Mitsubishi UFJ Financial Group
These particular loans went to Kunihiko Konishi and the foundation he once ran. To top it off, the loans weren't properly collateralized, Konishi was sentenced earlier this year to embezzlement from the foundation, and the loans are now considered unrecoverable.
Bad loans happen, but this case shows clearly that Japanese banks are still practicing more of a relationship-based lending approach than a risk-based one. This can work well when the economy is strong, but as we've seen in the past, it can be disastrous when the economy softens. With their sheer size, megabanks such as Mitsubishi UFJ, Sumitomo-Mitsui Financial Group, and Mizuho Financial Group
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At the time of publication, Nathan Parmelee had no financial interest in any of the companies mentioned. He was ranked 73rd out of 22,692 CAPS investors. The Motley Fool has an ironclad disclosure policy.