(Adds details, share price performance)
* MUFG Q1 net profit Y255.29 bln vs Y182.92 bln a year earlier
* Keeps FY profit f'cast at Y760 bln vs Y810.9 bln consensus
* Mizuho Q1 net profit Y247.95 bln vs Y183.92 bln a year earlier
* Keeps FY profit f'cast at Y500 bln vs Y538.8 bln consensus
TOKYO, July 31 (Reuters) - Mitsubishi UFJ Financial Group Inc, Japan's top lender by assets, and No. 2 Mizuho Financial Group Inc said their quarterly net profits had risen by more than a third, driven by a rally in Japanese stocks that pushed up the value of their equity portfolios.
MUFG and Mizuho join third-ranked Sumitomo Mitsui Financial Group Inc in reporting higher profits for April-June, after expectations for Prime Minister Shinzo Abe's economic policies propelled Tokyo stocks to an over five-year high in May.
The stock-fuelled gains helped offset declines in profit from bond trading, a key source of income for Japan's banks in recent years. But in the longer term, investors hope the banks' sluggish domestic lending businesses will also get a boost from "Abenomics", which is aimed in part at spurring borrowing and investment to regalvanise the economy.
MUFG's net profit rose 40 percent to 255.29 billion yen ($2.60 billion) in its fiscal first quarter from a year earlier, it said in a statement on Wednesday. It kept its full-year forecast for net profit unchanged at 760 billion yen, below the average estimate of 810.9 billion yen in a poll of 14 analysts by Thomson Reuters.
Net interest income, or profits from lending activities, at MUFG's banking units rose to 316.1 billion yen from 297.6 billion yen a year earlier. Gains from JGB trading at the units fell sharply, to 57.1 billion yen from 213 billion yen a year ago.
A surge in Japanese stock prices this year helped reduce impairment losses on the MUFG's equity holdings. Stock-related losses at its core banking units shrank to 13.1 billion yen in the first quarter, from a 75.7 billion yen loss a year earlier.
During the quarter, the benchmark Nikkei average rose as high as 15,739 on May 23 and ended June at 13,677, up from around 9,000 a year earlier.
Mizuho posted first-quarter net profit of 247.95 billion yen, up 35 percent from the same quarter last year, with large stock-related losses booked a year earlier swinging to profits. Mizuho stuck to its full-year forecast of 500 billion yen in net profit, below the average estimate of 538.8 billion yen in a poll of 16 analysts.
Net interest income from Mizuho's core banking unit also increased from a year earlier, while profits from JGB trading plunged.
On Monday, SMFG said its quarterly net profit more than doubled, with the stock market rally boosting profit at its brokerage unit.
MUFG, which owns California-based Union Bank, is the most aggressive among Japanese banks in overseas expansion.
It said earlier this month it is set to make a tender offer to buy up to 75 percent in Thailand's Bank of Ayudhya Pcl for about 560 billion yen, in what would be the biggest acquisition by a Japanese financial company in that region.
In the year to date, shares of MUFG have risen 30 percent, Mizuho has gained 29 percent and SMFG is up 44 percent, compared with a 32 percent rise in the broad Topix index.
MUFG closed down 1.3 percent and Mizuho dropped 1 percent prior to the earnings announcement on Wednesday, versus a 1.5 percent fall in the Topix. SMFG slipped 0.4 percent. ($1 = 98.0550 Japanese yen) (Reporting by Taiga Uranaka; Editing by Chris Gallagher)