| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥499.6B | ¥340.7B | +23.0% |
| Operating Income | ¥478.5B | ¥321.7B | +48.7% |
| Ordinary Income | ¥1,156.7B | ¥828.0B | +39.6% |
| Net Income | ¥475.1B | ¥320.3B | +48.3% |
| ROE | 4.4% | 3.3% | - |
For the fiscal year ended March 2026, Revenue (operating revenue) was ¥499.6B (YoY +¥158.9B +46.6%), Operating Income was ¥478.5B (YoY +¥156.8B +48.7%), Ordinary Income was ¥1,156.7B (YoY +¥328.7B +39.6%), and Net Income attributable to owners of the parent was ¥475.1B (YoY +¥154.8B +48.3%). These results reflect a substantial profit increase driven by top-line expansion and improved cost efficiency. Expansion of interest income and uplift in fee income drove revenue growth, while expense control was effective, yielding an exceptionally efficient operating margin of 95.8%.
[Revenue] Operating revenue increased significantly to ¥499.6B (+46.6%). Interest income rose, with interest income of ¥2,907.1B (↑¥66.2B) and growth across core lending operations (interest ¥1,671.8B, ↑¥35.9B) and securities investments (dividends & interest ¥1,041.3B, ↑¥21.9B). Fee income was resilient at ¥674.8B (↑¥27.4B +4.2%), and market income ¥6.9B (↑¥2.3B) also contributed, indicating diversification of revenue sources. Loan balance was ¥13,997.66B (↑6.0%), and securities balance was ¥3,848.22B (↓8.7%), with loan volume growth being the main driver of interest income.
[Profitability] Ordinary Income reached ¥1,156.7B (↑39.6%), outpacing revenue growth in margin expansion. Increases in operating expenses of ¥327.6B (↑¥50.3B +18.1%) were absorbed, resulting in Operating Income of ¥478.5B (↑48.7%) as revenue gains far exceeded expense increases. General and administrative expenses remained at ¥1,167.7B (↑¥67.9B +6.2%), and the expense ratio to ordinary revenue stayed around 26%, maintaining industry-leading efficiency. Extraordinary items were modest net +¥23.8B (extraordinary gains ¥31.8B, extraordinary losses ¥8.0B), with the main driver of profit growth being improved core operating profitability. Ordinary Income translated almost directly to profit before tax of ¥1,180.5B, and after tax expense of ¥338.8B (effective tax rate 28.7%), Net Income was ¥475.1B (↑48.3%). Conclusion: revenue and profit both increased.
The reported segment is solely Banking; non-banking activities are immaterial and not disclosed separately. Ordinary revenue by service: Lending Operations ¥1,671.8B (prior ¥1,312.4B, +27.4%), Securities Investment Operations ¥1,377.6B (prior ¥1,098.6B, +25.4%), Other ¥1,383.8B (prior ¥1,190.6B, +16.2%), Total ¥4,433.1B (↑23.1%). Lending and securities investment functioned as two high-growth pillars, and Other also posted double-digit growth, delivering revenue expansion across the board.
[Profitability] Operating margin 95.8% (prior 94.4%), Net margin 95.1% (prior 94.0%) remain at extremely high levels. ROE 4.4% (prior 3.3%, +1.1pt) is improving, but capital efficiency remains low given banking industry characteristics. ROA (on ordinary income basis) 0.5% (prior 0.3%) modestly improved. [Cash Quality] Operating Cash Flow (OCF) was significantly negative at -¥1,119.49B, but banking OCF is affected by balance sheet management of loans and deposits and does not immediately indicate revenue quality. Free Cash Flow was -¥730.24B, with capital expenditures of ¥13.51B and depreciation of ¥8.49B, indicating limited base investment. [Investment Efficiency] Total asset turnover is nearly zero and of limited comparability given banking industry traits. EPS ¥89.03 (prior ¥58.38, +52.5%), BPS ¥1,147.64 (prior ¥981.17, +17.0%) show per-share value has steadily increased. [Financial Soundness] Equity Ratio 5.1% (prior 4.5%, +0.6pt) remains low but improving. D/E ratio 18.66x (prior 21.16x) reflects high leverage, characteristic of deposit-funded bank funding structures and not directly comparable to non-financial corporates. Loan-to-deposit ratio 78.5% (loans ¥13,997.66B / deposits ¥17,831.76B) is within a healthy range, suggesting relative containment of liquidity risk.
OCF was -¥1,119.49B (prior -¥981.41B, -14.1%), a large negative outflow driven by structural movements inherent to banking asset/liability management; the subtotal (before working capital changes) was -¥1,095.03B and tax payments of ¥24.46B are reflected. Investing Cash Flow turned to a large positive at ¥389.26B (prior -¥195.56B) as securities sales and redemptions generated funds. Capital expenditure was contained at ¥13.51B, slightly above depreciation of ¥8.49B, indicating maintenance and limited refresh investment. Financing Cash Flow was -¥49.88B (prior -¥32.97B), with shareholder returns mainly comprising ¥30.00B share buybacks and ¥20.21B dividends paid. Free Cash Flow was a large negative -¥730.24B, but when viewed through the lens of banking OCF structural traits, this reflects portfolio rebalancing and loan growth-driven cash flow changes. Cash and cash equivalents at period-end were ¥2,431.44B (net decrease during period ¥-780.12B), but deposit base stability and liquidity buffers were maintained.
