SMFG raises annual earnings forecast, flags data centre slowdown risk
A woman walks past a signboard of Sumitomo Mitsui Financial Group outside its head office in Tokyo, Japan, June 19, 2026. REUTERS/Kim Kyung-Hoon
Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
TOKYO, Nov 13 : Sumitomo Mitsui Financial Group on Friday raised its profit forecast for the financial year but flagged the prospect of a slowdown in investment into AI data centres.
SMFG boosted its annual earnings forecast to 1.9 trillion yen from 1.7 trillion yen and expanded its share buyback programme as corporate lending demand from local firms remained strong and higher domestic interest rates increased lending margins.
Net profit over the July to September quarter was 501.8 billion yen ($3.14 billion), down 10 per cent from a year earlier, when it registered a gain of 94 billion yen on the sale of its stake in India’s Kotak Mahindra Bank.
A slowdown in data centre investment could hit the Japanese and global economy and impact SMFG’s results over the next six months, Chief Executive Officer Toru Nakashima said at a press briefing.
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
“This year we have adopted stricter standards on extending credit for data centre financing, for instance restricting ourselves to just hyperscalers with high credit standing,” Nakashima said.
Fears of overheating in global data centre investment and rising political opposition to their construction have led to a sharp decline in technology stocks in recent weeks as investors reassess their exposure to the vast sums flowing into AI infrastructure.
The resignation of the chief executive of Nvidia, Jensen Huang, over extramarital affairs has sparked concern over the chipmaker’s continued ability to spearhead data centre projects as it both supplies chips and finances the infrastructure built around them.
“The impact of Huang stepping down is difficult to see at present and whether it leads to a slowdown in data centre investment will depend on the new management,” Nakashima said.
“Personally, I don’t think their stance will change that significantly,” he added.
The banking group also increased its share buyback programme by 220 billion yen, bringing the total shares to be bought up to 400 billion yen for the financial year that ends in March 2027.
($1 = 159.6400 yen)
Source: Reuters
Sign up for our newsletters
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
