| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥184.7B | ¥141.8B | +30.1% |
| Operating Income | - | - | - |
| Ordinary Income | ¥50.0B | ¥31.3B | +59.6% |
| Net Income | ¥34.9B | ¥22.0B | +58.9% |
| ROE | 1.8% | 1.1% | - |
Ordinary Income and Net Income growth significantly outpaced Revenue growth, resulting in a higher-revenue, higher-profit quarter accompanied by improved profitability. Ordinary Income, corresponding to Revenue, was ¥184.7B (¥141.8B in the same period of the previous year, +30.1% YoY), Ordinary Income was ¥50.0B (¥31.3B, +59.6%), and Net Income was ¥34.9B (¥22.0B, +58.9%). The primary driver of revenue growth was the expansion of net interest income in the Banking Business segment. Although increased interest income from loans and securities boosted Ordinary Income, the increase in general and administrative expenses was relatively contained, and the revenue growth effect was the major driver of profit growth.
【Revenue】Ordinary Income was ¥184.7B, up +30.1% YoY. By segment, the Banking Business led overall performance at ¥169.5B (+33.5% YoY, 91.8% composition ratio), followed by the Leasing Business at ¥12.8B (+11.6%), the Credit Card and Credit Guarantee Business at ¥1.7B (-11.9%), and Other Businesses at ¥1.2B (-29.3%). Net interest income (interest income - interest expenses) was ¥107.2B, an increase of +20.0% from ¥89.3B in the previous year. Higher interest income from loans and securities supported revenue growth in the Banking Business.
【Profit and Loss】Ordinary Income was ¥50.0B (+59.6% YoY), while Net Income was ¥34.9B (+58.9%). General and administrative expenses were ¥65.6B, increasing only +2.6% from ¥63.9B in the previous year. As this was significantly below the +30.1% growth in Ordinary Income, positive operating leverage took effect. Extraordinary losses were a minor ¥0.04B, and the impairment loss on fixed assets recorded in the previous year (¥1M) did not occur in the current period, indicating that the impact of one-time factors was limited. The effective tax rate was 30.0%, broadly unchanged from 29.6% in the previous year, and there was no significant change in the conversion rate from Ordinary Income to Net Income. In conclusion, the Company achieved higher revenue and higher profit.
The Banking Business segment recorded segment profit of ¥49.9B, accounting for nearly all of total Ordinary Income (¥50.0B). Segment profit increased +60.5% from ¥31.1B in the previous year, confirming that the expansion of net interest income drove performance. Segment profit in the Leasing Business was ¥0.27B (¥0.06B in the previous year), while the Credit Card and Credit Guarantee Business recorded ¥1.19B (¥0.84B in the previous year, +41.7%). Both segments posted higher profit, although on a small scale. The Other Businesses segment turned negative at -¥0.30B (¥0.42B in the previous year). Revenue and profit are both highly concentrated in the Banking Business, and the impact of the other segments on overall performance is limited.
【Profitability】The Ordinary Income margin (Ordinary Income/Ordinary Income) was 27.1%, improving from 22.1% in the previous year, while the Net Income margin also improved to 18.9% from 15.5%. Both results reflect profit growth exceeding the +30.1% revenue growth rate.【Cash Flow Quality】Comprehensive Income was ¥65.4B, exceeding Net Income of ¥34.9B by ¥30.5B. Valuation-related items, including ¥12.2B in valuation difference on securities and ¥18.9B in deferred hedge gains or losses, were the primary contributors.【Investment Efficiency】ROE was 1.8% (based on quarterly results, not annualized), while financial leverage (total assets/net assets) was approximately 20.0x, a high level characteristic of the banking industry.【Financial Soundness】The Equity Ratio (net assets/total assets) was 5.0%, broadly unchanged from 4.98% in the previous year. The deposit-to-loan ratio (loans/deposits) was 68.7%, down from 71.8% in the previous year, indicating that loan growth was moderate relative to the pace of deposit growth. The expense ratio, calculated as general and administrative expenses/Ordinary Income, was 35.5%, improving from 45.1% in the previous year and confirming the relative containment of expenses against revenue growth.
Because a statement of cash flows has not been disclosed, funding trends are analyzed based on changes in key balance sheet items. Deposits were ¥3兆3,254.9B, compared with ¥3兆3,225.5B in the previous year, and did not increase by the stated amount; more precisely, they increased +3.1% (+¥1,002.4B) from ¥3兆2,252.5B, indicating a steady accumulation of stable funding. Meanwhile, loans were ¥2兆2,831.3B, down -1.3% (-¥309.8B) from ¥2兆3,141.0B in the previous year, indicating that loan growth was sluggish relative to deposit growth. Cash and deposits were ¥2,697.9B, down -30.7% (-¥1,193.0B) from ¥3,890.9B in the previous year, suggesting a shift of funds toward other operating assets, including securities (¥1兆1,424.5B, +0.9%) and call loans (¥2,040.0B). Total assets increased +1.7% YoY to ¥3兆9,784.3B, indicating a gradual expansion trend in both assets and liabilities.
