Aozora Bank Faces Significant Losses Amidst Challenging Real Estate Market

Aozora Bank, a Tokyo-based commercial lender, has recently experienced a significant decline in its shares. The bank’s shares plummeted by 18.5% to their lowest levels since February 2021 during early Friday Tokyo trade. This sharp drop in share prices follows Aozora Bank’s announcement of an unexpected change in its annual forecast.

Previously projected to achieve a net profit of 24 billion yen, Aozora Bank now expects to face a net loss of 28 billion yen for the fiscal year ending on March 31. This downgrade in earnings outlook is primarily attributed to the bank’s exposure to bad loans within the U.S. commercial real estate sector.

The bank’s decision to revise its forecast has attracted considerable attention from financial analysts. Goldman Sachs analysts, for instance, maintain a sell rating on Aozora Bank’s shares and have set a price target of approximately 2,460 yen per share. Their assessment reflects concerns surrounding the bank’s short to medium-term profitability.

In addition to the disappointing financial forecast, Aozora Bank also anticipates a decline in its Common Equity Tier 1 ratio, a measurement of a bank’s capital adequacy. The bank expects this ratio to fall to 6.6% by the end of the current fiscal year, temporarily slipping below its targeted 7% threshold.

Amidst these challenges, there are growing apprehensions regarding the potential impact on other banks. Masahiko Sato, a senior analyst with SMBC Nikko Securities, highlights the unprecedented nature of Aozora Bank’s low CET1 ratio due to unrealized losses in securities.

The recent surprise net loss announcement by U.S. regional bank New York Community Bancorp has further compounded concerns over the strength of regional banks, as they attempt to recover from last year’s liquidity crisis. Bank of America analysts note that while the sell-off in U.S. regional banking shares may be overdone, it serves as a reminder of the ongoing credit normalization across the industry.

As Aozora Bank navigates these challenges, it remains to be seen how it will steer its course and manage the impact of the challenging real estate market on its financial performance.









– 業績見通し(Gross Earnings Outlook):銀行などの企業において、将来の業績や収益に関する予測や見通しのことを指します。

– 不良債権(Bad Loans):返済が遅延しているか、返済不能となっている貸し付けを指し、貸し付けした銀行や金融機関にとってリスクや損失となるものです。

– 自己資本比率(Common Equity Tier 1 ratio, CET1 ratio):銀行などの金融機関が、貸し付け等のリスクに対していかに備えているかを示す指標で、自己資本の割合を基に計算されます。


– リンク:青空銀行公式ウェブサイト