The Musashino Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥8.20B
• EPS: ¥245.15

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Musashino Bank (8336) reported consolidated FY2026 Q2 (half-year) net income of ¥8.11bn, up 15.2% YoY, indicating improved profitability versus the prior-year period. Ordinary income and operating income were both reported at ¥11.70bn, suggesting stable core earnings at the headline level, though detailed drivers (net interest income, fees, credit costs, and security-related gains/losses) were not disclosed. Using period-end equity of ¥281.0bn and treating the half-year net income as H1 only, point-in-time ROE is approximately 2.9% for the half-year, which annualizes to roughly 5.8%—in line with typical regional bank profitability ranges but still below long-term cost of equity estimates for the sector. Total assets stood at ¥5.54tn and total liabilities at ¥5.21tn, resulting in financial leverage of about 19.7x (assets/equity), consistent with banking business models. The implied equity-to-asset ratio is approximately 5.1% (calculated), although the disclosed equity ratio field shows zero, which reflects non-disclosure in the template rather than the actual value. The effective tax rate, inferred from tax of ¥2.48bn on pre-tax income of about ¥10.59bn, is roughly 23.4%, broadly in line with Japan’s statutory rates adjusted for local taxes. Cash flow statement items were not disclosed, limiting assessment of earnings-to-cash conversion and free cash flow. Dividend data were also not disclosed; hence dividend sustainability cannot be quantitatively assessed from this dataset. As a bank, conventional manufacturing metrics (revenue, gross profit, current ratio, quick ratio) are not meaningful; banking-specific ratios (NIM, credit costs, OHR, NPL ratio, CET1) are absent, constraining deeper diagnostics. Nevertheless, the combination of higher net income and stable leverage suggests operating conditions improved YoY. The ordinary income equal to operating income implies limited non-operating noise in the period, but without breakdown it is unclear whether the driver was net interest income expansion, fee growth, lower credit costs, or security valuation gains. Balance sheet scale (¥5.54tn assets) and equity (¥281bn) appear steady for a regional bank focused on Saitama and neighboring areas. In the absence of cash flow and capital adequacy disclosures, we emphasize monitoring securities valuation volatility and credit cost normalization risks amid interest-rate fluctuations. Overall, performance appears solid for H1 with a healthier bottom line, but the lack of disclosure on key banking KPIs tempers confidence in drawing stronger conclusions.

Profitability Analysis

ROE_decomposition: Using a bank-adapted view: ROE ≈ Net income / Equity. With Net income ¥8.11bn and period-end equity ¥281.00bn, H1 ROE ≈ 2.9%; annualized ≈ 5.8%. Asset leverage is ~19.7x (Assets ¥5,536.76bn / Equity ¥280.997bn). Traditional DuPont margin and turnover are not meaningful as revenue and gross profit are not disclosed for a bank; the provided 0% margin is a placeholder due to non-disclosure. margin_quality: Effective tax rate ≈ 23.4% (¥2.48bn / ¥10.59bn pre-tax). Ordinary income equals operating income (both ¥11.70bn), indicating minimal non-operating distortions; however, lack of breakdown prevents assessing the balance of NII vs. fees vs. trading/securities gains, and credit cost trends. operating_leverage: Not assessable from disclosed data. No expense or gross/net interest margin details were provided, so sensitivity of profits to volume growth or rate changes cannot be quantified.

Growth Assessment

revenue_sustainability: Revenue is not disclosed for banks in a comparable form; thus topline trends cannot be assessed. Ordinary income stability suggests core earnings are intact, but sustainability depends on NIM, loan growth, fee trends, and security-related P&L, which are not disclosed. profit_quality: Net income increased 15.2% YoY to ¥8.11bn, with tax rate normalizing to ~23%. Without credit cost and securities gain data, we cannot determine whether the improvement reflects recurring core profitability or temporary market effects. outlook: With leverage stable at ~19.7x and equity at ~¥281bn, capacity to support moderate balance-sheet growth exists; however, outlook hinges on interest rate environment (NIM), credit costs normalization, and securities portfolio marks. Absent detailed KPIs, we maintain a neutral stance on the durability of H2 momentum.

