| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥266.8B | ¥1149.2B | +22.9% |
| Operating Income / Operating Profit | ¥248.4B | ¥1135.9B | -78.1% |
| Ordinary Income | ¥1,550.2B | ¥1227.6B | +26.2% |
| Net Income / Net Profit | ¥242.8B | ¥1135.0B | -78.6% |
| ROE | 1.7% | 8.8% | - |
FY2026 results: Revenue (OperatingRevenuesTR) ¥266.8B (YoY +22.9%), Operating Income ¥248.4B (YoY -78.1%), Ordinary Income ¥1,550.2B (YoY +26.2%), Net Income attributable to owners of the parent ¥242.8B (YoY -78.6%). In banking,経常収益 is synonymous with operating revenues; on an Ordinary Income basis the company secured a large increase in profit while Operating Income and Net Income declined year-on-year. Although Revenue (OperatingRevenuesTR) on XBRL shows a significant decline versus the prior year, for the banking business the substantive top-line indicator is OrdinaryIncomeBNK ¥4,907.2B (prior year ¥3,991.0B, +23.0%), indicating substantial core revenue growth. Ordinary Income increased by ¥322.6B from ¥1,227.6B to ¥1,550.2B, demonstrating improved core earning power. Net interest income was approximately ¥2,601.9B (interest income ¥3,551.4B - interest expense ¥948.7B), up from approximately ¥2,080.3B in the prior year (+25.0%), strengthening the revenue base aided by a rising rate environment.
[Revenue] OrdinaryIncomeBNK for the banking business was ¥4,907.2B (YoY +23.0%), of which investment income (interest income) rose sharply to ¥3,551.4B (+29.5%). Interest on loans was ¥2,693.4B (prior year ¥2,035.8B, +32.3%), and interest and dividends on securities were ¥474.3B (+4.5%). Deposit interest increased to ¥577.3B (prior year ¥306.5B, +88.4%), improving loan-deposit yields in the rising rate phase. Fee income (service transaction income) was ¥843.2B (prior year ¥769.7B, +9.5%) and grew steadily. Funding costs (interest expense) rose to ¥948.7B (prior year ¥661.7B, +43.4%), but the increase in interest income outpaced this and net interest income expanded substantially. Other operating income and other ordinary income totaled ¥388.4B (+6.0%), so the topline was broadly in a growth trend.
[Profitability] Ordinary Income ¥1,550.2B (YoY +26.2%) was driven by expanded net interest income and higher fee income. Credit costs including provision for general allowance were ¥20.8B (prior year ¥15.0B), a slight increase, and G&A expenses rose to ¥1,498.8B (prior year ¥1,341.3B, +11.7%), but revenue growth outpaced expense growth. Operating Income (XBRL OperatingIncome) is ¥248.4B, a large decline from prior year ¥1,135.9B; this is believed to stem from differences in recognition between banking Operating Income and Ordinary Income, and assessment on an Ordinary Income basis is appropriate. Extraordinary items were minimal: extraordinary gains ¥0.0B, extraordinary losses ¥12.7B (including impairment losses ¥0.4B). Profit before tax was ¥1,537.5B (prior year ¥1,189.2B, +29.3%); after deducting income taxes ¥458.0B (effective tax rate 29.8%), Net Income attributable to owners of the parent based on XBRL NetIncomeAttributableToOwners was ¥1,065.2B (prior year ¥828.1B, +28.6%), a substantial increase. Equity-method gains/losses were ¥6.7B (prior year ¥6.4B) and contributed modestly. Both Ordinary Income and Net Income achieved double-digit increases, confirming a revenue-and-profit expansion structure.
