Japan's SMFG, Mizuho post slim Q1 profit growth on robust lending demand

CNA

5 days ago

TOKYO :Mitsui Sumitomo Financial Group reported on Thursday a rise of 1.5 per cent in first-quarter net profit, trailed by a rise of 0.4 per cent for Mizuho Financial Group, as lending demand held up despite uncertain global economic conditions.
The return of inflation to Japan has unleashed a wave of loan demand among its companies seeking funding for mergers and acquisitions (M&A) and capital expenditure, which remains strong despite U.S. tariff threats and market volatility.
SMFG, Japan's second-largest banking group, recorded net profit of 376.9 billion yen ($2.53 billion) in the April-June quarter, up from the year-earlier figure of 371.4 billion yen.
Mizuho, Japan's third-largest banking group, had net profit of 290.5 billion yen ($1.95 billion) for the same period, compared to 289.3 billion yen in the corresponding year-ago period.
The results follow record annual profits in the year to the end of March as both banks cashed in on the end of ultra-low interest rates that hamstrung lending margins for years.
Global economic uncertainty triggered by U.S. President Donald Trump's sweeping tariffs in April did not hamper SMFG's lending over the quarter, as net interest income grew to 626.3 billion yen versus 524.2 billion the previous year.
Mizuho upped its profit forecast by 15 per cent to 1.02 trillion yen for this financial year, while SMFG kept its forecast at 1.3 trillion yen, which would both be record highs.
To account for the impact of tariffs, both SMFG and Mizuho had factored into the last quarter's earnings a bottomline hit of about 100 billion yen and 110 billion yen respectively, for the current financial year.
($1=148.7200 yen)