Net interest income is expected to rise by a further JPY100bln(US$ 690 mln).

Sumitomo Mitsui Financial Group’s profits rose to a record high in the first quarter of FY2024, doubling from last year’s numbers, its latest financial report showed.

Profit attributable to owners of the parent rose 123.3% year-on-year (YoY) to JPY371.4bln(US$ 2.564 bln) for Q1 FY3/2024, driven by growth from its wholesale business unit and retail business unit in Japan.

The Japanese megabank has already achieved 35% of its target profit for FY3/2025 with just the April-June 2024 period.

Consolidated gross profit rose 154.5% to almost JPY1.03bln(US$ 7.11 mln) on the back of increase of income on loan in domestic and overseas; good performance of its wealth management business, payment business, and consumer finance; and a rise in fee income from its domestic wholesale business.

Wealth management and loan-related fees from Sumitomo Mitsui Banking Corporation (SMBC) and SMBC Nikko lifted fee income to JPY127.5bln(US$ 880,3 mln), 16.9% YoY higher.

Net interest income rose by 78.3% YoY to JPY318.4bln(US$ 2.198 bln) as loan volume rose and margins improved, offset by higher deposit costs resulting from rising interest rates. Overseas, income from loans and deposits increased due to improved margins despite rising deposit costs, SMFG said.

SMFG expects its net interest income to rise by JPY100bln(US$ 690 mln) due to the Bank of Japan’s (BOJ) recent policy changes in March and July.

Loan demand rose 5% YoY in Q1 FY3/2024, with SMFG eyeing improvements in its loan spreads on top of a base rate increase.

SMFG also wrote that it may increase the deposit interest rate based on market trends.