Okinawa Financial Group,Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥3.83B
• EPS: ¥245.27

Income Statement

Balance Sheet

Cash Flow Statement

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

Okinawa Financial Group (consolidated, JGAAP) reported FY2026 Q2 cumulative results with operating income of ¥7.688bn and net income of ¥5.234bn, up 36.8% YoY. Many standard line items (revenue, gross profit, current assets/liabilities, cash & equivalents, investing CF, DPS, shares) are undisclosed in XBRL and appear as zeros; these are not actual zeros and should not be interpreted as such. Given the company’s nature as a financial holding company, traditional manufacturing-style metrics (revenue, gross margin, EBITDA margin, current ratio) are not meaningful. Balance sheet leverage is high by design, with total assets of ¥2,958.261bn and total equity of ¥160.825bn, implying financial leverage of 18.39x and an estimated equity ratio of roughly 5.4% (equity/assets), which is typical for a regional banking group. The effective tax burden, inferred from reported income tax of ¥1.728bn against pre-tax income approximated by ordinary income, is about 22–23%. Cash flow from operating activities was robust at ¥86.372bn, equating to an OCF/Net Income ratio of ~16.5x; for banks, OCF is heavily influenced by deposit and loan flows and is not a clean measure of earnings quality. Depreciation and amortization totaled ¥1.173bn, and EBITDA approximates ¥8.861bn, but EBITDA is not a primary performance metric for financial institutions. Based on period-end equity, half-year ROE is ~3.25%, which annualizes to roughly 6.5%; half-year ROA is ~0.18%, annualizing to ~0.35%. Ordinary income equaled operating income in this disclosure, suggesting limited non-operating distortions in the period. Financing cash flows were modest at -¥0.816bn, implying limited capital actions in the half year. Absent capital adequacy ratios (CET1, total capital, leverage ratio) and detailed breakdowns (net interest income, fees, credit costs, securities gains/losses), the assessment must rely on headline earnings and balance sheet scale. The YoY increase in net income indicates improved profitability, likely from net interest margin normalization, lower credit costs, or securities-related gains, but the drivers are not disclosed here. Liquidity metrics based on current assets/liabilities are not applicable to banks; funding stability should be assessed via deposit mix and liquidity coverage ratios, which are not provided. Dividend data are not disclosed; therefore, payout assessment cannot be completed from this set. Overall, results point to solid earnings momentum and a stable capital base for a regional financial group, with the caveat of significant data limitations typical for bank reporting mapped to generic templates.

Profitability Analysis

ROE_decomposition: - Approximate half-year ROE ≈ Net income / Ending equity = ¥5.234bn / ¥160.825bn ≈ 3.25%; annualized ≈ ~6.5%. - Financial leverage = Assets / Equity = ¥2,958.261bn / ¥160.825bn ≈ 18.39x (provided). - Asset-level profitability (ROA, half-year) ≈ Net income / Assets = ¥5.234bn / ¥2,958.261bn ≈ 0.177%; annualized ≈ ~0.35%. - Net profit margin and asset turnover from the provided DuPont are not interpretable because "revenue" is undisclosed for a bank; bank DuPont should rely on ROA × leverage rather than sales-based ratios. margin_quality: - Inferred effective tax rate ≈ ¥1.728bn / ¥7.688bn ≈ ~22.5%. - Ordinary income equals operating income, implying minimal non-operating effects in this dataset; however, bank ordinary income typically includes core and non-core items (e.g., securities gains), detail not provided. - EBITDA and gross margin are not meaningful for banks; core profitability should be assessed via net interest income, fees, and credit costs, which are not disclosed. operating_leverage: - YoY operating income change is shown as +0.0% due to non-disclosure mapping; cannot assess operating leverage from sales vs. fixed cost behavior. - The 36.8% YoY increase in net income suggests positive operating leverage or lower credit costs, but underlying drivers (NIM expansion, credit cost normalization, securities valuation) are not provided.

Growth Assessment

revenue_sustainability: - Revenue is undisclosed in this template for a financial institution; sustainability should be evaluated via net interest income trends, loan/deposit growth, and fee income, which are not provided. profit_quality: - Net income increased to ¥5.234bn (+36.8% YoY). With ordinary income = operating income and limited non-operating items evident, headline profit quality appears acceptable; however, lack of disclosure on credit costs and securities gains limits assessment of recurrence. outlook: - Assuming a stable macro backdrop and BOJ policy normalization, half-year ROE ~3.25% annualized to ~6.5% suggests mid–single-digit full-year ROE potential. Sustainability hinges on credit cost discipline, deposit beta management, and securities valuation stability. Data gaps (NIM, cost-to-income, credit cost) preclude a definitive forward view.

