SMFG raises annual earnings forecast, flags data centre slowdown risk
SMFG•Sumitomo Mitsui Financial Group raised its annual earnings forecast to 1.9 trillion yen from 1.7 trillion yen and expanded its share buyback programme to 400 billion yen. Its CEO warned that a slowdown in data centre investment could affect the Japanese and global economies and the group’s results over the next six months.
1. Forecast and buyback
Sumitomo Mitsui Financial Group raised its profit forecast for the financial year to 1.9 trillion yen from 1.7 trillion yen, citing strong corporate lending demand from local firms and higher domestic interest rates that increased lending margins. It increased its share buyback programme by 220 billion yen, bringing the total planned for the financial year ending in March 2027 to 400 billion yen.
2. Data centre concerns
CEO Toru Nakashima said a slowdown in data centre investment could affect the Japanese and global economies and the group’s results over the next six months. He said SMFG had adopted stricter credit standards for data centre financing, including restricting lending to hyperscalers with high credit standing.
3. Quarterly profit
Net profit for the July-to-September quarter was 501.8 billion yen, down 10% from a year earlier. The prior-year quarter included a 94 billion yen gain from the sale of SMFG’s stake in Kotak Mahindra Bank.
