Japan Post Sees 1.9 Tril. Yen Net Profit in FY 2005 Postal Savings

By Kyodo News International, Tokyo

May 22–TOKYO — Japan Post chalked up a net profit of around 1.9 trillion yen in the postal savings business in fiscal 2005 to March 31, larger than the biggest Japanese commercial bank’s profit, informed sources said Monday.

The result, which represents a 60 percent rise from the preceding year, means that a gigantic postal savings bank will be created through Japan Post’s privatization next year, they said.

The postal savings business brought in the huge profit due largely to the management of savings through stock investment against the backdrop of higher Tokyo stock prices.

The profit is larger than the consolidated net profit of 1,181.7 billion yen recorded by Mitsubishi UFJ Financial Group Inc. in fiscal 2005 and trails the 2,275.5 billion yen Japan Post booked in the postal savings business in fiscal 2003.

In contrast, Japan Post saw the net profit of its mail delivery business plunge 99 percent in fiscal 2005 from the previous year to some 200 million yen due to higher labor costs resulting from increased employment of part-time workers, the sources said.

In addition, the amount of mail handled by post offices decreased for the fourth year in a row, reflecting increased use of e-mail.

The mail delivery service was initially expected to post a net profit of 24.3 billion yen.

The sources also said the postal life insurance business will retain about 900 billion yen in internal reserves for fiscal 2005, up from the previous year’s 551.7 billion yen.

Japan Post’s 10-year, step-by-step privatization will begin in October 2007, creating four companies in charge of postal savings, postal insurance, mail delivery and management of the nationwide post-office network.

The public corporation, created in April 2003 to take over postal services from the government, will release its fiscal 2005 results on Wednesday.

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