The Gunma Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥25.79B
• EPS: ¥72.98

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

Gunma Bank (8334) reported consolidated FY2026 Q2 (cumulative first half) results under JGAAP with operating income (operating profit basis) and ordinary income both at ¥40.6bn and net income at ¥27.85bn, up 21.5% YoY. Many standard line items (revenue, gross profit, OCF, DPS, etc.) are unreported in XBRL for banks and therefore appear as zeros; analysis focuses on disclosed non-zero items and bank-specific interpretation. The earnings uplift suggests improved core profitability and/or lower credit costs versus the prior year, though the precise drivers are not disclosed here. Using period-end equity of ¥599.0bn and net income of ¥27.85bn, the simple (non-annualized) ROE is roughly 4.6%; annualized, this implies circa 9–10% depending on second-half seasonality. Financial leverage (assets/equity) is high at 17.81x, which is typical for a regional bank balance sheet. The computed equity ratio (equity/assets) is approximately 5.6%, consistent with banking sector norms, although regulatory capital ratios (CET1/Basel III) are not provided. Ordinary profit closely matches operating profit, indicating limited non-operating volatility in the period, while the gap between profit before tax and tax expense implies an effective tax rate in the mid‑20% range by rough approximation. Total assets stand at ¥10.67tn and total liabilities at ¥9.99tn, with debt-to-equity of 16.68x, suggesting a deposit-funded structure with modest tangible equity—again typical for a regional bank. EPS was ¥72.98 for the half, implying robust per-share earnings momentum YoY. Cash flow statement items are unreported; thus, cash flow quality and FCF coverage cannot be assessed from this dataset. Dividend data are also unreported; payout policy and coverage analysis therefore require management guidance or the statutory filings. For banks, current ratio, quick ratio, and gross margin are not meaningful; attention should instead focus on NIM, credit costs, fee income, securities-related gains/losses, and the overhead ratio, none of which are disclosed here. The macro backdrop of modest BoJ rate normalization and a steeper JGB curve is supportive for NIM, but also raises AFS valuation risk and duration management challenges. Absent segment detail, we infer the YoY profit improvement likely reflects a combination of better interest margins, resilient fee income, and/or benign credit costs. Balance sheet figures suggest adequate solvency for a regional bank, but the lack of regulatory capital metrics is a key limitation. Overall, results indicate healthy earnings traction into H2, but more disclosure is needed on margin drivers, credit quality, and securities portfolio positioning to fully assess sustainability.

Profitability Analysis

ROE_decomposition: - Reported DuPont figures show net margin and turnover as 0% due to unreported revenue; for banks, revenue-based DuPont is not meaningful.

• Approximate ROE (half-year, simple) = Net income / Equity = ¥27.854bn / ¥599.010bn ≈ 4.65%; annualized ≈ 9–10% assuming a similar second-half run rate.
• Financial leverage = Assets / Equity = ¥10,666.018bn / ¥599.010bn ≈ 17.81x (provided), typical for a regional bank. margin_quality: - Net income rose 21.5% YoY to ¥27.85bn, implying improved margin/credit cost dynamics versus prior-year H1.
• Ordinary profit equals operating profit at ¥40.58bn, suggesting limited non-operating noise.
• Approximate tax burden: tax of ¥8.95bn vs. (net income + tax) ≈ ¥36.81bn implies ~24–25% effective tax rate, subject to items below net income before taxes that are not disclosed. operating_leverage: - With revenue unreported, classical operating leverage cannot be computed. The 21.5% YoY net income growth against a stable operating/ordinary profit level suggests cost discipline and/or lower credit costs rather than top-line expansion as the primary driver.

Growth Assessment

revenue_sustainability: - Core banking revenue proxies (NIM, loan growth, fee income) are not disclosed; sustainability cannot be quantified from this dataset.

• Macro tailwinds: BoJ rate normalization and a steeper curve could support asset yields; deposit beta behavior will be key. profit_quality: - Net income growth of +21.5% YoY alongside ordinary/operating profit at ¥40.6bn indicates improved recurring profitability.
• Lack of disclosure on credit costs and securities gains adds uncertainty to the quality/recurrence of earnings. outlook: - If H2 earnings track H1, full-year ROE could approach high single digits. Upside depends on NIM expansion and stable credit costs; downside risks center on valuation losses in the AFS bond book and higher funding costs as deposit rates reprice.

