| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3054.4B | ¥2541.9B | +20.1% |
| Operating Income | - | - | - |
| Ordinary Income | ¥815.3B | ¥638.4B | +27.7% |
| Net Income | ¥665.4B | ¥459.9B | +44.6% |
| ROE | 5.8% | 4.8% | - |
For the interim period of FY2026 ending March, Revenue was ¥3054.4B (YoY +¥512.5B +20.1%), Ordinary Income was ¥815.3B (YoY +¥176.9B +27.7%), and Net Income attributable to owners of the parent was ¥665.4B (YoY +¥205.5B +44.6%). Against a background of rising interest rates, Net Interest Income expanded to ¥1166.3B (estimated YoY +12.7%), and Fee Income also grew steadily to ¥284.6B (YoY +10.5%). On the expense side, SG&A rose to ¥811.5B (YoY +11.8%), but revenue growth outpaced expense increases, producing operating leverage and improving Net Profit Margin to 21.8% (up +3.7pt from 18.1% a year earlier). Comprehensive Income turned strongly positive to ¥2211.0B (from ▲¥1,172.5B prior year), with unrealized gains on securities of ¥989.0B and deferred hedge gains of ¥455.3B boosting Net Assets to ¥1,1561.6B (YoY +19.5%). Overall, the results reflect revenue and earnings growth capturing the tailwind from the interest-rate environment.
[Revenue] Of Ordinary Revenues ¥3,054.4B (YoY +20.1%), investment income ¥1,708.4B (YoY +14.7%) was the largest growth driver. Interest on loans increased markedly to ¥868.4B (from ¥727.0B prior year, +19.5%) amid rising rates, and interest/dividends on securities remained firm at ¥658.1B (YoY +0.2%). Although deposit interest expense rose sharply to ¥202.7B (from ¥94.9B prior year, +113.5%) and funding costs increased, Net Interest Income was secured at approximately ¥1,166.3B (estimated YoY +12.7%). Fee and commission income was ¥284.6B (YoY +10.5%) and non-interest revenue diversification progressed. Other ordinary revenues ¥644.6B (YoY +52.0%) included trading revenue ¥5.0B (prior ¥2.7B) and other operating income ¥63.9B (prior ¥61.6B), with market-related revenue contributing. Loan balances were ¥6兆7,119.4億円 (YoY +3.9%), deposits ¥9兆5,520.5億円 (YoY +0.03%) maintaining a loan-to-deposit ratio around 70%, indicating a solid funding base.
[Profitability / Expenses] Ordinary expenses were ¥2,239.1B (YoY +17.6%), with funding costs ¥542.0B (YoY +21.2%) reflecting higher deposit rates. Fee and commission expenses were limited at ¥81.5B (YoY +1.6%), and other operating expenses decreased, but operating expenses (SG&A) rose to ¥811.5B (YoY +11.8%) led by personnel and system investments. Estimated CIR (cost-to-income ratio) remains high at about 69%, indicating limited expense elasticity against revenue growth. Non-operating items were minor, and Ordinary Income reached ¥815.3B (YoY +27.7%). Extraordinary income was ¥0.7B and extraordinary losses ¥17.3B (including impairment losses of ¥16.3B), netting to a small burden of ▲¥16.6B, resulting in Pretax Income of ¥798.8B (YoY +23.2%). After corporate taxes and others of ¥151.5B (effective tax rate 18.9%), Net Income attributable to owners of the parent was ¥665.4B (YoY +44.6%), delivering a higher profit growth rate than Ordinary Income (+27.7%) and concluding in a strong revenue-and-profit result.
