Increase in Credit Costs Due to Deterioration in Counterparties’ Financial Condition and Decline in Collateral Value
First written in FY2017. 9 of 15 entries say "Restated". Latest entry: FY2026.
The Yamanashi Chuo Bank moved to the "Worse" side of this theme in 2019, 4 years before the typical company in this theme (2023).
The whole theme swung hardest in 2019: 6 of 14 companies on the "Worse" side.
8 other companies' latest entry also says "Mitigated".
- FY2026Decrease in credit-related expensesAnnual report
「Credit-related expenses decreased by ¥1,023 million year on year,」
Credit-related expenses decreased from ¥1,455 million in the previous year to ¥432 million. Meanwhile, the possibility of increases in non-performing loans and the allowance for loan losses continues to be noted. - FY2025WorsenedAnnual report
「Credit-related expenses increased by ¥1,475 million year on year, but」
Credit-related expenses increased by ¥1,475 million, reversing the previous year's reversal gain on the allowance for loan losses, due in part to a net ¥1,379 million provision for individually assessed loan losses. - FY2024-Q3MitigatedAnnual report
「The economic effects of COVID-19 have weakened, including as a result of its classification under the Infectious Diseases Act being changed to Category 5, and economic activity is returning to normal. Meanwhile, it is assumed that government and local-government economic measures and support from financial institutions will continue for some borrowers still affected by COVID-19. These assumptions have not changed materially from those described under “Significant Accounting Estimates” in the securities report for the previous consolidated fiscal year.」
It was stated that the economic effects of the infectious disease had weakened and economic activity was returning to normal. Meanwhile, continued government, local-government and financial-institution support for certain borrowers still affected by the disease is assumed. - FY2024-Q1RestatedAnnual report
「Although the effects of the spread of COVID-19 are expected to continue for the time being, the economy has been gradually recovering as infection-control measures take hold and vaccines become more widely available, and the recovery is expected to continue as efforts progress to balance the response to the infectious disease with socioeconomic activity. However, if COVID-19 spreads more extensively than expected, if the response to the infectious disease cannot be balanced with socioeconomic activity as expected, or if government and local-government economic measures or support from financial institutions are less effective than expected, substantial losses may arise on loans and materially affect the consolidated financial statements.」
The report continued to state the risk of loan losses if the infection spreads more extensively than expected or similar events occur, while assuming an economic recovery supported by infection-control measures, the wider availability of vaccines and government support. It was stated that the accounting assumptions had not changed materially. - FY2023-Q3RestatedAnnual report
「In the current third-quarter cumulative consolidated accounting period, the assumptions concerning the effects of COVID-19 have not changed materially from those described under “Significant Accounting Estimates” in the securities report for the previous consolidated fiscal year.」
It was stated that there had been no material change in the accounting assumptions, which include the resolution of the infectious disease, an economic recovery and government support, as well as the possibility of loan losses if the infection spreads more extensively than expected. - FY2023-Q2RestatedAnnual report
「Although the effects of the spread of COVID-19 are expected to continue for the time being, the economy has been gradually recovering since around mid-2020. Despite the effects of the emergence of variants and other factors, the recovery is expected to continue as infection-control measures take hold and vaccines become more widely available. Although the effects on some industries may temporarily become severe during this period, it is assumed that government and local-government economic measures and support from financial institutions will continue. However, if COVID-19 spreads more extensively than expected, if infection-control measures or vaccines are less effective than expected, or if government and local-government economic measures or support from financial institutions are less effective than expected, substantial losses may arise on loans and materially affect the consolidated financial statements.」
Although the effects of the infectious disease continue, an economic recovery supported by infection-control measures, vaccines and government support is assumed, while the report continues to note the risk of loan losses if the infection spreads more extensively than expected or similar events occur. - FY2022RestatedAnnual report
「If COVID-19 spreads more extensively than expected, if infection-control measures or vaccines are less effective than expected, or if government and local-government economic measures or support from financial institutions are less effective than expected, substantial losses may arise on loans and materially affect the consolidated financial statements for the next consolidated fiscal year.」
While assuming a recovery supported by infection-control measures and government support, the report continues to state the possibility of loan losses if the infection spreads more extensively than expected or similar events occur. - FY2022-Q3RestatedAnnual report
