Sumitomo Mitsui’s market value rises by 5.1%

Recent stock market rally also benefits other Japanese megabanks.

Shares in Sumitomo Mitsui Financial Group Inc. rose the most in over four months on speculation Japan’s stock-market rally improved its earnings in the last quarter. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank, and Mizuho Financial Group, the third-largest lender by market value, also profited from the rally.

Analysts believe the rebound in stocks was fueled by Prime Minister Shinzo Abe’s vow to stimulate the economy. This pledge probably helped banks recover some of the losses they incurred on their equity holdings in the fiscal first half,.

They noted signs that domestic lending is recovering with loans at city banks rising for the first time in three years in December.

One analyst said megabanks look attractive to investors given the recent rally in the stock market. The rally cut impairment losses tied to banks’ shareholdings; increased their sales of mutual funds and helped boost income at their brokerage units.