Deposit rates hit 0.00% at Japan’s banks

tokyo — Two of Japan’s biggest banks are now paying almost nothing to look after their customers’ savings.

The average rate that Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc.’s main banking units pay depositors fell to 0.00 per cent for the first time in the nine months ended December, from 0.03 per cent a year earlier, their latest earnings statements show. The numbers aren’t exactly zero: the banks round the figures to two decimal places by simply cutting the third digit.

Lenders are lowering deposit rates to unprecedented levels to minimize a squeeze on interest margins since the Bank of Japan introduced negative rates a year ago. Still, MUFG and Mizuho have no plans to start charging retail depositors, spokesmen for the Tokyo-based companies said, an indication they’ll continue to feel the pinch from shrinking loan profitability. — Bloomberg