[Profitability] Operating margin 93.1% (prior year 98.8%), Net profit margin 91.0% (prior year 98.8%) are extremely high, but this reflects characteristics of banking XBRL reporting (mismatch between 経常収益 and OperatingRevenuesTR); the substantive profitability metric should be evaluated on Ordinary Income (¥4,907.2B). Adjusted operating margin (Ordinary Income / OrdinaryIncomeBNK) is 31.6% (prior year 30.8%), an improvement. ROE (Net Income attributable to owners of the parent ¥1,065.2B / shareholders’ equity ¥1,403.9B at fiscal year-end) is 7.6% (prior year 6.4%, +1.2pt), exceeding the company’s historical performance. ROA (Ordinary Income / total assets) is 0.6% (prior year 0.5%), a slight increase. NIM (net interest margin) is estimated at approximately 1.47%, slightly below the industry benchmark of 1.5% but improving year-on-year. CIR (cost-to-income ratio, G&A expenses / Ordinary Income) is approximately 30.5% (prior year approx. 33.6%), showing improved cost efficiency. [Cash Quality] Operating Cash Flow (OCF) -¥1,217.0B vs Net Income ¥1,065.2B, resulting in OCF/Net Income = -1.14x (turned negative). Loan increases +¥9,218B and securities +¥1,556B caused end-of-period cash outflows, lowering cash conversion efficiency due to working-capital factors. EBITDA estimate including depreciation ¥145.2B is approximately ¥394B, yielding OCF/EBITDA = -3.09x, a low level. Investing cash flow -¥1,167.2B (of which capex -¥138.8B, acquisition of subsidiary shares -¥544.8B) resulted in Free Cash Flow -¥2,384.2B, a large negative. [Investment Efficiency] Total asset turnover is 0.001x (Ordinary Income / total assets), low by banking characteristics but similar to prior year. Tangible fixed asset turnover is 28.6x (Ordinary Income / tangible fixed assets ¥1713.5B), indicating high asset efficiency. [Financial Soundness] Equity Ratio 5.5% (prior year 5.2%, +0.3pt) remains below the regulatory minimum of 8% but improved from prior year. D/E ratio is 17.1x (interest-bearing debt ¥2,405.1B / shareholders’ equity ¥1,403.9B), reflecting banking-sector leverage. Current ratio and similar metrics are not applicable for banks. Loan-to-deposit ratio (LDR) is 84.6% (loans ¥17,667.4B / deposits ¥20,877.3B), within an appropriate range and maintaining stable funding. Cash and deposits ¥4,152.4B (16.2% of total assets) provide a liquidity buffer. Interest-bearing debt consists of corporate bonds ¥350B and borrowings ¥1,976.5B (prior year ¥2,089.4B), reducing market funding dependence. BPS (shareholders’ equity / shares outstanding at fiscal year-end) is ¥1,263.05 (prior year ¥1,128.09, +12.0%), increasing per-share shareholder value.
Operating Cash Flow was -¥1,217.0B (prior year +¥3,762.6B), a substantial swing to negative. Subtotal before working capital changes was -¥712.0B (prior year +¥3,932.1B); asset expansion including loans +¥9,218B and securities +¥1,556B caused cash outflows, and corporate tax payments -¥505.0B also had an impact. Bank operating cash flows are highly influenced by changes in lending and invested assets, so this period’s negative OCF resulted from end-period asset accumulation rather than core business weakness. Investing Cash Flow was -¥1,167.2B, driven by capex -¥138.8B, intangible asset investment -¥95.0B, and acquisition of subsidiary shares -¥544.8B. Free Cash Flow was -¥2,384.2B; dividend payments -¥376.4B and share repurchases -¥417.5B could not be covered by internal funds and were financed by drawing down opening cash and adjusting funding composition. Financing Cash Flow was -¥645.3B (prior year -¥706.1B), with share buybacks and dividends as main outflows. Cash and deposits declined from ¥4,353.1B at the beginning of the period to ¥4,050.2B at period-end (-¥302.9B) but still maintain a liquidity buffer above ¥4,000B.
Of Ordinary Income ¥1,550.2B, net interest income approximately ¥2,601.9B and net fee income approximately ¥654.4B (service transaction income ¥843.2B - service transaction expenses ¥189.4B) were the mainstays of recurring income; equity-method gains/losses ¥6.7B and other operating/other ordinary income also contributed. Extraordinary items were minimal (extraordinary gains ¥0.0B; extraordinary losses ¥12.7B including impairment losses ¥0.4B), so recurring income base supports earnings. Comprehensive income ¥1,965.1B (attributable to owners of the parent ¥1,950.5B) exceeded Net Income attributable to owners of the parent ¥1,065.2B by a wide margin; valuation gains on securities +¥787.3B and actuarial gains on retirement benefits +¥101.1B in OCI contributed. The divergence between comprehensive income and net income (+¥885B) suggests valuation gains from improved market conditions, indicating stable earnings quality. The gap between OCF -¥1,217.0B and Net Income ¥1,065.2B is attributable not to accruals but to end-period increases in loans and invested assets causing cash outflows, and does not undermine the reliability of earnings recognition. Overall, recurring core business profits predominate, one-off impacts are limited, and valuation gains have strengthened capital.
Full-year forecast: Ordinary Income ¥1,915.0B (YoY +23.5%), Net Income attributable to owners of the parent ¥1,290.0B, EPS forecast ¥116.06, dividend forecast ¥23.00. This period’s results represent Ordinary Income ¥1,550.2B (81.0% of full-year forecast) and Net Income attributable to owners of the parent ¥1,065.2B (82.6% of full-year forecast), with progress above 80% and generally on track. Additional Ordinary Income of about ¥365B and Net Income of about ¥225B are required in the remaining period, premised on continued rising rates and steady fee income. Achieving the forecast depends on containing credit costs in H2, stable market conditions, and managing the pace of deposit rate increases. The full-year dividend forecast of ¥23.00 (this period’s dividend ¥38.00 is cumulative and thus difficult to compare directly) is inferred to be maintained with a payout ratio of approximately 40%. No forecast revisions have been announced, and the guidance stands at present.
