(Bloomberg) -- Sumitomo Mitsui Financial Group Inc. is forecasting a 3.3% rise in net profit for the current fiscal year due to a fall in bad loan costs and more revenue from its banking business.

Japan’s second-largest lender expects a net profit of 730 billion yen ($5.7 billion) for the year started April, after reporting a 38% increase in annual profit of 706.6 billion yen in the previous year. That compares with an average estimate of 737 billion yen from 15 analysts surveyed by Bloomberg.

Sumitomo Mitsui expects 210 billion yen of credit costs, including provisions for future loan losses, for the year, compared with 274.4 billion yen in the previous year.

For the quarter ended in March, net profit rose 3.7% to 81.8 billion yen, according to Bloomberg calculations. Shares of Sumitomo Mitsui have slipped 2.2% so far this year, compared with an 8.2% drop in the benchmark Nikkei 225 index. 

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