The company, known as SMFG, one of Japan's three 'megabanks,' reported that net profit for the nine months fell to 83.4 billion yen (S$1.4 billion) from 319.5 billion yen during the same period last year.

Revenue fell 13 percent to 2.8 trillion yen, while operating profit declined 47 per cent to 276.4 billion yen.

Higher interest income and better bond returns were overshadowed by heavy credit costs, which surged almost 150 per cent to 399.9 billion yen.

The company blamed 'the earnings deterioration of borrowers and loss provisions for claims on certain overseas financial institutions against a backdrop of financial market turmoil and global economic slowdown.'

Slumping equity markets also hit hard, with losses on its stock holdings totaling 106.1 billion yen.

For the full fiscal year through March, the company left its forecasts unchanged. It expects net profit to fall 61 per cent to 180 billion yen on revenue of 3.7 trillion yen.

Shares of SMFG rose 1.2 per cent to 3,360 yen on Wednesday on the Tokyo Stock Exchange. Its earnings were released after market closed.

The company's earnings are based on Japanese accounting standards. -- AP