Resona Holdings, Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥115.31B
• EPS: ¥62.55

Income Statement

Balance Sheet

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

Resona Holdings (8308) reported FY2026 Q2 (consolidated, JGAAP) results with net income of ¥142.9bn, up 25.1% YoY, indicating solid earnings momentum in the first half. Operating income and ordinary income were both ¥199.7bn, suggesting limited non-operating distortions in this period. The effective tax burden appears typical, with income taxes of ¥43.3bn implying a roughly 23.2% effective tax rate on pre-tax profit of about ¥186.1bn. Balance sheet scale remains large with total assets of ¥76.3tn and total equity of ¥2.905tn, translating to an equity ratio of approximately 3.8%, which is in line with a Japanese banking balance sheet structure. Financial leverage is high by non-bank standards (assets/equity ~26x) but typical for banks, and the reported debt-to-equity ratio of 25.69x is internally consistent with the balance sheet. Using a simple annualization of H1 net income, implied annual ROE is approximately 9.8% (subject to the assumption that H2 earnings are similar to H1), and annualized ROA is approximately 0.37%, both reasonable for a domestic retail-focused banking group. EPS printed at ¥62.55, but share count data were not disclosed in the provided XBRL snapshot, limiting cross-checks such as implied market capitalization or payout estimations. Many standard manufacturing metrics (revenue, gross margin, EBITDA, operating cash flow) are either not applicable to banks or not disclosed, and zeros in the input represent non-disclosure rather than actual zero values. As a result, this analysis emphasizes bank-relevant profitability and balance sheet leverage over conventional gross margin or current ratio metrics. The YoY profit growth likely reflects a combination of net interest income improvement, controlled credit costs, and possibly stable fee income, though these components were not disclosed. Ordinary income matching operating income points to a clean income structure this quarter without sizable one-off non-operating gains or losses evident in the summary. Liquidity and solvency are better assessed through regulatory capital and liquidity coverage indicators, which were not provided; hence conclusions on regulatory buffers are constrained. Dividend information (DPS and payout) was not provided, preventing a quantitative assessment of distribution sustainability; we therefore focus on earnings capacity and balance sheet flexibility as proxies. Cash flow statement line items were not disclosed; for banks, accrual earnings quality is better judged via credit cost trends, NIM, OHR, and securities valuation impacts, none of which were included here. Overall, the earnings trajectory into FY2026 appears favorable on the available figures, but data gaps on key bank-specific drivers temper confidence in the depth of analysis. Monitoring credit cost normalization, deposit beta dynamics, and securities valuation sensitivity will be important for the remainder of the fiscal year. Given the scale and domestic retail orientation, Resona’s results appear consistent with ongoing tailwinds from the domestic rate environment and disciplined cost control, with the caveat of limited visibility on underlying components.

Profitability Analysis

ROE decomposition must be adapted for banks given the lack of revenue disclosure and the limited usefulness of gross margins. Using balance sheet and earnings: (1) Profitability: Net income ¥142.9bn for H1 implies annualized NI ~¥285.7bn. On period-end equity of ¥2.905tn, annualized ROE ≈ 9.8% (assumes H2 ≈ H1; average equity not available). Annualized ROA ≈ 0.37% (¥285.7bn / ¥76.3tn). (2) Margin quality: Effective tax rate ≈ 23.2% (¥43.3bn / (¥142.9bn + ¥43.3bn)), consistent with normalized taxation. Operating and ordinary income are equal at ¥199.7bn, suggesting minimal non-operating noise in this summary. (3) Operating leverage: Not enough disclosure on income mix (net interest vs fees) or cost-to-income ratio (OHR) to quantify operating leverage. However, the +25.1% YoY NI suggests positive jaws (income growth outpacing costs) or lower credit costs; specifics are not disclosed. (4) DuPont-style leverage: Financial leverage (assets/equity) ≈ 26.3x aligns with the reported 26.27, magnifying modest ROA into near-double-digit ROE. Net profit margin and asset turnover figures in the provided metrics are shown as zero due to non-disclosure; we do not rely on them.

Growth Assessment

Revenue was not disclosed (common for banks, where interest and fee income are more relevant); however, net income growth of +25.1% YoY indicates strong H1 momentum. Growth drivers are not itemized, but plausible contributors include wider net interest margins, stable fee income, and controlled credit costs in a gradually normalizing rate environment in Japan. The absence of segment and income line breakdowns (NII, fees, trading, other) limits precision. The equality of operating and ordinary income suggests few non-recurring items captured under non-operating categories this quarter. If H2 earnings seasonally track H1, annual earnings could surpass the prior year, but seasonality and potential credit cost normalization are key uncertainties. Loan growth, deposit beta, and securities portfolio valuation impacts (e.g., JGB unrealized losses or gains) are not disclosed and represent important unknowns for sustainability. Tax rate appears normalized (~23%), so profit growth is unlikely driven by tax effects alone. Outlook-wise, modest domestic loan repricing and retail deposit dynamics could continue to support income, but sensitivity to interest rate volatility and credit cycles remains. Without credit cost data, we cannot confirm how much of the growth stems from lower provisions. Fee income trends (asset management, settlement) also remain unknown in this snapshot. Overall, we view the growth as credible on the surface with caveats around durability pending disclosure of core banking KPIs.

