Japan banking system stable, divergence seen in profitability: BOJ

TOKYO (Reuters) – Japan’s financial system remains stable as a whole but there is a growing divergence between regional banks that are profitable and those that are suffering, the Bank of Japan said on Monday.

“Core capital ratios for domestic banks have gradually declined recently,” as they have difficulty making profits that match the risks, the BOJ said in a twice-yearly report scrutinizing Japan’s financial system.

The report said there was no excess risk-taking seen in Japan’s banking system. But it warned that many banks were increasing lending to middle-risk borrowers and for property investment.

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