Mizuho Financial Group reported a better-than expected increase in its quarterly profit driven by strong performance in its lending and trading businesses.

Net income at Japan’s third-largest bank rose 18 per cent to 289.3 billion yen(US$ 1.921 billion) for its fiscal first quarter ended in June, accounting for almost 40 per cent of its annual projection of 750 billion yen(US$ 4.981 billion).

An average estimate by four analysts was for net income to be about 188 billion yen(US$ 1.249 billion) , which would be a drop from the same period a year ago.

Mizuho saw robust performance in its client-facing businesses in Japan and overseas, according to a statement from the bank. Its lending profit rose slightly, trading profit surged while gains on stock holdings almost doubled.

Mizuho reported results hours after the Bank of Japan raised its benchmark interest rate, underscoring its determination to normalise policy. With profitability at the country’s lenders expected to be boosted by the move, banking stocks soared the most since December 2022.