Japan Post Shares See 14% Drop Amid Uncertain Forecasts

 By Gina Lee

Investing.com – Japan Post Bank (T:) saw its shares plummet on Monday after it forecasted profit falling short of analyst expectations.

Japan Post shares dived 14.08% to JPY 897 ($8.373) by 12:24 AM ET (5:24 AM GMT), the biggest intraday decline since the company’s listing in 2015.

Meanwhile, shares of parent company Japan Post Holdings (T:) also slid 8.69%.

The company said on Friday that net income was expected to fall to JPY 200 billion ($1.867 billion) in the year ending March 2012.

“This is a negative surprise,” Masahiko Sato, an analyst at SMBC Nikko Securities, said in a note. He added that most market participants had expected profit would be around 280 billion yen this year, in line with the bank’s own midterm target.

The lower profit will raise concerns about whether the bank can keep its dividend payments, which it failed to give guidance on in the forecast.

Analysts also expressed concerns about Japan Post Bank’s paper losses on the bank’s securities portfolio. The company increased its overseas investments with interest rates tanking in Japan and had thus become more vulnerable to moves in the global financial market.

Japan Post Bank reported JPY 121.9 billion in unrealized losses on overseas collateralized loan obligations in the last quarter amid the COVID-19 economic turbulence.