| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥2089.4B | ¥1758.8B | +18.7% |
| Operating Income | - | - | - |
| Ordinary Income | ¥675.6B | ¥443.5B | +52.3% |
| Net Income | ¥478.2B | ¥319.1B | +49.9% |
| ROE | 4.5% | 3.3% | - |
The Company recorded higher revenue and higher earnings, with growth in Ordinary Income and Net Income significantly outpacing revenue growth, clearly demonstrating improved profitability. Ordinary Revenue, equivalent to revenue, was 2,089.4B (+18.7% YoY), Ordinary Income was 675.6B (+52.3%), and Net Income (consolidated) was 478.2B (319.1B in the previous year, +49.9% YoY; of which Net Income Attributable to Owners of the Parent was 477.1B, +50.0%). The primary drivers of earnings growth were the expansion of net interest income associated with growth in loans and the realization of operating leverage through improved operating efficiency (OHR). Progress against the full-year forecast after nine months was 88.9% for Ordinary Income and 86.7% for Net Income Attributable to Owners of the Parent, both progressing at a pace exceeding the time-apportioned benchmark (75%).
【Revenue】Ordinary Revenue (equivalent to revenue) was 2,089.4B, up +18.7% YoY. By segment, the core Banking Business generated 1,775.0B (84.9% of the total, +21.1% YoY), while the Leasing Business generated 292.2B (14.0% of the total, +6.6% YoY), with the Banking Business driving growth. Growth in the Banking Business was attributable to a +17.7% increase in interest income and a +14.3% expansion in fee income, against a backdrop of a +3.0% increase in the loan balance. The loan-to-deposit ratio rose from 67.7% to 70.0%, indicating a shift toward an asset composition centered on lending.
【Profit and Loss】Ordinary Income increased 52.3% YoY to 675.6B, expanding at a pace significantly exceeding revenue growth (+18.7%). The drivers were the expansion of net interest income and fee income, together with improved cost efficiency as the operating expense ratio (OHR) improved by 3.6pt from 41.0% to 37.4%. Non-recurring items remained limited, comprising extraordinary income of 0.6B and extraordinary losses of 2.2B (including impairment losses of 1.8B), so the improvement in profit at the Ordinary Income level was reflected almost directly in bottom-line earnings. Net Income (consolidated) was 478.2B (+49.9% YoY), while Net Income Attributable to Owners of the Parent was 477.1B (+50.0% YoY). The Company recorded higher revenue and higher earnings.
Profit from the Banking Business segment was 652.9B (426.5B in the previous year, +53.1%), while profit from the Leasing Business segment was 19.6B (17.8B in the previous year, +10.3%). Of the combined profit of 672.5B from both segments, the Banking Business accounted for 97.1%, indicating that virtually all of the Group’s earnings growth was driven by the Banking Business. Although the Leasing Business also maintained higher revenue and higher earnings, the earnings structure remains highly dependent on the Banking Business in terms of both scale and growth rate.
【Profitability】ROE was 4.5%, while the Net Profit Margin (Net Income (consolidated) / Ordinary Revenue) improved to 22.9% from 18.1% in the previous year. Under the DuPont decomposition, ROE of 4.5% comprises a Net Profit Margin of 22.9% × Total Asset Turnover of 0.015x × Financial Leverage of 12.8x, and the operating expense ratio (OHR) improved to 37.4% from 41.0% in the previous year. 【Cash Flow Quality】Comprehensive Income of 1,269.6B reached approximately 2.7 times Net Income (consolidated) of 478.2B, with the divergence between the two largely attributable to market-related factors, including fluctuations in unrealized gains and losses on securities and hedging gains and losses. 【Investment Efficiency】Total Asset Turnover of 0.015x reflects a level characteristic of the banking sector, which has an asset scale centered on deposits and loans, while Financial Leverage of 12.8x is inextricably linked to this structure. 【Financial Soundness】The Equity Ratio (BS basis) improved to 7.8% from 7.1% in the previous year, while the BIS Capital Ratio improved by +0.6pt to 7.7% from 7.1% in the previous year. The loan-to-deposit ratio increased to 70.0% from 67.7%.
Funding trends can be confirmed from balance sheet movements. While loans increased to 6.66T (6.46T in the previous year, +3.0%), deposits remained broadly flat at 9.51T (9.55T in the previous year, △0.4%). Cash and deposits decreased to 2.89T (3.03T in the previous year, △4.5%), while borrowings were reduced to 1.30T (1.58T in the previous year, △17.8%), suggesting that the funding for loan growth was also covered through a reduction in on-hand liquidity and market-based funding. The securities balance declined slightly to 3.37T (3.41T in the previous year, △1.1%), indicating an ongoing shift in funds from investment assets toward loans. Treasury stock increased to 352.7B (253.97B in the previous year, +38.9%), suggesting that more active capital policies, including share repurchases, were also among the uses of funds.
