Sumitomo Mitsui Financial Group (NYSE:SMFG), Japan’s second-largest banking group, reported a rise in fiscal third-quarter profit as the end of the country's negative interest rate policy continued to boost lending income.
The Tokyo-based lender joined other global peers in benefiting from a higher-for-longer interest rate environment that has expanded the gap between what banks charge on loans and pay on deposits.
The bank reported net income of $2.99 billion for the quarter ending Dec. 31.
Revenue for the period reached $17.71 billion, with revenue net of interest expense also totaling $17.71 billion, a figure that exceeded average analyst estimates.
Earnings per share were 16 cents.
The results come as Japanese "megabanks" experience a fundamental shift in their domestic business model.
After years of stagnant growth under the Bank of Japan's ultra-loose monetary policy, recent rate hikes have provided a tailwind for margins.
Sumitomo Mitsui has also been aggressive in expanding its footprint in overseas markets and growing its wealth management and payment services to diversify income streams.
For the full fiscal year, the group has previously signaled confidence in its ability to reach record profit levels, supported by robust corporate demand for loans and a wave of mergers and acquisitions activity among Japanese firms.