| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥696.6B | ¥577.4B | +20.6% |
| Operating Income | - | - | - |
| Ordinary Income | ¥252.4B | ¥175.1B | +44.1% |
| Net Income | ¥176.8B | ¥127.9B | +38.3% |
| ROE | 3.0% | 2.2% | - |
Both ordinary revenue and profit achieved double-digit growth, resulting in higher revenue and higher profit, with the profit growth rate exceeding the revenue growth rate. Ordinary revenue, equivalent to revenue, was ¥696.6B (¥577.4B in the same period last year, +20.6%), ordinary income was ¥252.4B (¥175.1B in the same period last year, +44.1%), and net income attributable to owners of the parent was ¥176.8B (¥127.9B in the same period last year, +38.3%). The primary factors behind the increase in profit were the expansion of net interest income in the banking account (interest income of ¥403.6B less interest expenses of ¥125.0B), an increase in net fees and commissions income, and an improvement in the expense ratio (general and administrative expenses / gross operating profit) resulting from the control of general and administrative expenses (from 51.8% in the same period last year to 44.9% in the current period). During the quarter, the Company revised its full-year earnings forecast and dividend forecast upward, and progress is ahead of the pace initially anticipated.
【Revenue】Ordinary revenue was ¥696.6B (+20.6%). The Banking segment, which accounted for 86.3% of the composition, led overall results with ¥601.3B (+22.7%). Securities revenue of ¥18.2B (+46.5%) and leasing revenue of ¥58.8B (+6.1%) also increased, while Other Businesses not included in the reported segments declined to ¥19.6B (△4.6%).
【Profit and Loss】Ordinary income was ¥252.4B (+44.1%), and net income was ¥176.8B (+38.3%). In addition to the Banking segment’s profit of ¥234.6B (+40.2%), Securities profit of ¥8.9B (+132.5%) and Leasing profit of ¥3.4B (+142.9%) also increased substantially. General and administrative expenses were ¥161.5B, representing a slight year-on-year decline. Cost efficiency improved at a pace exceeding the growth in gross operating profit, confirming positive operating leverage. The difference between ordinary income of ¥252.4B and net income of ¥176.8B was attributable to income taxes and other taxes of ¥75.3B (an effective tax rate of approximately 29.9%, broadly flat from the previous-year level). Extraordinary losses were limited to ¥0.2B, including impairment losses of ¥0.1B, indicating that the impact of one-time factors was limited. Accordingly, the current period represented a higher-revenue and higher-profit result.
The reported segments comprise Banking, Leasing, and Securities. Banking is the core business, accounting for 86.3% of ordinary revenue and 95.0% of segment profit (total reported segments of ¥246.9B). Banking reported higher revenue and higher profit, with ordinary revenue of ¥601.3B (+22.7%) and segment profit of ¥234.6B (+40.2%), supported by the expansion of net interest income and net fees and commissions income. Leasing achieved substantial profit growth, with segment profit of ¥3.4B (+142.9%) against ordinary revenue of ¥58.8B (+6.1%), while Securities also recorded strong growth, with ordinary revenue of ¥18.2B (+46.5%) and segment profit of ¥8.9B (+132.5%). Other Businesses not included in the reported segments, including credit guarantees and credit card operations, recorded ordinary revenue of ¥19.6B (△4.6%), representing a slight decline, but accounted for only 2.8% of consolidated revenue. Although the strong growth of the Securities and Leasing businesses is contributing to diversification of revenue sources, revenue and profit remain highly concentrated in Banking, and consolidated performance continues to be significantly influenced by trends in the Banking business.
【Profitability】The net profit margin was 25.4%, improving by 3.3pt from 22.1% in the same period last year. The expense ratio (general and administrative expenses / gross operating profit) declined significantly to 44.9% from 51.8% in the previous year, with profitability being supported by both revenue expansion and cost control.【Cash Quality】Comprehensive income was ¥382.1B, substantially exceeding net income of ¥176.8B. The primary factors behind the difference were valuation-related other comprehensive income, including valuation differences on securities of ¥110.1B and deferred hedge gains or losses of ¥102.4B. These items differ in nature from realized income and therefore warrant attention.【Investment Efficiency】ROE was 3.0% (quarterly result). The deposit-to-loan ratio (loans / deposits) was 68.1%, slightly below 69.0% in the previous year. Deposit growth (+1.5%) exceeded loan growth (+0.1%), resulting in increased capacity for fund deployment.【Financial Soundness】The equity ratio (net assets / total assets) was 5.6%, improving from 5.2% in the previous year. Total assets declined 1.7% year on year to ¥106,572.7B, while net assets increased 5.1% year on year to ¥5,983.8B, indicating simultaneous progress in asset reduction and capital accumulation.
