By Anton Bridge and Makiko Yamazaki
TOKYO (Reuters) -Japan's Aozora Bank on Thursday flagged its first annual net loss in 15 years as it took massive loan-loss provisions for U.S. commercial property, sending its shares down more than 20%.
The loss forecast came just after New York Community Bancorp (NYSE:NYCB) cut its dividend and took a big charge against bad property-related loans in echoes of last year's banking crisis.
The $2 billion Japanese bank's net income forecast for the year to March 31 was revised down to a net loss of 28 billion yen ($190.5 million) from a net profit of 24 billion yen.
This would mark the bank's first annual net loss since the year to March 31, 2009, at the height of the global financial crisis. The bank also plans to skip dividends for the rest of the financial year.
Rising U.S. interest rates brought about losses on Aozora's securities portfolio, which is mostly made up of foreign bonds, and its U.S. office loan portfolio, which has also suffered under the shift to remote work, the bank said.
"Our view is that it may take another year or two for the U.S. office market to stabilise," Aozora said as it announced 32.4 billion yen in provisions against U.S. office loans.
The announcements spooked investors, said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
"Aozora shares were popular due to a high dividend yield," Arisawa said.
Formerly known as Nippon Credit Bank, Aozora was owned by private equity firm Cerberus after the bank was put under temporary government control during Japan's financial crisis in the late 1990s.
Cerberus, which took the bank public in 2006 and exited its investment entirely in 2013, helped the bank to expand its U.S. property business.
($1 = 146.9900 yen)