UFJ, Japan's fourth-biggest bank, systematically deceived inspectors about the financial health of large borrowers, forging the minutes of meetings, and hiding and deleting documents, financial regulators revealed yesterday.
The blistering criticism by the Financial Services Agency increases pressure on UFJ to sever links with large troubled borrowers such as Daiei, the retail chain, and Daikyo, Japan's biggest condominium developer.
The FSA ordered the bank to bolster internal controls and redraw its business plan, detailing how it intends to cut about 4,000 billion yen ($30.2 billion) of problem loans in half by next March.
Last month, UFJ, whose outstanding loans of Y42,000 billion make it bigger than the UK's Barclays, sacked its top management after revealing an annual loss of Y403 billion against a profit forecast of Y78 billion.
The downgrade came after an FSA inspection, which forced UFJ to reclassify some of its biggest borrowers. Yesterday, the FSA revealed that UFJ had "moved and concealed, in rooms separated from regular working spaces, important documents that would substantially affect the classifications of borrowers".
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