| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥702.8B | ¥523.8B | +34.2% |
| Operating Income | - | - | - |
| Ordinary Income | ¥218.7B | ¥124.5B | +75.7% |
| Net Income | ¥157.0B | ¥86.1B | +82.3% |
| ROE | 2.4% | 1.4% | - |
Supported by the rising interest rate environment, net interest income and net fee income expanded, enabling the Company to start the quarter with higher revenue and profit. Ordinary revenue was ¥702.8B (¥523.8B in the same period of the previous year, YoY +34.2%), ordinary income was ¥218.7B (¥124.5B in the previous year, YoY +75.7%), and consolidated net income was ¥157.0B (¥86.1B in the previous year, YoY +82.3%). Of this amount, net income attributable to owners of the parent was ¥155.6B (¥84.9B in the previous year, YoY +83.2%), while basic EPS was ¥111.71 (¥60.98 in the previous year). The primary driver of profit growth was the expansion of interest income in the Banking Business segment. Top-line growth outpaced the increase in expenses, contributing to improved profit margins.
【Revenue】Ordinary revenue was ¥702.8B, up +34.2% year on year. External ordinary revenue from the Banking Business segment was ¥637.3B (+37.7%), accounting for 90.7% of the total and serving as the primary source of revenue growth. Other segments, including credit guarantees and credit cards, generated ¥65.5B (+7.3%), representing 9.3% of the total. By revenue category, net interest income was ¥375.7B (interest income of ¥510.5B − interest expenses of ¥134.8B), while net fee income was ¥69.1B (fee income of ¥98.6B − fee expenses of ¥29.5B). Both expanded from the previous year and contributed to the diversification of the top line. Meanwhile, other ordinary income and expenses was negative at ▲¥51.0B, offsetting a portion of the revenue increase.
【Profit and Loss】Ordinary income was ¥218.7B (+75.7%), profit before tax was ¥228.8B, and consolidated net income was ¥157.0B (+82.3%). Expenses (general and administrative expenses) were ¥230.0B, only slightly higher than ¥223.1B in the previous year. As expense growth remained below the pace of revenue expansion, the ordinary income margin improved to 31.1% from 23.8% in the previous year. Extraordinary income of ¥10.7B and extraordinary losses of ¥0.6B, including impairment losses of ¥0.1B, were both limited in scale. Accordingly, the increase in profit was attributable not to temporary factors but to improved earnings power from the core business. In conclusion, the Company achieved higher revenue and profit.
The reported segments comprise the Banking Business and Other Businesses, including credit guarantees, credit cards, financial instruments business, and information systems services. Ordinary revenue of the Banking Business segment on a total basis was ¥643.8B, while segment profit was ¥197.6B (¥106.9B in the previous year, +84.7%), representing substantial profit growth and driving the increase in consolidated ordinary income. Other Businesses recorded ordinary revenue on a total basis of ¥169.2B and segment profit of ¥106.8B (¥84.4B in the previous year, +26.6%). Although smaller in scale, the segment maintained a high level of profitability. Eliminations and adjustments for intersegment transactions increased to ▲¥85.7B from ▲¥66.9B in the previous year, resulting in consolidated ordinary income of ¥218.7B.
【Profitability】The ordinary income margin was 31.1%, improving by +7.3pt from 23.8% in the previous year. The consolidated net profit margin was 22.3%, also improving from 16.4% in the previous year. This improvement was driven by the expansion of interest income and fee income, which outpaced the increase in expenses. 【Cash Flow Quality】Other ordinary income and expenses remained negative at ▲¥51.0B. While fluctuations in gains and losses related to securities and credit costs remain factors affecting earnings volatility, extraordinary gains and losses accounted for only a limited proportion of ordinary income, with ordinary items remaining the core source of earnings. 【Investment Efficiency】ROE was 2.4% for the quarter, while the expense ratio (general and administrative expenses / gross profit equivalent) was approximately 58%. The ability to contain expense growth during a period of revenue expansion contributed to improved efficiency. 【Financial Soundness】The Equity Ratio was 4.7%, a slight improvement from 4.5% in the previous year. The loan-to-deposit ratio (loans / deposits) was approximately 96.0%, slightly lower than 97.5% in the previous year. Loans were ¥10.12T (▲1.1% year on year), while deposits were ¥10.55T (+0.5%), indicating changes in the composition of assets and liabilities.
