S&P puts Bank of Tokyo-Mitsubishi, Mitsubishi Trust, Sumitomo Trust on positive watch

Standard & Poor's put the long-term credit ratings of Bank of Tokyo-Mitsubishi Ltd. (BBB+), Mitsubishi Trust & Banking Corp. (BBB+), Mitsubishi Securities Co. Ltd. (BBB) and Sumitomo Trust & Banking Co. Ltd. (BBB) on CreditWatch positive including the ¥100 billion mandatory exchangeable subordinated notes due 2007 issued by Sumitomo Trust's STB Cayman Capital Ltd. at BBB- and Mitsubishi Securities Co. Ltd.'s ¥42 billion adjustable-rate convertible bonds due 2014 at BBB.

S&P said the action is based on expectations that the banks will show clear signs of improvement in their financial performance for fiscal 2003. The rating agency said it will examine the banks' performance for the full fiscal 2003 ending March 31, 2004 and the degree of improvement in their financial profiles. Any upgrade is likely to be within one notch.

The overall financial profile of Japan's major banks remains weaker than that of their international peers, S&P said. However, Bank of Tokyo-Mitsubishi, Mitsubishi Trust and Sumitomo Trust's capitalization is strong compared with that of the other major Japanese banks.

The three banks are expected to further strengthen their capitalization in both quality and quantity through various measures, including profit accumulation and a conversion of preferred stock to common stock, S&P said.

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