Annual dividend is ¥38.00 (interim ¥17.00, year-end ¥21.00). Total dividends of ¥376.4B correspond to a payout of approximately 35.3% against Net Income attributable to owners of the parent ¥1,065.2B (XBRL PayoutRatio=40.4% difference due to calculation basis). Prior year dividend was ¥13.00, so this period implemented a large increase of ¥25.00. Share buybacks totaled ¥417.5B; combined with dividends, total shareholder returns were approximately ¥794B, with a Total Return Ratio of about 74.6% (¥794B / ¥1,065B), indicating an aggressive shareholder return stance. However, with Free Cash Flow -¥2,384.2B, the ¥794B return could not be covered by internal funds and was financed by drawing down opening cash and adjusting funding composition. Dividend payout of roughly 35–40% is within a sustainable range, but given an Equity Ratio of 5.5% and thin capital buffers, continued high returns depend on future capital accumulation and profit growth. The discrepancy between the full-year dividend forecast ¥23.00 and actual dividend ¥38.00 likely reflects cumulative dividends (beginning/interim), but the company appears to intend to maintain a dividend-upward trend.
Deposit beta increase risk in a rising rate environment: Deposit interest grew sharply from ¥306.5B to ¥577.3B (+88.4%). There is concern that rising deposit rates could compress NIM (estimated 1.47%). The key is whether loan rate increases (loan interest +32.3%) can continue to outpace deposit rate increases; if deposit rates rise further due to competition or customer outflows, NIM could fall below the industry caution threshold of 1.5% and profitability would deteriorate.
Low Equity Ratio and capital capacity constraints: Equity Ratio 5.5% is below the regulatory minimum of 8%, indicating insufficient capital buffer under Basel III. Share buybacks ¥417.5B compress capital; increases in RWA or market shocks could further lower the Equity Ratio, constraining dividend/return capacity and asset growth. Building capital (thicker retained earnings) and RWA management are urgent priorities.
Liquidity risk from continued negative OCF: OCF -¥1,217.0B and Free Cash Flow -¥2,384.2B are large negatives; shareholder returns ¥794B were financed by cash drawdown (-¥302.9B) and changes in funding composition. Continued accumulation of loans and invested assets would reduce the liquidity buffer (cash and deposits ¥4,050B) and increase dependence on external funding. Rising funding costs in a rate-hike environment or deteriorating market liquidity could tighten funding and create stress.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 93.1% | 14.6% (7.2%–39.4%) | +78.4pt |
| Net Profit Margin | 91.0% | 11.9% (7.2%–35.4%) | +79.1pt |
Due to the characteristics of banking XBRL reporting, operating margin and net profit margin are extremely high, but on an economic Ordinary Income margin basis of 31.6% the company ranks among the top in the sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 22.9% | 10.1% (7.3%–12.1%) | +12.8pt |
Ordinary Income growth +23.0% outperforms the industry median by +12.8pt, reflecting notable revenue expansion capturing the rising rate environment.
※ Source: Company aggregation
Strengthened core earnings in a rising rate environment: Net interest income expanded to approximately ¥2,601.9B (YoY +25.0%), driving Ordinary Income +23.0%. Ordinary Income +26.2% and improved adjusted CIR approx. 30.5% (prior year 33.6%) suggest a strengthened revenue base in the rate-hike phase. Estimated NIM 1.47% is slightly below the industry caution threshold 1.5%; deposit rate trends and loan re-pricing progress are key to sustaining margins.
Tension between active returns and capital capacity: With dividend ¥38.00 (payout approx. 35–40%) and share buybacks ¥417.5B, Total Return Ratio approx. 74.6% signals an aggressive return policy, but Free Cash Flow -¥2,384.2B required cash drawdown to fund returns. Equity Ratio 5.5% below 8% means continuing returns depend on capital accumulation (improving ROE and RWA management); balancing capital buffer enhancement and shareholder returns is a key issue.
Large increase in comprehensive income and strengthened capital: Comprehensive income ¥1,965.1B exceeds Net Income attributable to owners of the parent ¥1,065.2B by ¥885B, with securities valuation gains +¥787.3B and retirement benefit adjustment +¥101.1B boosting capital. BPS ¥1,263.05 (prior year ¥1,128.09, +12.0%) indicates improved shareholder value, but valuation gains are market-sensitive, so capital buffers could shrink if rates or equity markets reverse.
This report is an AI-generated financial analysis document based on XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.