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Japan banks downgraded
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January 14, 1999: 10:37 p.m. ET
Moody's cuts ratings on five Asian regionals, cites varied causes
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NEW YORK (CNNfn) Moody's Investors Service announced late Wednesday evening that it was downgrading its ratings for five Japanese regional banks.
The banks whose ratings were affected were Joyo Bank (long-term deposit rating to A3 from A1); Gunma Bank (to A2 from A1); Bank of Yokohama (to Baa2 from A3); Fukuoka City Bank (to Baa3 from Baa1) and Suruga Bank (to A3 from A1).
Moody's cut multiple ratings for each of the banks and cited a variety of weaknesses in all the banks' positions, most of which reflected difficulties in Japan's real-estate environment and the Asian economic crisis.
For example, Joyo Bank's bank financial strength rating was cut to D+ from C. Moody's said Joyo Bank's "loan portfolio continues to be characterized by a higher proportion of financially-depressed wholesale customers."
Gunma Bank was called to task for its "notable exposure to problematic construction companies and golf course projects."
Bank of Yokohama's overall financial fundamentals "are very weak," Moody's said, and the bank "requires external capital to restore its financial stabilization."
Fukuoka's restructuring plans, Moody's said, "are believed to be marginal."
Moody's said that Suruga had been hurt by "the harsher-than-expected competition in its key local markets, particularly housing loans." The New York-based credit rating service also noted that Suruga's "earnings power has been slowing down." 
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Moody's
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