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The combined net profits of Japan’s five largest banking groups in the April-September period soared 77.4% from a year earlier, the first rise in three years, to hit a record high of ¥1,815 billion, according to their latest earnings reports.

The semiannual profit figure exceeded the previous record of ¥1,696.4 billion, set in 2018.

In the first half of fiscal 2021, all of the five groups, including Mitsubishi UFJ Financial Group Inc., posted profit increases, with the impact of the COVID-19 pandemic on their sales activities receding.

They reduced credit-related costs for possible defaults by borrowers, in response to a drop in the number of bankruptcies, which was thanks to funding support by the government and financial institutions.

Mitsubishi UFJ enjoyed its highest-ever net profit, partly thanks to the contribution of affiliated U.S. financial giant Morgan Stanley.

“It was a solid earnings report,” Mitsubishi UFJ President Hironori Kamezawa said.

Mitsubishi UFJ, Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. all revised up their net profit forecasts for the full year through March 2022.

Mizuho CEO Tatsufumi Sakai, however, said, “There still are uncertainties about the future, such as concerns over a resurgence of COVID-19 infections and sluggishness in economic recovery.”

Mitsubishi UFJ, Sumitomo Mitsui and Sumitomo Mitsui Trust Holdings Inc. posted a reversal of reserves for possible loan losses due to improvements in the business conditions of borrower customers.

Credit expenses fell at Mizuho and Resona Holdings Inc.

The five banking group’s combined net business profits, or profits from core banking operations, fell 2.4%.

While market-related revenues, such as those from bond trading, were stagnant, businesses with clients, including asset management targeting individuals and businesses with corporate clients, were strong.

“The quantity and quality of our operations have almost returned to the levels before the pandemic,” Sumitomo Mitsui President Jun Ota said.

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