As a cash flow statement has not been disclosed, funding trends are analyzed based on changes in the balance sheet. On the funding side, deposits increased to ¥8,639.1B (前年比+1.5%), while borrowings declined to ¥6,902.0B (前年比△12.0%) and negotiable certificates of deposit declined to ¥1,147.5B (前年比△32.4%). Liabilities related to securities lending and borrowing also contracted substantially, indicating reduced reliance on market-based funding and a return to stable, deposit-centered funding. On the asset deployment side, securities declined to ¥23,955.8B (前年比△4.7%), and cash and deposits with the Bank of Japan also decreased slightly to ¥19,631.8B (前年比△3.1%), while loans remained broadly flat at ¥58,799.9B (前年比+0.1%). Overall, the Company appears to be pursuing a conservative fund management policy that maintains traditional banking assets and liabilities—deposits and loans—while reducing market-based assets and liabilities, thereby enhancing funding stability during periods of interest-rate volatility.
The majority of current-period profit was generated by recurring banking operations, including net interest income, net fees and commissions income, and other operating income. Extraordinary losses were limited to ¥0.2B, including impairment losses of ¥0.1B, indicating that the impact of one-time factors on performance was limited. The difference between profit before tax of ¥252.2B and net income of ¥176.8B was attributable to income taxes and other taxes of ¥75.3B, resulting in an effective tax rate of approximately 29.9%, a normal level. Meanwhile, comprehensive income of ¥382.1B substantially exceeded net income of ¥176.8B, with the difference attributable to fair-value-related items such as valuation differences on available-for-sale securities of ¥110.1B and deferred hedge gains or losses of ¥102.4B. These items may fluctuate depending on movements in market interest rates, stock prices, and other factors, and should be distinguished from net income, which reflects recurring earnings power. Overall, although flow-based profit consists largely of recurring income, the fact that the increase in equity was led by OCI should be taken into account in evaluating the results.
The progress rate against the full-year forecast was 252.4B/780.0B, or 32.4%, for ordinary income, and 176.8B/530.0B, or 33.4%, for net income (calculated from forecast EPS of ¥201.44 × the period-average number of shares of 262,516 thousand shares). This represents progress ahead of the 25% level implied by simple quarterly averaging. During the current quarter, the Company revised both its earnings forecast and dividend forecast, with the disclosures indicating upward revisions and an increase in dividends. The factors behind the accelerated progress as of Q1 include the expansion of net interest income and net fees and commissions income, as well as improved operating leverage resulting from the lower expense ratio.
The dividend forecast is ¥80 per share, and the dividend forecast was revised upward during the current quarter. The payout ratio based on forecast EPS of ¥201.44 is approximately 39.7%, calculated as ¥80/¥201.44. As the previous fiscal year was affected by the stock split effective October 1, 2025 (a 1-for-3 stock split), a simple comparison of total annual dividends is not possible. The total annual dividend for the previous fiscal year after adjusting for the split is stated to be ¥63.00. Treasury shares amount to 4.6% of issued shares (12,555 thousand shares/275,658 thousand shares); however, no results for treasury share repurchases during the current period have been disclosed, so shareholder returns can only be evaluated based on the payout ratio.
Risk related to net interest margins: Net interest income expanded to ¥278.6B on a funds income basis (¥238.3B in the previous year), but the loan balance was virtually flat at +0.1% year on year, indicating that revenue growth depends primarily on improved yields. Margins may be compressed again by future increases in funding costs or changes in the interest-rate environment.
Risk of fluctuations in other comprehensive income: Of comprehensive income of ¥382.1B, valuation differences on securities of ¥110.1B and deferred hedge gains or losses of ¥102.4B were the primary contributors. These valuation-related items may move in the opposite direction due to fluctuations in market interest rates, stock prices, and other factors, and should be monitored as drivers of changes in equity.
Revenue concentration risk: The Banking segment accounts for 86.3% of ordinary revenue and the vast majority of segment profit, indicating a high degree of dependence on a single business. Although profit growth in the Securities and Leasing businesses is contributing to revenue-source diversification, their scale remains small.
Profitability and Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 25.4% | – | – |
As comparative data within the industry is limited, there is insufficient information to assess whether the Company’s figures are relatively high or low.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 20.6% | – | – |
Similarly, median data is limited, and the Company’s positioning in terms of growth within the industry is unclear.
※Source: Compiled by the Company
The expense ratio (general and administrative expenses / gross operating profit) improved from 51.8% in the previous year to 44.9%. Together with the expansion of net interest income and net fees and commissions income, this confirms positive operating leverage. If this structure continues, it may lead to a sustained improvement in profitability.
Progress against the full-year plan was 32.4% for ordinary income and 33.4% for net income, exceeding the 25% quarterly run-rate level and representing a strong start consistent with the upward revisions to the earnings forecast and dividend forecast during the current quarter.
The difference between comprehensive income of ¥382.1B and net income of ¥176.8B was primarily attributable to valuation-related items such as valuation differences on securities and deferred hedge gains or losses. To understand the nature of the increase in equity, these items should be distinguished from profit based on ordinary revenue.
This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
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