TOKYO (Reuters) -Japan’s second-largest banking group Sumitomo Mitsui Financial Group posted a 75% slump in fourth-quarter net profit but still hit a record 1.18 trillion yen profit for the year on strong demand for loans among Japanese corporations.
SMFG generated net income of 42 billion yen ($285.8 million) in the January-March quarter compared to 170 billion yen for the same period a year prior.
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 ending its policy of negative interest rates in March 2024, which raised SMFG’s margins.
SMFG forecast a record 1.3 trillion yen in net profit for the coming financial year.
Despite the bumper results, SMFG’s prospects have suffered from the uncertainty following the announcement of tariffs by U.S. President Donald Trump 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.
($1 = 146.9500 yen)
(Reporting by Anton Bridge, Editing by Louise Heavens and Muralikumar Anantharaman)
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