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JP sets weak earnings target in 3-year plan

Jiji Press TOKYO (Jiji Press) — Japan Post Holdings Co. has set a consolidated net profit target that is weaker than the latest result, according to a recently published three-year business plan.

The company aims for a net profit of ¥410 billion for fiscal 2020, down sharply from the ¥460.6 billion scored for fiscal 2017. The target reflects the sluggishness of its banking and insurance arms.

“Historically low interest rates are beginning to shake Japan Post Bank at last,” Masatsugu Nagato, president of the holding company, told a news conference Tuesday.

The bank and Japan Post Insurance Co. are trying to cover the negative effects of the superlow interest rates through rationalization and other measures.

The bank aims to increase commission revenue from the sale of investment trust funds and introduce advanced asset management techniques, while the insurer plans to expand the lineup of products with bigger profit margins. But they have yet to map out a clear path to growth.

The parent company hopes to jack up the group’s earnings through corporate acquisitions, on which it is ready to spend hundreds of billions of yen over the three years, according to Nagato.

But it is uncertain whether such efforts will bear fruit, after the holding company incurred heavy losses on Australian logistics giant Toll Holdings Ltd., which the Japanese group acquired in 2015.Speech

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