「Although the effects of the spread of COVID-19 are expected to continue for the time being, the economy has been gradually recovering since around mid-2020. Despite the effects of the emergence of variants and other factors, the recovery is expected to continue as infection-control measures take hold and vaccines become more widely available. Although the effects on some industries may temporarily become severe during this period, it is assumed that government and local-government economic measures and support from financial institutions will continue. However, if COVID-19 spreads more extensively than expected, if infection-control measures or vaccines are less effective than expected, or if government and local-government economic measures or support from financial institutions are less effective than expected, substantial losses may arise on loans and materially affect the consolidated financial statements. In the current third-quarter cumulative consolidated accounting period, the assumptions concerning the effects of COVID-19 have not changed materially from those described under “Significant Accounting Estimates” in the securities report for the previous consolidated fiscal year.」
The accounting assumptions incorporate an economic recovery supported by infection-control measures, the wider availability of vaccines and government support, while taking into account the emergence of variants and other factors. The report continues to state that substantial losses may arise on loans if the infection spreads more extensively than expected or countermeasures are insufficiently effective. It was also stated that the accounting assumptions had not changed materially. - FY2022-Q2RestatedAnnual report
「In the current interim consolidated accounting period, the assumptions concerning the effects of COVID-19 have not changed materially from those described under “Significant Accounting Estimates” in the securities report for the previous consolidated fiscal year.」
It was stated that there had been no material change in the accounting assumptions concerning the spread of the infection, the recovery supported by infection-control measures, vaccines and government support, and the possibility of loan losses if the infection spreads more extensively than expected. - FY2022-Q1RestatedAnnual report
「Although the effects of the spread of COVID-19 are expected to continue for the time being, the economy has been gradually recovering since around mid-2020, and is expected to continue recovering as infection-control measures take hold and vaccines become more widely available. Although the effects on some industries may temporarily become severe during this period, it is assumed that government and local-government economic measures and support from financial institutions will continue. However, if COVID-19 spreads more extensively than expected, if infection-control measures or vaccines are less effective than expected, or if government and local-government economic measures or support from financial institutions are less effective than expected, substantial losses may arise on loans and materially affect the consolidated financial statements.」
While assuming an economic recovery supported by infection-control measures, the wider availability of vaccines and government support, the report continues to state that substantial losses may arise on loans if the infection spreads more extensively than expected or countermeasures are insufficiently effective. - FY2021-Q2RestatedAnnual report
「Although the effects of the spread of COVID-19 are expected to continue to some extent, the economy has been gradually recovering since July, and this recovery is expected to continue. Although the effects on some industries may temporarily become severe during this period, it is assumed that government and local-government economic measures and support from financial institutions will prevent a situation in which substantial losses arise on loans. However, if the resolution of the situation is delayed and its effects continue for an extended period, additional losses may arise in the future.」
It was stated that the accounting assumptions concerning the effects of COVID-19 had not changed materially from those in the previous year's securities report. The expected continuation of the economic recovery and the possibility of additional losses if the effects persist were both noted. - FY2020WorsenedAnnual report
「However, if the resolution is delayed and the effects continue for an extended period, additional losses may arise in the future.」
It was noted that if the effects of COVID-19 continue for an extended period, additional losses may arise on loans. - FY2019WorsenedAnnual report
「Even if a customer defaults or a similar event occurs, the bank group may not exercise its rights as a creditor for reasons including the efficiency and effectiveness of recovery, or may waive claims or take other measures to support the customer. As a result, expenses such as the allowance for loan losses may increase, adversely affecting results.」
In addition to deterioration in customers' conditions and declines in collateral values, the risk of higher expenses due to not exercising rights or waiving claims for support purposes was added. - FY2018RestatedAnnual report
「If customers' financial condition and other factors deteriorate due to economic trends or other developments, the bank group’s non-performing loans and credit-related expenses may increase, adversely affecting results. Deterioration in customers' business conditions or declines in collateral values may increase the allowance for loan losses, also adversely affecting results.」
The risk of higher credit costs due to deterioration in customers' financial condition or business conditions and declines in collateral values continues to be noted. - FY2017First statedAnnual report
「If customers' financial condition and other factors deteriorate due to economic trends or other developments, the bank group’s non-performing loans and credit-related expenses may increase, adversely affecting results. Deterioration in customers' business conditions or declines in collateral values may increase the allowance for loan losses, also adversely affecting results.」
It is noted that deterioration in customers' financial condition or business conditions and declines in collateral values may increase non-performing loans, credit-related expenses and the allowance for loan losses.