Sumitomo Mitsui projects a net income decrease of 4% to $6.39b in 2019.
Bloomberg reported that Japanese megabanks are bracing for another tough year ahead of weakening net income amidst the weakening economy, rising trade tensions, and the sustained monetary easing from the central bank.
Whilst both Mizuho and MUFG are expecting profit to increase this year, to $4.3b (JPY470b) and $8.22 (JPY900b),respectively, that’s only after they booked large writedowns that hurt results in the previous period. Meanwhile, Sumitomo Mitsui sees net income slipping about 4% to $6.39b (JPY700b).
Net income projections from Sumitomo Mitsui Financial Group (SMFG), Mitsubishi UFJ Financial Group, and Mizuho Financial Group have all missed analysts estimates amidst rising bad loan costs and lesser gains from sales of stock holdings, which used to be its saving grace amidst rock-bottom interest rates.
“Signs of an economic slowdown have been emerging in Japan and overseas,” said Tatsufumi Sakai, CEO of Mizuho Bank, which is seeking to cut a further 30 branches in the next five years after the 100 reductions previously targeted.
Here’s more from Bloomberg.
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