Financial Health

liquidity: Current and quick ratios are not meaningful for banks; disclosed zeros reflect non-disclosure. Liquidity assessment requires loan-to-deposit ratio and high-quality liquid asset (HQLA) buffers, which are not provided. solvency: Implied equity-to-asset ratio ≈ 5.1% (¥281.0bn / ¥5,536.8bn). Financial leverage ≈ 19.7x is typical for regional banks. Regulatory capital metrics (CET1, total capital ratio, leverage ratio) are not disclosed; thus regulatory solvency cannot be evaluated here. capital_structure: Total liabilities ¥5.21tn vs. equity ¥281.0bn (D/E ~18.5x as provided). Funding mix (deposits vs. market funding) and duration profile are undisclosed; these are material to interest-rate and liquidity risk assessments.

Cash Flow Quality

earnings_quality: Operating, investing, and financing cash flows were not disclosed. Consequently, OCF-to-net income and accrual assessments cannot be performed. FCF_analysis: Free cash flow is not applicable in the conventional corporate sense for banks and is not disclosed here. We cannot evaluate internal capital generation beyond net income. working_capital: Working capital metrics are not applicable to banks; disclosed zeros signify non-disclosure rather than true zeros.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio were not disclosed; EPS is ¥245.15 for H1. Without dividend data, we cannot compute payout or compare to earnings. FCF_coverage: Cash flow data are absent; FCF coverage of dividends cannot be assessed. policy_outlook: No information on dividend policy or guidance was provided. For banks, distributions typically consider earnings stability and regulatory capital buffers; absent CET1 and payout guidance, visibility is low.

Risk Assessment

Business Risks:

• Net interest margin compression or volatility due to changes in domestic rate environment and yield curve
• Credit cost normalization from SME and household segments in core regions
• Concentration and demographic headwinds in Saitama and surrounding markets
• Competition from megabanks and non-bank lenders pressuring pricing and fees
• Lower fee income if asset management and settlement-related activities soften

Financial Risks:

• Securities portfolio valuation losses amid interest-rate rises (especially JGBs and foreign bonds)
• Interest-rate risk in the banking book (duration mismatch, reinvestment risk)
• Liquidity risk if deposit dynamics change; funding mix details not disclosed
• Capital adequacy uncertainty due to absent CET1/total capital disclosures
• Operational and cyber risk tied to system modernization and compliance

Key Concerns:

• Lack of disclosure on NIM, credit costs, OHR, and securities gains/losses limits visibility on earnings durability
• Absence of cash flow and dividend data constrains assessment of capital distribution capacity
• Sensitivity to rate movements given leverage and potential AFS valuation swings

Investment Implications

Key Takeaways:

• H1 FY2026 net income ¥8.11bn, up 15.2% YoY, indicating improved profitability
• Annualized ROE ~5.8% based on H1 earnings and period-end equity
• Financial leverage ~19.7x; implied equity-to-asset ratio ~5.1%
• Effective tax rate ~23.4%; ordinary income equals operating income at ¥11.7bn
• Material gaps in disclosure (cash flows, dividends, banking KPIs) limit deeper analysis

Metrics to Watch:

• Net interest margin (NIM) and loan/deposit growth
• Credit costs (net credit charges) and NPL ratio
• Operating efficiency (OHR) and expense management
• Securities portfolio duration and unrealized gains/losses (AFS/OCI sensitivity)
• Regulatory capital ratios (CET1, total capital, leverage ratio)
• Dividend policy and payout trajectory
• Interest-rate sensitivity (EaR/EVE) and liquidity buffers (LCR/NSFR)

Relative Positioning: Within Japan’s regional banks, Musashino Bank’s scale (~¥5.5tn assets) and implied ROE in the mid-single digits appear broadly in line with peers; however, limited KPI disclosure in this dataset precludes precise benchmarking on NIM, credit costs, OHR, and capital adequacy.

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