3 Japan Megabanks' Net Profits Seen Highest since Lehman Shock

Tokyo, Oct. 21 (Jiji Press)--Japan's three megabank groups are expected to have logged highest combined net profits since the 2008 Lehman shock in April-September, thanks to better appraisal value of their stockholdings and growth in investment trust sales fees, market sources said. According to the sources, the combined net profits in the first half of fiscal 2013 at Mitsubishi UFJ Financial Group Inc. <8306>, Sumitomo Mitsui Financial Group Inc. <8316> and Mizuho Financial Group Inc. <8411> are expected to have reached some 1.3 trillion yen, up 60 pct from a year before and above the post-Lehman record of 1,264.3 billion yen set in April-September 2011. Also behind their robust performances are falling costs in lending operations amid economic recovery in Japan and increasing revenue in operations abroad, according to the sources. The three banking groups are set to release their earnings reports in mid-November. Mitsubishi UFJ Financial is expected to report a net profit of 470 billion to 480 billion yen, up from 360 billion yen it has projected, thanks chiefly to growth in commission fees from sales of investment trusts and decreasing costs in lending. The company also enjoyed solid revenue abroad on the back of business expansion in North America and Asia, according to the sources. On Oct. 4, Sumitomo Mitsui revised up its net profit estimate to 480 billion yen from the previously forecast 290 billion yen. Mizuho Financial's net profit is expected to have increased to some 370 billion to 390 billion yen from its estimate of 250 billion yen. In core banking business profit, however, only Sumitomo Mitsui is estimated to have logged growth thanks to a rise in commission fees and an increase in overseas loans. Mitsubishi UFJ Financial's core banking business profit did not reach its year-earlier level as profit from bond transactions surged in April-September last year. Mizuho Financial also failed to post growth in core banking business profit due to smaller gains from bond transactions, according to the sources. END