San ju San Financial Group,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥1.66B
• Net Income: ¥1.66B
• EPS: ¥217.88

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Sanjuusan Financial Group (Consolidated, JGAAP) reported FY2026 Q2 results with ordinary income of ¥7.768bn and net income of ¥5.674bn, up 16.2% YoY, indicating solid earnings momentum. Operating income was ¥1.659bn (+70.9% YoY), but for a banking group, ordinary income is the more relevant profitability indicator as it captures net interest income, fees, and market-related gains/losses. The sharp gap between operating income and ordinary income suggests earnings were driven primarily by core banking and financial income rather than non-financial “operating” categories in XBRL. The effective tax burden appears normal: income tax of ¥2.069bn implies an effective tax rate of roughly 26.7%, close to the domestic statutory range, pointing to predominantly recurring income with limited extraordinary items. Balance sheet scale is large with total assets of ¥4,555.0bn and equity of ¥221.6bn, implying a financial leverage (Assets/Equity) of about 20.6x, which is typical for regional financial groups. The equity ratio shown as 0.0% in the data should not be interpreted literally; based on disclosed totals, equity-to-asset is approximately 4.9%, consistent with a bank’s balance sheet structure. Liquidity metrics like current and quick ratios, as well as gross margin/EBITDA, are not meaningful for banks and were not disclosed (zeros indicate non-reporting, not actual zero). EPS for the period is ¥217.88; annualizing the half-year net income would imply full-year EPS in the mid-¥430s, assuming a stable share count and earnings trajectory. Using the period-end equity as a proxy for average equity, an annualized ROE is estimated around 5–6%, while the period (half-year) ROE proxy would be roughly half that; reported DuPont fields are not applicable since “revenue” is not provided for a financial institution. The YoY growth in operating income (+70.9%) and net income (+16.2%) suggests positive operating leverage and potential tailwinds from interest rate normalization, fee growth, or securities-related gains. Ordinary income exceeding operating income by a wide margin may also reflect robust net interest income and fee/commission income, possibly supplemented by market valuation or realized gains. With total liabilities of ¥4,304.8bn and D/E of ~19.4x, solvency should be assessed via regulatory capital ratios (not disclosed), but the equity base appears adequate for a regional bank of this size. Cash flow statement items were not disclosed in this dataset, limiting assessment of statutory OCF/FCF; for banks, cash flow analysis relies more on funding mix, liquidity coverage, and asset-liability management than on industrial FCF constructs. Dividend information (DPS/payout) was not disclosed here; given earnings growth and moderate implied ROE, capacity for distributions likely exists, but policy confirmation is needed. Key uncertainties include the sustainability of ordinary income if market-related gains normalize, the trajectory of credit costs, and interest rate sensitivity of the securities portfolio. Overall, the interim results point to solid core profitability with improving operating leverage, but the lack of granularity (CF, detailed revenue mix, capital ratios) warrants caution in extrapolating trends.

Profitability Analysis

roe_decomposition: Traditional DuPont is not directly applicable because revenue is unreported and not meaningful for banks. Using approximations: annualized ROE ≈ (2 × ¥5.674bn) / ¥221.614bn ≈ 5.1%. Financial leverage (Assets/Equity) is ~20.55x (¥4,555.0bn / ¥221.6bn). Net profit margin and asset turnover are not interpretable under bank accounting. Effective tax rate approximates 26.7% (¥2.069bn / (¥5.674bn + ¥2.069bn)). margin_quality: Ordinary income (¥7.768bn) materially exceeds operating income (¥1.659bn), consistent with bank earnings being dominated by net interest income, fees, and market gains/losses. The normalization of the tax rate suggests earnings are largely recurring. However, without a revenue breakdown, the proportion of sustainable core net interest and fee income vs. market-related components remains unclear. operating_leverage: Operating income grew 70.9% YoY while net income rose 16.2% YoY, implying positive operating leverage but also potential non-linear impacts from credit costs or market gains. Cost discipline likely contributed, but confirmation requires cost-to-income data (not provided).

