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On Aug 15, Zacks Investment Research upgraded Sumitomo Mitsui Financial Group Inc. (SMFG - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Sumitomo Mitsui Financial has been witnessing rising earnings estimates on the back of strong fiscal first-quarter 2013 results (ended Jun 30). Moreover, this well-known foreign bank has recorded a year-to-date return of 21.6%.

Sumitomo Mitsui Financial reported its fiscal first-quarter results on Jul 29 with net income at ¥288.3 billion ($2.9 billion), more than double as compared with the year-ago earnings. Robust results for the reported quarter were primarily aided by elevated net interest income, higher fees and commissions and gains on stocks.

Net interest income increased 20.8% from the year-ago period to ¥399.7 billion ($4.0 billion). Moreover, fees and commissions rose 31.3% year over year to ¥250.3 billion ($2.5 billion).

However, on the downside, general and administrative expenses surged 6.4% year over year to ¥391.4 billion ($3.95 billion). This reflects undisciplined expense management.

Following fiscal first-quarter 2013 results, over the last 30 days, the Zacks Consensus Estimate for fiscal 2013 increased 17.9% to 99 cents per share. For fiscal 2014, the Zacks Consensus Estimate advanced 7.9% to 96 cents per share over the same time period.

Other Stocks to Consider

Besides Sumitomo Mitsui Financial, other foreign banks that are worth considering include BBVA Banco Franc (BFR - Snapshot Report) with a Zacks Rank #1, while Barclays PLC (BCS - Analyst Report) and Mitsubishi UFJ Financial Group, Inc. (MTU - Analyst Report) carry a Zacks Rank #2 (Buy).

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