| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥3599.8B | ¥3001.1B | +20.0% |
| Operating Income | - | - | - |
| Ordinary Income | ¥1162.0B | ¥974.0B | +19.3% |
| Net Income | ¥809.0B | ¥710.1B | +13.9% |
| ROE | 2.7% | 2.4% | - |
Revenue and profit increased, driven by expanded earnings in the Retail and Corporate divisions; however, profit growth slightly trailed revenue growth due to increased losses in the Markets division and a higher tax burden. Ordinary revenue (equivalent to revenue) was ¥3,599.8B (+20.0% YoY), Ordinary Income was ¥1,162.0B (+19.3%), and consolidated Net Income was ¥809.0B (+13.9%). Net Income attributable to owners of the parent was ¥805.3B (+14.2%), while EPS was ¥35.79 (+16.3%). The primary drivers of revenue growth were increases in interest income and fee income, while the slowdown in profit growth was attributable to increased losses in the Markets division and a higher effective tax rate.
【Revenue】Ordinary revenue was ¥3,599.8B, up +20.0% YoY. The main components were interest income of ¥2,351.5B (¥1,821.0B in the previous year, +29.1%) and fee income of ¥696.5B (¥639.0B in the previous year, +9.0%). Segment gross operating profit increased in both the Retail division to ¥1,467.9B (¥1,049.8B in the previous year, +39.8%) and the Corporate division to ¥1,381.1B (¥1,120.8B in the previous year, +23.2%). Meanwhile, the Markets division recorded a loss of ▲¥550.6B (▲¥208.0B in the previous year), resulting in an expanded deficit. Consequently, the growth in total gross operating profit (+15.8%) fell below the growth in overall ordinary revenue. The expanded loss in the Markets division was largely attributable to the transfer of revenue following a change in the transfer pricing rate (▲¥498.1B in the current period versus ▲¥176.7B in the previous year).
【Profit and Loss】Total expenses were ¥1,230.7B (¥1,142.3B in the previous year, +6.8%), significantly below the growth rate of ordinary revenue (+20.0%). The expense ratio (general and administrative expenses/ordinary revenue) remained at an efficient level of 33.4%. Credit-related costs slightly deteriorated to ▲¥13.4B in the current period (recognized as an expense, compared with a reversal of +¥9.2B in the previous year), although the absolute level remained limited. Profit before tax reached ¥1,161.0B (+19.3%), but income taxes and other taxes were ¥352.0B, and the effective tax rate increased to 30.3% from 27.0% in the previous year, restraining Net Income growth relative to profit before tax growth. Extraordinary items were immaterial, comprising extraordinary gains of ¥2.9B and extraordinary losses of ¥3.9B (including impairment losses of ¥1.8B); therefore, the impact of one-time factors on performance was limited. Consolidated Net Income was ¥809.0B (+13.9%), resulting in higher revenue and profit overall.
Core operating profit (total segments, before credit-related costs) was ¥1,064.8B (¥810.5B in the previous year, +31.4%), driven by the Retail division at ¥820.8B (¥437.2B in the previous year, +87.7%) and the Corporate division at ¥816.6B (¥597.7B in the previous year, +36.6%). Conversely, the Markets division recorded a loss of ▲¥572.6B (▲¥224.4B in the previous year), with the deficit widening. As a result, total core operating profit after credit-related costs was limited to ¥1,050.7B (¥819.8B in the previous year, +28.2%). The strong growth in the Retail and Corporate divisions reflected revenue expansion exceeding expense growth (+5.6% and +7.3%, respectively), indicating improved profitability. The expanded loss in the Markets division was primarily caused by the transfer of revenue following the change in the transfer pricing rate, and it should be noted that the revision of profit and loss allocations between divisions had a substantial impact.
【Profitability】The Ordinary Income margin (Ordinary Income/ordinary revenue) was 32.3%, almost unchanged from 32.5% in the previous year. The Net Income margin (consolidated Net Income/ordinary revenue) was 22.5%, narrowing by approximately 1.2pt from 23.7% in the previous year. The decline in the Net Income margin was primarily attributable to the increase in the effective tax rate from 27.0% to 30.3%, while operating-level profitability itself was maintained.【Cash Quality】Extraordinary items were immaterial, comprising extraordinary gains of ¥2.9B and extraordinary losses of ¥3.9B, and the majority of profit was based on recurring transactions such as interest income and fee income.【Investment Efficiency】ROE was 2.7%, while financial leverage (total assets/net assets) was high at 25.4x. Asset turnover was extremely low, as is characteristic of the banking industry, and changes in profitability are primarily determined by fluctuations in the Net Income margin.【Financial Soundness】The Equity Ratio (BIS basis) was 3.9%, a slight improvement from 3.8% in the previous year. The loan-to-deposit ratio (loans/deposits) was 76.8%, indicating stable liquidity, while the expense ratio (general and administrative expenses/ordinary revenue) was 33.4%, maintaining a favorable level of cost efficiency.
