| Metric | Current Period | Previous Year Period | YoY |
|---|---|---|---|
| Revenue | ¥20.75B | ¥14.08B | +47.4% |
| Operating Income | - | - | - |
| Ordinary Income | ¥3.60B | ¥2.17B | +66.2% |
| Net Income | ¥2.65B | ¥1.61B | +65.1% |
| ROE | 1.7% | 1.1% | - |
The Company posted higher revenue and earnings, driven by growth in its core Banking Business segment, while profitability also improved from the previous year. Ordinary revenue (Revenue) was ¥20.75B, up +47.4% year on year; Ordinary Income was ¥3.60B, up +66.2%; and Net Income attributable to owners of the parent was ¥2.65B, up +65.3%. Ordinary revenue from external customers in the Banking Business increased to ¥18.83B (+53.7%), driving overall performance, with increases in both interest revenue and fee revenue serving as the primary factors behind top-line expansion. Meanwhile, other ordinary expenses increased to ¥6.38B (¥3.27B in the previous year), partially offsetting the increase in earnings.
【Revenue】Ordinary revenue was ¥20.75B (¥14.08B in the previous year, +47.4%). By segment, the Banking Business, at ¥18.83B (90.8% of total, +53.7%), was the primary growth driver, while the Leasing Business at ¥1.53B (7.3% of total, +5.0%), the Credit Guarantee Business at ¥0.06B (0.3% of total, +3.8%), and Other Businesses at ¥0.37B (1.8% of total, +15.0%) posted only moderate growth. The increase in Banking Business revenue was driven by both interest revenue of ¥10.82B (¥8.68B in the previous year, +24.7%) and fee revenue of ¥2.17B (¥1.81B in the previous year, +19.9%).
【Profit and Loss】Ordinary Income was ¥3.60B (+66.2%), and the Ordinary Income margin improved to 17.4% from 15.4% in the previous year. Net Income attributable to owners of the parent was ¥2.65B (+65.3%), and the Net Income margin improved to 12.8% from 11.4% in the previous year. Extraordinary gains and losses were immaterial, consisting only of an extraordinary loss of ¥0.001B. The difference between Ordinary Income and Net Income (approximately ¥0.95B) was primarily attributable to income taxes, with the effective tax rate at 26.3%, within a normal range. However, other ordinary expenses increased +95.2% year on year (+¥3.11B), partially offsetting the benefits of revenue expansion; this is an important consideration when assessing the quality of the earnings increase. In conclusion, the current period saw higher revenue and earnings.
Segment profit (before adjustments) increased significantly in the Banking Business to ¥3.84B (¥2.40B in the previous year), making it the core contributor to the Group’s overall Ordinary Income generation. The Banking Business segment profit margin (based on total ordinary revenue) improved to 19.9% from 18.8% in the previous year. The Leasing Business posted higher profit at ¥0.035B (¥0.015B in the previous year), while Other Businesses remained solid at ¥0.048B (¥0.036B in the previous year). In contrast, the Credit Guarantee Business recorded lower profit at ¥0.055B (¥0.139B in the previous year). Intersegment adjustments were negative ¥0.38B (negative ¥0.42B in the previous year), resulting in consolidated Ordinary Income of ¥3.60B.
【Profitability】The Ordinary Income margin was 17.4%, improving +1.95pt from 15.4% in the previous year, while the Net Income margin was 12.8%, improving +1.38pt from 11.4% in the previous year. 【Cash Flow Quality】Extraordinary gains and losses were virtually zero, and the majority of profit consisted of recurring revenue. However, other ordinary expenses increased +95.2% year on year, and fluctuations in market-related gains and losses remain a factor affecting changes in Ordinary Income. 【Investment Efficiency】ROE was 1.7%, with a DuPont decomposition of a 12.8% Net Income margin, total asset turnover of 0.6%, and financial leverage of 21.4x, reflecting the high-leverage structure characteristic of the banking industry. 【Financial Soundness】The Equity Ratio was 4.7%, a slight increase from 4.6% in the previous year. The loan-to-deposit ratio was 72.3%, slightly down from 72.9% in the previous year, while liquidity remained at a stable level.
