The Chiba Kogyo Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥4.88B
• EPS: ¥84.98

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

Chiba Kogyo Bank (8337) reported FY2026 Q2 consolidated results under JGAAP with ordinary income and operating income of ¥6.917 billion and net income of ¥4.873 billion, up 20.2% YoY. The YoY improvement in bottom line indicates better cost control, lower credit costs, or improved core profitability, despite limited disclosure on revenue composition for a bank. Total assets stood at ¥3,303.7 billion and total equity at ¥186.0 billion, implying a leverage (assets/equity) of roughly 17.8x, which is typical for a regional bank. The implied equity ratio calculated from disclosed figures is approximately 5.6% (¥186.0b/¥3,303.7b), even though the reported equity ratio field shows 0.0% (treated as undisclosed). The relationship between assets, liabilities, and equity suggests the presence of non-controlling interests or other net asset components not fully shown, given that assets minus liabilities exceed the equity figure provided. Effective tax appears around 22% based on income tax of ¥1.383 billion and an implied pre-tax income of approximately ¥6.256 billion (net income plus income tax), which is within a reasonable range for a domestic bank. Ordinary and operating income being equal suggests limited non-operating items in the half. EPS was ¥84.98 for the period; if this is first-half EPS, it suggests solid annualized earnings power, but share count data are undisclosed here. Cash flow statements are not disclosed in this dataset (zeros indicate unreported), which is common for interim bank disclosures; thus, cash flow-based quality checks cannot be performed. Dividend data are also undisclosed in this extract (DPS shows 0.00), so payout and coverage cannot be directly assessed. Overall, profitability shows an improving trajectory on the bottom line, leverage is within sector norms, and tax burden is stable; however, limited disclosure on net interest margin (NIM), fee income, credit costs, and capital adequacy constrains depth of analysis. Key factors to monitor are BOJ policy normalization, deposit beta dynamics, and credit cost trends in the regional SME and real estate portfolios. The bank’s scale (~¥3.3 trillion assets) and moderate profitability imply sensitivity to rate and credit cycles. Given data limitations, conclusions rely on the non-zero values and standard bank heuristics rather than full ratio coverage.

Profitability Analysis

ROE decomposition: Using bank-appropriate framing, ROE is approximated as (Net income / Equity). On a half-year basis, ROE ~ 2.6% (¥4.873b / ¥186.047b). Annualized, ROE is ~5.2%. DuPont elements based on conventional sales metrics are not applicable because revenue is undisclosed for a bank; instead, key drivers are NIM, fee/commission income, costs (OHR), and credit costs. Margin quality: The 20.2% YoY net income increase with ordinary income at ¥6.917b suggests improved cost discipline or lower credit costs; however, without disclosure of credit cost and fee lines, we infer margin improvement but cannot attribute precisely. Operating leverage: Ordinary income equals operating income, indicating minimal non-operating swings this half. If expenses grew below core income growth, some positive operating leverage likely contributed to the net profit increase. Effective tax rate is ~22% (¥1.383b / ~¥6.256b pre-tax), supportive of net margin retention. Asset utilization: Financial leverage is 17.76x (assets/equity), typical for regional banks; asset turnover metrics based on sales are not meaningful for a bank. Overall profitability appears stable to improving, but confirmation requires NIM and OHR details.

Growth Assessment

Revenue sustainability: Revenue is undisclosed in this dataset; for banks, top-line drivers are net interest income and fees. The +20.2% YoY increase in net income points to improved core earnings or lower credit costs. Profit quality: Ordinary income = operating income at ¥6.917b and net income of ¥4.873b indicate modest below-the-line items and a normal tax load. Without credit cost disclosure, sustainability depends on whether the YoY lift stemmed from recurring spread/fee gains or cyclical credit cost normalization. Outlook: With BOJ policy normalization underway, upward pressure on asset yields can support NIM, but rising deposit betas and valuation volatility in securities portfolios can offset. Regional SME and real estate exposures will influence credit cost normalization. If H1 EPS (¥84.98) annualizes, FY earnings capacity appears solid, implying a potential mid-single-digit ROE environment absent shocks.

