Japan's manufacturing industries have been enjoying record profits thanks to a combination of stringent cost controls, growth in global trade and a weakening yen. Yet, the banking industry remains under a cloud, with the latest round of interim results -- announced this month -- producing a very mixed bag in terms of performance.
In the nonfinancial sector, interim profits are up around 35% year on year, with close to two-thirds of reporting companies beating analysts' consensus forecasts. For many Japanese banks, on the other hand, it has been another year of feeble revenue growth, net interest margin squeezes and an end to the loan loss reserve write-backs that have characterized bank results for the last several seasons, propping up reported earnings.
