Latest news with #ToruNakashima
Gulf Today
15-05-2025
- Business
- Gulf Today
Japan's three largest banks make record annual profits
Japan's three largest banking groups posted record annual net profit in the last financial year, benefitting from increased corporate activity due to the end of deflation in Japan. The banks also expect to increase earnings this financial year - forecasting record profits once again - even though the economic outlook has been muddied by US President Donald Trump's sweeping global tariffs. Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group booked net profits of 1.86 trillion yen ($12.76 billion), 1.18 trillion yen and 885 billion yen, respectively, in the 12 months ended March 2025. The banks said the impact of the tariffs and the resulting uncertainty was already being felt, and was accounted for in their forecasts. Japan's largest lender MUFG cited a global economic slowdown, continued market volatility and lost trust in the US dollar among risk factors, but nevertheless forecast a record net profit this financial year of 2 trillion yen. SMFG projected net profit of 1.3 trillion yen and Mizuho 940 billion yen, including downward adjustments of 100 billion yen and 110 billion yen, respectively, to account for continued uncertainty. Mizuho's pipeline of equity capital markets and mergers and acquisitions deals is currently backed up as shifting business conditions make decision making on large-scale investment challenging, Chief Executive Masahiro Kihara told a press briefing in Tokyo. But the banks expect Japanese companies to keep investing and each has extensive overseas operations across different financial services including retail and investment banking, asset management and wealth management. 'We have operations across Japan, Asia and the Americas with varied sources of profit, so we are strong in any business environment,' MUFG Chief Executive Hironori Kamezawa told a press briefing. MUFG owns 24 per cent of US bank Morgan Stanley, a business alliance that began in 2008. The holding contributed more than a quarter of MUFG's annual net profit. Asia has also been a growth market for the banks. Most recently, SMFG announced last week its acquisition of a 20 per cent stake in Indian private lender Yes Bank. But the tariff uncertainty means SMFG too is holding off on further acquisitions, CEO Toru Nakashima said on Wednesday. Japan's banks have been among the largest beneficiaries of the end of deflation in Japan, which has encouraged Japanese companies to borrow to invest at home and abroad and carry out mergers and acquisitions. The return of inflation also pushed the Bank of Japan to end its policy of negative interest rates in March 2024 and hike rates twice thereafter, raising lending margins for Japanese banks. PayPay CEO Ichiro Nakayama, SoftBank Corp CEO Junichi Miyakawa, Sumitomo Mitsui Financial Group CEO Toru Nakashima and Sumitomo Mitsui Card President Yukihiko Onishi pose attended a press conference in Tokyo, Japan, on Thursday. Meanwhile talk of big fiscal spending and a subsequent spike in super-long yields are raising questions over just how quickly the Bank of Japan can taper its bond purchases, adding to the challenges it faces in removing remnants of its massive monetary stimulus.
15-05-2025
- Business
S'tomo Mitsui, SoftBank to Form Payment Service Alliance
News from Japan Economy Technology May 15, 2025 21:36 (JST) Tokyo, May 15 (Jiji Press)--Japan's Sumitomo Mitsui Card Co. and mobile phone carrier SoftBank Corp. said Thursday that they have agreed to form a comprehensive partnership in the digital financial service field. Under the deal, the PayPay mobile payment service of a SoftBank affiliate will be available for transactions, including payment and loading, on the Olive general financial app of Sumitomo Mitsui Banking Corp., which, along with Sumitomo Mitsui Card, is under the wing of Sumitomo Mitsui Financial Group Inc. The partnership between the two payment service giants will allow customers to exchange V points, earned mainly through credit card use on Olive, and PayPay reward points, merging the two sides' huge customer bases. The deal is a major development in intensifying competition to attract customers to so-called economic blocs of affiliated services with reward point programs. "We'll realize a grand coalition that would lead our country's shift to a cashless (society)," Sumitomo Mitsui Financial Group President Toru Nakashima said. [Copyright The Jiji Press, Ltd.] Jiji Press
Japan Times
15-05-2025
- Business
- Japan Times
Sumitomo Mitsui braces for tariff fallout with more buffers
Sumitomo Mitsui Financial Group is shoring its buffers to prepare for U.S. President Donald Trump's trade war, even as it forecast another year of record profit. Japan's second-largest lender expects net income to climb about 10% to ¥1.3 trillion ($8.8 billion) in the year that started in April, it said on Wednesday. That is slightly less than the ¥1.37 trillion average estimate of analysts as the company said the U.S. tariff measures may have a ¥100 billion impact on profit. Tokyo-based Sumitomo Mitsui is the first of Japan's biggest banks to give profit guidance as earnings drivers come under strain from Trump's tariffs. Lending income has benefited from the Bank of Japan's interest-rate hikes — a campaign that is now in doubt as recession fears mount. Net income for the fourth quarter tumbled 75% to ¥42 billion as