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Japan’s UFJ posts mammoth half year loss

Japan’s UFJ posts mammoth half year loss

(14 September 2004 – Japan) Japanese bank UFJ Holdings which has been at the centre of takeover battles over recent months has posted a half year loss of almost US$7 billion. Japan’s second largest bank, Mitsubishi Tokyo Financial Group, is the favoured partner to take over UFJ but has come under pressure from Sumitomo Mitsui Financial Group which offered US$31 billion for the bank.

MTFG has not said how much it would pay for UFJ but has pledged US$6.40 billion in capital to prop up the ailing bank. In exchange, UFJ will issue the same amount in preferred shares to MTFG by the end of September.

In May, UFJ said it would post a 120 billion yen profit for the half year but has forecast 780 billion yen net losses for the period due to mushrooming bad debts.

A merger between MTFG and UFJ would create the largest bank in the world in assets, bigger even than Citigroup.

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