Japan Post Holdings Co Ltd's six-month net profit rose by a fifth as its banking unit again helped offset weakness at its mail business, underscoring its reliance on the arm as the government cuts its stake in the postal and financial giant. Japan Post's profit for April-September was 180.1 billion yen ($1.59 billion), with net profit at Japan Post Bank Co surging 20.2 percent to 181.5 billion yen on foreign exchange trading gains, which made up for diminishing returns on its huge Japanese government bonds (JGBs) holdings.
The results, announced on Tuesday, were the first look at Japan Post's health after the government's 1.3 trillion yen share sale in September and come amid investors' concerns about clear growth prospects for the firm. The share sale, popular with domestic retail investors for its relatively high dividend yield, followed a mammoth triple initial public offering of Japan Post two years ago and reduced the government's stake in the company to under 60 percent.
On Tuesday, Finance Minister Taro Aso said the government hadn't yet worked out details of a further sale of its stake after a report that it could sell as much as 1.4 trillion yen ($12.3 billion) in shares as early as April.
The banking unit, of which Japan Post owns 74 percent, is the country's biggest deposit taker. It makes money from returns on its JGB holdings, instead of relying on loans like commercial lenders.
But under the Bank of Japan's negative interest rate policy it has been forced to diversify its investments to boost returns. Its holdings of low-yield JGBs totalled 31.1 percent of total assets at the end of September, or 64.5 trillion yen, down marginally from the 32.2 percent three months earlier.
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