Tokyo, Nov. 13 (Jiji Press)–Combined consolidated net profit at Japan’s five major banking groups is projected to reach 7.06 trillion yen in fiscal 2026, surpassing the 7 trillion-yen mark for the first time, according to their earnings forecasts. All five groups, including Mitsubishi UFJ Financial Group Inc., revised up their full-year earnings estimates, supported by higher lending rates following the Bank of Japan’s gradual interest rate hikes. If achieved, the projected figure would far exceed the previous record combined net profit of 5,835.1 billion yen in fiscal 2025, which ended last March. For April-September, the five groups posted a combined consolidated net profit of 3,954.2 billion yen, up 22.4 pct from a year earlier. Sumitomo Mitsui Financial Group Inc.’s net profit rose 7.5 pct, topping 1 trillion yen in the first fiscal half for the first time. Net profit at Mitsubishi UFJ grew 26.1 pct, while Mizuho Financial Group Inc. saw its net profit rise 29.9 pct. Sumitomo Mitsui Trust Group Inc. logged a net profit jump of 46.0 pct, and Resona Holdings Inc. reported a 21.5 pct increase. The sharp earnings growth reflected wider lending margins following a series of the BOJ’s rate hikes, as well as increased lending driven by strong corporate funding demand. Asset-management-related fee revenue also remained strong amid rising stock prices, further boosting profits. Four of the five groups, excluding Resona Holdings, posted record-high net profits for the first half. Sumitomo Mitsui Financial Group President Toru Nakashima said his company believes that the BOJ is expected to raise interest rates twice by next summer, each by 0.25 percentage point. “I think higher interest rates will make a significant contribution to earnings in fiscal 2027, but their contribution to earnings growth is likely to become smaller in fiscal 2028,” he said. “We want to strengthen our fee-based businesses so that we can continue to increase profits even if interest rates stop rising.” END [Copyright The Jiji Press, Ltd.]
