{"id":10721,"date":"2024-02-05T11:04:54","date_gmt":"2024-02-05T11:04:54","guid":{"rendered":"https:\/\/imsfund.com\/?p=10721"},"modified":"2024-02-05T11:04:54","modified_gmt":"2024-02-05T11:04:54","slug":"japans-aozora-bank-hits-near-3-year-lows-as-bad-u-s-property-loans-prompt-loss-forecast","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2024\/02\/05\/japans-aozora-bank-hits-near-3-year-lows-as-bad-u-s-property-loans-prompt-loss-forecast\/","title":{"rendered":"Japan&#8217;s Aozora Bank hits near 3-year lows as bad U.S. property loans prompt loss forecast"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107368027\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>The Aozora Bank Ltd. headquarters in Tokyo Japan, on Thursday, Feb. 1, 2024. Japan&#8217;s Aozora Bank became the second lender in a span of hours to surprise investors with losses tied to US commercial property, sending shares down by the limit and heightening concern over global banks&#8217; exposure to souring real estate bets.<\/p>\n<p>Akio Kon | Bloomberg | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\"><a href=\"https:\/\/www.cnbc.com\/quotes\/8304.T-JP\/\">Aozora Bank<\/a><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> shares hit near three-year lows Friday, as investors continued to hammer the Japanese commercial lender after it downgraded its annual outlook to a loss on bad U.S. commercial real estate loans.<\/p>\n<p>Aozora, which had earlier forecast a profit, saw its shares plunge by as much as 18.5% to their lowest levels since February 2021 in early Friday Tokyo trade \u2014 the <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-2\"><a href=\"https:\/\/www.cnbc.com\/quotes\/.N225\/\">Nikkei 225<\/a><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"\/><\/button><\/span><\/span><\/span> benchmark was up 0.5%. <\/p>\n<p>The bank&#8217;s Tokyo-listed shares fell for a second day, tracking losses in U.S. regional lenders overnight.<\/p>\n<\/div>\n<div>\n<div class=\"Collapsible-proliveCollapsableContainer\" role=\"button\" tabindex=\"0\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"256\" height=\"256\" viewbox=\"0 0 256 256\" aria-labelledby=\"title desc\" role=\"img\" focusable=\"false\" preserveaspectratio=\"xMinYMin\" class=\"Collapsible-stockChartIcon\"><title>Stock Chart Icon<\/title><desc>Stock chart icon<\/desc><g transform=\"translate(1.4065934065934016 1.4065934065934016) scale(2.81 2.81)\"><path d=\"M 87.994 0 H 69.342 c -1.787 0 -2.682 2.16 -1.418 3.424 l 5.795 5.795 l -33.82 33.82 L 28.056 31.196 l -3.174 -3.174 c -1.074 -1.074 -2.815 -1.074 -3.889 0 L 0.805 48.209 c -1.074 1.074 -1.074 2.815 0 3.889 l 3.174 3.174 c 1.074 1.074 2.815 1.074 3.889 0 l 15.069 -15.069 l 14.994 14.994 c 1.074 1.074 2.815 1.074 3.889 0 l 1.614 -1.614 c 0.083 -0.066 0.17 -0.125 0.247 -0.202 l 37.1 -37.1 l 5.795 5.795 C 87.84 23.34 90 22.445 90 20.658 V 2.006 C 90 0.898 89.102 0 87.994 0 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 65.626 37.8 v 49.45 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 23.518 L 65.626 37.8 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 47.115 56.312 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 42.03 L 47.115 56.312 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 39.876 60.503 c -1.937 0 -3.757 -0.754 -5.127 -2.124 l -6.146 -6.145 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 59.844 C 41.952 60.271 40.933 60.503 39.876 60.503 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><path d=\"M 22.937 46.567 L 11.051 58.453 c -0.298 0.298 -0.621 0.562 -0.959 0.8 V 87.25 c 0 1.519 1.231 2.75 2.75 2.75 h 8.782 c 1.519 0 2.75 -1.231 2.75 -2.75 V 48.004 L 22.937 46.567 z\" transform=\" matrix(1 0 0 1 0 0) \" stroke-linecap=\"round\"\/><\/g><\/svg><\/p>\n<div class=\"Collapsible-proLivePlayerCloseOrExpand\"><img decoding=\"async\" src=\"https:\/\/static-redesign.cnbcfm.com\/dist\/a54b41835a8b60db28c2.svg\" class=\"Collapsible-dismissButton\" alt=\"hide content\"\/><\/div>\n<\/div>\n<p><iframe title=\"Aozora Bank tumbles again\" src=\"https:\/\/www.cnbc.com\/appchart?symbol=8304.T-JP&amp;range=5Y&amp;type=line&amp;embedded=true&amp;$DEVICE$=undefined\" height=\"460\" scrolling=\"no\" style=\"border:0;width:100%\"><\/iframe><\/p>\n<p>Aozora Bank tumbles again<\/p>\n<\/div>\n<div class=\"group\">\n<p>The commercial lender <a href=\"https:\/\/www.cnbc.com\/2024\/02\/01\/japans-aozora-bank-tanks-after-flagging-losses-tied-to-us-commercial-property.html\">said Thursday<\/a> it expects to post a net loss of 28 billion Japanese yen ($191 million) for the fiscal year ending March 31, compared with its previous outlook for a net profit of 24 billion yen. The bank forecast a net profit of 17 billion yen for the next fiscal year.