Financial Health

liquidity: - Current ratio and quick ratio are not applicable to banks; zeros reflect non-disclosure. Liquidity should be judged via LCR/NSFR and deposit stability, which are not provided. Operating CF of ¥86.372bn is not a reliable liquidity proxy for banks due to balance sheet flow effects. solvency: - Total equity ¥160.825bn vs. assets ¥2,958.261bn implies an equity ratio ~5.4%, consistent with regional bank norms. Regulatory capital metrics (CET1, total capital ratio, leverage ratio) are not disclosed here; these are critical to solvency assessment. capital_structure: - Total liabilities ¥2,825.534bn; debt-to-equity (liabilities/equity) ≈ 17.57x (provided). High leverage is structural for banks and should be assessed against regulatory buffers and risk-weighted assets, which are not disclosed.

Cash Flow Quality

earnings_quality: - OCF/Net Income ≈ 16.5x (¥86.372bn / ¥5.234bn), reflecting strong cash inflows; for banks, this is largely driven by changes in deposits/loans and is not a clean indicator of accrual quality. Net income appears supported by cash movements, but composition is unclear. FCF_analysis: - Investing CF is undisclosed (shown as zero) and free cash flow cannot be meaningfully computed for a bank from this template. Traditional FCF is not a relevant metric; focus should be on internal capital generation and dividend capacity versus regulatory capital needs. working_capital: - Working capital metrics are not applicable to banks. Balance sheet dynamics should be evaluated via loan-to-deposit ratio, liquidity buffers, and maturity gaps—none are disclosed here.

Dividend Sustainability

payout_ratio_assessment: - DPS and payout ratio are undisclosed in this dataset (zeros indicate non-reporting). With EPS of ¥245.27 for the half year, capacity exists for distributions, but policy and actual payout cannot be inferred. FCF_coverage: - FCF is not meaningful for banks in this template; coverage should be assessed against core earnings and regulatory capital headroom. Data to compute coverage are not available. policy_outlook: - Dividend outlook depends on capital policy, CET1 ratio, and earnings visibility. In absence of capital adequacy disclosures and DPS guidance, no firm conclusion can be drawn.

Risk Assessment

Business Risks:

• Regional concentration in Okinawa economy (tourism and service-sector cyclicality).
• Interest rate risk from BOJ policy shifts affecting deposit betas and securities portfolios.
• Credit cost volatility tied to SMEs and consumer lending in the region.
• Market risk from valuation changes in JGBs and equity holdings (AFS/HTM).
• Fee income sensitivity to market activity and insurance/investment product sales.

Financial Risks:

• Capital adequacy uncertainty due to lack of disclosed CET1/total capital ratios.
• High structural leverage (assets/equity ≈ 18.4x) magnifies shocks to earnings and capital.
• Liquidity/funding risk if deposit mix shifts or competition raises funding costs.
• Unrealized losses risk on securities amid rate volatility (data not disclosed).
• Regulatory risk from Basel III finalization and domestic supervisory changes.

Key Concerns:

• Data gaps on NIM, credit costs, and securities gains limit assessment of earnings durability.
• Absence of LCR/NSFR and CET1 ratios constrains solvency and liquidity evaluation.
• Dividend policy and payout not disclosed, obscuring capital return expectations.

Investment Implications

Key Takeaways:

• Headline profitability improved: net income ¥5.234bn (+36.8% YoY).
• Estimated half-year ROE ~3.25% (annualized ~6.5%); ROA annualized ~0.35%.
• Capital base of ¥160.825bn implies equity ratio ~5.4%, typical for regional banks.
• OCF strong at ¥86.372bn, but not a clean quality-of-earnings signal for banks.
• Significant disclosure gaps necessitate caution in interpreting standard ratios.

Metrics to Watch:

• CET1 ratio and total capital ratio (Basel III).
• Net interest margin and deposit beta trends post-BOJ policy changes.
• Credit costs (NPL inflows, coverage ratio) and loan growth.
• Securities portfolio duration and unrealized gains/losses (JGBs, equities).
• Cost-to-income ratio and fee income trajectory.

Relative Positioning: Within Japan’s regional bank cohort, Okinawa Financial Group’s leverage and implied equity ratio are in a typical range, and annualized ROE around mid–single digits appears competitive but not exceptional; precise relative ranking requires peer NIM, credit cost, and capital ratio data not provided here.

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