Sumitomo Mitsui Trust Group (TSE:8309) Non Performing Loan Improvement Challenges Bearish Risk Views

Sumitomo Mitsui Trust Group (TSE:8309) has just posted its Q3 2026 numbers, with total revenue of ¥403.9 billion and basic EPS of ¥135.88, alongside trailing twelve month EPS of ¥422.33 and net income of ¥298.32 billion. Over recent quarters, revenue has moved between ¥324.4 billion in Q2 2025 and ¥422.9 billion in Q3 2025, while quarterly EPS has ranged from ¥44.50 in Q4 2025 to ¥135.88 in the latest period. This is likely to prompt investors to focus on how these earnings translate into the group’s underlying margin profile. See our full analysis for Sumitomo Mitsui Trust Group.With the latest figures on the table, the next step is to see how these results line up with the widely followed narratives around Sumitomo Mitsui Trust Group’s growth, risks, and profitability, and where those stories might need updating. Curious how numbers become stories that shape markets? Explore Community Narratives TSE:8309 Revenue & Expenses Breakdown as at Feb 2026 Loan book edges above ¥34t while credit quality improves Total loans stand at ¥34,045,337 million in Q3 2026, up from ¥33,044,276 million in Q2, while non performing loans sit at ¥76,200 million compared with ¥89,011 million in Q2. What stands out for a bullish read is that a larger loan book is paired with a lower level of non performing loans quarter on quarter, which suggests: Earnings of ¥95,363 million this quarter and trailing twelve month net income of ¥298,318 million are being generated on a loan portfolio that has grown by just over ¥1,000,000 million since Q2 2025, without a rise in reported problem loans. Bulls arguing for durable earnings growth at around 16.6% over the past year can point to this credit profile as supportive of that view, while still monitoring any future shift in non performing loan trends. Margins steady at 19.1% while revenue outlook softens On a trailing twelve month basis, net income of ¥298,318 million on revenue of ¥1,561,183 million implies a net margin of 19.1%, compared with 21.9% a year earlier, while revenue is forecast in the dataset to decline around 6.4% per year over the next three years. Bears focus on this margin slip and the projected revenue decline, and the data gives them some support but also a few checks: Critics highlight the margin move from 21.9% to 19.1% and the revenue decline forecast as indications that future profit growth could be harder to sustain than the recent 16.6% earnings growth rate over the past year. At the same time, trailing twelve month net income has risen from ¥257,635 million in Q4 2025 to ¥298,318 million in Q3 2026, which challenges a more extreme bearish view that profitability is already under severe pressure. P/E around 12x with DCF fair value above price The shares trade on a P/E of about 12x compared with around 13.8x for the JP Banks industry and roughly 22x for peers, and the current price of ¥5,118 sits below a DCF fair value of ¥8,326.80 referenced in the dataset. Supporters of a bullish case lean heavily on this gap, and the current earnings profile provides some backing for that stance: The trailing twelve month EPS of ¥422.33 and the indicated DCF fair value that is roughly 60% above the current share price together indicate that the market is paying less for each yen of earnings than both industry averages and the DCF model suggest. At the same time, the data indicate that earnings are forecast to grow around 6.5% per year while revenue is expected to decline, so the bullish argument that valuation alone tells the whole story is tested by these more cautious top line projections. To see how this valuation picture lines up with a fuller story on growth, risks, and income, have a look at the balanced narrative that pulls these pieces together. 📊 Read the full Sumitomo Mitsui Trust Group Consensus Narrative. Next Steps Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Sumitomo Mitsui Trust Group's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move. See What Else Is Out There While earnings and credit quality look solid, the slip in net margin and the forecast revenue decline suggest the growth story may be losing some momentum. If that slower top line trend gives you pause, shift your focus to stable growth stocks screener (2166 results) and zero in on companies built around steadier revenue and earnings progress. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.