| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥504.4B | ¥341.4B | +47.8% |
| Operating Income | - | - | - |
| Ordinary Income | ¥113.1B | ¥51.2B | +120.9% |
| Net Income | ¥80.8B | ¥37.9B | +113.1% |
| ROE | 1.5% | 0.7% | - |
Supported by the rising interest rate environment, interest on loans and interest and dividend income on securities increased, resulting in Ordinary Income more than doubling. Ordinary Revenue (equivalent to Revenue) was ¥504.4B (¥341.4B in the same period of the previous year, YoY +47.8%), Ordinary Income was ¥113.1B (¥51.2B, YoY +120.9%), and Net Income for the period was ¥80.8B (¥37.9B, YoY +113.1%). The primary driver of the increase in income was that the growth in interest on loans (+19.6%) and interest and dividend income on securities (+79.0%) exceeded the increase in funding costs, including interest on deposits (interest expenses +47.0%). Extraordinary gains and losses were immaterial, indicating that the increase in income was of high quality, driven by the expansion of core funding income and fee income.
【Revenue】Ordinary Revenue increased 47.8% year on year to ¥504.4B. By segment, the Banking Business increased 56.9% to ¥449.4B, accounting for 89.1% of the total and driving the increase in Revenue. The Leasing Business was ¥42.3B (-0.5%), essentially flat, while Other Businesses were ¥12.7B (+2.3%). Within the Banking Business, interest on loans increased 19.6% to ¥171.7B, and interest and dividend income on securities increased 79.0% to ¥84.4B. Fee income also remained solid, increasing 4.9% to ¥49.3B.
【Profit and Loss】Ordinary Income increased substantially by 120.9% to ¥113.1B, while Net Income for the period increased 113.1% to ¥80.8B. Overall interest income growth (+35.2%) exceeded interest expense growth (+47.0%), and the expansion of underlying funding income directly contributed to the improvement in earnings. Extraordinary gains and losses were almost entirely offset, consisting of extraordinary gains of ¥0.3B and extraordinary losses of ¥0.3B, and their contribution to the increase in income was limited. Income taxes and other taxes were ¥32.3B, with the effective tax rate rising slightly to 28.6% (25.6% in the previous year). Consequently, the growth rate of Net Income (+113.1%) was slightly below the growth rate of profit before tax (+121.8%). In conclusion, the Company achieved increases in both Revenue and income.
The Banking Business drove overall performance, with Revenue of ¥449.4B (+56.9%) and segment profit of ¥109.3B (¥52.1B in the previous year, +110.1%), accounting for 96.7% of total segment profit of ¥113.1B. The Leasing Business was essentially flat in terms of Revenue at ¥42.3B (-0.5%), but segment profit declined substantially to ¥1.07B (¥2.12B in the previous year, -49.5%). Other Businesses, including credit card operations, recorded Revenue of ¥12.7B (+2.3%) and segment profit of ¥2.65B (¥3.83B in the previous year, -30.8%), representing a decline in income. The benefits of the rising interest rate environment have been concentrated in the Banking Business, while the profitability of non-bank businesses has instead declined. Accordingly, overall profit growth is highly dependent on the expansion of interest-related income in the Banking Business.
【Profitability】The Ordinary Income Margin was 22.4%, improving by +7.4pt from 15.0% in the previous year, while the Net Income Margin was 16.0%, improving by +4.9pt from 11.1% in the previous year. Against the backdrop of the rising interest rate environment, the expansion of interest spread-related income lifted profitability. 【Cash Flow Quality】The net impact of extraordinary gains and losses was only ¥0.03B, indicating that the increase in income was dependent on the expansion of core operating income at the Ordinary Income stage. 【Investment Efficiency】ROE was 1.5%, a level reflecting the low total asset turnover and high financial leverage characteristic of the banking industry. 【Financial Soundness】The Equity Ratio was 6.6%, slightly down from 6.8% in the previous year. The loan-to-deposit ratio (loans ¥5,163.7B ÷ deposits ¥6,243.99B) was 82.7%, maintaining a stable level from a liquidity perspective.
As no cash flow statement has been disclosed, funding trends are assessed based on changes in funding-related balance sheet items. Cash and due from banks increased substantially to ¥832.1B (¥658.3B in the previous year, +26.4%), while securities also increased by 2.9% to ¥1,649.95B. Loans grew only modestly to ¥5,163.7B (+0.4%), whereas deposits steadily increased to ¥6,243.99B (+2.8%). This indicates a structure in which the Company maintains ample liquid assets while securing stable funding. Treasury stock increased to ¥96.8B (¥71.8B in the previous year, +34.8%), indicating that continued share repurchases are contributing to a reduction in net assets.