Financial Health

Liquidity: Traditional current/quick ratios are not meaningful for banks. Funding stability depends on core deposits and wholesale reliance (not disclosed here). Solvency/capital: Total assets ¥3,303.7b, liabilities ¥3,072.1b, equity ¥186.0b imply leverage ~17.8x and an estimated equity ratio of ~5.6%. The difference between assets minus liabilities and the equity figure suggests other net asset components (e.g., non-controlling interests/valuation adjustments). Regulatory capital metrics (CET1, total capital ratio, LCR/NSFR) are not disclosed here; these are critical for a bank’s solvency assessment. Balance sheet scale is consistent with a regional bank profile, with sector-typical leverage.

Cash Flow Quality

Earnings quality: Cash flow data are undisclosed in this extract (all zeros treated as unreported). For banks, OCF/NI and FCF are not standard quality measures due to balance sheet intermediation. Absent credit cost and securities gains/loss detail, earnings quality cannot be fully assessed, but ordinary income aligning with operating income suggests limited reliance on non-operating items this half. FCF analysis: Not meaningful for banks; lending/securities flows dominate. Working capital: Not applicable in the traditional sense; key is asset-liability management (ALM) and liquidity buffers, which are undisclosed here.

Dividend Sustainability

Payout ratio and DPS are not disclosed in this dataset (DPS shows 0.00 as undisclosed). With EPS at ¥84.98 for the half, dividend capacity appears supported by earnings, but sustainability depends on capital policy, regulatory requirements, and retained earnings needs amid rate volatility. Without FCF (not meaningful for banks) and capital ratios, we cannot quantify coverage. Historically, regional banks target stable dividends with gradual increases tied to profit growth and capital adequacy; confirmation requires disclosed DPS and CET1/net assets to risk-weighted assets.

Risk Assessment

Business Risks:

• Net interest margin compression from rising deposit betas as rates normalize
• Securities portfolio valuation losses from JGB yield volatility
• Credit cost normalization in SME and real estate exposures within the Chiba region
• Fee income pressure from competition and slower transaction volumes
• Operational and IT risks in digital channels and payment platforms

Financial Risks:

• ALM duration mismatch leading to OCI hits and capital volatility
• Funding mix shifts toward higher-cost time deposits or wholesale funding
• Limited earnings buffer given mid-single-digit annualized ROE
• Potential gap between consolidated net assets and parent equity due to valuation components/non-controlling interests
• Regulatory capital constraints under Basel standards (CET1, leverage ratio) not disclosed here

Key Concerns:

• Lack of disclosed NIM, OHR, credit costs, and capital ratios limits visibility
• Sensitivity to BOJ policy path and domestic yield curve shifts
• Regional economic dependence and concentration risks in borrower base

Investment Implications

Key Takeaways:

• Net income rose 20.2% YoY to ¥4.873b, indicating improved profitability or lower credit costs
• Leverage at ~17.8x and an implied equity ratio ~5.6% are in line with regional bank norms
• Ordinary income equals operating income (¥6.917b), suggesting limited non-operating noise
• Effective tax rate ~22% supports net margin stability
• Data gaps on NIM, fees, OHR, credit costs, and capital ratios constrain deeper assessment

Metrics to Watch:

• Net interest margin and deposit beta behavior as rates normalize
• Credit costs (net), NPL ratio, and coverage ratios
• Cost-to-income ratio (OHR) for operating leverage
• AFS/OCI sensitivity to yield moves and duration positioning
• Regulatory capital (CET1, total capital ratio) and leverage ratio
• Loan-to-deposit ratio and wholesale funding reliance
• Dividend per share and payout guidance

Relative Positioning: Scale and leverage are typical of a Japanese regional bank. Profit growth is positive, but without disclosed NIM, OHR, and capital metrics, it is difficult to benchmark operational efficiency and solvency rigorously against peers. Annualized ROE near ~5% would place the bank around the sector median to slightly below top-tier regional peers that achieve higher fee mix and tighter cost control.

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