| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥137.9B | ¥99.01B | +39.2% |
| Operating Income | - | - | - |
| Ordinary Income | ¥49.86B | ¥31.69B | +57.3% |
| Net Income | ¥34.51B | ¥22.22B | +55.3% |
| ROE | 3.1% | 2.1% | - |
The expansion of net interest income and fee income, together with cost controls, resulted in increases of more than 50% in both ordinary income and net income. Ordinary revenue (equivalent to revenue) was ¥137.90B (¥99.01B in the same period of the previous year, +39.2% YoY), ordinary income was ¥49.86B (¥31.69B, +57.3%), and net income attributable to owners of the parent was ¥34.50B (¥22.22B, +55.2%). The primary drivers of the earnings increase were the fact that the increase in interest expense did not exceed the increase in interest income, growth in net fee income, and the fact that the increase in general and administrative expenses remained moderate relative to the growth in ordinary revenue.
【Revenue】Ordinary revenue was ¥137.90B, up +39.2% YoY. As the Group operates in a single banking segment, the breakdown by account item was as follows: interest income was ¥79.29B (¥65.03B in the previous year, +21.9%), while interest expense was ¥24.51B (¥19.61B, +25.0%). Accordingly, net interest income increased by +20.6% to ¥54.78B from ¥45.42B in the previous year. Net fee income steadily increased to ¥13.97B (¥12.76B, +9.5%), contributing to the diversification of revenue sources. Meanwhile, other ordinary expenses increased substantially to ¥19.77B from ¥4.19B in the previous year, indicating that highly volatile items such as market-related gains and losses pushed up expenses.
【Profit and Loss】Ordinary income was ¥49.86B (+57.3% YoY), and the ordinary income margin improved by +4.1pt to 36.1% from 32.0% in the previous year. Extraordinary losses were limited to ¥0.09B, and the impact of temporary factors on earnings was limited. Corporate income taxes and other taxes were ¥15.26B against pretax income of ¥49.77B, representing an effective tax rate of approximately 30.7%. The difference between ordinary income and net income was primarily attributable to the tax burden, with no significant divergence arising from non-recurring items. Net income attributable to owners of the parent was ¥34.50B (+55.2% YoY), and the net income margin improved by +2.6pt to 25.0% from 22.4% in the previous year. Ordinary revenue, ordinary income, and net income all posted double-digit increases, indicating growth in both revenue and earnings.
The Group’s only reportable segment is banking, and segment information for businesses other than banking has been omitted because they are immaterial. Accordingly, a breakdown of profit and loss by business has not been disclosed; however, the ordinary revenue and ordinary income described above can be interpreted as figures representing substantially all of the Group’s revenue and earnings.
【Profitability】The ordinary income margin improved to 36.1% from 32.0% in the previous year (+4.1pt), while the net income margin improved to 25.0% from 22.4% (+2.6pt). ROE was 3.1% (quarterly result, before annualization). Given the equity ratio of 5.1% (also 5.1% in the same period of the previous year and essentially unchanged), the earnings structure continues to rely on financial leverage. 【Cash Quality】Extraordinary losses were limited to ¥0.09B, and the majority of profit was based on recurring net interest spread and fee income. Comprehensive income was ¥52.68B, exceeding net income of ¥34.50B, with an increase in deferred hedge gains and losses (equivalent to approximately +¥27.04B) serving as a contributing factor, while valuation differences on securities of -¥7.78B were a negative factor. 【Investment Efficiency】Basic EPS was ¥36.76 (¥23.25 in the previous year, +58.1%), while diluted EPS was ¥36.75, essentially at the same level. The total asset turnover ratio remains low due to the structural characteristics of the banking industry, and the improvement in profitability was primarily attributable to margin expansion. 【Financial Soundness】The loan-to-deposit ratio (loans/deposits) was 77.2%, indicating that lending operations remain within an appropriate range relative to deposit-based funding. The equity ratio of 5.1% represents the simple equity ratio disclosed by the Company (net assets/total assets), and it should be noted that its calculation basis may differ from the regulatory Basel capital ratio.
