Q1 profit evaporates at Japanese lender Takefuji

TOKYO (Reuters) - Japanese consumer lender Takefuji Corp (8564.T) posted a 93 percent fall in first-quarter profit, becoming the only one of Japan's major consumer moneylenders to post lower profits in the first quarter.

Japan's consumer finance sector is reeling from tougher regulations lowering the maximum interest rate companies can charge and after courts forced them to return interest rate payments considered illegally high.

While earnings and stock prices have fallen sharply across the industry, in the past week Takefuji rivals Promise Co Ltd (8574.T) Aiful Corp (8515.T) and Acom Co Ltd (8572.T) all posted higher profits for the three months to June.

Takefuji, however, reported a net profit of just 1.3 billion yen, down from 18.4 billion yen a year earlier, as its loan volume declined.

"My key focus has always been the capitulation of the core business and there are very few signs of stabilisation in any area," said Jason Rogers, a credit analyst at Barclays Capital.

"Near term liquidity seems okay, but there was a slight weakening in the capital base and the company was unable to reduce debt levels despite the reduction in loans."

Rogers also said the lower net profit in part reflected the company's lower reliance on reserve write-backs in Q1 -- meaning Takefuji was possibly being cautious about provisioning for bad loans and grey zone expenses.

Shares of Takefuji have lost nearly 60 percent of their value over the last 12 months, compared to a 36 percent fall in Tokyo's index of non-bank financials .IBNKS.T.

(Reporting by David Dolan)