| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2512.1B | ¥2013.7B | +24.8% |
| Operating Income | - | - | - |
| Ordinary Income | ¥620.2B | ¥521.8B | +18.9% |
| Net Income | ¥437.5B | ¥358.4B | +22.1% |
| ROE | 7.7% | 7.1% | - |
The fiscal year ended March 2026 closed with Ordinary Revenue (Net Sales) of ¥2,512.1B (YoY +¥498.5B +24.8%), Ordinary Income of ¥620.2B (YoY +¥98.4B +18.9%), and Net Income attributable to owners of the parent of ¥437.3B (YoY +¥79.0B +22.1%), marking substantial revenue and profit growth. The main drivers were expanded interest income (loan balance +3.3% and improved investment yields due to rising market interest rates) and increased fee income. The ordinary income margin remained high at 24.7% (down 1.2pt from 25.9% in the prior year), although funding cost increases due to rising deposit rates (+36.2%) put pressure on net interest margin. Net income margin slightly declined to 17.4% (prior year 17.8%) but double-digit profit growth was secured due to stable tax burden. EPS (basic) rose significantly to ¥145.84 (prior year ¥118.55 +23.0%), and BPS increased to ¥1,904.72 (prior year ¥1,679.1). Comprehensive income improved substantially to ¥844.6B from negative in the prior year; deferred hedge valuation +¥263.3B and unrealized gains on securities +¥103.7B contributed to the increase in shareholders' equity.
[Revenue] Ordinary revenue was ¥2,512.1B (+24.8%), a strong increase. Banking business contributed ¥2,144.1B (+28.3%), representing 85.4% of the total, with interest income ¥1,572.9B (+26.1%) and fee income ¥413.7B (+8.2%) both expanding. Loan balances increased by +¥2,585.3B (+3.3%) to ¥8兆1,930.7B, and against a backdrop of rising market interest rates, loan interest income rose substantially to ¥1,050.5B (+15.7%). Securities investments expanded by ¥389.7B (+35.8%) to ¥2兆470.2B, increasing interest and dividend income by ¥389.7B (+35.8%). Conversely, funding costs increased by ¥530.9B (+36.2%), outpacing interest income growth and compressing margins as deposit rates rose. Leasing business rose slightly to ¥234.7B (+3.4%), and Other Businesses (financial product transactions, receivables management & collection, IT-related, etc.) performed well at ¥133.3B (+14.9%). Equity-method investment gains were ¥0.7B (prior year ¥0.6B), a marginal increase.
[Profit/Loss] Ordinary income of ¥620.2B (+18.9%) was achieved as top-line expansion absorbed increased expenses. Operating expenses rose sharply to ¥1,891.9B (+26.9%), of which SG&A including personnel and premises expenses increased by ¥695.2B (+8.3%). The cost-to-income ratio (expense ratio) deteriorated slightly to approximately 75.3% (prior year 74.1%), while provisions for loan losses were increased in line with higher net assets to correspond with the growth in loan balances. Extraordinary income was ¥0.3B and extraordinary losses ¥5.6B (including impairment losses of ¥3.4B), resulting in a net extraordinary loss of ¥5.3B, but the impact on ordinary income was minor. Profit before tax was ¥614.9B, and after corporate taxes of ¥177.4B (effective tax rate 28.9%), Net Income attributable to owners of the parent totaled ¥437.3B (+22.1%). Revenue expansion and fee diversification together drove profit growth.
The Banking business, the core segment, generated segment profit of ¥569.1B (prior year ¥477.2B +19.3%), accounting for 97.5% of reported segment profit. External-customer ordinary revenue of ¥2,144.1B (+28.3%) benefited from expanded lending and securities operations and margin improvement due to higher rates. Segment assets were ¥12兆1,303.7B (prior year ¥12兆643.2B +0.5%), a slight increase, with lending, securities, and call loans accumulated while funding composition improved through deposit increases and borrowings reductions. Leasing segment profit was ¥14.4B (prior year ¥14.7B -2.4%), a slight decrease. External-customer ordinary revenue for leasing was ¥234.7B (+3.4%), modestly higher, and segment assets expanded steadily to ¥993.9B (prior year ¥954.2B +4.2%). Other Businesses (financial product transactions, receivables management & collection, IT-related, etc.) recorded segment profit of ¥107.0B (prior year ¥249.3B -57.1%), a substantial decline; last year's one-off high profit levels reversed, and although external-customer ordinary revenue increased to ¥133.3B (+14.9%), profitability deteriorated. After intersegment eliminations and adjustments, consolidated ordinary income aggregated to ¥620.2B. The results were supported by the banking business's overwhelming profit contribution, but the profitability decline in Other Businesses warrants continued monitoring.
