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MUFG Subprime Loss May Grow to $850 Million

Mitsubishi UFJ Financial Group (MUFG), Japan's largest bank, may see up to $850 million of losses in the year to March from soured investments in the U.S. subprime mortgage market, the Nikkei business daily reported on Thursday.

Potential subprime losses reported so far at Japan's big three banks, either by themselves or in Japanese media, total $4.6 billion, with the bulk of that faced by second-ranked Mizuho Financial Group.

Subprime losses at MUFG may come to about 90 billion yen ($850 million) in the 12 months to March, the Nikkei said, without naming sources.

So far, MUFG has only announced losses of 4 billion yen for the six months to September, although executives with direct knowledge of the matter told Reuters this month losses had risen to about 50 billion yen by the end of December.

A spokesman for the bank declined to comment on the report.

Both MUFG and second-ranked lender Mizuho Financial Group are due to report earnings on Thursday.

Mizuho's subprime losses may have nearly doubled to $2.8 billion in the year to March, potentially forcing the bank to further cut its forecast and plough more money into its struggling brokerage, newspapers reported on Wednesday.

Sumitomo Mitsui Financial Group, Japan's No.3 lender, said on Tuesday subprime losses cost it 99 billion yen ($932 million) in the nine months from April to December, 13 percent more than a previous estimate for the entire financial year to March 2008.