<\/p>\n<p>&#8220;Aozora is a major mid-tier lender whose strength lies in its relationships with real estate\/business revitalization financing companies and regional financial institutions,&#8221; Goldman Sachs analysts wrote in a Friday note.<\/p>\n<p>They retained their sell rating on Aozora&#8217;s shares with a price target of about 2,460 yen per share, mainly due to the short to medium outlook for the bank&#8217;s profits.<\/p>\n<p>Aozora said Thursday it expects its Common Equity Tier 1 ratio, which compares a bank&#8217;s capital against its assets, to fall to 6.6% by the end of the current fiscal year, temporarily dipping below its 7% target.<\/p>\n<p>&#8220;There have been some concerns in recent years over a decline in the CET1 ratio due to deterioration in U.S. commercial real estate credit costs and valuation losses on available-for-sale securities,&#8221; Masahiko Sato, a senior analyst with SMBC Nikko Securities, wrote in a Thursday note to clients.<\/p>\n<p>&#8220;How this will impact other banks is another question,&#8221; Sato added. &#8220;U.S. real estate lending for around 10% of (its) total lending with a CET1 ratio of below 7% due to unrealized losses on securities has no precedent.&#8221;<\/p>\n<p>Aozora&#8217;s update came shortly after U.S. regional bank\u00a0<a href=\"https:\/\/www.cnbc.com\/quotes\/NYCB\/\">New York Community Bancorp<\/a>\u00a0<a href=\"https:\/\/ir.mynycb.com\/news-and-events\/news-releases\/press-release-details\/2024\/NEW-YORK-COMMUNITY-BANCORP-INC.-REPORTS-RECORD-RESULTS-FOR-2023\/default.aspx\" target=\"_blank\" rel=\"noopener\">announced a surprise net loss of $252 million for the fourth quarter<\/a>.<\/p>\n<p>NYCB also slashed its dividend and said it had &#8220;[built] reserves during the quarter to address weakness in the office sector&#8221; \u2014 renewing some fears over the strength of U.S. regional banks, which were embroiled in a liquidity crisis last year.<\/p>\n<p>The lender said this was in response to its purchase of the assets of Signature Bank, one of the regional banks that collapsed in last year&#8217;s crisis. That purchase raised their total assets to $100 billion,\u00a0<a href=\"https:\/\/www.reuters.com\/business\/finance\/moodys-puts-new-york-community-bancorp-review-downgrade-2024-02-01\/#:~:text=The%20purchases%20at%20Signature%20Bank,%24116.3%20billion%20as%20of%20December.\" target=\"_blank\" rel=\"noopener\">placing them in a category<\/a>\u00a0that subjects the bank to more stringent liquidity standards.<\/p>\n<p>Bank of America analysts said in a Wednesday note that the sell-off in U.S. regional banking shares on contagion fears is &#8220;likely overdone given idiosyncratic factors tied to NYCB.&#8221;<\/p>\n<p>&#8220;However, higher losses tied to commercial real estate office exposure, increase in criticized loans tied to multi-family CRE [commercial real estate] are a reminder of ongoing credit normalization that we are likely to witness across the industry,&#8221; Bank of America U.S. banking analysts wrote.<\/p>\n<p>&#8220;It is worth pointing out that the credit\/liquidity build at NYCB are mostly the bank playing catch-up to actions taken by larger regional peers over the last year,&#8221; they added.<\/p>\n<p><em>\u2014 CNBC&#8217;s Michael Bloom contributed to this story.<\/em><\/p>\n<\/div>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.cnbc.com\/2024\/02\/02\/japans-aozora-bank-shares-hit-near-3-year-lows-on-us-commercial-property-losses.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Aozora Bank Ltd. headquarters in Tokyo Japan, on Thursday, Feb. 1, 2024. Japan&#8217;s Aozora Bank became the second lender in a span of hours to surprise investors with losses tied to US commercial property, sending shares down by the limit and heightening concern over global banks&#8217; exposure to souring real estate bets. Akio Kon [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":10722,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/image.cnbcfm.com\/api\/v1\/image\/107368027-1706834706687-gettyimages-1969097912-JAPAN_AOZORA_BANK.jpeg?v=1706834762&w=1920&h=1080","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-10721","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10721","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=10721"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10721\/revisions"}],"predecessor-version":[{"id":10723,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/10721\/revisions\/10723"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/10722"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=10721"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=10721"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=10721"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}