Comprehensive Income was 1,269.6B, exceeding Net Income (consolidated) of 478.2B by 791.4B. The primary factors underlying the difference were other securities valuation difference (OCI basis: +471.7B, △912.5B in the previous year) and an improvement in deferred hedge gains and losses (+333.4B), resulting in a significant improvement from the previous year’s Comprehensive Loss (△508.7B). These are highly market-sensitive items arising from changes in the fair value of securities held and hedge accounting, and therefore need to be distinguished from recurring earnings power. At the Ordinary Income level, however, both net interest income (interest income +17.7%) and income from transactions with customers (fee income +14.3%) expanded, while non-recurring items remained limited to extraordinary income of 0.6B and extraordinary losses of 2.2B (including impairment losses of 1.8B). The effective tax rate was 29.1% (28.3% in the previous year), with no significant change, and the conversion from Ordinary Income to Net Income was generally stable. Accordingly, although growth in Ordinary Income was supported by expansion in recurring income sources such as net interest income and fee income, it should be noted that the sharp increase in Comprehensive Income was largely attributable to market valuation effects.
Progress against the full-year forecast is favorable. Ordinary Income was 675.6B, representing progress of 88.9% against the full-year forecast of 760.0B and progressing at a pace exceeding the time-apportioned benchmark of 75% after nine months. Net Income Attributable to Owners of the Parent was 477.1B, representing progress of 86.7% against the full-year forecast of 550.0B. Actual EPS of ¥104.11 also represented progress of 86.6% against full-year forecast EPS of ¥120.25, with all indicators progressing above the apportioned pace.
The interim dividend was ¥13.00 and the forecast year-end dividend is ¥29.00, resulting in a full-year forecast total dividend of ¥42.00. Based on forecast full-year EPS of ¥120.25, the Payout Ratio is 34.9%. Treasury stock increased to 352.7B (253.97B in the previous year, +38.9%), suggesting a strengthening commitment to shareholder returns, including share repurchases. However, as detailed disclosure of in-period acquisition amounts is not available, the above Payout Ratio is calculated solely on the basis of dividends.
Market value fluctuation risk related to securities: Other securities valuation difference fluctuated significantly, reaching +471.7B on an OCI basis (△912.5B in the previous year), while accumulated other comprehensive income amounted to 378.37B (35.6% of net assets of 1,061.98B). Fluctuations in financial markets have a relatively significant impact on shareholders’ equity.
Credit cost and credit-related risk: The loan balance increased to 6.66T (+3.0% YoY), while the allowance for loan losses was 55.26B (55.00B in the previous year), remaining broadly flat. As loan growth continues, trends in credit-related expenses require ongoing monitoring.
Capital level trends: The Equity Ratio (BS basis) was 7.8%, while the BIS Capital Ratio was 7.7% (improving by +0.6pt from 7.1% in the previous year). Net assets increased +9.7% YoY, outpacing total asset growth (+0.6%), indicating an improving capital base. However, the balance against the pace of risk-weighted asset growth associated with the increase in the loan-to-deposit ratio (67.7%→70.0%) remains subject to ongoing monitoring.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 22.9% | – | – |
| The Company’s Net Profit Margin of 22.9% reflects an improvement from 18.1% in the previous year. |
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 18.7% | – | – |
| The Company’s revenue growth rate of 18.7% represents a significant increase from the previous year for the Company. |
※Source: Compiled by the Company
Growth in Ordinary Income (+52.3%) and Net Income (+49.9%) significantly exceeded revenue growth (+18.7%), while the operating expense ratio (OHR) improved from 41.0% to 37.4%, confirming a qualitative improvement in profitability.
Comprehensive Income (1,269.6B) reached approximately 2.7 times Net Income (478.2B), primarily due to improvements in securities valuation differences and hedge gains and losses. As the previous year recorded a Comprehensive Loss, the magnitude of the fluctuation was significant, indicating the high sensitivity of shareholders’ equity to market movements.
Progress against the full-year forecast was 88.9% for Ordinary Income and 86.7% for Net Income, exceeding the time-apportioned benchmark. The loan-to-deposit ratio, BIS Capital Ratio, and operating expense ratio all improved from the previous year, and qualitative improvements in the earnings base can be observed across multiple indicators.
This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
---End of Report---