[Profitability] Net income margin of 17.4% (down 0.4pt from 17.8% prior year) remains high despite margin pressure from higher funding costs. Ordinary income margin was 24.7% (prior year 25.9%), slightly down due to rising deposit rates and increased expenses, but partially offset by fee net revenue accumulation of ¥277.2B (fee income ¥413.7B − fee expenses ¥137.3B). The banking business cost-to-income ratio is estimated at about 57.2%, worsening from about 54.3% in the prior year. ROE is 7.7% (improved 0.8pt from 6.9% prior year); although below the industry benchmark of 10%+, it shows improvement relative to the company’s historical performance. [Cash Quality] Operating CF / Net Income is -7.89x, and OCF/EBITDA (EBITDA = Ordinary Income + Depreciation = ¥690.3B) is -5.00x, both extremely weak; growth in bank account lending +¥2,585.3B, securities +¥1,303.2B, and call loans +¥1,381.3B has driven operating CF deeply negative. However, these reflect changes in financial institutions' asset management structures and do not directly indicate a permanent deterioration in earnings quality. [Investment Efficiency] CAPEX / Depreciation is 0.36x, indicating restrained tangible fixed-asset renewal investment. Intangible asset acquisitions of ¥74.8B (prior year ¥63.2B) suggest continued digital investment. [Financial Soundness] Equity Ratio is 4.7% (improved 0.5pt from 4.2% prior year), which meets domestic standards but is not thick compared to international standards (>8%). D/E (debt-to-equity ratio) is 20.47x, reflecting the high-leverage structure of banking operations. Loan-to-deposit ratio (LDR) is 86.4% (loan balance ¥8兆1,930.7B ÷ deposits ¥9兆4,814.3B), within an optimal range, limiting liquidity risk.
Operating CF was -¥3,451.7B (prior year -¥8,974.3B, improvement of +¥5,522.6B), a large negative but improved YoY. The primary drivers were loan growth (+¥2,585.3B), securities acquisitions (+¥1,303.2B), and increases in call loans (+¥1,381.3B), structural shifts in cash allocation accompanying expanded investment assets. Operating CF subtotal (before working capital changes) was -¥3,298.2B (prior year -¥8,727.8B), indicating extremely limited cash generation from core operations. Including corporate tax payments of -¥153.4B, Operating CF remained substantially negative. Investing CF was -¥2,028.0B (prior year -¥2,025.2B) with tangible fixed-asset acquisitions of -¥25.3B and intangible asset acquisitions of -¥74.8B reflecting cautious investment. Financing CF was -¥209.1B (prior year -¥177.2B), with dividend payments of -¥156.5B and share buybacks of -¥51.5B executed as shareholder returns while reducing borrowings. Free Cash Flow was -¥5,479.7B (Operating CF -¥3,451.7B + Investing CF -¥2,028.0B), a large negative, and cash and deposits declined by -¥5,688.6B (ending balance ¥1兆1,165.2B, prior year ¥1兆6,853.8B). However, bank-account cash and deposits of ¥1兆1,534.4B (prior year ¥1兆7,269.9B) remain at a level sufficient for liquidity management, preserving a liquidity cushion.
Of Ordinary Income ¥620.2B, net interest income (interest income ¥1,572.9B − interest expense ¥530.9B) is ¥1,042.0B, comprising the bulk of earnings and indicating the interest business is the core revenue base. Fee net revenue of ¥277.2B (fee income ¥413.7B − fee expenses ¥137.3B) provides stable recurring income. Trading gains were ¥24.9B (prior year ¥23.6B), and other ordinary revenue was ¥292.5B (prior year ¥274.3B), which include market-related and one-off elements but play a complementary role in the overall revenue structure. Extraordinary items were net -¥5.3B and minor, with impairment losses of ¥3.4B as one-off costs. Comprehensive income of ¥844.6B far exceeded net income of ¥437.3B; other comprehensive income of ¥407.1B (deferred hedge valuation +¥263.3B, unrealized gains on securities +¥103.7B, actuarial gains/losses related to retirement benefits +¥40.1B) bolstered equity. Improvements in hedge accounting and securities valuation are temporary factors but the increase in shareholders’ equity functions as a capital buffer. The large negative Operating CF stems from accumulation of investment assets and does not necessarily impair earnings quality itself, but the weak cash conversion requires ongoing attention.
