UPDATE 1-SMFG lifts full-year profit forecast on back of Nikkei's gains
(Recasts, adds details)
* Lifts full-year net profit forecast 750 bln yen from 580 bln yen earlier
* Full year forecast still 5.5 percent below 2012/13 net
* First half net up 53 percent versus year earlier, but Q2 net up 2 pct year-on-year
* Japanese stock rally buoys profits
TOKYO, Nov 12(Reuters) - Sumitomo Mitsui Financial Group Inc , Japan's third-largest lender by assets, raised its profit forecast for the year ending in March, as a rally in Japanese stocks pushed up the value of the bank's equity holdings.
SMFG lifted its full-year net profit forecast to 750 billion yen, up from a previous forecast of 580 billion yen, but still 5.5 percent below its 2012/13 net. The Starmine SmartEstimate for 2013/14 was 740.7 billion yen.
The bank said first-half net profit jumped 53 percent from a year earlier period to 505.7 billion yen, but lost momentum in the second quarter, as the stock market rally also lost some of its steam.
For the July to September quarter, SMFG's net profit rose 2 percent from a year earlier to 217.4 billion yen.
SMFG is the first among Japan's top three banks to post results for the first half of the financial year, with top lender Mitsubishi UFJ Financial Group Inc and second-ranked Mizuho Financial Group Inc scheduled to report on Thursday.
Japanese banks have benefited from a stock market rally that began late last year, as investors anticipated the aggressive economic stimulus policies adopted by Prime Minister Shinzo Abe. The benchmark Nikkei average ended September 63 percent than a year earlier.
Rising stock prices pushed up the value of the banks' massive equity portfolio, which includes client companies' shares and mutual funds. Valuation losses on stock holdings had long been a drag on Japanese banks' earnings.
SMFG posted its results after the Nikkei's close on Tuesday, but its stock closed up 2 percent at 4,865 yen on Tuesday. The stock is up 53 percent so far this year, outperforming a 38 percent rise in the TOPIX index.
SMFG agreed in May to buy 40 percent of Indonesian lender BTPN.
(Reporting by Taiga Uranaka; Editing by Simon Cameron-Moore)