| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥7863.9B | ¥6526.0B | +20.5% |
| Operating Income | - | - | - |
| Ordinary Income | ¥1734.7B | ¥831.9B | +108.5% |
| Net Income | ¥1427.2B | ¥935.0B | +52.6% |
| ROE | 3.9% | 2.6% | - |
The quarter was characterized by higher revenue and higher earnings, with a sharp recovery in non-interest income and market-related income significantly boosting ordinary income. Ordinary revenue was ¥7,863.9B (+20.5% YoY), while ordinary income was ¥1,734.7B (+108.5%). Consolidated net income was ¥1,427.2B (+52.6%), of which net income attributable to owners of the parent was ¥1,422.2B (+56.6%). The primary drivers of earnings growth were the expansion of adjusted business net profit, centered on the Markets Business, and improved cost efficiency. Although extraordinary income of ¥190.4B was recorded, this was lower than the previous year’s ¥410.7B, indicating that the earnings growth was driven by the core business.
【Revenue】Ordinary revenue was ¥7,863.9B (+20.5% YoY). By segment, adjusted gross business profit (based on internal management accounting) for the Markets Business expanded sharply from ¥54.6B to ¥228.8B (+319.3%). Non-interest income-oriented segments also drove growth, with the Real Estate Business increasing from ¥125.7B to ¥170.5B (+35.6%) and the Asset Management Group increasing from ¥640.2B to ¥795.1B (+24.2%). The Retail Business increased steadily from ¥673.0B to ¥775.1B (+15.2%), while the Corporate Business rose from ¥826.2B to ¥936.0B (+13.3%). Adjusted gross business profit for the Company as a whole increased from ¥2,225.2B to ¥2,864.7B (+28.7%).
【Earnings】Adjusted business net profit increased from ¥746.5B to ¥1,225.9B (+64.2%). As gross profit growth (+28.7%) outpaced the increase in total expenses (+10.8%), the cost-to-income ratio improved from 66.5% to 57.2%. The primary driver of overall earnings growth was the sharp expansion in adjusted business net profit for the Markets Business, from ¥0.8B to ¥160.1B. Ordinary income, after adjustments for differences, was ¥1,734.7B (+108.5%). Although extraordinary income of ¥190.4B was recorded, compared with ¥410.7B in the previous year, its scale was lower than the previous year, indicating that this period’s earnings growth was largely attributable to improvements in the core business. After deducting income taxes and other taxes of ¥493.1B from profit before tax of ¥1,920.3B, consolidated net income was ¥1,427.2B (+52.6%), of which net income attributable to owners of the parent was ¥1,422.2B (+56.6%). Revenue and earnings increased.
On an adjusted business net profit basis, the Corporate Business maintained stable growth, increasing from ¥549.8B to ¥617.2B (+12.3%), while the Asset Management Group and Real Estate Business posted substantial earnings growth, increasing from ¥238.9B to ¥349.2B (+46.2%) and from ¥46.0B to ¥82.0B (+78.3%), respectively. The largest change was in the Markets Business, where adjusted business net profit expanded sharply from ¥0.8B to just ¥16.0B, reflecting the improved earnings environment. The Retail Business also improved from ¥158.7B to ¥220.0B (+38.7%). In terms of contribution to the Company-wide total, the Corporate Business, with a composition ratio of 50.4%, remained the largest source of profit, but growth in the Asset Management Group and Markets Business led the earnings increase this quarter.
【Profitability】The ordinary income margin improved by approximately 930bp to 22.1% from 12.8% in the previous year, while the net profit margin, based on net income attributable to owners of the parent, also improved by approximately 420bp to 18.1% from 13.9% in the previous year. ROE was 3.9%, with the growth in consolidated net income serving as the primary driver in the DuPont decomposition. 【Cash Flow Quality】Extraordinary income of ¥190.4B accounted for approximately 9.9% of profit before tax of ¥1,920.3B. However, its contribution declined from the previous year, when extraordinary income was ¥410.7B against profit before tax of ¥1,237.2B, or approximately 33.2%. Thus, the contribution of temporary factors to earnings growth has diminished. 【Investment Efficiency】Ordinary revenue amounted to approximately 0.93% of total assets of ¥84,227.5B, representing the total asset turnover ratio and highlighting the large asset scale characteristic of a trust bank. 【Financial Soundness】The equity ratio (net assets / total assets) was 4.4%, broadly flat from 4.3% in the previous year. The loan-to-deposit ratio declined from 83.2% in the previous year to 79.1%, based on loans of ¥33,581.2B and deposits of ¥42,460.2B. The pace of deposit growth (+6.2%) exceeded loan growth (+0.9%).