Ordinary Income of ¥1,156.7B rose to profit before tax of ¥1,180.5B, a net uplift of ¥23.8B, driven by extraordinary gains of ¥31.8B less extraordinary losses of ¥8.0B (including impairment losses ¥4.7B). Non-operating income saw a significant increase in other ordinary income to ¥13.69B (prior ¥4.22B), reflecting improved market-related income. Fee income of ¥674.8B serves as a stable non-interest revenue source, mitigating interest dependence. Comprehensive income ¥1,610.5B substantially exceeded Net Income ¥475.1B; other comprehensive income was +¥768.8B (securities valuation difference ¥78.7B, deferred hedge gains/losses ¥557.2B, retirement benefit adjustments ¥132.9B) contributing positively. This reflects market improvement and hedge accounting effects, boosting net assets though with limited direct impact on period profit. OCF -¥1,119.49B versus Net Income ¥475.1B yields OCF/Net Income -23.6x, a substantial divergence explained by bank asset/liability operations and not necessarily indicative of accounting manipulation or accrual distortions. Overall, profit growth was primarily driven by higher interest income and cost efficiency, and earnings quality is assessed as broadly sound.
Full Year guidance is Ordinary Income ¥1,390.0B (YoY +20.1%), EPS ¥101.21 (YoY +13.7%), and dividend ¥20.0. Current period results of Ordinary Income ¥1,156.7B and EPS ¥89.03 fall short of the full-year plan to date, but the plan is understood to assume further contributions in H2. The dividend guidance of ¥20.0 is below the current fiscal year actual dividend of ¥28.0 (interim ¥12.0 + year-end ¥16.0), implying a conservative stance prioritizing capital accumulation and preparation for interest/market volatility.
Annual dividend was ¥28.0 (interim ¥12.0, year-end ¥16.0), with a payout ratio of 27.4% (based on Net Income attributable to owners of the parent ¥475.1B), a healthy level. Share buybacks of ¥30.00B were executed, and together with total dividends of ¥15.86B, the Total Return Ratio was approximately 96.5%, indicating an aggressive shareholder return stance. Next fiscal year dividend guidance at ¥20.0 signals a planned reduction, interpreted as prioritizing capital build-up given a low Equity Ratio of 5.1%. Treasury stock after buybacks increased to ¥7.59B (prior ¥1.60B), and EPS was calculated using the average number of shares outstanding during the period of 945,292,000 shares, after deducting treasury stock of 8,503,000 shares from issued shares of 947,055,000 shares.
Interest Rate Risk (IRRBB): The company holds interest-sensitive assets of loans ¥13,997.66B and securities ¥3,848.22B; movements in the yield curve (especially flattening or steepening) can materially impact net assets and earnings. Increase in deferred hedge gains/losses to ¥84.23B (prior ¥28.51B, +196.0%) indicates expanded hedge accounting application, but limits of hedge effectiveness and valuation swing risk remain in the event of sudden rate moves. With an Equity Ratio of 5.1%, capital absorption capacity in the case of realized interest risk is relatively weak.
Liquidity Risk: While deposits ¥17,831.76B are the primary funding source, short-term funding showed large swings: borrowings ¥1,208.82B (↓34.8%), call money ¥74.27B (↑165.8%), securities borrowing liabilities ¥1,601.94B (↓30.8%). Cash and deposits ¥2,445.16B (↓24.3%) decreased, reducing liquidity buffers and raising refinancing risk and potential maturity mismatch pressure in stressed markets. Loan-to-deposit ratio 78.5% is within a healthy range, but unrealized securities gains/losses can quickly affect liquidity given the funding structure.
Credit Risk: Loan balance growth to ¥13,997.66B (↑6.0%) expands revenue but poses upside risk to credit costs; allowance for loan losses ¥73.23B (prior ¥73.55B, -0.4%) was essentially flat. As a regional bank group concentrated in local economies, deterioration in regional economic conditions or SME funding stress could drive higher credit costs. Contingent liabilities (guarantee obligations) are limited (accepted bills ¥18.29B) but disclosure of off-balance credit exposures is limited, leaving the full extent of potential credit losses unclear.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 95.8% | 14.6% (7.2%–39.4%) | +81.1pt |
| Net Margin | 95.1% | 11.9% (7.2%–35.4%) | +83.2pt |
The company's operating and net margins substantially exceed industry medians, reflecting an extremely efficient revenue structure.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 23.0% | 10.1% (7.3%–12.1%) | +13.0pt |
Revenue growth outpaces the industry median substantially, indicating strong growth momentum.
※ Source: Company compilation
Favorable interest rate environment and cost efficiency drove top-tier efficiency with Operating Margin 95.8% and Net Margin 95.1%; ROE improved to 4.4% (prior 3.3%). Revenue growth of 23.0% well exceeded the industry median of 10.1%, with loan growth +6.0% and stronger fee income underpinning revenue expansion.
A low Equity Ratio of 5.1% is a watch point for resilience against realized interest and market risks. While shareholder returns were aggressive (¥30.00B buybacks and ¥15.86B dividends, Total Return Ratio ~96.5%), guidance for next fiscal year dividend at ¥20.0 (current fiscal year ¥28.0) suggests prioritization of capital accumulation. Liquidity is generally healthy with loan-to-deposit ratio 78.5% and reduced borrowings (-34.8%), but fluctuations in short-term funding and a 24.3% decline in cash buffers are monitoring points for liquidity management.
Comprehensive income ¥1,610.5B (3.4x Net Income ¥475.1B) was supported by deferred hedge gains/losses +¥557.2B and securities valuation differences +¥78.7B, reflecting market improvement and effective interest hedging. Guidance for next fiscal year targets Ordinary Income ¥1,390B (↑20.1%) continuing profit growth, but sustainability of interest spreads and credit cost trends are key to achieving this target.
This report is an AI-generated financial analysis produced by analyzing XBRL earnings disclosure data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by our firm from public financial disclosures. Investment decisions are your responsibility; consult a professional advisor as appropriate.