Bloomberg News

Sumitomo Mitsui First-Half Profit Rises 5.2% to 330 Billion Yen

October 26, 2012

Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest bank by market value, said first- half profit probably climbed 5.2 percent as lower credit costs helped make up for valuation losses from stock holdings.

Net income rose to 330 billion yen ($4.1 billion) for the six months ended Sept. 30 from 313.8 billion yen a year earlier, the Tokyo-based lender said in a preliminary earnings statement today. That exceeded the bank’s forecast for 250 billion yen.

Japanese banks are spending the least amount to cover losses on loans in at least 12 years, having cleaned up bad debts that soared in the wake of an asset bubble two decades ago. At the same time, lenders are losing money from stocks they hold as part of a practice of companies taking stakes in each other to cement ties.

Mizuho Financial Group Inc. (8411), the country’s third-biggest lender by market value, this month booked a 173.7 billion yen valuation loss on its domestic stock holdings last quarter.

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


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