All 11 banks said their non-performing debt, meaning loans on which interest has not been paid for six months, increased in the reporting period despite significant money spent on writing off those debts.

As of September 30, the 11 banks had 9.24 trillion yen (about HK$661 billion) in non-performing loans, the banks said.

In March, the end of Japan's fiscal year, the banks reported bad debt of 8.43 trillion yen.

Analysts said the growth in bad debt would certainly continue as Japan's recession pushed more debtors into the non-performing category.

''The outlook is extremely poor for the remainder of the fiscal year,'' said Yasuo Noda, managing director of Daiichi Kangyo Bank, the largest of the commercial banks.

It would take two to three years for most banks to dig their way out from under the mountain of bad debt, said Mr Noda, echoing the comments of executives from the other 10 banks.

Besides the major banks, electronic equipment giants Toshiba Corp and Hitachi Ltd also reported dismal results yesterday.

Toshiba said its group pre-tax profit dropped two per cent from a year earlier to 36.2 billion yen in the first half of the current fiscal year.

Consolidated sales in the six months fell two per cent to 2.2 trillion yen.

Toshiba said its business was affected by the protracted Japanese economic slump coupled with slow consumer spending and the yen's high exchange value.

The high yen slashed its consolidated sales overseas in the six months by seven per cent to 646 billion yen, Toshiba said.

Sales fell in all categories, except for heavy electric equipment where sales jumped 12 per cent to 607 billion yen, it said.

Earlier, Toshiba said its unconsolidated pre-tax profit in the April to September period fell five per cent to 22.4 billion yen.

Hitachi said its group pre-tax profit in the six months fell six per cent to 105.9 billion yen on sales of 3.73 trillion yen, down one per cent.

The company said in a consolidated financial report that its business was also affected by the high yen which weakened the competitiveness of Japanese products overseas. The report did not provide the value of exports.

Hitachi said earlier its unconsolidated pre-tax profit in the six months plunged 20 per cent to 29.9 billion yen.

In contrast to the poor profit conditions of Toshiba and Hitachi, the consolidated pre-tax profit of another electronic equipment giant, Mitsubishi Electric Corp, jumped 32 per cent to 35.7 billion yen.

Mitsubishi's group sales in the six months dropped three per cent from a year earlier to 1.48 trillion yen.

A company spokesman said its consolidated profit condition was improved mainly because of an increase in revenue from non-operating profits.

The revenue increase was mainly from foreign exchange gains and interest from loans, Mitsubishi Electric said.

Its unconsolidated pre-tax profit in the April to September period jumped 22 per cent to 15.04 billion yen.

For the fiscal year ending next March, Toshiba estimated its group pre-tax profit would reach 80 billion yen on sales of 4.67 trillion yen.

Hitachi estimated its consolidated pre-tax profit at 210 billion yen on sales of 7.3 trillion yen, while Mitsubishi Electric's forecast was 50 billion yen on sales of 3.1 trillion yen.