As a cash flow statement has not been disclosed, funding trends are assessed based on changes in the balance sheet. Loans increased from ¥476.35T to ¥485.16T (+1.9%), indicating an expansion in credit volume, while deposits decreased slightly from ¥637.28T to ¥631.54T (▲0.9%). Securities increased from ¥11.48T to ¥11.85T (+3.2%), reflecting continued growth in investment assets. On the funding side, call money increased from ¥0.73T to ¥1.28T (+75.8%), while payments related to securities lending and borrowing increased from ¥2.21T to ¥2.86T (+29.7%). Thus, reliance on short-term market funding increased slightly as a means of offsetting the modest decline in deposits. Treasury stock increased from ¥706.9B to ¥908.5B, confirming progress in share repurchases as an activity affecting cash and capital allocation.
The majority of profit was based on recurring transactions such as interest income and fee income. Extraordinary items were immaterial, comprising extraordinary gains of ¥2.9B and extraordinary losses of ¥3.9B (including impairment losses of ¥1.8B). The difference between Ordinary Income and Net Income was primarily attributable to the tax burden (effective tax rate of 30.3%) and remains within an acceptable range. Meanwhile, comprehensive income of ¥1,590.4B significantly exceeded Net Income of ¥809.0B, primarily because the valuation difference on securities expanded from ¥378.8B to ¥691.4B. This increase in the valuation difference reflects changes in the market value of securities held and is more susceptible to fluctuations in market conditions than Net Income. Comprehensive income attributable to owners of the parent was ¥1,575.9B, and the difference from Net Income attributable to owners of the parent of ¥805.3B was likewise primarily attributable to the increase in the valuation difference.
The full-year forecast for Net Income attributable to owners of the parent is ¥330.0B, representing progress of 24.4% against current Q1 actual Net Income of ¥805.3B, which is broadly in line with the simple progress benchmark of 25% and represents a standard pace. Based on results through Q1, the full-year consolidated earnings target announced on May 12, 2026 has been revised, while the dividend forecast (¥37 for the full year) remains unchanged. The full-year EPS forecast is ¥146.97, and Q1 EPS of ¥35.79 represents 24.4% of the full-year forecast.
The full-year dividend forecast remains unchanged at ¥37, implying a Payout Ratio of approximately 25.2% against the full-year EPS forecast of ¥146.97. The dividend paid in the same period of the previous year was ¥14.5. Although this report does not provide sufficient information to confirm whether a progressive dividend increase trend exists over the full year, the dividend forecast appears conservative relative to profit growth. Treasury stock increased from ¥706.9B to ¥908.5B, suggesting progress in share repurchases. However, as detailed data on the scale of repurchases is unavailable, no assessment is made of the Total Return Ratio combining dividends (Payout Ratio) and share repurchases.
Risk of earnings volatility in the Markets division: Gross operating profit in the Markets division declined to a loss of ▲¥550.6B (▲¥208.0B in the previous year), with the deficit widening. The transfer of revenue following the change in the transfer pricing rate (▲¥498.1B in the current period) had a substantial impact, and revisions to intersegment allocations represent a source of earnings volatility.
Risk of fluctuations in valuation differences on securities and OCI: The valuation difference on securities expanded from ¥378.8B to ¥691.4B, accompanied by an increase in deferred tax liabilities from ¥498.0B to ¥876.3B. If the valuation difference contracts due to changes in the interest rate environment, it could create headwinds for net assets and comprehensive income.
Changes in the funding structure: While deposits declined modestly from ¥637.28T to ¥631.54T, call money increased from ¥0.73T to ¥1.28T (+75.8%), and payments related to securities lending and borrowing increased from ¥2.21T to ¥2.86T (+29.7%). Reliance on short-term market funding has therefore increased slightly.
Profitability and Returns
| Metric | Our Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 22.5% | – | – |
As comparable data is limited, the relative position of our company’s Net Income margin of 22.5% within the industry cannot be confirmed.
Growth and Capital Efficiency
| Metric | Our Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 20.0% | – | – |
As comparable data is limited, the relative position of our company’s Revenue growth rate of 20.0% within the industry cannot be confirmed.
※Source: Compiled by Our Company
While core operating profit in the Retail and Corporate divisions grew substantially by +87.7% and +36.6%, respectively, the Markets division’s deficit expanded due to the impact of the change in the transfer pricing rate, revealing a duality in the earnings structure across divisions.
The expense ratio remained largely unchanged from the previous year at 33.4%. Expense growth (+6.8%) was restrained relative to ordinary revenue growth (+20.0%), and cost efficiency remained stable.
Full-year progress was 24.4%, representing a standard pace, and the dividend forecast (¥37 for the full year) remains unchanged. However, the increase in the effective tax rate (27.0%→30.3%) slightly reduced the Net Income margin, which is an important point in assessing earnings quality.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by our company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
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