Japan’s Norinchukin reports profit loss of $2.75b in Q1

It attributed the loss to low-yielding asset sales, part of its portfolio improvement efforts.

Japan’s Norinchukin Bank has reported a profit loss of JPY412.7b (over $2.757b) in Q1 FY2024, blamed on low-yielding asset sales, the bank’s latest financial statement showed.

“Steady progress of the portfolio improvement has associated sales of low-yielding assets, which resulted in a loss attributable to owners of parent for the first quarter,” the bank said.

In contrast, the bank earned JPY63.8b ($426.3m) in the corresponding April-June period of FY2023.

Ordinary losses were JPY379b ($2.53b) in Q1 FY2024, versus JPY98.2b ($656.46m) in Q1 FY2023.

Ordinary expenses rose 53% to over JPY1t, from just JPY654b ($4.37b) in Q1 FY2023.

Total assets were JPY96.77t ($646.98b) as of end-June. Deposits, payables under repurchase agreements, and other assets all fell during the period. Debentures rose 24.3% to JPY403.8b ($2.7b).

Its market investment portfolio decreased, which it said was due to “sales of low-yielding assets–primarily US and EU government bonds–as part of Norinchukin’s ongoing portfolio improvement.

Net unrealized losses were JPY1.85t ($12.37b), a result of a rise in global interest rates and the depreciation of the yen in Q1.

Norinchukin Bank said it will improve its investment portfolio in FY2024 to achieve stable profits from FY2025 onward and establish an even more robust profitability base.

(US$1 = JPY149.57; as of 2 August 2024, 11:02AM)