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Investing.com -- Sumitomo Mitsui Financial Group (NYSE:SMFG), Japan’s second-largest lender by assets, reported a 54% surge in net profit for the third quarter on Wednesday.
The increase was driven by a rise in interest income, with net profit reaching 410.8 billion yen ($2.65 billion) in the October-December period, up from 266.4 billion yen in the same period a year earlier.
This year has been particularly fruitful for SMFG, with the bank experiencing an increase in interest income. This is largely due to the Bank of Japan’s (BOJ) interest rate hikes and a surge in corporate activity in Japan following the end of deflation.
The BOJ’s two interest rate increases in March and July of last year are expected to contribute 70 billion yen to SMFG’s bottom line in the current financial year, according to the bank.
Additionally, the recent rate hike, which took place last week, raising the interest rate to 0.5% from 0.25%, is projected to generate an extra 100 billion yen in net interest income annually, SMFG said.
Despite the strong third-quarter results, SMFG kept its profit forecast for the year through March 2025 steady at 1.16 trillion yen.
The bank had previously raised this forecast from 1.06 trillion yen in November of last year.
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