TOKYO, JAPAN - JAPANESE financial institutions together lost more than 1.5 trillion yen (S$19.5 billion) in the year to March because of the United States subprime mortgage crisis, a report said.

The nation's eight major banking groups alone are likely to post a combined subprime-related loss of more than 900 billion yen, the Nikkei newspaper said on Friday.

That is around 200 billion yen more than forecasts made public so far, it added.

'While this is less than the losses incurred by their European and US counterparts, it has still dealt a major blow to Japanese banks' profit forecasts,' the Nikkei said.

One of those eight, Mizuho Financial Group, will post subprime losses likely to top 565 billion yen, highlighting how banks widely involved in such investments are set to pay the price, the paper added.

Brokerage house Nomura Holdings and Norinchukin Bank saw losses grow heading into the end of this fiscal year 2007, the newspaper said.

Aioi Insurance and Sompo Japan Insurance booked 83.6 billion yen and around 30 billion yen respectively in losses.

The burden created by subprime losses is likely to delay the institutions' expansion into investment banking and overseas businesses, the Nikkei said. -- AFP