November 14, 2018 / 9:15 AM / a month ago

Japan lender SMFG posts 37 percent rise in second-quarter profit, beats bigger rivals

A woman walks past a sign board of Sumitomo Mitsui Banking Corporation, part of Sumitomo Mitsui Financial Group Inc (SMFG) outside its branch in Tokyo, Japan, January 27, 2017. REUTERS/Toru Hanai

TOKYO (Reuters) - Sumitomo Mitsui Financial Group Inc (SMFG) (8316.T) posted on Wednesday a 37 percent jump in second-quarter net profit, helped by gains from its stock holdings and smaller bad loan costs.

The results come as Japan’s major lenders embark on a cost-cutting drive at a time of weak domestic lending while the central bank pursues an interest rate policy aimed at stimulating the economy.

For July-September, SMFG’s profit was 245.56 billion yen ($2.16 billion), compared to 178.67 billion yen in the same period a year earlier, according to Reuters calculations based on the bank’s six-month reported earnings. First-half profit rose 12.5 percent.

For the full-year through March, Japan’s third-largest lender by assets kept its profit forecast at 700 billion yen, down 4.7 percent from the prior year and below the 751.9 billion yen average of 14 analyst estimates compiled by Refinitiv.

Earlier on Wednesday, second-ranked Mizuho Financial Group Inc (8411.T) reported flat growth in quarterly net profit, hurt by weak domestic lending in a prolonged ultra-low interest rate environment.

On Tuesday, market leader Mitsubishi UFJ Financial Group Inc (8306.T) reported a 0.6 percent decline in second-quarter profit. It also raised its full-year view by 100 billion yen, but cited the ongoing Sino-U.S. trade war as well as growing market volatility as risks to second-half performance.

Reporting by Taiga Uranaka; Editing by Christopher Cushing and Muralikumar Anantharaman

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