Interim results for 3 megabanks show record high profits this time as well, thanks to Bank of Japan's interest rate hike

The three megabank groups announced their interim financial results for September 2026 on the 13th. Net profits, which indicate final profits, were record highs for all three companies, totaling 3.5305 trillion yen, an increase of 21.1% from the previous year. This was supported by the Bank of Japan's interest rate hike and customers' strong need for funds. On the other hand, the intensifying demand for deposits was a mixed bag.

"I take it very seriously." Tatsu Nakajima, president of Sumitomo Mitsui Financial Group (FG), whose net income exceeded 1 trillion yen for the first time in its interim results, spoke about the company's results at a financial results conference on the 13th. This is the fifth consecutive year of record profits.

The largest company, Mitsubishi UFJFG, had the highest profits for the fourth consecutive year, and Mizuho FG for the third consecutive year. All three companies have raised their full-year net profit forecasts by 100 billion to 300 billion yen from May, with Mitsubishi UFJFG forecasting a record high of 2.8 trillion yen.

The Bank of Japan's interest rate hike will support the company's performance. The Bank of Japan raised its policy interest rate by a total of 0.5 percentage points in June and September, and the lending rates at the three core banks rose accordingly. The difference (interest margin) between deposit interest rates and lending rates, which are the source of banks' profits, has widened.

An increase in lending rates due to interest rate hikes may dampen corporate demand for funds. However, the top executives of the three companies remain bullish, saying, ``Domestic corporate lending is doing very well due to working capital, M&A (mergers and acquisitions), and new capital investment.'' (Masahiro Kihara, president of Mizuho FG).