TOKYO, July 29 (Reuters) – Japan’s Sumitomo Mitsui Financial Group Inc ( 8316.T ) reported a bigger-than-expected rise in first-quarter net profit on improving economic conditions, while that higher credit costs weighed on rival Mizuho Financial Group Inc. (8411.T).
Sumitomo Mitsui, Japan’s second-largest lender, said loan demand is returning in commercial and industrial loans, as well as the bank’s credit card and consumer finance business units.
The easing of the pandemic has helped revive business activities, increasing the need for funds and investments in Japan and abroad, he said.
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Net profit in the April-June period rose 24.2% from a year ago to 252.4 billion yen ($1.9 billion), far beating the 156.33 billion yen average estimate of two analysts polled by Refinitive.
In contrast, Mizuho Financial Group Inc ( 8411.T ), Japan’s third-largest lender by assets, posted a 36 percent drop in first-quarter net profit from a year ago, when earnings were boosted by fiscal Read more
Mizuho also took additional loan loss provisions for its $3 billion exposure to auto parts supplier Marelli Holdings Co, which entered a court-led restructuring process after a voluntary debt workout failed. get full support.
But Mizuho said it saw strong demand for overseas loans as companies were drawn to lower borrowing costs relative to raising funds in the capital markets.
Mizuho’s profit for the April-June quarter was 159.29 billion yen ($1.2 billion), beating the average estimate of 115.25 billion yen.
Both Sumitomo Mitsui and Mizuho kept their full-year net profit forecasts at 730 billion yen and 540 billion yen, respectively, citing several uncertainties, including the war in Ukraine.
Japan’s biggest lender Mitsubishi UFJ Financial Group Inc ( 8306.T ) will report quarterly results on Tuesday.
Business bankruptcies in Japan have remained at record lows, falling 1.2% from a year earlier to 3,045 cases in the first half of this calendar year, according to research firm Teikoku Databank.
But with the end of interest-free loans for small businesses hit by the pandemic and rising material costs, Teikoku now predicts a gradual pick-up in bankruptcies in the second half.
($1=132.6800 yen)
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Reporting by Makiko Yamazaki and Rocky Swift; Editing by Jacqueline Wong, Clarence Fernandez and David Evans
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