(Provisional Translation)


Results of the Inspection on the Major Banks (17 banks)

The Financial Supervisory Agency (FSA), in collaboration with the Bank of Japan, carried out an intensive inspection on the 17 major banks, on the basis of the banks' self-assessment report as of end-March 1998. Results of the inspection are as follow (see appendix for details):

1. Results of the (Note 1)credit-quality-assessment (as of end-March 1998; after the write-off/allowance)

(billion yens)
　

　Classification

 Total credits
1 2 3 4

Assessment by the FSA (a)

 344,708.5 43,781.2 5,342.6 375.6 394,207.9
Self-assessment (b)(Note 2) 350,114.6 40,197.0 3,771.8 (Note 3)
124.5		 394,207.9

(a) － (b)

 -5,406.1 3,584.2 1,570.8 251.1 －
Note 1: "Credit" refers to the collective term of the following: loans and bills discounted, securities loaned, foreign exchanges (those due from foreign banks, foreign bills bought or receivable), customers'liabilities for acceptances and guarantees, accrued interest, and suspense payments.
2: "Self-assessment (b)" refers to results of the Self-Assessment which banks have reported to the FSA in accordance with article 24, the banking law (the errors-and-omission corrected basis).
3: Category 4 includes the classified credits in trust account (118.0 billion yens).

(Reference) Results of the credit-quality-asssessment of the LTCB and the NCB (as of end-March 1998)

(billion yens)
　

　Classification

 Total credits
1 2 3 4

Assessment by the FSA (a)

 19,623.9 5,189.9 2,414.1 261.0 27,488.9
Self-assessment (b) 21,492.2 4,960.1 1,036.6 － 27,488.9

(a) － (b)

 -1,868.3 229.8 1,377.5 261.0 －
LTCB: The Long-Term Credit Bank of Japan, Ltd
NCB : The Nippon Credit Bank, Ltd


2. Adequacy of Write-off/Allowances (as of end-March 1998)

(billion yens)

Amount of write-off/allowance based on the FSA assessment
(1)

Amount of write-off/allowance based on self-assessment
(2)

 Additional amount of the write-off/allowance required
(1) - (2)
8,606.0 7,564.7 1,041.3
Note: "Write-off/allowance amount based on the FSA assessment (1)" is calculated on the base of the write-off/allowance standards employed by the banks.



(Reference) Adequacy of write-off/allowances of the LTCB and the NCB (as of end-March 1998)

(billion yens)

Amount of write-off/allowance based on the FSA assessment
(1)

Amount of write-off/allowance based on self-assessment
(2)

 Additional amount of the write-off/allowance required
(1) - (2)
1,638.7 806.4 832.3

Summary of the operation
　

Objective

Inspection of soundness of asset
Inspected Banks 17 banks:

Dai-ichi Kangyo Bank, Fuji Bank, Bank of Tokyo-Mitsubishi, Sakura Bank, Sanwa Bank, Tokai Bank,Asahi Bank, Industrial Bank of Japan, Yasuda Trust and Banking, CO., Sumitomo Trust and Banking, CO,Chuo Trust and Banking, Co, Toyo Trust and Banking, Co, ----inspected by the Financial Supervisory　Agency

Sumitomo Bank, Daiwa Bank, Mitsubishi Trust and Banking, Co, Mitsui Trust and Banking, Co, Nippon Trust Bank ----examined by the Bank of Japan
On-site inspection period from July 24 to October 28, 1998
Average number of inspection days per bank 20.8 days /bank
Average number of inspectors per bank 12.0 inspectors/bank
Average number of inspected debtors per bank 9,806 debtors /bank
Average sampling rate 56.2%
Note: All classified credits (categories 2,3 and 4) were inspected exhaustively, while unclassified credits (category 1) were inspected on the sampling basis.
Standard of classification
Category 1: credit exposures which have not been classified as category 2, 3 or 4
Category 2: credit exposures for which an adequate specific risk management is needed.
Category 3: credit exposures with serious concerns in terms of their ultimate collection.
Category 4: credit exposures which have been judged to be non-collectable or of no value.

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