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Fitch Ratings (Tokyo/Singapore) issued a press release yesterday citing a number of positives for Japan's 6-major banks. It also said in a comment that the "banks can expect further upgrades to their Individual ratings and ultimately their Long-term Issuer Default ratings as well."

These 6 banks include: Mitsubishi UFJ Financial Group (MTU), Mizuho Financial Group, Sumitomo Mitsui Financial Group (SMFJY.pk), Resona Holdings, Sumitomo Trust & Banking (STBUY.pk) and Mitsui Trust Holdings (MUITF.pk).

According to Fitch they are on course to report record net profits for the current fiscal year ending this March. This will be the first time since 2000 that all of Japan's major banks even report positive annual net income. See a bullet point summary below.

• Credit trends for Japan’s major banks are overwhelmingly positive based on improving quantity and quality of capital (expected to continue through FYE March 2008)

• Recovery in the sector’s capital position follows on from the improvements in asset quality and profitability in FYE05 and in the current fiscal year FYE06

    - Extensive reversals of loan loss reserves across the sector and rapid growth in fee and commission income

• “The impact of low net credit costs on bottom line profitability really is going to be dramatic when the banks report their full year results for the current fiscal year…

Source: Fitch Sees Further Upgrades for Japan's 6 Major Banks (MTU)