Tsukuba Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥3.73B
• EPS: ¥45.98

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

Tsukuba Bank (Consolidated, JGAAP) reported FY2026 Q2 cumulative results with ordinary/operating income of ¥4.128bn and net income of ¥3.788bn, a strong +94.6% YoY increase in bottom line despite limited disclosed line items. Revenue and many operating metrics are undisclosed (shown as zero), which is common for banks where interest-related income is presented differently than manufacturing-style revenue. Using available balance sheet data, total assets are ¥2,870.36bn and total equity is ¥102.701bn, implying a tangible equity-to-assets ratio of roughly 3.6%, consistent with regional bank leverage. Leverage (assets/equity) is approximately 27.9x, in line with the provided DuPont leverage figure and typical for Japanese regional banks under JGAAP. Calculated ROE for the half-year period is approximately 3.7% (¥3.788bn / ¥102.701bn), which annualizes to around 7–8% if performance is maintained in H2, though seasonality and credit costs can vary. ROA for the period is about 0.13% (annualized ~0.26%), within a normal range for regional banks amid a still-low-rate environment transitioning to modest normalization. The effective tax rate appears low at roughly 6.7% (¥270m tax on an estimated ¥4.058bn pre-tax), suggesting the YoY profit surge may be aided by one-offs, tax effects, or reduced credit costs, though drivers are not disclosed. Operating leverage and margin analysis are constrained by the lack of disclosed gross/net revenue and expense details, but the spread between ordinary and net income is narrow, indicating modest below-the-line items in the period. Liquidity ratios like current/quick are not meaningful for banks, and cash flow statements are undisclosed, limiting earnings quality assessment from OCF/FCF angles. No dividend data is provided (DPS and payout appear as zero due to non-disclosure), preventing payout sustainability evaluation based on reported cash flows. Share count and per-share book are not provided, constraining per-share capitalization and valuation context, although EPS is disclosed at ¥45.98 for H1. Given limited line-item granularity, core banking profitability metrics (NIM, fees, cost-to-income, credit costs, securities gains/losses) are not observable; thus, conclusions rely on high-level profitability and balance sheet scale. Overall, the bank shows a healthy rebound in net income on a sizable balance sheet with typical leverage, but the durability of the YoY profit jump cannot be confirmed without details on recurring vs. non-recurring drivers. We therefore emphasize cautious interpretation and the need for supplemental disclosures such as segment earnings, credit cost trends, and capital adequacy ratios.

Profitability Analysis

ROE (period) ≈ 3.7% (¥3,788m / ¥102,701m). Annualized, this implies roughly 7–8%, assuming no material H2 deviations. DuPont for banks is better framed as ROE ≈ ROA × Leverage; with ROA ≈ 0.13% (half-year) and leverage ≈ 27.95x, the arithmetic supports the observed ROE range. Reported DuPont sub-metrics using manufacturing-style revenue are not meaningful given undisclosed revenue; net profit margin and asset turnover in the provided table default to zero and should be disregarded. Margin quality: net income margin vs. ordinary income is 91.7% (¥3,788m / ¥4,128m), but this is a limited proxy for banking margins; a low effective tax rate (~6.7%) and minimal gap between ordinary and net income suggest few below-the-line drags in H1. Operating leverage cannot be assessed due to no disclosure of interest income/expenses, fee income, or operating expenses. Cost efficiency (cost-to-income) and spread/NIM are not provided, preventing deeper margin diagnostics. The significant YoY lift in net income (+94.6%) suggests either improved core earnings (wider spreads, better fees, lower costs) and/or non-recurring tailwinds (credit cost reversals, securities gains, tax effects). Without segment detail, we treat margin gains as provisional.

Growth Assessment

Top-line proxies are not disclosed; operating/ordinary income is flat YoY per the table (+0.0%), while net income surged +94.6% YoY, pointing to improved bottom-line conversion. The divergence between ordinary income and net income growth suggests favorable non-operating items, lower credit costs, gains on securities, or tax normalization; the very low effective tax rate corroborates this possibility. Profit quality is uncertain: absent evidence of sustained revenue expansion or cost efficiency gains, we cannot ascribe the YoY jump to durable structural improvements. Outlook hinges on rate environment normalization, loan growth in the Ibaraki/regional footprint, fee income development, and credit quality in SME/retail books. Sustainability will depend on whether H1 drivers repeat in H2; annualizing H1 yields EPS run-rate near ¥92–96 if conditions hold, but this assumes stable credit costs and market conditions. Without details on loan book mix, duration, deposit beta, or securities portfolio, we cannot infer sensitivity to yield curve shifts. We flag medium visibility on growth until management provides more disclosure on core vs. non-core earnings drivers.

