Yen for Living

League of Extraordinarily Happy Gentlemen: entrance to Tokyo Bankers Association

On May 15 several major banks announced they would start paying corporate taxes. Mizuho Corporate Bank said it would start paying this year, while Mizuho Bank, Mitsui Sumitomo Bank and Resona Holdings will start next year. According to the Asahi Shimbun, it will be the first time in 15 years that Mitsui Sumitomo will pay any taxes. For Resona, a consolidation of Daiwa Bank, Kinki Osaka Bank, Nara Bank and, later, Asahi Bank, it’s the first time in 18 years.

The Tokyo-Mitsubishi UFJ financial group started paying corporate taxes last year. Despite the Lehman Brothers-triggered recession, all these banks have been in the black since at latest 2006. However, by law they can carry over cumulative losses from previous years on their books. All the banks suffered huge losses in the 1990s due to bad loans. At its worst point, Mizuho was in the hole by as much as ¥5 trillion; Mitsui Sumitomo ¥2.7 trillion. The three top banks’ total profits for fiscal 2012 is estimated to be ¥1.9 trillion, a 35 percent increase over 2011, even though they don’t lend money any more. All these banks received government bailouts and Resona was actually nationalized for a while. Of the total ¥3.1 trillion that was injected into the banking system by the government, ¥2.3 trillion has been paid back, and it’s assumed that the rest will be reimbursed earlier than originally planned.

Until the cut that went into effect April 1, Japanese companies always complained that corporate tax rates were higher here than in other countries, but 70 percent of them never pay any, including listed companies that pay dividends. More than 80 percent of companies listed on the Tokyo Stock Exchange paid dividends last year. Moreover, before the Diet approved the 5 percent corporate tax reduction (from 40 to 35 percent for the biggest companies), the Japan Communist Party, which opposed any cuts to the corporate tax, revealed that “internal reserves” (naibu ryuho) of Japanese companies amounted to ¥266 trillion. At any rate, the special taxes enacted to pay for reconstruction have reduced the cut slightly, but companies still have a smaller rate than they did last year.

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The “super futsu” entry is the fourth line

The other day I was looking at one of our bank passbooks after some bills were paid and noticed an entry term I’d never noticed before: “super futsu.” It refers to the the type of account, and the entry listed the most recent interest we received for the balance in that account. Futsu means “regular,” so what exactly does “super regular” mean?

Apparently nothing. It’s simply a means of distinguishing a deposit account with Tokyo Mitsubishi UFJ’s All One system from a regular passbook deposit account. The interest is the same: 0.05 percent. The difference between the two types of accounts is that with the All One system, they don’t charge a fee unless the balance falls below ¥100,000. The main reason we signed up for All One was so that we wouldn’t have to pay a handling fee when we use TMUFJ ATMs during non-business hours, but we eventually found out that there are still some instances when handling fees apply. The fine print is there to be read — or not.

And as you can see by the photo on the right, the most recent interest payment we received — ¥182 — would mostly be wiped out had we incurred a single handling fee of ¥105 during the appropriate period of time, so I fail to see what’s “super” about this account. You have to remember that 0.05 percent interest means you multiply your balance by 0.0005. And then you have to subtract an additional 20 percent from the result for taxes.

Instead of “super regular” maybe they should call it “super insignificant”; or, more poetically, a susume no namida — tears of a sparrow — account.

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