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Increasing loan loss provisions will create more nonperforming assets down the road, Bove added.
Increasing loan loss provisions will create more nonperforming assets down the road; if loan loss provisions decrease, as they did for Citigroup in the recent quarter, the expectation is that earnings will start to improve in 2010..
In the last fiscal year, government inspections found 49percentt more nonperforming loans at the seven banks than the banks themselves had counted.
According to the plan, which runs through March 2005, Resona promised to lend more to small companies, dispose of more nonperforming loans and improve its profitability.
It is "almost inevitable" Mr. Pettis said, that the recent credit splurge would lead to more nonperforming loans, or NPLs, and the burden of recapitalizing banks might ultimately fall on households.
Japan's fifth-largest banking group, Resona Holdings, widened its expected loss in the fiscal year that ends March 31 because of a steeper downturn in stock prices and more nonperforming loans.
Similar(49)
In the fiscal year ended March, four new "megabanks" and five other big lenders wrote off 4.3 trillion yen $35.7 billionn) in nonperforming assets, more than double the 1.66 trillion yen $13.8 billionn) they forecast a year ago.
Forbes: One of our competitors reported that more than 150 publicly traded U.S. lenders have 5% or more of their holdings in nonperforming loans.
Thai banks are still struggling under a total of about 2.2 trillion baht in nonperforming loans -- more than $58 billion today.
By agreeing to pay more for the loans, the Resolution and Collection Corporation reportedly received requests to buy about 700 billion yen ($5.3 billion) of nonperforming loans in January, more than all the loans it bought in the last fiscal year.
And it comes as Japanese financial regulators press the country's banks to calculate their balance sheets more accurately than in the past, including a more strict evaluation of what loans are nonperforming.
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