As a statement of cash flows has not been disclosed, funding trends are assessed based on changes in the balance sheet. Loans decreased by ¥1,175.0B (▲1.1%) year on year to ¥10.12T, while deposits increased by ¥485.8B (+0.5%) to ¥10.55T, resulting in a decline in the loan-to-deposit ratio to 96.0%. Securities increased by ¥587.5B (+3.1%) to ¥1T9,723B, indicating greater allocation to investment assets. Borrowings decreased by ¥858.8B (▲6.4%) to ¥1T2,464B, while payables under securities lending increased by ¥707.4B (+14.7%) to ¥5,518B, indicating a shift in the funding mix toward market-based funding. Overall, amid sluggish loan demand, the Company appears to be allocating deposits and market-based funding to securities investments and the securing of liquidity.
The primary sources of ordinary income of ¥218.7B were net interest income of ¥375.7B and net fee income of ¥69.1B. Extraordinary income of ¥10.7B and extraordinary losses of ¥0.6B were immaterial, indicating limited reliance on temporary factors. However, other ordinary income and expenses remained negative at ▲¥51.0B, and fluctuations in market conditions and provisions offset a portion of earnings, which warrants attention from an accrual perspective. Corporate income taxes and other taxes of ¥71.8B were recorded against profit before tax of ¥228.8B, resulting in an effective tax rate of approximately 31.4%, a standard level. Comprehensive income was ¥336.4B, substantially exceeding consolidated net income of ¥157.0B. The primary reason for this difference was an increase of ¥181.9B in valuation differences on securities. This divergence reflects accumulated valuation gains arising from market fluctuations and differs in nature from ordinary revenue generated by the core business.
Against the full-year ordinary income forecast of ¥690.0B, Q1 actual ordinary income of ¥218.7B represented progress of 31.7%, exceeding the standard quarterly benchmark of 25%. Basic EPS of ¥111.71 likewise represented progress of 32.4% against the EPS forecast of ¥344.63, indicating that performance is ahead of schedule. Neither the earnings forecast nor the dividend forecast was revised during the quarter. Although the expansion of interest income and control of expenses drove progress, the pace of progress may normalize depending on future interest rate conditions and fluctuations in market-related gains and losses.
The full-year dividend forecast is ¥140, resulting in a payout ratio of approximately 40.6% based on the EPS forecast of ¥344.63. The dividend forecast was not revised during the quarter. Net income, the source of shareholder returns, is supported by the expansion of ordinary income generated by the core business, and the payout ratio is broadly consistent with the pace of profit growth.
Capital level: The Equity Ratio was 4.7%, only slightly improved from 4.5% in the previous year. However, it remains low in absolute terms, and the accumulation of capital requires continued monitoring.
Loan-to-deposit and liquidity structure: The loan-to-deposit ratio was approximately 96.0% (loans of ¥10.12T / deposits of ¥10.55T). Although it declined from 97.5% in the previous year, it remains high, requiring close attention to changes in the funding and liquidity structure.
Reliance on valuation differences on securities: Accumulated other comprehensive income was ¥832.7B, an increase of +¥276.8B year on year, of which ¥181.9B was attributable to an increase in valuation differences on securities. A substantial portion of the increase in net assets resulted from market-linked valuation gains and could become a source of fluctuations in net assets if market conditions reverse.
Profitability and Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 22.3% | – | – |
The Company's net profit margin of 22.3% has limited comparative data against the industry median; however, it has improved from the previous year on an absolute basis.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 34.2% | – | – |
The Company's revenue growth rate of 34.2% has limited comparative data against the industry median and represents strong growth reflecting the expansion of interest income.
※Source: Compiled by the Company
The drivers of profit growth were the expansion of net interest income and net fee income. The ordinary income margin improved to 31.1% from 23.8% in the previous year, an improvement of approximately 7.3pt. As expense growth remained below revenue growth, the earnings structure demonstrated high-quality improvement centered on the core business.
The Equity Ratio was 4.7% and the loan-to-deposit ratio was approximately 96.0%, making both the capital level and liquidity structure areas requiring continued monitoring. Part of the increase in net assets was attributable to the market-linked expansion of valuation differences on securities of ¥181.9B, which differs in nature from the growth in ordinary income.
Progress against the full-year ordinary income forecast was 31.7%, while progress against the EPS forecast was 32.4%. Both exceeded the quarterly standard of 25%. As of the end of the quarter, neither the earnings forecast nor the dividend forecast had been revised.
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.
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