Mitsubishi UFJ Financial Group Inc., the nation's biggest bank, reported Thursday a smaller-than-estimated decline in first-quarter profit as lending income and fees rose, shrugging off an equity-market slowdown.
Net income fell 5.8 percent from a year earlier to ¥240.5 billion in the three months ended June 30, the Tokyo-based company said in a statement. Mizuho Financial Group Inc., the third-biggest lender by market value, said profit decreased 38 percent to ¥154.7 billion.
Mizuho also beat estimates, joining Sumitomo Mitsui Financial Group Inc., which posted results Wednesday. At the same time, profit for all three so-called megabanks is lower than last year, when Prime Minister Shinzo Abe's economic stimulus measures fueled a stock rally that spurred sales of investment products.
"The flagging market dragged down banks' earnings," said Ken Takamiya, a Tokyo-based analyst at Nomura Securities Co. "You can't blame them. Last year was too good."
Profit at Mitsubishi UFJ exceeded the average ¥212.2 billion estimate of six analysts surveyed by Bloomberg. Mizuho's result surpassed the ¥135.4 billion average projection of five analysts.
Mitsubishi UFJ maintained its profit target of ¥950 billion for the year ending March and Mizuho kept its ¥550 billion forecast, the companies said.
Sumitomo Mitsui said Wednesday that net income fell 20 percent to ¥230.8 billion. That exceeded the ¥180 billion average analyst estimate as borrowers' improving financial health allowed the bank to put aside less funds for defaults.
Shares of Mitsubishi UFJ closed 0.9 percent higher before Thursday's results announcement, while Mizuho gained 0.1 percent. All three banks have declined at least 11 percent this year, more than the Nikkei 225 stock average's 4.1 percent drop, with Sumitomo Mitsui tumbling the most.
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