Japan Bank Sector: SMTG (8309) 1Q earnings: Strong progress toward profit guidance in key segments

Research evidence excerpt

Japan Bank Sector: SMTG (8309) 1Q earnings: Strong progress toward profit guidance in key segments

J P M O R G A N Asia Pacific Equity Research

31 July 2026

Japan Bank Sector: SMTG (8309)

1Q earnings

Strong progress toward profit guidance in key

segments

Somewhat positive: Sumitomo Mitsui Trust Group’s 1Q FY2026 net profit rose Japan Equity Research

57% YoY to ¥142.2 billion, above our estimate of ¥117.0 billion. Management left

Banks

FY2026 profit guidance unchanged and announced no additional shareholder

returns, in line with our expectations. However, segment net business profit made Takahiro Yano, CFA AC

a solid start against full-year guidance: 28% for the Wealth Management Business, (81-3) 6736-8616

takahiro.yano@jpmorgan.com

33% for the Corporate Business, and 29% for the Asset Management Group. We

Kohichi Takano

expect the company to raise profit guidance at 1H results, as the June rate hike by (81-3) 6736 8621

the BOJ should also work in its favor. kohichi.takano@jpmorgan.com

JPMorgan Securities Japan Co., Ltd.

• Growth in interest-related earnings and fee income outpaced expense

growth: Figure 1 summarizes 1Q results. Net fees and commissions was in line

with our estimates, as were G&A expenses. Net gains on stocks fell short of our

expectations, but effective interest-related earnings and other profit beat our

estimates. We think that other profit comes mainly from the global markets

business, and that it benefited from further improvements to the securities

portfolio (unwinding and switching of low-yielding bonds) made in 4Q

FY2025. Effective interest-related earnings rose by 13% YoY, net fees and

commissions by 19%, and G&A expenses by 11%. Management explained that

higher yen interest rates drove the growth in effective interest related earnings.