| Metric | Current | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥13572.2B | ¥11174.9B | +21.5% |
| Operating Income / Operating Profit | - | - | - |
| Ordinary Income | ¥3909.0B | ¥2921.6B | +33.8% |
| Net Income / Net Profit | ¥2601.0B | ¥2148.0B | +21.1% |
| ROE | 8.9% | 7.8% | - |
For the fiscal year ended March 2026, Revenue (ordinary income) was ¥1兆3,572B (YoY +¥2,397B, +21.5%), Ordinary Income was ¥3,909B (YoY +¥987B, +33.8%), and Net Income attributable to owners of the parent was ¥2,587B (YoY +¥445B, +21.1%), achieving top-line and bottom-line growth. The top-line expansion was driven by two pillars: Net interest income ¥8,226B (prior ¥6,172B, +¥2,054B) and fee income ¥2,935B (prior ¥2,846B, +¥89B). Loan repricing in a normalization of the interest rate environment and resilience in asset management operations contributed. Operating expenses increased to ¥9,663B (prior ¥8,253B, +¥1,410B, +17.1%) accompanying revenue growth, but the revenue growth rate exceeded expense growth, improving margins at the ordinary income stage. Equity-method income turned to a large negative at -¥448B (prior +¥4B), as valuation losses at affiliates restrained ordinary income, but the improvement in core business profitability absorbed this impact.
[Revenue] Ordinary income rose sharply to ¥1,3572B (+21.5%). Breakdown: asset management revenue ¥8,226B (prior ¥6,172B, +33.3%) was the largest driver, with interest on loans ¥5,555B (prior ¥4,162B, +33.5%) and interest on securities ¥1,440B (prior ¥1,128B, +27.6%) both increasing. Loan balance expanded to ¥47.6T (prior ¥44.5T, +7.0%), and repricing during the rate-hike phase improved yields. Fee income was ¥2,935B (+3.1%), only slightly higher, affected by intensified competition in fee-based transactions and market environment changes but remained resilient. Trading income rose slightly to ¥47B (prior ¥39B), and other ordinary income was ¥699B (prior ¥704B), nearly flat. By segment, Retail segment gross profit was ¥4,106B (prior ¥3,562B, +15.3%), Corporate segment ¥4,855B (prior ¥4,579B, +6.0%)—both achieved revenue growth—and Markets segment gross profit improved its loss to -¥828B (prior -¥1,147B), narrowing the deficit by ¥319B.
[Profitability] Ordinary income was ¥3,909B (+33.8%), with revenue gains more than offsetting expense increases. Funding costs were ¥2,307B (prior ¥1,367B, +68.8%), reflecting higher deposit costs, but growth in asset management revenue absorbed this, expanding net interest income (asset management revenue - funding costs) to ¥5,919B (prior ¥4,805B, +23.2%). Fee-related costs were ¥900B (prior ¥823B), trading costs ¥0.3B (prior ¥0.2B), both slightly higher. Operating expenses (SG&A) were ¥4,662B (prior ¥4,478B, +4.1%), an increase within the range commensurate with revenue growth. Equity-method investment losses of -¥448B (prior +¥4B) pressured ordinary income, but core business strength compensated. Extraordinary items: extraordinary gains ¥31B, extraordinary losses ¥100B (including impairment losses ¥71B), netting ¥69B loss, limited in scale. Profit before income taxes was ¥3,839B (prior ¥2,939B, +30.6%), income taxes ¥1,239B (effective tax rate 32.3%, prior 26.9%), resulting in Net Income attributable to owners of the parent ¥2,587B (+21.1%). In conclusion, the company achieved revenue and profit growth driven by improved interest rate environment and loan expansion.
Retail segment gross profit ¥4,106B (prior ¥3,562B, +15.3%), expenses ¥2,373B (prior ¥2,277B), and core operating profit ¥1,732B (prior ¥1,285B, +34.9%)—a substantial increase. Expansion of asset management and succession-related advisory services and improved personal loan yields from rising rates contributed. Corporate segment gross profit ¥4,855B (prior ¥4,579B, +6.0%), expenses ¥2,264B (prior ¥2,160B), and core operating profit ¥2,591B (prior ¥2,420B, +7.1%) maintained a positive trend, supported by growth in corporate lending and steady trust/pension operations. Markets segment gross profit improved to -¥828B (prior -¥1,147B), narrowing the loss by ¥319B, mainly due to improvement in revenue transfer from changed internal transfer rates of -¥618B (prior -¥1,231B). Other (corporate management and similar) core operating profit deteriorated to -¥383B (prior -¥27B), largely due to equity-method loss -¥448B. Credit costs totaled ¥141B (Retail ¥16B, Corporate ¥122B, Other ¥3B), remaining low and supporting earnings.