Growth Assessment

revenue_sustainability: Top-line proxies for banks (net interest income, fees) are not disclosed. The strong growth in operating and ordinary income suggests tailwinds from rate environment and business volumes, but sustainability depends on deposit beta, loan growth/mix, and fee traction. profit_quality: Effective tax rate near statutory and minimal gap between (Net Income + Taxes) and Ordinary Income imply limited extraordinary items. Still, the large ordinary vs. operating income gap indicates reliance on financial income; if securities gains contributed, profit quality could normalize lower in volatile markets. outlook: Assuming stable credit costs and a gradually improving interest rate environment, earnings could maintain momentum in the near term. Risks include an uptick in provisions amid SME stress, and mark-to-market pressure on bond portfolios if yields rise faster than hedges.

Financial Health

liquidity: Current/quick ratios are not relevant for banks and were not disclosed. Liquidity should be assessed via LCR/NSFR and cash/marketable securities buffers, which are not provided here. solvency: Equity ratio approximates 4.9% (¥221.6bn / ¥4,555.0bn). Debt-to-equity is ~19.4x, typical for regional banks. Regulatory capital metrics (CET1, total capital ratio) are not disclosed, limiting solvency assessment. capital_structure: Total assets ¥4.555tn and liabilities ¥4.305tn imply a deposit- and market-funding heavy structure common to banks; precise funding mix not disclosed. Financial leverage is ~20.55x.

Cash Flow Quality

earnings_quality: OCF not disclosed; for banks, ordinary income composition and credit cost stability are better indicators than industrial OCF. The normalized effective tax rate supports recurring earnings quality. fcf_analysis: Free cash flow metrics are not meaningful for banks in the industrial sense and were not disclosed. Assessment should focus on retained earnings after dividends and regulatory capital generation. working_capital: Working capital constructs are not applicable for banks; asset-liability management and liquidity coverage are the relevant frames. No data on gap/tenor profiles provided.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are not disclosed in this dataset. With interim net income of ¥5.674bn, capacity for distribution exists, but payout depends on capital policy and regulatory buffers. fcf_coverage: FCF data not reported; for banks, coverage should be judged by earnings and capital generation vs. capital requirements. On current earnings, modest payouts could likely be covered, but confirmation requires CET1 and RWA trends. policy_outlook: Regional banks in Japan often target stable or progressive dividends, occasionally augmented by share buybacks; absent explicit guidance here, assume a stability bias contingent on credit costs and market volatility.

Risk Assessment

Business Risks:

• Net interest margin compression if deposit betas rise faster than asset yields
• Credit cost uptick from SME and household sectors in core regions
• Volatility in securities/ALM portfolios impacting ordinary income
• Fee income softness amid subdued regional economic activity
• Competitive pressure from megabanks and digital players
• Regulatory and compliance changes affecting fees and capital needs

Financial Risks:

• Interest rate risk in the banking book (JGB and corporate bond duration)
• Equity/foreign securities valuation risk if markets correct
• Funding concentration risk if deposit mix shifts
• Capital adequacy risk if RWA grows faster than retained earnings
• Operational risk including systems and cyber exposure

Key Concerns:

• Sustainability of ordinary income if market gains normalize
• Potential rise in credit costs given macro uncertainty
• Lack of disclosure on capital ratios, liquidity, and detailed income mix in this dataset

Investment Implications

Key Takeaways:

• Solid interim earnings with net income ¥5.674bn (+16.2% YoY) and ordinary income ¥7.768bn
• Financial leverage ~20.6x and implied equity ratio ~4.9%, typical for a regional bank
• Positive operating leverage indicated, but reliance on financial income warrants scrutiny
• Effective tax rate ~26.7% suggests normalized, recurring earnings
• Data gaps (cash flows, capital ratios, income breakdown) limit precision of assessment

Metrics to Watch:

• Net interest margin and loan/deposit growth
• Credit costs (provisions) and NPL ratio
• Cost-to-income (OHR) and efficiency initiatives
• Securities portfolio duration/valuation gains or losses
• Capital ratios (CET1, total capital) and dividend/buyback guidance

Relative Positioning: As a regional banking group, scale (~¥4.6tn assets) and improving profitability place it in the healthier cohort, but visibility into capital strength and earnings mix is needed to benchmark precisely against peers.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis