SuMi TRUST Q1 FY2027: Ordinary profit soars 108.5% on rising rates

Consolidated ordinary revenue rose 20.5% to ¥786,388 million, ordinary profit jumped 108.5% to ¥173,469 million, and net profit attributable to shareholders increased 56.6% to ¥142,223 million, achieving significant top- and bottom-line growth. The main driver was expanded net interest and dividend income amid rising rates: interest and dividend income climbed 23.4% to ¥363,453 million, with loan interest up 15.0% to ¥187,761 million and securities income surging 55.2% to ¥112,146 million. Trading income also soared to ¥30,592 million (from ¥1,962 million), helped by equity sale gains. Interest expenses rose 12.9% to ¥347,280 million due to higher deposit costs, but revenue growth outpaced the increase. Operating expenses edged up 3.2% to ¥143,293 million, reflecting controlled costs. As a result, core business profit (net business profit before credit costs) improved sharply to ¥122,589 million from ¥74,648 million a year earlier.

From the first quarter of FY2027, SuMi TRUST reorganized its segments into five: Personal Banking, Corporate Banking, Asset Management Group (combining the former Investor Business and Asset Management businesses), Real Estate, and Markets. Additionally, SBI Sumishin Net Bank (renamed Docomo SMTB Net Bank on August 3, 2026) was consolidated into Personal Banking. All segments reported higher net business profits or widened surpluses. Net business profit by segment: Personal Banking ¥21,997 million (up from ¥15,866 million), Corporate Banking ¥61,722 million (from ¥54,984 million), Asset Management Group ¥34,920 million (from ¥23,892 million), Real Estate ¥8,201 million (from ¥4,598 million), and Markets ¥16,013 million (from ¥78 million). Personal Banking benefited from rising interest margins and the inclusion of SBI Sumishin Net Bank's equity-method profits. Corporate Banking performed solidly on robust lending and fee income. The new Asset Management Group saw strong fee growth from investment trusts and pension mandates. Real Estate maintained its improvement, while Markets captured gains from interest rate and currency swings, rebounding from a near-breakeven prior year.

As of June 30, 2026, total assets stood at ¥84,227,513 million, up 2.5% from March 2026. Securities rose 18.7% to ¥15,927,950 million, and loans grew 0.9% to ¥33,581,200 million. Deposits increased 6.2% to ¥42,460,215 million, while negotiable certificates of deposit and short-term corporate bonds declined. Net assets totaled ¥3,698,562 million, up 3.0%, and the equity ratio improved slightly to 4.4% (from 4.3%). On May 14, 2026, the board approved a 4-for-1 common stock split, effective August 1, 2026. The dividend forecast for FY2027 is ¥47.50 per share (post-split, ¥23.75 interim and ¥23.75 year-end). Compared to the prior year's ¥185 per share (pre-split), this represents an effective increase after adjusting for the split. No share buyback was disclosed.

While rising interest rates have boosted profits, they also pose risks of securities valuation losses and higher credit costs. Global economic slowdowns, foreign exchange volatility, and regulatory changes could impact operations. Fintech competition remains a medium- to long-term challenge. In Q1, however, credit-related expenses were minimal and non-performing loan disposals were small, indicating a currently sound financial base.

The full-year FY2027 net profit forecast is unchanged at ¥380,000 million, a 19.7% increase from the prior year. First-quarter net profit of ¥142,223 million represents about 37.4% of the full-year target.

Effective April 1, 2026, SuMi TRUST streamlined its reporting segments from six to five, consolidating its asset management operations into the Asset Management Group. The inclusion of SBI Sumishin Net Bank in Personal Banking underscores the strengthening of its digital retail strategy. The online bank, which will operate as Docomo SMTB Net Bank from August 3, 2026, is set to deepen collaboration with NTT Docomo. These moves align with the group's purpose: 'Unlocking the Future through Trust,' aiming to enhance the business portfolio and drive synergies for diversified revenue growth.