[Profitability] ROE was 8.9% (prior 7.8%, +1.1pt), with Net Profit Margin 19.1% (prior 19.2%, nearly flat), Total Asset Turnover 0.018x (prior 0.014x), and financial leverage 26.05x (prior 28.11x). Ordinary income margin was 28.8% (prior 26.1%, +2.7pt), reflecting improved core profitability. [Cash Quality] Operating Cash Flow / Net Income was -18.21x, an extreme negative, reflecting structural effects of loan/deposit movements unique to banking. Accrual ratio was 6.5%, neutral to slightly cautionary, driven by asset-side expansion (loans +7.0%, securities +11.4%) and drawdown of cash and deposits (-29.5%). [Investment Efficiency] Capital expenditure / Depreciation was 0.46x, indicating restrained new investment in branches and systems. [Solvency] Equity Ratio was 3.8% (prior 3.5%, +0.3pt), but significantly below the regulatory minimum of 8%, making capital buffer buildup a priority. D/E ratio was 25.05x (prior 27.33x), reflecting leverage typical of the banking model. Loan-to-deposit ratio (LDR) was approximately 75% (Loans ¥47.6T / Deposits ¥63.7T), within an optimal range, indicating limited excessive reliance on short-term funding.
Operating Cash Flow was -¥4,737.6B (prior -¥293.4B), a large negative, driven mainly by operating cash flow subtotal (pre-tax, before working capital changes) of -¥4,644.3B. Breakdown: net increase in loans (+¥3.1T) and expanded securities operations (+¥1.2T) caused cash outflows; net increase in deposits (+¥309.8B) did not fully absorb these, and cash and cash equivalents decreased by ¥5.8T. Corporate tax payments ¥93.3B and equity-method losses -¥448B further pressured OCF. Investing Cash Flow was -¥983.9B (prior -¥1,045.5B), primarily capital expenditure ¥17.2B, intangible asset purchases ¥11.9B, and expenditures related to securities/fixed-asset replacements. Free Cash Flow was -¥5,721.5B (prior -¥1,338.9B), a sizable negative reflecting funding needs from asset-side expansion. Financing Cash Flow was -¥127.9B (prior -¥89.0B); dividend payments ¥64.2B and share buybacks ¥66.0B were main outflows, partially offset by net bond issuance ¥91.0B. Cash and cash equivalents at period-end decreased to ¥13,466.2B (prior ¥19,316.9B, -¥5.9T), reflecting substantial operating cash outflows. Operating cash flow in banking fluctuates significantly with balance-sheet expansion of loans and deposits and does not directly indicate revenue recognition quality; this period showed a pronounced active asset-side deployment.
Recurring revenue is composed primarily of Net Interest Income (asset management revenue - funding costs) ¥5,919B and Net Fee Income (fee revenue - fee costs) ¥2,035B, indicating a core business–centric revenue structure. Non-operating profit/loss included an equity-method investment loss of -¥448B (prior +¥4B), a temporary negative affecting earnings but likely non-recurring compared with past results. Extraordinary items comprised extraordinary gains ¥31B (proceeds from fixed asset sales, etc.) and extraordinary losses ¥100B (including impairment losses ¥71B), netting a ¥69B loss with limited impact on net income. Comprehensive income was ¥3,039B (¥2,601B net income +¥438B), driven by valuation gains on other securities +¥483B, deferred hedge losses -¥261B, retirement benefit adjustments +¥249B, and foreign currency translation adjustments -¥34B, with securities valuation gains boosting comprehensive income. The gap between Ordinary Income ¥3,909B and Net Income ¥2,587B is mainly due to a higher effective tax rate of 32.3% (prior 26.9%), compressing after-tax profits; there is no indication of earnings-management in revenue recognition. The accrual ratio 6.5% is neutral to slightly cautionary, and the large negative operating cash flow is attributable to structural loan/deposit shifts, reflecting banking characteristics rather than manipulation.
