Due to a surge in lending in Japan, SMFG announces a 10.7% increase in third-quarter earnings

Due to a surge in lending in Japan, SMFG announces a 10.7% increase in third-quarter earnings

TOKYO: The second-biggest bank in Japan, Sumitomo Mitsui Financial Group (SMFG), said on Thursday that its third-quarter net profit increased by 10.7 percent, mostly due to robust domestic loan demand.

SMFG earned 266.37 billion yen ($1.8 billion) in profit from October to December, up from 240.6 billion yen in the same time last year, as per estimates by Reuters using nine months' worth of cumulative data from stock market filings.

SMFG maintained its full-year profit projection through March at 920 billion yen, which was higher than the average of 12 analyst predictions published by LSEG, which came out to 921.36 billion yen.

The bank's business plan for the three years ending in March 2026 sets a goal of 900 billion yen, which is exceeded by the yearly projection, which also breaks the previous record established ten years ago.

With expectations that the central bank's departure from its ultra-easy policy would increase the difference between deposit and lending rates and increase the net interest income of Japanese banks, the Topix Bank index surged to its highest point since 2008. which has gone up after years of being below the low level. Prices.

However, the US economy's unpredictability might hurt the earnings of Japanese banks. The revenue impetus looks to be waning as the Federal Reserve stopped interest rate rises, loan growth slowed, and banks are paying more to hold deposits. Higher rates last year helped banks' net interest income.

One dollar is equivalent to 146.9100 yen.