* Top three banks get 2.6 trln yen in loan requests after
* Total includes 1.4 trillion yen emergency loan for TEPCO
* Demand surge comes after months of sluggish lending
(Updates with confirmation from banks)
By Taiga Uranaka
TOKYO, March 27 Japanese companies' demand for
funding has soared since the March 11 earthquake and tsunami,
with the country's top three banks seeing a surge in new loan
requests, lenders said on Sunday.
Companies are rushing to secure extra financing to repair
damage to their operations in the areas worst-hit by the
disaster as well as fund their day-to-day operations following
fall in revenue amid output disruptions, the banks said.
Japan's top three banks, Sumitomo Mitsui Banking Corp,
Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ have
received requests for new loans totalling 2.6 trillion yen ($32
billion) over two weeks, said the banks.
The total includes 1.4 trillion yen in emergency funds
sought by Tokyo Electric Power Co the operator of the
stricken Fukushima nuclear plant north of Tokyo. Even excluding
that number, requests were running at about four times the usual
levels, the banks said.
The top three banks and major trust banks are in talks to
provide up to 2 trillion yen in emergency loans to TEPCO,
sources said last week.
Sumitomo Mitsui is the core unit of Sumitomo Mitsui
Financial Group , Mizuho Corporate Bank is a unit of
Mizuho Financial Group and BTMU is the core commercial
banking unit of Mitsubishi UFJ Financial Group .
Commercial paper issues also jumped by more than 50 percent
in the first week after the disaster, with new offers totalling
about 1.1 trillion yen and rates for one- to two-month paper
rising above 0.2 percent from 0.11 percent before March 11, the
Nikkei business daily reported on Sunday.
In the weeks following the disaster, the Bank of Japan has
been pumping record amounts of funds into the banking system to
ensure that credit keeps flowing to affected businesses and it
has also increased its purchases of commercial paper.
LOAN DEMAND LIKELY TO INCREASE
Japanese banks had been suffering sluggish lending demand as
households and businesses remained cautious on spending amid
prolonged deflationary trend. Bank lending fell 1.8 percent in
February, the 15th month of decline, the Bank of Japan data
Awash with deposit money, the banks had been buying up
Japanese government bonds to make up a fall in profit from
"We have been approached by companies which had not needed
our loans up until now. We are very likely to accept pretty much
all of these loan requests since most of these companies are
those we wanted to have business with," said a source at one of
the top banks, who declined to be named.
Including the emergency lending for TEPCO, BTMU said it has
received request for about 700 billion yen in new loans, Mizuho
said it has been asked to provide about 900 billion yen in
Officials of SMBC were not immediately available but a
source said the bank had requests for about 1 trillion yen in
new loans, including 600 billion for TEPCO.
While the banks said they did not have comparative numbers,
the loan requests - even excluding that by TEPCO- marked a jump
from regular years, at least four or five times larger in
volume, though the increase was not as dramatic as in the
aftermath of the collapse of Lehman Brothers.
The total is equivalent to 3 percent of the overall
outstanding loans to major corporations by these banks, said the
Nikkei, which reported the surge in the lending request.
The total loan demand is likely to be bigger since the banks
said their figures were from large corporate clients only and
those from small and mid-sized businesses have not been counted.
Nikkei cited officials at companies considering extra
funding, such as Renesas Electronics Corp , Taiheiyo
Cement Corp. , whose plants have been damaged by the
disaster and All Nippon Airways Co , bracing for a drop
in demand for its passenger and cargo services.
($1 = 80.985 Japanese Yen)
(Additional reporting by Tomasz Janowski)