Japan's Norinchukin books $95 million profit in third quarter
Norinchukin Bank President & CEO Taro Kitabayashi talks about their strategy at their office in Tokyo, Japan Apr 9, 2025. REUTERS/Miho Uranaka
TOKYO, Feb 18 : Japan's Norinchukin Bank on Wednesday reported net profit of 14.6 billion yen ($95 million) for October-December, compared with a loss of 520.5 billion yen over the same period the previous year.
That marked the unlisted bank's third consecutive quarter of profit as it slowly rebuilds its finances. The results follow an annual loss of $12.63 billion in the last financial year due to a fall in the value of its foreign sovereign bond portfolio.
For the financial year through March 2027, Norinchukin forecast profit of 50 billion to 100 billion yen, versus 30 billion to 70 billion yen forecast for this financial year.
The bank had 1.07 trillion yen of unrealised loss in its bond portfolio at the end of December.
It had built up holdings of U.S. and European sovereign debt which plummeted in value when central bank interest rates began to rise from 2022. Selling down those positions in the last financial year resulted in realised loss.
The bulk of Norinchukin's bond holdings are overseas which meant it was less impacted by the jump in Japanese government bond yields at the end of last year.
Norinchukin is the principal financial institution for farm, forestry and fishing cooperatives. Unlike most banks, it earns much of its money through securities investment rather than lending.
The rising value of Norinchukin's bond, stock and credit holdings pushed the total value of its market investments up to 45.2 trillion yen by the end of December. This is still well below the 56.3 trillion yen value of its holdings at the end of March 2024.
Norinchukin also booked a loss of 52.4 billion yen over the nine months to end-December due to its exposure to bankrupt auto parts maker First Brands Group, with further losses or gains possible depending on new developments, Norinchukin said.
The bank is also one of the world's largest investors in collateralised loan obligations - securities backed by a pool of loans - and has been upping its investments over 2025.
Its holdings reached 9.8 trillion yen at the end of December, up from 8.2 trillion yen a year earlier.
($1 = 153.4100 yen)
