It was a long wait.
Japan’s biggest banks agreed to raise salaries for the first time in 19 years as an economic recovery puts them on pace to achieve record annual profit.
Bloomberg News reports that the banking units of Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group will each increase base pay by 0.5% in the year starting April 1, in line with requests from the companies’ labor unions, bank officials said by phone Thursday.
'The pay rise is ideal for Japan’s economy as it should spur consumption', said Nana Otsuki, an analyst at Bank of America's Merrill Lynch unit in Tokyo. 'A 0.5 percent increase may look small compared with the inflation target but it probably reflects the banking industry’s revenue growth prospects'.
Japanese banks halted salary increases in the mid-1990s, when bad loans soared and deflation began plaguing the economy after a stock and property market bubble burst. The 2008 global financial crisis further deterred lenders from raising pay as they focused on bolstering capital and restoring profits.
To access the complete Bloomberg article hit the link below: