Japan's MUFG to Boost Subprime Write-Downs Sixfold


Mitsubishi UFJ Financial Group, Japan's largest bank, said on Monday it would have to write down the value of its subprime-related investments by as much as 30 billion yen ($260 million), or six times more than previously announced.

MUFG becomes the latest of several Tokyo financial institutions to announce greater-than-expected losses from subprime investments in the last week.

Nomura Holdings, Japan's largest brokerage, posted its first quarterly net loss in 4-½ years last week due to losses on mortgage-backed securities.

An MUFG spokesman said on Monday losses related to the troubled subprime mortgage market had likely ballooned to between 20 billion and 30 billion yen by the end of September, from an appraisal loss of 5 billion yen announced by the group in August.

MUFG's exposure to subprime-related investments was 280 billion yen as of July, according to the latest figures available from the bank.

While Japanese banks have so far reported relatively little exposure to subprime-related investments, some analysts have said there is growing concern the amounts involved may be greater than so far disclosed.

Shares of MUFG rose 4.4 percent on Monday to 1,088 yen, in line with the Tokyo exchange's index of bank stocks .