As cash flow statement data have not been disclosed, funding trends are reviewed based on changes in key balance sheet accounts. Cash and deposits increased by +¥770.14B from ¥321.53B (+31.5%), strengthening the liquidity buffer. Loans decreased slightly to ¥1,387.898B from ¥1,399.766B in the previous year, a decline of -¥11.87B (-0.85%), while deposits increased to ¥1,796.73B from ¥1,783.18B, up +¥13.55B (+0.8%), indicating steady accumulation of stable funding. Borrowings decreased to ¥113.87B from ¥120.88B, down -¥7.01B (-5.8%), suggesting a review of the composition of interest-bearing liabilities. Call loans increased to ¥30.25B from ¥26.18B, up +¥4.06B (+15.5%), while liabilities related to securities lending and borrowing transactions rose substantially to ¥65.94B from ¥16.02B, up +¥49.92B (+311.5%). This indicates expanded use of short-term market transactions for funding and investment. Overall, the funding structure is based on stable deposit funding while making greater use of short-term market transactions.
The earnings increase for the current period was supported by recurring sources of income, namely growth in net interest income and fee income. Extraordinary losses were limited to ¥0.09B, and the contribution from temporary factors was limited. The difference between ordinary income (¥49.86B) and net income (¥34.50B) was primarily attributable to corporate income taxes and other taxes of ¥15.26B (effective tax rate of approximately 30.7%), rather than non-recurring items. Meanwhile, other ordinary expenses increased substantially to ¥19.77B from ¥4.19B in the previous year, suggesting that highly volatile items such as market-related gains and losses may have affected the expense side. Comprehensive income was ¥52.68B, exceeding net income by ¥18.18B. The primary factor was an increase in deferred hedge gains and losses (equivalent to approximately +¥27.04B), while valuation differences on securities made a negative contribution of -¥7.78B. It should be noted that the difference between net income and comprehensive income arose from changes in OCI related to other securities and hedge accounting.
Against the full-year ordinary income forecast of ¥153.50B, Q1 actual ordinary income was ¥49.86B, representing a progress rate of 32.5%. Against the full-year net income forecast attributable to owners of the parent of ¥105.00B, Q1 actual net income was ¥34.50B, representing a progress rate of 32.9%. Both figures exceeded the standard quarterly progress benchmark of 25%, indicating progress ahead of the pace implied by the full-year forecasts. During the quarter, revisions to the earnings forecast and dividend forecast (in the direction of a dividend increase) were announced, indicating that the strength of the earnings trend was reflected in the forecast revisions.
Full-year forecast EPS is ¥111.87, and forecast DPS is ¥44.00. Based on these assumptions, the payout ratio is approximately 39.3%. A revision to the dividend forecast (an increase) was announced during the quarter, confirming that the shareholder return policy was reviewed in light of earnings growth. Actual EPS was ¥36.76 as of Q1, representing progress of approximately 32.9% against the full-year forecast. The payout ratio indicates that a balance between retained earnings and shareholder returns is being maintained.
Volatility in market-related expenses: Other ordinary expenses were ¥19.77B, increasing substantially from ¥4.19B in the previous year. These expenses are believed to include market-related items such as bond-related gains and losses, and quarterly fluctuations may become a factor affecting earnings volatility going forward.
Reliance on a highly leveraged structure: The equity ratio was 5.1% (essentially unchanged YoY), with total assets of ¥21,887.71B versus net assets of ¥1,114.82B, indicating that the earnings structure continues to rely on financial leverage.
Increased market sensitivity accompanying the expansion of short-term funding transactions: Liabilities related to securities lending and borrowing transactions were ¥65.94B, up +¥49.92B (+311.5%) from ¥16.02B in the previous year, while call loans also increased by +¥4.06B (+15.5%). The expansion of short-term market transactions has increased sensitivity to interest rates and market fluctuations.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 25.0% | – | – |
The 25.0% net income margin is primarily assessed based on the Company’s own performance trend, as comparative data against the industry median are limited.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 39.2% | – | – |
The +39.2% revenue growth rate indicates substantial growth from the previous year; however, comparative data against the industry median are limited.
※Source: Compiled by the Company
Progress toward the full-year ordinary income and net income forecasts was 32.5% and 32.9%, respectively, exceeding the standard quarterly pace of 25%. Upward revisions to the earnings forecast and dividend forecast (an increase in dividends) were announced during the quarter.
The ordinary income margin was 36.1% (32.0% in the previous year), and the net income margin was 25.0% (22.4% in the previous year), with both improving from the previous year. Growth in net interest income and net fee income contributed to improved profitability.
Other ordinary expenses increased from ¥4.19B in the previous year to ¥19.77B, while liabilities related to securities lending and borrowing transactions also expanded sharply by +311.5%, suggesting changes in the range of earnings fluctuations accompanying the expansion of market-related transactions.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
---End of Report---