Full Year guidance: Ordinary Income ¥745.0B (YoY +20.1%), Net Income attributable to owners of the parent ¥510.0B, projected EPS ¥172.73, projected dividend ¥35.00. Progress toward the full year plan is 83.3% based on first-half actual Ordinary Income of ¥620.2B, indicating steady progress. The second half is assumed to benefit from loan repricing in a rising-rate environment and accumulation of fee income, but risks include follow-on increases in deposit rates and market volatility in investments. Achievement of the plan assumes improvement in the cost-to-income ratio (expense restraint) and stability in credit costs.
Annual dividend is ¥58 (Q2-end 27, year-end 31), with a payout ratio of 40.5%, a sustainable level. Prior year dividend was ¥23.5, a substantial increase (+146.8%). Share buybacks totaled ¥51.5B (prior year ¥50.0B), and the total return ratio is approximately 52.3% ((dividends ¥156.7B + share buybacks ¥51.5B) ÷ Net Income ¥437.3B), reinforcing shareholder returns. Next fiscal year dividend guidance is ¥35, a reduction from ¥58 this year, aligned with initial planning considerations. Given Free Cash Flow of -¥5,479.7B, dividends and buybacks were funded through balance sheet reallocation and strengthened equity. Net assets increased by ¥641.9B and comprehensive income turned positive, preserving room for potential dividend increases in the following year.
Continued low NIM risk: Estimating average balances of lending and securities investments at approx. ¥11兆 and net interest income at ¥1,042.0B gives an approximate NIM of about 0.95%, which is very low. If deposit rates continue to rise, margins will be further compressed, weakening the revenue base. Urgent actions include loan repricing and duration management of the securities portfolio.
Limited capital buffer and high leverage risk: Equity Ratio of 4.7% meets domestic standards but is thin compared to international standards (>8%). Under a D/E of 20.47x, resilience to sharp interest changes or market shocks is limited. Contingent liabilities such as accepted bills and guarantees amounting to ¥625.5B (prior year ¥559.9B, +11.7%) have increased, warranting attention to underwriting risk in deteriorating credit conditions.
Revenue concentration in banking and worsening expense ratio risk: With the banking business accounting for 97.5% of segment profit, a concentrated structure exposes the company directly to regional economic slowdown or adverse interest conditions. Cost-to-income ratio of 57.2% has worsened year-on-year, and if expense growth (+26.9%) outpaces ordinary revenue growth (+24.8%) persistently, operating leverage could turn negative. Realization of returns from digital investments and cost-efficiency improvements is urgent.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 17.4% | 11.9% (7.2%–35.4%) | +5.5pt |
Net income margin exceeds the industry median by 5.5pt, placing profitability high within the sector.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 24.8% | 10.1% (7.3%–12.1%) | +14.8pt |
Revenue growth rate exceeds the industry median by 14.8pt, indicating standout top-line expansion.
※Source: Company aggregation
Balancing growth and margin management in a rising-rate environment: The company achieved substantial revenue and profit growth (Ordinary Revenue +24.8%, Ordinary Income +18.9%), but deposit rate increases raised funding costs by +36.2%, compressing margins. NIM at approx. 0.95% is very low; loan repricing and duration management of the securities portfolio are critical for sustainable earnings. Lending balance +3.3% and securities +6.8% show aggressive expansion of investment assets, requiring nimble responses to interest-rate changes in the second half and beyond.
Balance between strengthened shareholder returns and capital buffer: With dividends increased +146.8% and share buybacks of ¥51.5B, total return ratio rose to about 52.3%, significantly enhancing shareholder returns. Comprehensive income of ¥844.6B and shareholders’ equity increase of ¥641.9B provided some capital buffer, but Equity Ratio of 4.7% leaves limited headroom by international standards. The next-year dividend forecast of ¥35 is a reduction, but depending on full-year performance, there may be room for increases. ROE of 7.7% is below top industry levels; improving capital efficiency and further profit growth are prerequisites for sustainable dividends.
Need to realize cost efficiencies and returns on digital investment: Cost-to-income ratio of 57.2% has worsened, with expense growth sometimes exceeding ordinary revenue growth. Intangible asset acquisitions of ¥74.8B (prior year ¥63.2B) indicate ongoing digital investment, but delayed realization of cost-effectiveness could further pressure profitability. Given the revenue concentration in banking (97.5% of segment profit), regional economic weakness or adverse rate environments pose direct risks; diversification of fee businesses and accelerated cost-structure reforms are essential for medium- to long-term sustainable growth.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.