[Profitability] Net Profit Margin improved to 21.8% (up +3.7pt from 18.1%), and ROE rose to 5.8% (from 4.6% prior year, +1.2pt). As a bank-specific metric, with Net Interest Income of ¥1,166.3B (estimate) against SG&A of ¥811.5B, the estimated CIR is about 69%, which is high and indicates substantial scope for expense-efficiency improvement. [Cash Quality] Operating Cash Flow was ▲¥4,404.6B versus Net Income of ¥665.4B, producing an OCF/Net Income of ▲6.6x, reflecting the bank-specific balance-sheet expansion/contraction dynamics (loan, deposit, securities position changes) that weaken conversion of profit to cash. Depreciation of ¥60.9B yields an estimated EBITDA of ¥876.2B, and OCF/EBITDA is ▲5.0x, a low level. [Investment Efficiency] With Total Assets of ¥13兆5,544.9億円 against Revenue ¥3,054.4B, the total asset turnover is 0.023x, low as typical for banking, and ROE 5.8% is decomposed into Net Profit Margin 21.8% × Asset Turnover 0.023 × Financial Leverage 11.7x. [Financial Soundness] Equity Ratio is 8.5% (up +1.3pt from 7.2%) exceeding the regulatory floor of 8% and in an appropriate range, but below a healthy level of 12%. D/E (debt-to-equity) multiple is 10.7x, indicating high leverage typical of banking but implying sensitivity to interest and credit risk. Loan-to-deposit ratio is about 70% and favorable, but call money increased to ¥9,183.0B (YoY +54.7%) and short-term funding has risen, making maturity mismatch management important. BPS is ¥2,534.41 (from ¥2,087.32 prior year, +21.4%) and shareholders’ equity has grown steadily. Guarantees related to bills receivable, etc. amount to ¥5,830.1B and are off-balance-sheet credit exposures.
Operating Cash Flow was ▲¥4,404.6B (narrowing from ▲¥6,394.8B prior year), with a subtotal of ▲¥4,242.2B plus corporate tax payments of ▲¥162.4B. Due to bank-specific balance-sheet movements in loans, deposits, and securities operations, OCF/Net Income is ▲6.6x against Net Income of ¥665.4B, largely driven by short-term market position adjustments (call money +¥3,249.5B, negotiable certificates of deposit ▲¥1,612.4B, etc.). Investing Cash Flow turned positive to +¥2,764.9B (from ▲¥75.4B prior year) as proceeds from securities sales and similar cash recoveries far exceeded fixed-asset investments of ▲¥118.2B. Financing Cash Flow was ▲¥326.1B, driven by dividend payments of ▲¥225.3B and share buybacks of ▲¥100.0B as shareholder returns. Free Cash Flow (Operating + Investing CF) was ▲¥1,639.7B, which does not cover dividend and share buyback outflows of ¥325.3B; shareholder returns are being executed at a pace that exceeds internal cash generation. Cash and cash equivalents at period-end decreased to ¥2兆8,031.4億円 (YoY ▲¥1,965.8億円 ▲6.6%), adjusting the mix of liquidity assets through drawdown. Overall, while recognizing bank-specific cash flow structures, conversion of profit to cash and balance-sheet management stability are points of future focus.
Core recurring earnings are Net Interest Income of ¥1,166.3B (estimate) and Fee Income of ¥284.6B, indicating a sound composition of core business revenue. Non-operating income is minor, and extraordinary items net to ▲¥16.6B, so the gap between Ordinary Income ¥815.3B and Pretax Income ¥798.8B is small. A one-off factor is extraordinary losses of ¥17.3B (including impairment losses of ¥16.3B), but its scale is limited relative to total revenue. Corporate taxes and others of ¥151.5B (effective tax rate 18.9%) are at normal levels and the disparity between Ordinary and Net Income is reasonably explained by tax burden. However, there is a large divergence between Comprehensive Income ¥2,211.0B and Net Income ¥665.4B: unrealized gains on securities ¥989.0B, deferred hedge gains ¥455.3B, and actuarial gains (retirement benefit adjustments) ¥119.5B together boosted Net Assets by ¥1,885.1B. These valuation differences are non-cash items dependent on market movements and should be distinguished from sustainable earning power. From an accrual perspective, with Operating CF ▲¥4,404.6B versus Net Income ¥665.4B, the accrual ratio is ▲7.6x, substantially negative, suggesting caution on earnings quality. In summary, core business revenue composition is recurring and sound, but most of the Comprehensive Income is valuation-driven, and low cash conversion warrants a neutral-to-cautious assessment of earnings quality.
Full-year guidance targets Ordinary Income of ¥1,060.0B (YoY +30.0%), Net Income attributable to owners of the parent ¥700.0B (YoY +5.2%), EPS ¥160.60, and DPS ¥30.00. The interim results achieved Ordinary Income ¥815.3B, representing 76.9% of the full-year plan, and Net Income ¥665.4B, or 95.1% progress toward the full-year plan, with Net Income progressing faster than expected. Progress against the Annual Ordinary Income plan is standard, while the stronger Net Income progress is likely due to tax burden and timing differences in extraordinary items. The growth assumptions rely on continued expansion of Net Interest Income amid higher rates and strengthening fee income, but downside risks include faster-than-anticipated rise in deposit rates, sustained high expenses (CIR remaining elevated), and market volatility affecting unrealized securities valuation. Full-year DPS ¥30.00 appears to normalize from the interim actual ¥60.00 (which included a commemorative dividend of ¥5), and the dividend policy remains stability-oriented.
