen rate swaps. Paper losses do not pose an immediate risk to the insurers and under a new rule, higher interest rates push down the value of both assets and liabilities and do not affect a regulatory gauge of fiscal soundness. While the current yields are already "very attractive,' the insurer now has little room to buy fresh JGBs, as it is almost done with a regulation-driven buildup, Kikuta said. The company will keep replacing lower-yielding bonds with higher ones, he added. The company is pulling back on foreign bonds with currency hedging, which were one of the mainstays for insurers during Japan's period of low interest rates. The company is also cautious on buying foreign bonds without currency hedging, given the risks of a stronger yen in the future. "The need has shrank a lot for foreign bond investment as a replacement for yen-interest assets,' Kikuta said, adding high hedging costs make it hard to justify them. "Things which were unthinkable just a short while ago are happening now,' he said. Dai-ichi has been aggressively expanding beyond traditional life insurance in Japan and focusing on asset management as one of its growth areas. Earlier this month, the company said it plans to acquire an additional stake in U.K.-based Capula Investment Management. Dai-ichi is looking for further opportunities to invest in alternative fund management firms and can start looking at deals worth several billion dollars in the asset management industry once it completes current efforts to boost capital efficiency, Kikuta said. "We still lack scale in asset management,' he said.
