SMFG’s Q3 profit jumps 43% as economic activities recover

SMFG's Q3 profit jumps 43% as economic activities recover
FILE PHOTO: People walk past a branch of the SMBC bank of Japan’s Sumitomo Mitsui Financial Group Inc (SMFG) in Tokyo, Japan, May 13, 2016. REUTERS/Thomas Peter

TOKYO : Sumitomo Mitsui Financial Group Inc, Japan’s second-largest bank, on Monday reported a 42.6 per cent increase in third-quarter net profit thanks to a continuing recovery in economic activities as the coronavirus pandemic eased.

SMFG posted a profit of 240.6 billion yen ($1.3 billion) in the October-December period versus 168.7 billion yen, according to Reuters’ calculations based on nine-month cumulative figures disclosed in a stock exchange filing.

SMFG kept its full-year profit forecast through March at 770 billion yen, which compared with the 794.8 billion yen average of 12 analyst estimates compiled by Refinitiv.

A level of loan-loss provisions remained subdued, as the Japanese government continued to normalise the nation’s social and economic activities.

A weak yen, driven by a widening gap between U.S. and Japanese interest rates, inflated profits earned abroad. A brisk lending business in Japan and abroad also helped lift quarterly earnings.

Shares of SMFG have jumped about 20 per cent since the Bank of Japan’s surprise tweak to its bond yield control in late December, a decision that sparked expectations that the central bank could change its interest rate policy soon.

An exit from ultra-easy policy would widen the spread between deposit and lending rates, a boost for Japanese banks’ core earnings after years of being squeezed by rock-bottom rates.

($1 = 129.4600 yen)


Source: Reuters