Sumitomo Mitsui Financial’s profitability to strengthen in next 18 months

The improvement is projected to come from revenue growth.

Moody’s Ratings expects Sumitomo Mitsui Financial Group’s (SMFG) profitability to strengthen over the next 12 to 18 months.

The agency also forecasts the insurer’s its net income to tangible assets ratio to rise above 0.40% from 0.37% in the fiscal year ended March 2025. 

The improvement is projected to come from revenue growth, tighter cost controls, and stronger capital efficiencies.

Although SMFG reported a $910m (¥135b) impairment on its Vietnam business in fiscal 2024, operations there have since stabilised. 

Moody’s noted that overseas loans, which make up around 40% of SMFG’s total lending, continue to pose risks, but it expects the group’s capital ratio to remain above 12%.