Profit for the current quarter had a highly recurring composition. Extraordinary losses were a minor ¥0.04B, and the impairment loss on fixed assets recorded in the previous year (¥1M) did not occur in the current period, further reducing reliance on one-time factors. The effective tax rate was 30.0%, broadly unchanged from 29.6% in the previous year, with no structural change in the conversion from Ordinary Income to Net Income. Meanwhile, Comprehensive Income was ¥65.4B, exceeding Net Income of ¥34.9B by ¥30.5B. This difference resulted from valuation-related items such as ¥12.2B in valuation difference on securities, ¥18.9B in deferred hedge gains or losses, and -¥0.6B in adjustments related to retirement benefits. Since these items may reverse depending on changes in market interest rates and securities prices, recurring Net Income itself is highly sustainable, while these items should be noted as volatile factors affecting changes in equity.
Progress toward the full-year forecast was 34.5% for Ordinary Income (¥50.0B/¥145.0B), 34.9% for Net Income (¥34.9B/¥100.0B), and 34.9% for EPS (¥50.61/¥144.85). Each exceeded the 25% benchmark for simple quarterly progress. While the full-year Ordinary Income forecast represents a +12.8% increase from the previous fiscal year, Ordinary Income in Q1 increased +59.6% YoY, significantly exceeding that level. This may indicate that the full-year plan factors in a slowdown in growth from the second half onward. No revisions were made to the earnings forecast or dividend forecast during the current quarter.
Effective April 1, 2026, the Company conducted a stock split at a ratio of 4 shares of common stock for every 1 share. The forecast annual dividend of ¥29.00 for the fiscal year ending March 2027 is based on the post-split number of shares. On a pre-split basis, this is equivalent to an annual dividend of ¥232.00. The Payout Ratio is 20.0% (¥29.00/¥144.85) against forecast EPS of ¥144.85, indicating that dividends remain funded solely from current-period profit. The Company holds 4.878M treasury shares, equivalent to 6.6% of the 73,991K issued shares. No revision was made to the dividend forecast during the current quarter.
Revenue concentration risk: The Banking Business segment accounts for 91.8% of Ordinary Income and nearly all segment profit, while the Leasing, Credit Card, and Other Businesses are small in scale. The Company has a structure with a high degree of revenue dependence on a specific business.
Monitoring of capital levels: The Equity Ratio (net assets/total assets) was 5.0%, remaining broadly unchanged from 4.98% in the previous year. Financial leverage was approximately 20.0x, a high level characteristic of the banking industry, and capital adequacy remains an indicator requiring continued attention.
Volatility risk of valuation-related assets: Comprehensive Income exceeded Net Income by ¥30.5B, primarily due to valuation-related items such as valuation difference on securities and deferred hedge gains or losses. These items may fluctuate in response to changes in interest rates and securities markets and should therefore be monitored as factors affecting changes in equity.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 18.9% | – | – |
The Company’s Net Income margin of 18.9% improved by the equivalent of +340bp YoY, demonstrating the strength of profit growth relative to revenue growth.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 30.1% | – | – |
The Company’s Revenue growth rate of 30.1% represents strong growth supported by the expansion of net interest income in the Banking Business segment.
※Source: Compiled by the Company
Growth in Ordinary Income (+59.6%) and Net Income (+58.9%) significantly exceeded Revenue growth (+30.1%), and the Ordinary Income margin improved to 27.1% from 22.1% in the previous year. A key feature of these financial results was the positive operating leverage resulting from the containment of expense growth accompanying revenue growth.
While progress toward the full-year forecast was 34.5% for Ordinary Income and 34.9% for Net Income, exceeding the 25% benchmark for simple quarterly progress, the full-year Ordinary Income forecast is limited to +12.8% versus the previous fiscal year. The gap from the Q1 growth rate will be a reference point for assessing developments from the second half onward.
Comprehensive Income of ¥65.4B exceeded Net Income of ¥34.9B by ¥30.5B, with significant contributions from valuation-related items such as valuation difference on securities and deferred hedge gains or losses. These valuation gains may fluctuate with market movements and therefore warrant monitoring separately from Net Income.
This report is an earnings analysis document automatically generated by AI based on XBRL financial results release data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed financial results data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
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