Financial Health

liquidity: - Bank-specific liquidity is better gauged by LCR/NSFR, which are not provided. Current/quick ratios are not meaningful for banks. solvency: - Equity ratio (computed) ≈ 5.6% (¥599.0bn / ¥10.67tn). Debt-to-equity: 16.68x. These are within expected ranges for a regional bank.

• Regulatory capital (CET1, total capital, leverage ratio) and risk-weighted assets are not disclosed; this limits solvency assessment. capital_structure: - Assets: ¥10.67tn; Liabilities: ¥9.99tn; Equity: ¥0.599tn. Financial leverage 17.81x aligns with sector norms.
• Note: There appears to be a small mismatch between Assets and Liabilities+Equity in the provided figures, likely due to reporting scope/rounding; conclusions are based on the stated totals.

Cash Flow Quality

earnings_quality: - OCF, investing CF, and financing CF are unreported; cash conversion cannot be assessed.

• For banks, accrual quality is better evaluated via credit cost trends and realized/unrealized securities gains—data not provided here. FCF_analysis: - Free cash flow and coverage metrics cannot be computed due to missing OCF and capex data (typical for bank disclosures under this format). working_capital: - Working capital metrics are not meaningful for banks; funding stability should be assessed via deposit mix and duration gap, which are not disclosed.

Dividend Sustainability

payout_ratio_assessment: - Annual DPS and payout ratio are unreported; EPS for H1 is ¥72.98, but without dividend guidance, payout sustainability cannot be quantified. FCF_coverage: - FCF coverage cannot be evaluated due to missing OCF/FCF data. policy_outlook: - Sector practice among regional banks emphasizes stable/dividend growth policies tied to earnings and capital; sustainability will hinge on full-year profits and regulatory capital headroom (CET1), which are not disclosed here.

Risk Assessment

Business Risks:

• Net interest margin sensitivity to BoJ rate path and deposit beta dynamics
• Credit cost volatility amid SME exposure and regional economic conditions
• Securities portfolio valuation risk from JGB yield moves and duration positioning
• Fee income cyclicality (wealth management, settlement, corporate solutions)
• Competition from megabanks and fintechs in retail/corporate segments

Financial Risks:

• Lower AFS bond valuations and potential realized losses if yields rise further
• Funding cost pressures as deposits reprice, compressing spreads
• Concentration risks in local lending portfolios
• Capital adequacy uncertainty due to absence of disclosed CET1/total capital ratios
• Interest rate risk in the banking book (IRRBB) and duration gap management

Key Concerns:

• Lack of disclosure on NIM, credit costs, and securities gains obscures earnings quality
• No reported cash flow data limits assessment of cash generation and internal capital formation
• Dividend data absent; payout sustainability cannot be validated

Investment Implications

Key Takeaways:

• H1 net income of ¥27.85bn (+21.5% YoY) indicates solid interim profitability momentum
• Approximate annualized ROE could reach high single digits if H2 trends hold
• Balance sheet leverage (17.81x) and equity ratio (~5.6%) are in line with regional bank norms
• Macro environment (post-NIRP normalization) is supportive for NIM but elevates securities valuation risk
• Critical datapoints (NIM, credit costs, CET1, OHR, securities gains/losses) are missing and should be obtained for a fuller view

Metrics to Watch:

• Net interest margin and loan-deposit spread
• Credit cost ratio and NPL trends
• Overhead ratio (cost-to-income)
• CET1 ratio and capital buffer versus regulatory minima
• Unrealized gains/losses on AFS securities and portfolio duration
• Deposit mix, deposit beta, and funding cost trajectory
• Fee and commission income growth

Relative Positioning: Based on disclosed figures alone, Gunma Bank exhibits typical regional bank leverage and a solid H1 profit uptick; however, without NIM, credit quality, and capital ratios, its positioning versus peers cannot be conclusively benchmarked.

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