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UPDATE 2-Japan's top 3 banks to book $1.9 bln loss on TEPCO shares-sources

Published 04/19/2011, 10:02 PM
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* SMFG to book Y80bln in impariment losses on Tepco shares-source

* Mizuho to book Y50bln loss, MUFG facing Y30bln loss-sources

* Tokyo Electric shares lost about 80 pct between Mar 11-31

* Credit Suisse cuts bank earnings estimates on Tepco share losses (Adds analyst comments)

By Taiga Uranaka

TOKYO, April 20 (Reuters) - Japan's top three banks are planning to book a combined loss of 160 billion yen ($1.9 billion) on their stakes in Tokyo Electric Power , whose shares have tumbled sharply due to the crisis at its crippled nuclear plant, sources said on Wednesday.

Shares of Tokyo Electric have slumped nearly 80 percent since the March 11 earthquake and tsunami tore through its Fukushima Daiichi plant, forcing the banks to reassess the value of their shares for the financial year ended March 31.

Shares of all three banks posted small gains in morning trade, brushing off news of the losses, which was first reported by the Yomiuri newspaper.

"I think the market has already factored in impairment losses on Tokyo Electric shares so it's no surprise," said Takehito Yamanaka, analyst at MF Global FXA Securities.

"I don't think those losses are big enough to force the banks to change their forecasts, though the market consensus on their earnings could be lowered."

Sumitomo Mitsui Financial Group (SMFG) will book the biggest valuation loss of about 80 billion yen, followed by Mizuho Financial Group at 50 billion yen and Mitsubishi UFJ Financial Group (MUFG) at 30 billion yen, sources at the there banks told Reuters.

The sources spoke on condition of anonymity because the losses have not been announced publicly. Officials for all three banks said nothing has been decided and declined to comment further.

As of Sept 30, 2010, Sumitomo Mitsui Banking Corp, a core unit of SMFG, owned a 2.7 percent stake in Tepco. Mizuho Coporate Bank, a unit of Mizuho, held 1.8 percent of the troubled utility.

Mainly due to expected losses on Tokyo Electric shares, Credit Suisse had on Tuesday cutting its rating on SMFG to "neutral" from "outperform" while lowering its net profit estimate for the year ended March by 108 billion yen to 485.9 billion yen.

SMFG's own forecast is for a net profit of 540 billion yen, double the prior year's level. MUFG and Mizuho are both estimating a net profit of 500 billion yen.

Credit Suisse cut its net profit estimate for MUFG to 503 billion yen from 574.2 billion and that for Mizuho to 432.4 billion yen from 514.9 billion yen, while keeping a "neutral" rating on both shares.

Last month, the three banks made a total 1.4 trillion yen in emergency loans to Tepco, which is struggling to bring the nuclear plant under control and is bracing for a massive bill to compensate local residents and businesses.

Shares of SMFG were up 0.3 percent, while MUFG gained 0.3 percent and Mizuho rose 1.6 percent. The benchmark Nikkei average was up 1.4 percent. ($1 = 82.580 Japanese Yen) (Reporting by Taiga Uranaka; Editing by Nathan Layne)

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