As a cash flow statement has not been disclosed, fund flows are assessed based on changes in the balance sheet. Deposits were ¥2,939.89B (up ¥44.81B year on year, +1.5%), while loans and bills discounted were ¥2,126.37B (up ¥16.36B, +0.8%), indicating that deposits have been accumulating at a faster pace than loans have been increasing. Cash and due from banks increased to ¥237.85B (up ¥46.96B, +24.6%), strengthening the liquidity buffer, while securities declined slightly to ¥843.63B (down ¥7.93B, ▲0.9%). Borrowings decreased to ¥101.62B (down ¥29.21B, ▲22.3%), suggesting lower reliance on market-based funding and greater stability in the funding structure.
Profit for the current period consisted almost entirely of recurring revenue, while extraordinary gains and losses were limited to an extraordinary loss of ¥0.001B. Meanwhile, other ordinary expenses expanded significantly to ¥6.38B (¥3.27B in the previous year, +95.2%), and market-related fluctuations, including those associated with securities, had a material impact on Ordinary Income. Comprehensive income was ¥7.17B, exceeding Net Income attributable to owners of the parent of ¥2.65B, but decreased ▲19.4% from ¥8.89B in the previous year. This divergence was primarily attributable to changes in the valuation difference on available-for-sale securities (up +¥4.71B in the current period and +¥6.57B in the previous year), with changes in the fair value of financial assets being the primary factor creating the difference between Net Income and comprehensive income. Income taxes were ¥0.95B, representing a normal effective tax rate of 26.3%.
The Q1 progress rates against the full-year forecast were 31.9% for Revenue (Ordinary revenue) (¥20.75B/¥65.10B), 29.8% for Ordinary Income (¥3.60B/¥12.10B), and 35.4% for Net Income (¥2.65B/¥7.50B). Each indicator exceeded the 25% benchmark for simple seasonal progress, with Net Income progress particularly exceeding the benchmark by +10.4pt. As of the current quarter, neither the earnings forecast nor the dividend forecast has been revised.
Under the Company’s plan, the full-year dividend forecast is ¥98 per share, and the full-year EPS forecast is ¥242.85, implying a planned Payout Ratio of approximately 40.4%. In addition to Net Income progress running somewhat ahead of schedule at 35.4%, deposits are expanding and borrowings are being reduced. Accordingly, no major change has been observed in the financial foundation supporting the current dividend plan.
Volatility in market-related gains and losses: Other ordinary expenses increased to ¥6.38B, up +95.2% year on year (+¥3.11B), and fluctuations in valuation gains and losses on securities and other assets have a relatively significant impact on Ordinary Income.
Concentration in the Banking Business: The Banking Business accounts for 90.8% of ordinary revenue from external customers, while the other segments (Leasing, Credit Guarantee, and Other Businesses) account for a combined 9.2%.
Equity Ratio level: Although the Equity Ratio improved slightly to 4.7% (4.6% in the previous year), the level continues to require monitoring.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 12.8% | – | – |
| The Company’s Net Income margin of 12.8% improved from 11.4% in the previous year. Industry median data for comparison purposes has not yet been compiled. |
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 47.4% | – | – |
| The Revenue growth rate of +47.4% reflects expansion in the core Banking Business segment. Comparison with the industry median is not currently possible because the relevant data has not yet been prepared. |
※Source: Compiled by the Company
The Ordinary Income margin improved to 17.4% (15.4% in the previous year), and the Net Income margin improved to 12.8% (11.4% in the previous year), confirming an improvement in profitability primarily driven by increases in interest revenue and fee revenue.
Full-year progress was 35.4% on a Net Income basis, exceeding the standard seasonal progress benchmark of 25%. However, a volatility factor exists in the form of increased other ordinary expenses (+95.2%), while comprehensive income declined ▲19.4% year on year, moving in a different direction from Net Income growth.
Trends in the loan-to-deposit ratio of 72.3% and the Equity Ratio of 4.7% (4.6% in the previous year) indicate stability in the asset and liability structure, while the level of equity capital remains an area requiring continued attention.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.
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