Mizuho Raises Profit Forecast as Japan Banks Beat Estimates
Tokyo-based Mizuho now expects net income to reach a record ¥1.02 trillion in the year ending March 31, up from ¥940 billion projected earlier, it said Thursday. Sumitomo Mitsui's first-quarter profit reached about 29% of its full-year goal, which it left unchanged at ¥1.3 trillion.
Japan's three biggest banks in May predicted another year of record profits, even as the nation's export-driven economy was at risk from US tariff threats. Last week's clinching of a trade deal has been generally taken as a positive in the country as the lenders benefit from higher rates and a resurgent stock market.
It's relatively rare for a Japanese bank to raise its profit target so early in the fiscal year. Mizuho said it did so due to 'solid' first-quarter results and 'expectations for future business upsides.' It now expects smaller bad-loan costs and bigger gains from the sale of stakes in client companies.
Mizuho's net income rose 0.4% from a year earlier in the three months ended June 30 to ¥290.5 billion. Sumitomo Mitsui's profit increased 1.5% to ¥376.9 billion. Both exceeded analysts' estimates.
Underlying businesses showed growth in the quarter, with both banks posting an increase in net interest income, or profits from lending.
Japanese banks' core lending operations have benefited from higher rates following the Bank of Japan's exit from its massive monetary easing policy in March last year. The BOJ stood pat earlier Thursday, while raising its inflation outlook in a sign it may be closer to its next rate hike even as it assesses the impact of President Donald Trump's tariffs.
Shares of banks rose sharply in a broader stock rally earlier this month after the US announced its tariff deal with Japan. Mizuho has gained about 16% this year, while Sumitomo Mitsui is up 2.4%.
Japan's largest lender Mitsubishi UFJ Financial Group Inc. is scheduled to announce results on Monday.
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