According to Reuters, Sumitomo Mitsui Financial Group Inc reported a higher-than-expected first-quarter net profit due to improved economic conditions.Rival Mizuho Financial Group Inc. was hurt by higher credit charges.
Sumitomo Mitsui, Japan’s second-largest lender, said commercial, industrial, credit card, and consumer loan demand is up.
Easing pandemic restrictions has helped revitalise commercial operations, increasing the need for financial and investment in Japan and abroad.
Net profit grew 24.2% year-over-year to 252.4 billion yen ($1.90 billion), greatly above analysts’ average forecast of 156.33 billion yen.
Mizuho Financial Group Inc., Japan’s third-largest lender by assets, reported a 36% reduction in first-quarter net profit from a year ago.
Mizuho assumed increased loan loss provisions for its $3 billion exposure to auto components supplier Marelli Holdings Co., which entered into a court-led restructuring procedure.
Mizuho observed robust demand for loans overseas as businesses were drawn to reduced borrowing charges compared to capital markets.
Mizuho’s April-June earnings were $1.20 billion, exceeding estimates of 115.25 billion yen.
Sumitomo Mitsui and Mizuho reaffirmed their full-year net profit forecasts at 730 billion yen and 540 billion yen, respectively, citing the Ukraine war.
On Tuesday, Mitsubishi UFJ Financial Group Inc (NYSE: MUFG) will report its quarterly earnings.
According to Teikoku Databank, corporate bankruptcies in Japan fell 1.2% from a year earlier to 3,045 in the first half of this year.
Teikoku forecasts a steady upturn in bankruptcies in the second half as zero-interest loans for pandemic-hit small firms finish and materials costs rise.
$1 = 133,6800 yen