Extraordinary gains and losses were immaterial, consisting of extraordinary gains of ¥0.3B and extraordinary losses of ¥0.3B. As the growth rate of Ordinary Income (+120.9%) was reflected almost directly in the growth rate of profit before tax (+121.8%), the increase in income resulted from the expansion of recurring core operating income, including interest income and fee income, and can be considered high quality. Income taxes and other taxes were ¥32.3B, and the effective tax rate rose slightly to 28.6% (25.6% in the previous year). This increase in the tax burden slightly reduced the growth rate of Net Income (+113.1%) below that of profit before tax. Meanwhile, comprehensive income was ¥147.1B, essentially flat from ¥147.3B in the previous year (YoY -0.1%), resulting in a ¥66.3B gap from Net Income of ¥80.8B. This difference reflects valuation-related OCI items, such as the valuation difference on other securities. The change in the valuation difference on securities was ¥68.8B in the current period, down from ¥109.0B in the previous year. The slower growth in comprehensive income than in Net Income indicates a slowdown in the pace of expansion of valuation gains.
Against the full-year Ordinary Income forecast of ¥412.0B, Q1 actual Ordinary Income was ¥113.1B, representing a progress rate of 27.4%. Against the full-year Net Income forecast of 28.9B, not ¥28.9B but ¥289.0B, Q1 actual Net Income was ¥80.8B, representing a progress rate of 28.0%. Both figures are progressing at a pace above the quarterly benchmark of 25%. The EPS forecast is ¥119.72, and Q1 actual EPS of ¥33.39 corresponds to a progress rate of 27.9%. As of Q1, no revisions have been made to the earnings or dividend forecasts. Against the backdrop of accelerating interest income, progress in the first half is expected to remain in line with or exceed the plan.
The full-year dividend forecast is ¥42.00, resulting in a Payout Ratio of 35.1% against the EPS forecast of ¥119.72. As of Q1, there has been no revision to the dividend forecast. Treasury stock increased to ¥96.8B (¥71.8B in the previous year, +34.8%), suggesting continued share repurchases. However, because the acquisition amount for share repurchases has not been disclosed, the Payout Ratio is described based solely on dividends.
Declining trend in capital levels: The Equity Ratio was 6.6%, slightly down from 6.8% in the previous year. The increase in treasury stock (+34.8%) also contributes to the reduction of equity, making future trends in capital levels a key area for monitoring.
Risk of fluctuations in interest spreads due to rising deposit costs: Interest on deposits increased 72.2% to ¥46.8B, pushing up the overall increase in interest expenses (+47.0%). If the difference from interest income growth (+35.2%) narrows, the growth rate of funding income may slow.
Declining profitability of non-bank segments: Segment profit declined in both the Leasing Business, to ¥1.07B (-49.5%), and Other Businesses, to ¥2.65B (-30.8%), further increasing reliance on the Banking Business for income.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 16.0% | – | – |
The Company’s Net Income Margin of 16.0% improved from 11.1% in the previous year, but comparative data against the industry median has not been collected as of this time.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 47.8% | – | – |
The Company’s Revenue Growth Rate of 47.8% represents substantial growth against the backdrop of the rising interest rate environment, but comparative data against the industry median has not been collected as of this time.
※Source: Compiled by the Company
The expansion of interest income in the Banking Business drove increases in both Ordinary Income and Net Income, with income roughly doubling from the previous year. Progress against the full-year plan was also above the quarterly benchmark of 25%, at 27.4% for Ordinary Income and 28.0% for Net Income, indicating that the earnings growth trend continued throughout the quarter.
The increase in income was driven by the expansion of core operating income at the Ordinary Income stage, with almost no reliance on extraordinary gains and losses. Meanwhile, comprehensive income was nearly flat year on year, and the slower pace of expansion in the valuation difference on securities than in the previous year suggests a gap between Net Income growth and qualitative growth in equity.
The Equity Ratio was 6.6%, slightly down from 6.8% in the previous year, while treasury stock acquisitions have continued. Future trends in capital levels and the balance of shareholder returns will be key areas for observation.
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. 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, and, where necessary, after consulting with a professional advisor.
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