Tokyo – Mitsui Sumitomo Financial Group (8316.T) anticipates a significant surge in its financial performance,forecasting a 10.4% increase in consolidated net profit for the fiscal year ending March 2026.The company announced on May 14 that it expects profits too reach 1.3 trillion yen, marking a potential record high for the third consecutive year.

Navigating Uncertainty

Despite the optimistic outlook, the financial giant acknowledges growing uncertainties in the global economic landscape. Uncertainty about the future is increasing, and some are beginning to negatively impact on businesses, said President Nakajima Tatsushi at the financial statement press conference. Tho, he added, We can maintain the main business’s profit growth trend, which has been in place as last year.

The Impact of U.S. Tariff Measures

One significant factor influencing the forecast is the impact of U.S. tariff measures, which are projected to negatively affect net profit by approximately 100 billion yen. This calculation takes into account several factors:

• Decline in stock prices
• Impact of reduced profits from selling policy stocks
• Effects on the financial needs of client companies
• Decline in long-term interest rates
• A strong yen

President Nakajima emphasized that due to these tariff measures, all of the various indicators are shifting in a negative direction. He noted that considerations such as corporate mergers and acquisitions (M&A) and large-scale capital investments are increasingly being postponed.

Share Buyback Declaration

In a move to bolster investor confidence, Mitsui Sumitomo Financial Group also announced a share buyback program. The company plans to repurchase a maximum of 40 million shares, representing 1.0% of the total number of issued shares, with a total investment of 100 billion yen.

President Nakajima explained that, considering the uncertain habitat and current capital levels, the company will initially acquire up to 100 billion yen worth of shares and will consider implementing the system flexibly during the period.

Analyst Expectations and Previous Year’s Performance

The company’s forecast aligns closely with analyst expectations. According to a consensus forecast of 12 analysts compiled by IBES, the average net profit was projected to be 1.346 trillion yen.

For the fiscal year ending March 2023, Mitsui Sumitomo Financial Group reported a consolidated net profit of 1.178 trillion yen, a 22.3% increase from the previous year. This strong performance was attributed to the Bank of Japan’s interest rate hike, which boosted deposit and lending revenues both domestically and internationally, and also profits from selling shares held in the policy.

Preparing for Potential Recession Risks

In anticipation of potential recession risks, such as those stemming from U.S. tariff measures, the company implemented a 90 billion yen forward-looking allowance.