Financial Health

Total assets ¥76.32tn, total liabilities ¥74.62tn, total equity ¥2.905tn. Equity ratio ≈ 3.81% (calculated), typical for Japanese banks given their balance sheet structure. Debt-to-equity of 25.69x and assets/equity ~26.3x are internally consistent. Liquidity indicators like current ratio and quick ratio are not meaningful for banks and were not disclosed; bank liquidity should be assessed via LCR/NSFR and funding mix, which are absent here. Solvency and capital adequacy (CET1 ratio, Tier 1, total capital, leverage ratio) were not provided; hence we cannot assess regulatory buffers. Liability structure granularity (deposits vs market funding) and duration gaps are not provided. On the available data, balance sheet scale and leverage are consistent with a large domestic banking group; no anomalies apparent in the headline totals.

Cash Flow Quality

Cash flow statement items (operating, investing, financing CF) were not disclosed in the provided dataset; zeros should be interpreted as non-disclosure. For banks, OCF is less indicative of earnings quality than accrual constructs like credit costs, NIM, fee stability, and securities valuation effects, none of which were provided. Earnings quality signals here include: (1) ordinary income equals operating income, implying limited non-operating distortions in this summary; (2) tax rate around 23% appears normal; and (3) strong YoY net income growth suggests core momentum, though the absence of credit cost and gains/losses disclosure prevents a definitive view on recurring vs. non-recurring contributions. Working capital analysis is not applicable in the conventional sense for banks. Free cash flow is not a relevant metric for bank operations in the manufacturing sense and was not disclosed.

Dividend Sustainability

Dividend per share, payout ratio, and FCF coverage were not disclosed in the provided data. Without DPS or total dividends, we cannot compute payout against earnings or assess coverage. A framework-based view: sustainability depends on earnings capacity (which appears solid in H1), capital adequacy (CET1/Tier 1 not disclosed), and regulatory distributions policy. EPS is ¥62.55 for the reported period; if this represents H1, an annualized EPS proxy would be ~¥125. However, absent board-declared DPS or guidance, we cannot infer payout. We therefore refrain from drawing conclusions on dividend sustainability and recommend monitoring official dividend guidance, payout policy targets, and capital ratios.

Risk Assessment

Business Risks:

• Net interest margin sensitivity to domestic rate changes and deposit beta behavior
• Credit cost normalization amid macro slowdown or SME stress
• Fee income cyclicality (asset management, settlement, and mortgage-related fees)
• Exposure to securities valuation volatility (JGBs and foreign bonds) impacting OCI and capital
• Competition in retail/SME lending compressing spreads
• Operational and IT risks given large retail footprint

Financial Risks:

• Regulatory capital adequacy (CET1, leverage ratio) not disclosed; potential buffer constraints unknown
• Interest rate risk in the banking book (IRRBB) affecting NII and OCI
• Funding mix and liquidity coverage risk not assessable due to data gaps
• High balance sheet leverage (structural for banks) amplifying earnings variability
• Potential increase in credit costs from consumer or SME segments

Key Concerns:

• Lack of disclosure on core banking KPIs (NIM, OHR, credit costs, CET1) in the provided snapshot
• Sustainability of +25% YoY net income growth without breakdown of drivers
• Sensitivity to interest rate and securities valuation movements in H2

Investment Implications

Key Takeaways:

• H1 net income of ¥142.9bn (+25.1% YoY) signals strong interim momentum
• Calculated equity ratio ~3.8% and assets/equity ~26x are typical for a large Japanese bank
• Annualized ROE approximates ~9.8% based on H1 results and period-end equity (assumption-based)
• Effective tax rate around 23% indicates normalized taxation
• Limited visibility on core drivers (NIM, credit costs, OHR) tempers conviction on sustainability

Metrics to Watch:

• CET1 ratio (fully loaded and transitional) and leverage ratio
• Net interest margin and deposit beta
• Credit costs / cost of risk and NPL ratio
• Cost-to-income ratio (OHR) and expense discipline
• Unrealized gains/losses on securities (particularly JGBs) and OCI sensitivity
• Loan and deposit growth trends
• Dividend guidance and payout policy updates

Relative Positioning: Relative to Japan’s megabanks, Resona has higher domestic retail/SME exposure and typically lower international diversification; current H1 profitability appears competitive on an ROE basis, but visibility on capital ratios and core income mix is required to benchmark resilience.

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