Sumitomo Mitsui First-Half Profit Rises on Lower Credit Cost
Net income rose to about 480 billion yen ($4.9 billion) for the six months ended Sept. 30 from 331 billion yen a year earlier, the Tokyo-based lender said in a preliminary earnings statement today. That beat its forecast for 290 billion yen.
Prime Minister Shinzo Abe’s fiscal and monetary stimulus policies have fueled a stock-market rally that helped lenders profit from fee businesses such as sales of investment products. Borrowing is picking up as the economy recovers, with loans at Japan’s biggest banks rising the most in four years in August, central bank data show.
Sumitomo Mitsui probably posted about 192 billion yen of profit for the second quarter, down from 213.2 billion yen a year earlier, according to calculations made by subtracting first-quarter profit from the six-month figures in today’s statement.
Credit costs at Sumitomo Mitsui’s lending unit were 80 billion yen lower than it previously forecast as the bank helped corporate borrowers improve management, according to the statement. Company bankruptcies in Japan fell for a 10th straight month in August, Tokyo Shoko Research Ltd. data show.
Lending by major banks increased 1.9 percent in August, the ninth consecutive gain and the biggest since May 2009. Still, loan margins are shrinking as the central bank’s monetary easing depresses interest rates.
The Bank of Japan today refrained from expanding its bond-buying program after business confidence surged and Abe said the economy was strong enough to weather a sales-tax increase. Governor Haruhiko Kuroda’s board maintained its view that the world’s third-largest economy is recovering moderately.
Sumitomo Mitsui maintained its forecast for net income of 580 billion yen for the year ending March.
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