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Saturday, Nov. 15, 2008

SMFG's group net profit plunges 51%


Staff writer

Sumitomo Mitsui Financial Group Inc. said Friday its consolidated net profit plunged 51.2 percent from a year ago to ¥83.3 billion in the April-September half amid the ongoing global financial turmoil.

Meanwhile, its banking unit, Sumitomo Mitsui Banking Corp., posted net profit of ¥80.4 billion for the first six months of fiscal 2008, up 26 percent from a year earlier.

On a consolidated basis, credit costs soared 111 percent to ¥302.1 billion. Subprime-related losses totaled ¥4.6 billion in the six months to September, SMFG said.

But stock-related losses shrank 58.2 percent to ¥19.8 billion, it said.

Net operating profit fell some 17.9 percent to ¥410 billion, according to SMFG.

Sumitomo's capital adequacy ratio fell to 10.25 percent at the end of September, down from 10.56 percent at the end of March.

For the full business year to March, the group forecasts net profit of ¥180 billion, down 61 percent from the last business year.

Teisuke Kitayama, the group's president, said the first half saw credit costs climb as the domestic macroeconomic situation worsened and Lehman Brothers Holdings Inc. collapsed.

In addition, the president responded to criticism of banks' reluctance to lend money to client corporations.

"Although the situation is tough, we as a bank would like to cope with it by managing to support (companies) so that such criticism would not come up here and there," Kitayama told reporters.

Aozora falls into red

Kyodo News

Aozora Bank said it will fall into the red in its group net balance for the current business year through next March on losses it has suffered amid the global financial turmoil.

The bank, which had earlier forecast ¥15 billion in consolidated net profit, revised the estimate and now projects a ¥27 billion loss for business 2008.

Aozora Bank said it has incurred heavy losses on investments in securitized products, as well as in some U.S. firms, including Lehman Brothers Holdings Inc., which went bankrupt in September.

Its president and 12 other board members had their pay cut by 30 percent starting in October.



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