SMFG April-Dec profit up three-fold, keeps forecast

TOKYO Feb 8 (Reuters) - Sumitomo Mitsui Financial Group (8316.T), Japan's third-largest bank by assets, posted a three-fold rise in April-December profit, aided by an improvement in its stock portfolio and a decline in bad loans, and stuck to its full-year forecast.

Sumitomo Mitsui, which last year bought Citigroup's (C.N) Japanese brokerage, said on Monday that nine-month group net profit was 247.8 billion yen ($2.8 billion) versus 83.4 billion yen in the year-ago period.

Sumitomo Mitsui stuck to its forecast for a full-year net profit of 220 billion yen. That compared with the average 230 billion yen estimate of 10 analysts, according to Thomson Reuters I/B/E/S.

The StarMine SmartEstimate, which predicts earnings by putting more weight on recent forecasts from top-rated analysts, has the bank posting a profit of 235.5 billion yen.

Sumitomo Mitsui and rivals Mitsubishi UFJ Financial Group (8306.T) and Mizuho Financial Group (8411.T) have been on a slow path to recovery after losing a combined 1.2 trillion yen the previous financial year, when they were hit by surging bad loans and plummeting share prices due to the global financial crisis.

Unlike their Western rivals, Japanese banks take stakes in their corporate clients, making them sensitive to swings in stock prices. But the signs of improvement do not equal a full-fledged recovery, as a weak economy at home means little demand for loans.

Shares of Sumitomo Mitsui have gained 4.9 percent so far this year, after losing about 30 percent in 2009.

So far this year, Tokyo's index of bank stocks .IBNKS.T is up 1.5 percent. (Reporting by David Dolan; Editing by Muralikumar Anantharaman)