SMFG H1 profit rises 5.5 pct on bond trading, raises FY outlook

TOKYO Wed Nov 14, 2012 3:07am EST

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TOKYO Nov 14 (Reuters) - Sumitomo Mitsui Financial Group (SMFG), Japan's No.3 bank by assets, posted a 5.5 percent increase in first-half net profit, helped by investment gains from government bond trading.

Net profit rose to 331.0 billion yen ($4.2 billion) in April-September from 313.7 billion yen a year earlier, SMFG said on Wednesday. That's in line with the 330 billion yen guidance provided by the bank last month.

For the full year through March 2013, SMFG raised its net profit forecast to 540 billion yen from 480 billion yen. That compares with an average estimate of 503.1 billion yen in a poll of 16 analysts by Thomson Reuters.

SMFG has enjoyed solid gains from trading of government bonds, which benefited from their safe-haven appeal due to growing global economic uncertainty.

The gains, however, were countered by losses on its equity portfolio as some of the stocks held by SMFG plunged far below their values on the bank's book. Japanese banks traditionally own stakes in their corporate clients.

First-half stock-related losses widened to 132.9 billion yen from 12.1 billion yen a year earlier, SMFG said.

Shares in SMFG have climbed 10.5 percent so far this year, outperforming a 2.5 percent rise in the benchmark Nikkei average . ($1 = 79.4400 Japanese yen) (Reporting by Taiga Uranaka; Editing by Ryan Woo)

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