Interim dividend was ¥20.00 per share (ordinary dividend ¥20.00). Forecast year-end dividend is ¥40.00 per share (ordinary ¥35.00, commemorative ¥5.00), for an annual total of ¥60.00. Based on interim EPS of ¥141.18, annual DPS ¥60.00 implies a payout ratio of 42.5%, and on full-year forecast EPS ¥160.60 the payout ratio is 37.3%, within an appropriate range. Share buybacks of ¥100.0B were executed, increasing treasury stock to 39.2 million shares against a period-average outstanding share count of 457.4 million shares. Dividend payments of ¥225.3B (actual) plus share buybacks of ¥100.0B yield total shareholder returns of ¥325.3B, representing a Total Return Ratio of 48.9% versus Net Income ¥665.4B. However, Free Cash Flow of ▲¥1,639.7B does not cover total returns of ¥325.3B, so return funding relies on capital increases through Comprehensive Income (+¥1,885.1B). Sustainability of dividends depends on continued earnings growth via expanded interest income and improved expense efficiency, and on maintaining or improving the Equity Ratio of 8.5%. Excluding the commemorative dividend of ¥5, the normalized annual dividend is assumed around ¥55, indicating a commitment to stable returns.
Interest Rate Risk: While interest on loans rose to ¥868.4B (YoY +19.5%) in a rising rate environment, deposit interest also jumped to ¥202.7B (YoY +113.5%). If deposit rate increases outpace loan rate repricing, net interest spread could compress. With a loan-to-deposit ratio of about 70% and deposits of ¥9.55 trillion against loans of ¥6.71 trillion, surplus funds depend on market investments, so abrupt rate changes may heighten earnings volatility.
Structural Expense Rigidity Risk: SG&A increased to ¥811.5B (YoY +11.8%), leaving estimated CIR around 69%, a high level indicating limited expense elasticity. Fixed-cost burdens such as personnel and system investments are heavy, so in a revenue decline scenario profit margins could fall sharply. Delays in expense efficiency improvements could jeopardize maintaining ROE at 5.8%.
Short-term Funding Dependence & Liquidity Risk: Call money rose to ¥9,183.0B (YoY +54.7%) and short-term funding increased, while negotiable certificates of deposit decreased to ¥5,720.8B (YoY ▲73.8%), changing the funding mix. In times of short-term market liquidity stress or sudden rate spikes, funding costs could rise and maturity mismatches could cause liquidity strain. With Operating CF at ▲¥4,404.6B and weak profit-to-cash conversion, ensuring stable balance-sheet management is critical.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 21.8% | 11.9% (7.2%–35.4%) | +9.9pt |
Profitability exceeds the industry median by 9.9pt, confirming a high-profit structure capturing the rising-rate environment.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 20.1% | 10.1% (7.3%–12.1%) | +10.1pt |
Growth outperformed the industry median by 10.1pt, driven by expansion in rate-related revenue relative to peers.
※ Source: Company aggregation
Continued expansion of core business earnings in a rising-rate environment: Net Interest Income ¥1,166.3B (estimated, YoY +12.7%) and Fee Income ¥284.6B (YoY +10.5%) point to improving core earning power. The full-year plan assumes Ordinary Income up +30.0%, with elevated rates supporting results; however, if deposit rate increases exceed expectations, spread compression risk exists. As long as loan balances grow steadily (+3.9%), the revenue base is sustainable, but maintaining a loan-to-deposit ratio around 70% and managing reliance on short-term funding are key.
Scope for expense-efficiency improvement and enhancement of cash-flow quality: Estimated CIR of about 69% is high within the sector. Although SG&A growth (+11.8%) lags revenue growth (+20.1%), absolute improvements in expense levels are the next driver to lift ROE. Operating CF ▲¥4,404.6B and OCF/Net Income ▲6.6x indicate weak cash conversion, mainly due to short-term market position changes; confirming sustainable cash generation is crucial for investment decisions. While Equity Ratio at 8.5% is in an appropriate range, total returns of ¥325.3B are being executed at a pace exceeding FCF ▲¥1,639.7B, relying on Comprehensive Income-driven capital build-up—this structure carries valuation-difference volatility risk.
This report was auto-generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the Company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.