JUN TAMAKI, Nikkei staff writer
TOKYO -- Sharp's two main creditors gave differing evaluations of the struggling electronics maker's debt when compiling their fiscal 2015 results, a decision likely influenced by their view of Sharp rescuer Hon Hai Precision Industry.
Sharp had 324.6 billion yen ($2.95 billion) in outstanding loans with Mizuho Bank and 318.3 billion yen with Bank of Tokyo-Mitsubishi UFJ as of March 2015.
Mizuho Bank classified Sharp in its internal rating as a debtor that requires special attention, while BTMU downgraded it to a debtor at risk of bankruptcy, sources said. The latter wrote off just under 100 billion yen in costs related to Sharp for the fiscal year ended in March.
Many say that BTMU decided to shore up bad-loan reserves despite Hon Hai's acquisition of Sharp, because it still distrusts the Taiwanese electronics manufacturing giant for backing out of a planned partnership with Sharp back in 2013.
Mizuho Bank, on the other hand, had built up reserves for Sharp-related debt in advance of March 2015, and did not log additional expenses last fiscal year.
Mitsubishi UFJ Financial Group posted a net profit of 951.4 billion yen for fiscal 2015, down about 8%. It might have been able to top its 1.03 trillion yen record from fiscal 2014 without the added Sharp-related expenses.
Mizuho Financial Group will likely fall behind Sumitomo Mitsui Financial Group to become Japan's third-largest banking group this fiscal year. But it is currently not expecting to reverse any of its allowances for Sharp-related debt. If the electronics maker can get back on its feet with Hon Hai's help, it could shore up both BTMU and Mizuho Bank's fiscal 2016 results.