Aiful Leads Gain in Consumer Lenders on Rule Easing: Tokyo Mover

Apr 21, 2014 3:54 am ET

April 21 (Bloomberg) -- Aiful Corp. led gains in Japanese consumer-finance stocks after the Nikkei newspaper reported that the ruling party is considering loosening lending restrictions.

Aiful jumped 11 percent, the most since September, to 346 yen at the close of trading in Tokyo. Aplus Financial Co., Orient Corp. and Acom Co. all climbed more than 7 percent. They were among the top seven gainers on the benchmark Topix index, which fell 0.2 percent.

The Liberal Democratic Party is considering a proposal to restore the ceiling on interest rates to 29.2 percent from 20 percent to make it easier for smaller businesses to procure funds, the Nikkei reported on April 19. The cap was lowered as part of a government crackdown to protect borrowers.

“The report on interest-rate easing is clearly pushing non-banks higher,” said Takehito Yamanaka, an analyst at Credit Suisse Group AG in Tokyo. “Debate on moneylending business restrictions is drawing a lot of attention and will have a positive impact on those shares for the time being.”

The LDP aims to revise the rate cap in the current parliament session, the Nikkei reported, without citing anyone. An official from the party’s policy research council wasn’t immediately available to comment on the report.

Aplus Financial, a unit of Shinsei Bank Ltd., surged 13 percent, the most since September. Orient advanced 13 percent and Acom climbed 7.7 percent. J Trust Co., which bought bankrupt consumer lender Takefuji Corp. in 2011, rose 10 percent.

Industry Crackdown

Consumer-finance firms had to reduce interest rates and cap lending to low-income clients under changes to the law in 2010. The clampdown also forced lenders to refund billions of dollars in overcharged interest, leading to the collapse of Takefuji that year.

The industry is showing signs of a recovery. Acom, the nation’s biggest consumer lender, forecast last May that loans will jump 11 percent to 800 billion yen ($7.8 billion) in the two years ending March 2016.

Rising import costs and a sales-tax increase are squeezing consumers and small businesses in the world’s third-largest economy. That may force some to increase borrowing from consumer lenders, Junichi Shimizu, an analyst at Deutsche Bank AG in Tokyo, said last month.

--With assistance from Takashi Hirokawa in Tokyo.