For the fiscal year ending March 2027, company guidance is Net Income attributable to owners of the parent ¥3,100B (YoY +approx. 19.2%), Basic EPS ¥137.6 (prior ¥113.82), and annual dividend ¥18.5 (prior ¥29). On profits, management assumes continued earnings growth under further loan repricing and stabilization in Markets segment profitability. Dividends are reduced from ¥29 to ¥18.5, indicating a conservative capital allocation pivot prioritizing internal reserves to strengthen equity. Progress toward the plan is about 83% (current Net Income ¥2,587B / full-year plan ¥3,100B), and achievement is feasible depending on H2 earnings accumulation. Payout ratio on plan basis is about 13%, kept low to prioritize improving regulatory capital (Equity Ratio 3.8%). The policy clearly prioritizes capital strengthening over immediate shareholder distributions.
Actual dividends were annual ¥29 (interim ¥14.5, year-end ¥14.5), with payout ratio 27.1% (prior 27.1%, flat), a sustainable level on a net-income basis. Share buybacks were ¥66.0B (prior ¥40.0B), and total shareholder returns were Dividends ¥64.2B + Buybacks ¥66.0B = ¥130.2B, implying a Total Return Ratio of about 50%. Cash and cash equivalents at ¥13.5T provide adequate cash coverage for dividends, but Free Cash Flow is -¥5.7T, so dividends and buybacks are financed from asset-side funding (deposits / market funding). Next fiscal year’s dividend plan is ¥18.5 (vs prior ¥29, -36.2%), lowering payout ratio to about 13%. This reflects a policy prioritizing internal capital accumulation to improve Equity Ratio 3.8% (well below regulatory minimum 8%). Dividend policy appears to be shifting from a “payout ratio” standard to a “capital enhancement” priority; stronger returns are likely only after reaching regulatory capital targets, making capital buffer accumulation the immediate priority.
NIM downside risk: Estimated NIM in the low 1.2% range remains low; if deposit beta (degree to which deposit rates follow market rates) rises, funding cost increases could compress net interest income. Funding costs have already risen YoY by ¥940B (+68.8%), and there is no guarantee that loan rate increases will outpace deposit cost increases. Intensified competition for deposits and rapid market rate spikes could narrow spreads and deteriorate profitability.
Capital adequacy risk: Equity Ratio 3.8% is materially below the regulatory minimum of 8%, leaving capital buffers extremely thin. Further loan growth or market-driven asset value declines (e.g., securities valuation losses) could trigger regulatory breaches or capital-raising pressure. Constraints on dividends and buybacks are already reflected in next year’s plan, increasing uncertainty around sustainable shareholder returns. Stricter RWA management or the need for additional capital could constrain management flexibility.
Volatility in equity-method affiliates’ results: Equity-method investment loss -¥448B (prior +¥4B) materially pressured ordinary income. If affiliates’ performance deteriorates or valuation losses recur—particularly in property- or resource-related JVs sensitive to market conditions—consolidated earnings could be directly affected. Enhanced monitoring is required.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 19.2% | 11.9% (7.2%–35.4%) | +7.3pt |
Net Profit Margin exceeds the industry median by 7.3pt, placing the company among the higher-profitability banks in the sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 21.5% | 10.1% (7.3%–12.1%) | +11.4pt |
Revenue growth rate exceeds the industry median by 11.4pt, reflecting pronounced loan and asset management revenue expansion during the rate-hike cycle.
※Source: Company aggregation
Pronounced revenue expansion in rate-hike environment: Net interest income rose YoY +¥2,054B (+42.8%), driven by loan balance expansion (+7.0%) and repricing effects from higher rates. If policy rate normalization continues, there remains material upside to asset management revenue, but attention is needed on deposit beta and funding cost increases. NIM level and loan-deposit spread trends will determine mid-term sustainability of profitability.
Capital policy inflection point: Dividend plan reduction to ¥18.5 (vs actual ¥29, -36.2%) signals prioritization of improving Equity Ratio 3.8% (substantially below regulatory minimum 8%). If internal reserve accumulation proceeds, there may be scope to restore shareholder returns later, but low payout is likely to persist near term. Timing to reach regulatory levels and pace of capital-policy normalization are monitoring points.
Improved segment revenue structure: Retail core operating profit increased YoY +34.9%, aided by expanded asset-management advisory. Corporate profit rose +7.1% with steady lending and trust operations; Markets segment narrowed its loss by ¥319B. Continued segment-level improvements could absorb equity-method negatives and further improve margins at the ordinary income stage. Credit costs remain low at ¥141B, supporting earnings stability.
This report was generated automatically by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are compiled by our firm from public financial statements and are provided for reference. Investment decisions are your responsibility; consult a professional advisor as necessary.