the bank booked losses on bonds and securities trading and set aside ¥90 billion in "forward-looking provisions' for "recession risks initiated by U.S. tariffs' and high interest rates, Sumitomo Mitsui said in a presentation. It still beat its ¥1.16 trillion profit goal for the year, posting a record ¥1.18 trillion. The bank's clients are becoming cautious about making deals and investments, CEO Toru Nakashima said at a briefing in Tokyo. Companies in the U.S. have paused mergers and equity underwriting transactions, he added. For Sumitomo Mitsui, too, Nakashima said now is not the time to aggressively pursue more acquisitions. His hesitation comes after a flurry of dealmaking to expand globally. The company's main banking unit last week agreed to buy a 20% stake in India's Yes Bank for about 135 billion rupees ($1.6 billion), as it seeks opportunities in faster-growing markets. It also clinched a deal to expand in private credit in the U.S. Sumitomo Mitsui unveiled plans to buy back up to 1% of its shares for as much as ¥100 billion and cancel them. It will consider further repurchases this fiscal year, depending on performance and capital conditions. Bank stocks are among the worst performers in Japan since Trump announced his so-called reciprocal tariffs on April 2. Shares of Sumitomo Mitsui have slid about 12% from an 18-year high in March. The Bank of Japan earlier this month slashed its growth forecasts, citing "extremely high' uncertainties. Japan's economy probably shrank in the first quarter, even before the tariffs started hitting the country in earnest. Sumitomo Mitsui said bad-loan costs are likely to reach ¥300 billion this fiscal year, down from ¥344.5 billion in the previous year.
15-05-2025
- Business
Sumitomo Mitsui Financial's Net Profit Tops 1 T. Yen
News from Japan Economy May 15, 2025 11:26 (JST) Tokyo, May 15 (Jiji Press)--Sumitomo Mitsui Financial Group Inc. said Wednesday that its consolidated net profit rose 22.3 pct to 1,177.9 billion yen in the year ended last March from the previous year, topping 1 trillion yen for the first time in its history. The Japanese banking group saw its lending margins improve because of higher interest rates. Its bottom line was also boosted by gains on the sale of cross-shareholdings. Sumitomo Mitsui became the second Japanese banking group to post a full-year net profit of over 1 trillion yen, following Mitsubishi UFJ Financial Group Inc. For the ending in March 2026, Sumitomo Mitsui expects its net profit to increase to 1.3 trillion yen, still about 100 billion lower than its forecast as of March. The company lowered the forecast because of the possible impact of U.S. President Donald Trump's high tariffs on financial markets and corporate earnings. Sumitomo Mitsui has already started to see some impact on its business, Group CEO Toru Nakashima said at a press conference. [Copyright The Jiji Press, Ltd.] Jiji Press
CNA
14-05-2025
- Business
- CNA
Japan's SMFG posts record annual profit, forecasts better year ahead despite tariff hit
TOKYO :Japan's second-largest banking group Sumitomo Mitsui Financial Group hit a record 1.18 trillion yen ($8.1 billion) profit for the financial year ended March 2025 and sees more growth ahead even accounting for the hit to its business from tariff uncertainty. SMFG generated net income of 42 billion yen in the January-March quarter compared to 170 billion yen for the same period a year before - a 75 per cent slump - but forecast a record 1.3 trillion yen in net profit for the coming financial year. The end of deflation has encouraged borrowing by Japanese corporations for overseas expansion, mergers and acquisitions and capital investments amid a shrinking workforce in Japan. The group has also benefitted from the Bank of Japan endingits policy of negative interest rates in March 2024, which raised margins. Despite the bumper results, SMFG's prospects have suffered from the uncertainty following U.S. President Donald Trump's announcement of sweeping tariffs at the start of April. Compared to its forecasts from March, SMFG has factored in a hit to its bottom line of around 100 billion yen for the current financial year as a result of the tariffs, chief executive Toru Nakashima told a press conference in Tokyo. Corporate activities such as M&A and capital raising that might have gone ahead from the summer onwards are being delayed and decision making slowed as customers wait to see how the tariff situation develops, Nakashima said. But the base trend of growth investment and higher wages as Japan emerges from deflation looks set to continue, he added. Nevertheless SMFG revised down its Japanese GDP growth forecast for this financial year to 0.4 per cent from 1.1 per cent and said it expects no further interest rate hikes. Last week SMFG announced it would acquire 20 per cent of Indian private lender Yes Bank , marking the latest example of an overseas acquisition by a Japanese financial institutions seeking growth beyond their shrinking home market. But the tariff uncertainty means SMFG too is holding off on further acquisitions, Nakashima said. "Now is not the time to do more inorganic acquisitions, while things are still this uncertain we don't have to force it," Nakashima said. SMFG is the first of Japan's three "megabanks" to announce earnings, with the country's largest lender Mitsubishi UFJ Financial Group and number three player Mizuho Financial Group due to report on Thursday.