Financial Health

Balance sheet scale is large at ¥2,870.36bn assets with ¥102.701bn equity, implying an equity ratio of ~3.6% (more relevant than the undisclosed 0.0%). This is broadly typical for regional banks under JGAAP; however, regulatory capital metrics (CET1, total capital ratio) are not provided, limiting solvency assessment. Leverage is high at ~27.9x, consistent with banking norms. Liquidity metrics such as current and quick ratios are not meaningful for banks; high-quality liquid assets and LCR/NSFR are the appropriate gauges but are not disclosed. Liability structure details (deposits vs. market funding) are not available, preventing funding cost and stability analysis. Debt-to-equity of 27.25x (liabilities/equity) aligns with the computed leverage. Without details on unrealized AFS securities gains/losses, liquidity buffers, and duration, we cannot assess sensitivity to rate moves or OCI impacts. Overall solvency appears adequate on book equity basis, but regulatory capital and stress metrics are required for a full view.

Cash Flow Quality

Operating, investing, and financing cash flows are undisclosed (zeros indicate non-reporting), preventing a traditional OCF-to-net-income triangulation. Consequently, OCF/NI, FCF, and working capital dynamics cannot be assessed. For banks, cash flow analysis typically centers on loan/deposit growth, interest spread realization, and securities cash flows; none are available. Earnings quality thus must be inferred from the relation between ordinary and net income and the effective tax rate; the small delta between ordinary and net income indicates limited below-the-line losses, but the unusually low tax expense suggests potential one-offs or tax benefits. Without credit cost disclosure or securities valuation effects, we cannot validate the persistence of earnings. We therefore classify cash flow visibility as low and recommend monitoring subsequent quarters for reconciliation of profits with core cash-generating activities.

Dividend Sustainability

Dividend information is not disclosed (DPS and payout appear as zero due to non-reporting). EPS for H1 is ¥45.98, but without a declared interim or full-year DPS, payout ratio and FCF coverage cannot be computed. In Japanese regional banks, dividend policy often targets stable or gradually rising dividends with payout ratios in the 30–40% range, subject to capital adequacy; however, in this case, lack of DPS and regulatory capital data precludes assessment. Free cash flow coverage is not meaningful for banks and is additionally undisclosed. Until management provides DPS guidance and capital metrics (CET1, total capital ratio), dividend sustainability and policy trajectory remain indeterminate.

Risk Assessment

Business Risks:

• Interest rate risk on the banking book (securities duration and loan repricing gaps) amid rate normalization
• Credit risk in SME/retail portfolios during economic slowdown or sector-specific stress
• Fee income weakness if regional economic activity softens
• Competition for deposits potentially raising funding costs and compressing spreads
• Regulatory changes affecting capital requirements and profitability
• Concentration risk within the regional footprint

Financial Risks:

• Thin equity buffer (~3.6% of assets) typical for banks but sensitive to valuation swings in securities
• Potential OCI volatility from AFS securities not disclosed
• Unclear credit cost trajectory; reversals in H1 could normalize higher in H2
• Low effective tax rate suggests potential non-recurring support to earnings
• Limited disclosure on liquidity buffers (LCR/NSFR) and funding mix

Key Concerns:

• Sustainability of the +94.6% YoY net income increase without underlying revenue/cost disclosure
• Lack of visibility into NIM, cost-to-income, and credit costs
• Absence of regulatory capital ratios to gauge dividend capacity and growth flexibility

Investment Implications

Key Takeaways:

• H1 FY2026 net income rebounded strongly to ¥3.788bn (+94.6% YoY) on ¥4.128bn ordinary/operating income
• Balance sheet leverage ~27.9x and equity-to-asset ratio ~3.6% are consistent with regional bank norms
• Period ROE ~3.7% (annualized ~7–8%) and ROA ~0.13% (annualized ~0.26%) indicate improved profitability
• Very low effective tax rate (~6.7%) may imply non-recurring support; durability uncertain
• Core banking metrics (NIM, fees, cost-to-income, credit costs) are undisclosed, limiting quality assessment
• Dividend data not provided; payout capacity cannot be evaluated without capital ratios

Metrics to Watch:

• Net interest margin and loan/deposit growth
• Credit costs (net charge-offs, provision expenses) and NPL trends
• Cost-to-income ratio and expense control initiatives
• Securities portfolio duration, unrealized gains/losses, and OCI sensitivity
• Regulatory capital ratios (CET1, total capital) and any capital actions
• Management guidance on DPS/payout and FY net income
• Effective tax rate normalization

Relative Positioning: Within Japan’s regional bank cohort, Tsukuba Bank’s leverage and interim ROA/ROE are broadly in line, but limited disclosure obscures whether H1 strength is core-driven or aided by transitory items; clarity on NIM, credit costs, and capital will be decisive for comparative positioning.

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