| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥456.9B | ¥349.8B | +30.6% |
| Operating Income | - | - | - |
| Ordinary Income | ¥143.0B | ¥93.3B | +53.3% |
| Net Income | ¥99.4B | ¥67.4B | +47.5% |
| ROE | 1.5% | 1.3% | - |
The bank posted substantial increases in revenue and earnings, primarily due to the expansion of net interest income, while its equity capital level also improved from the previous year. Ordinary revenue was ¥456.9B (+30.6% YoY), Ordinary Income was ¥143.0B (+53.3%), and Net Income was ¥99.4B (+47.5%). In an environment of rising interest rates, interest income grew at a faster pace than interest expenses, resulting in an expansion of net interest income and serving as the primary driver of earnings growth.
【Revenue】Ordinary revenue was ¥456.9B, up +30.6% YoY. As banking is the sole business segment, no breakdown by business is disclosed. The primary driver of revenue growth was the expansion of net interest income. Interest income increased to ¥309.7B (¥258.5B in the previous year, +19.8%), growing at a faster pace than interest expenses (+26.9%); consequently, net interest income expanded +17.5% to ¥231.2B (¥196.7B in the previous year). Net fee and commission income declined slightly by ▲4.8% to ¥3.65B (¥3.83B in the previous year), but other operating income improved to ▲¥1.18B (▲¥2.72B in the previous year), supporting overall ordinary revenue.
【Profit and Loss】Ordinary Income was ¥143.0B (+53.3% YoY), while Net Income was ¥99.4B (+47.5%). Ordinary expenses increased to ¥313.8B (+22.3%), but revenue growth exceeded the increase in expenses, improving the Ordinary Income margin to 31.3% (26.7% in the previous year). Extraordinary items were limited, comprising extraordinary gains of ¥0.09B and extraordinary losses of ¥0.06B, and there was virtually no difference between Ordinary Income and profit before tax of ¥143.4B. After deducting income taxes of ¥44.0B (effective tax rate: 30.7%), Net Income came to ¥99.4B. Revenue and earnings increased.
【Profitability】The Ordinary Income margin was 31.3%, improving by +4.6pt from 26.7% in the previous year, while the Net Income margin also increased by +2.5pt to 21.8% from 19.3%. The expense ratio (G&A ÷ equivalent gross operating profit), an indicator of banking-sector efficiency, was 49.3%. As revenue growth exceeded the increase in expenses (G&A +8.6%), cost efficiency remained at a favorable level.【Cash Flow Quality】Extraordinary items were limited, comprising extraordinary gains of ¥0.09B and extraordinary losses of ¥0.06B. Most profit was generated from ordinary revenue, indicating limited dependence on one-time factors.【Investment Efficiency】ROE was 1.5% (quarterly actual, not annualized). Although the improvement in the Net Income margin was a positive factor, total asset turnover remained low due to the characteristics of the banking industry.【Financial Soundness】The BIS equity ratio was 8.1%, improving from 6.6% in the previous year and exceeding regulatory requirements. Total assets expanded to ¥7,943.89B (+3.6%), while net assets increased to ¥645.66B (+26.8%). The loan-to-deposit ratio was 75.3% (loans of ¥4,576.97B / deposits of ¥6,080.03B), with loans remaining broadly flat against a stable deposit-based funding base.
As no cash flow statement is disclosed, funding trends are assessed based on changes in the balance sheet. Cash and due from banks increased by +6.0% to ¥107.19B (¥101.12B in the previous year), strengthening the liquidity buffer. Securities increased by +14.6% to ¥1,973.42B (¥1,722.41B in the previous year), indicating continued expansion of investment assets. On the funding side, deposits increased by +2.2% to ¥6,080.00B (¥5,950.29B in the previous year), while borrowings decreased by ▲12.2% to ¥688.62B (¥784.28B in the previous year), suggesting declining reliance on market-based funding. Loans were broadly flat at ¥4,576.97B (¥4,588.66B in the previous year), indicating that much of the increase in deposits was directed toward securities investments and additional liquidity.
Current-period profit was primarily supported by recurring revenue. Extraordinary gains of ¥0.09B and extraordinary losses of ¥0.06B were limited, and there was virtually no difference between Ordinary Income of ¥143.0B and profit before tax of ¥143.4B. The expansion of net interest income and improvement in other operating income increased Ordinary Income, representing a substantive improvement in earnings linked to the interest-rate environment. Meanwhile, comprehensive income was ¥140.08B, substantially exceeding Net Income of ¥99.4B, with most of the difference attributable to an increase of +¥130.00B in valuation differences on securities. These valuation differences are unrealized gains that do not pass through the P/L and are susceptible to changes in market interest rates and prices; therefore, comprehensive income should not be regarded as equivalent to the underlying earning power represented by Net Income.
The progress rate toward the full-year Ordinary Income forecast was 34.0% (¥143.0B / ¥421.0B), while the progress rate for Net Income was 34.9% (¥99.4B / ¥285.0B). Both are progressing at a pace above the quarterly seasonal benchmark of 25%. No revision was made to the earnings forecast during the quarter. If the expansion of net interest income and improvement in other operating income continue, progress against the full-year plan may continue to trend above expectations. However, the pace of increase in funding costs and market volatility could affect the pace of progress.
The full-year dividend forecast is ¥25.00 per share, and no revision was made to the dividend forecast during the quarter. The Payout Ratio against the company’s planned EPS of ¥123.98 is calculated at approximately 20.2%. A 5-for-1 stock split of common shares is scheduled to take effect on April 1, 2026; therefore, it should be noted that the dividend amount for the fiscal year ending March 2026 is presented at the actual pre-split amount. The equity ratio has improved to 8.1%, and from a capital-base perspective, the bank has sufficient capacity to implement the planned dividend.
Risk of securities price fluctuations: The securities balance increased by +14.6% YoY to ¥1,973.42B, while valuation differences on securities expanded significantly to +¥130.00B. As investment assets have increased, the impact of interest-rate and market fluctuations on equity capital (net assets) is greater than in the previous year.
Risk of margin pressure from rising expenses: General and administrative expenses (G&A) increased by +8.6% to ¥12.63B (¥11.62B in the previous year). Although the expense ratio (49.3%) remains favorable because revenue growth currently exceeds the increase in expenses, higher costs could pressure the profit margin if revenue growth slows.
Stagnation in net fee and commission income: Net fee and commission income declined by ▲4.8% to ¥3.65B (¥3.83B in the previous year). While fee and commission income increased by +1.2%, fee and commission expenses increased by +23.2%, meaning that the growth pace of non-interest income was weaker than that of net interest income.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 21.8% | – | – |
The Company’s Net Income margin of 21.8% improved from 19.3% in the previous year, although comparative data against the industry median is limited.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 30.6% | – | – |
The Company’s ordinary revenue growth rate of +30.6% represents strong growth reflecting the expansion of net interest income in an environment of rising interest rates.
※Source: Compiled by the Company
The expansion of net interest income (+17.5% YoY) drove growth in Ordinary Income and Net Income, improving the Ordinary Income margin to 31.3% (26.7% in the previous year). This is a structurally important point to monitor regarding the impact of a rising interest-rate environment on the earnings structure.
Although the equity ratio improved to 8.1%, the primary cause was an increase in net assets driven by the increase in valuation differences on securities (+¥130.00B). The fact that unrealized gains linked to market valuations were the central factor behind the increase in capital warrants monitoring.
Progress rates toward the full-year forecasts for both Ordinary Income and Net Income were in the 34% range, tracking above the quarterly seasonal benchmark of 25%.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, and you should consult a professional as necessary.
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