As data from the statement of cash flows has not been disclosed, funding trends are assessed based on changes in the balance sheet. Deposits increased by +6.2% from the end of the same period of the previous year to ¥42,460.2B, loans increased by +0.9% to ¥33,581.2B, and securities increased by +18.7% to ¥15,928.0B, all showing an upward trend. Intangible fixed assets increased by +55.1%, from ¥1,878.5B at the end of the same period of the previous year to ¥2,914.0B, suggesting increased investment in systems and related areas. Treasury stock expanded significantly from ¥60.4B to ¥557.2B, reflecting progress in share repurchases. Short-term bonds payable of ¥25,282.5B and market-based funding related to repo and cash collateralized transactions also remained at certain levels. Overall, the funding structure combines stable funding centered on deposits with market-based funding as a supplementary source.
Although this period’s earnings growth was supported by extraordinary income of ¥190.4B, or approximately 9.9% of profit before tax, its contribution clearly declined from extraordinary income of ¥410.7B in the same period of the previous year, which represented approximately 33.2% of profit before tax at that time. This indicates a stronger contribution from improvements in core business profitability. In terms of non-operating and ordinary revenue, fee income increased from ¥1,198.3B to ¥1,466.3B (+22.4%), while trading income surged from ¥19.6B to ¥305.9B. The expansion of non-interest income supported the growth in adjusted business net profit. Comprehensive income was ¥2,310.2B, approximately ¥883B above consolidated net income of ¥1,427.2B. This difference was attributable to valuation-related OCI items, including a hedge valuation difference of +¥650.2B, a securities valuation difference of +¥157.2B, and foreign currency translation adjustments of +¥97.3B. As these valuation gains and losses may reverse depending on market fluctuations, it should be noted that whether the boost to comprehensive income in the current period represents a strengthening of the sustainable earnings base will depend on future market conditions.
The Company has not revised either its earnings forecast or dividend forecast during the quarter. Against the full-year forecast of ¥380.0B in net income attributable to owners of the parent, first-quarter actual net income of ¥1,422.2B represented a progress rate of 37.4%, exceeding the 25% benchmark for quarterly progress. Although first-quarter actual EPS of ¥204.72 cannot be compared directly with the full-year forecast EPS of ¥137.67, the rapid pace of earnings progress is evident.
The Company’s dividend forecast is ¥23.75 per share for the interim period and ¥23.75 per share at year-end, on a post-stock-split basis, for an annual total of ¥47.5. Based on forecast EPS of ¥137.67, the payout ratio is approximately 34.5%. The Company conducted a 4-for-1 stock split of its common shares, effective August 1, 2026. Without taking the split into account, the annual dividend total would be equivalent to ¥190. As treasury stock increased from ¥60.4B at the end of the same period of the previous year to ¥557.2B, progress in share repurchases can also be confirmed. However, the total return ratio cannot be calculated from the disclosed data; therefore, the Company is evaluated based on the payout ratio alone.
Increased sensitivity to market-related income: Adjusted business net profit for the Markets Business expanded sharply from ¥0.8B to ¥160.1B, becoming a major driver of earnings growth this period. The segment’s earnings structure is susceptible to fluctuations in market conditions.
Relative capital thickness: The equity ratio (net assets / total assets) was 4.4%, broadly flat from the previous year’s 4.3%. Net assets of ¥3,698.6B against total assets of ¥84,227.5B indicate structurally high balance-sheet leverage characteristic of a trust bank, at approximately 22.8 times based on total assets / net assets. The pace of capital accumulation will therefore remain an item requiring close monitoring.
Decline in the loan-to-deposit ratio and funding composition: The loan-to-deposit ratio was 79.1%, down from 83.2% in the same period of the previous year. Deposits are growing (+6.2%) faster than loans (+0.9%). Market-based funding, including short-term bonds payable and repo and cash collateralized transactions, is also maintained at a certain scale, making funding cost trends amid changes in the interest-rate environment a key monitoring point.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 18.1% | – | – |
The Company’s net profit margin of 18.1% improved from 13.9% in the same period of the previous year. However, its relative positioning cannot be assessed because industry median data has not been prepared.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 20.5% | – | – |
The Company’s ordinary revenue growth rate of +20.5% represents strong growth reflecting the expansion of non-interest income and market-related income. However, comparison with the industry median cannot be conducted at this time due to insufficient data.
※Source: Compiled by the Company
Expansion in non-interest income-oriented segments, including the Markets Business, Asset Management Group, and Real Estate Business, drove earnings growth. Adjusted business net profit increased by +64.2%, while the cost-to-income ratio improved from 66.5% to 57.2%. The simultaneous progress in diversification of the earnings structure and cost efficiency is an important point in assessing earnings quality.
Against the full-year forecast of ¥380.0B in net income attributable to owners of the parent, progress for the current quarter was 37.4%, exceeding the standard quarterly progress benchmark of 25%.
Comprehensive income of ¥2,310.2B exceeded net income by approximately ¥883B, most of which was attributable to valuation-related OCI items, such as hedge valuation differences. As valuation gains may reverse due to market fluctuations, future market conditions will be key to determining the extent to which the current earnings expansion translates into a strengthening of the sustainable earnings base.
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. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting professionals as necessary.
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