Sumitomo Mitsui Financial Group Inc. said net profit was roughly flat in the first quarter and stuck by its forecast for an earnings rebound for the full year, helped by an improvement in its bond portfolio and strong sales of investment trusts.

While Japan's third-largest bank posted a 48 percent rise in recurring profit during the quarter, the lack of a one-time extraordinary gain from last year weighed on net profit.

Japanese banks are expecting strong growth of investment trusts as cash-rich retirees in the world's second-largest economy turn their savings into investments.

SMFG said on Friday that group net profit totalled 119.7 billion yen ($1 billion) in the three months to June, compared with 120.1 billion yen in the same quarter last year.

The lender left unchanged its projection for full-year net profit to rise 22 percent to 540 billion yen. That compares with an average projection of 594 billion yen from 13 analysts polled by Reuters Estimates.

SMFG posted a 36 percent fall in annual net profit the previous year, due to a deterioration in its bond portfolio and problems at a consumer loan affiliate.

SMFG's shares rose 7.5 percent during the April-June quarter, compared with a 3.4 percent gain in the Tokyo market's index of bank stocks.

Ahead of the announcement, shares of SMFG closed down 1.8 percent at 1.10 million yen, compared with a 2.2 percent fall in Tokyo's index of banking stocks.

SMFG posted a 36 percent fall in annual profit in the previous year, due to a deterioration in its bond portfolio and problems at a consumer loan affiliate.

SMFG's shares rose 7.5 percent during the April-June quarter, compared to a 3.4 percent gain in the Tokyo bank index.

Japan Nikkei 225