| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1148.7B | ¥987.2B | +16.4% |
| Operating Income / Operating Profit | - | - | - |
| Ordinary Income | ¥323.7B | ¥233.1B | +38.9% |
| Net Income / Net Profit | ¥206.3B | ¥158.5B | +30.2% |
| ROE | 8.3% | 6.7% | - |
The fiscal year ended March 2026 results recorded substantial revenue and profit growth, with Revenue (Ordinary Income) of ¥1,148.7B (YoY +¥161.5B +16.4%), Ordinary Income of ¥323.7B (YoY +¥90.6B +38.9%), and Net Income attributable to owners of the parent of ¥206.3B (YoY +¥47.8B +30.2%). The main driver was expanded interest income of ¥743.1B (prior year ¥591.3B, +25.7%) due to improved loan yields and spreads in a rising interest rate environment. The expense ratio improved to 71.8% from 76.4% a year earlier (−4.6pt), and the operating profit margin rose to 28.2% (prior year 23.6%) (+4.6pt). ROE was 8.3%, up +0.8pt from 7.5% a year earlier, and EPS increased to 339.91 yen (prior year 272.51 yen, +24.7%). Loan balance expanded to ¥4.34兆円 (+4.8%), deposit balance to ¥4.83兆円 (+3.4%), maintaining a loan-to-deposit ratio of about 90%. Special losses of ¥24.3B (provision for head office rebuilding loss ¥15.8B, impairment ¥5.5B) were one-off items, and the strength of core earnings remains intact.
[Revenue] Ordinary income expanded to ¥1,148.7B (YoY +¥161.5B +16.4%). The breakdown shows interest income ¥743.1B (prior year ¥591.3B, +25.7%) as the largest contributor, including loan interest ¥551.5B (prior year ¥426.9B, +29.2%) and securities interest ¥146.1B (prior year ¥140.3B), reflecting improved investment yields from rising rates. Fee income rose modestly to ¥190.7B (prior year ¥184.7B, +3.3%), and other ordinary income remained firm at ¥127.3B (prior year ¥125.9B). Interest expenses rose significantly to ¥152.2B (prior year ¥83.9B, +81.4%), but the increase in deposit rates was relatively limited compared with loan yield improvement, resulting in Net Interest Income (NII) expanding to ¥590.9B (prior year ¥507.4B, +16.5%). Loan balance increased to ¥4.34兆円 (+¥198.57B +4.8%), and deposit balance increased to ¥4.83兆円 (+¥158.57B +3.4%), establishing the top-line growth base.
[Profit & Loss] Operating expenses (ordinary expenses minus funding costs) rose to ¥825.0B (prior year ¥754.1B, +9.4%). Breakdown: fee expenses ¥58.8B (prior year ¥57.4B) and general & administrative expenses ¥365.4B (prior year ¥349.6B, +4.5%) increased, but well below the Revenue growth rate of +16.4%, leading to an improved expense ratio of 71.8% (prior year 76.4%). Ordinary Income was ¥323.7B (prior year ¥233.1B, +38.9%), with an operating profit margin of 28.2% (prior year 23.6%) (+4.6pt). Extraordinary items included special gains of ¥0.2B (gain on disposal of fixed assets) against special losses of ¥24.3B (provision for head office rebuilding loss ¥15.8B, impairment loss ¥5.5B, loss on disposal of fixed assets ¥2.9B), which temporarily depressed profit before tax. Profit before tax was ¥299.6B (prior year ¥232.8B, +28.7%); after deducting corporate taxes of ¥81.0B (prior year ¥56.4B), Net Income attributable to owners of the parent was ¥206.3B (prior year ¥158.5B, +30.2%), and net profit margin improved to 18.0% (prior year 16.1%) (+1.9pt). In conclusion, expansion of net interest margins due to rising rates and strengthened cost discipline delivered revenue and profit growth.
The Banking segment is the core business, accounting for external-customer ordinary income of ¥1,019.8B, segment profit of ¥306.5B, and segment assets of ¥6.11兆円. Other segments (administrative outsourcing, employment placement, credit guarantees, leasing, investments, credit cards, IT services, etc.) contributed ordinary income of ¥128.9B and segment profit of ¥17.5B, representing only 11.2% of overall revenues. Consolidated ordinary income after intersegment adjustments was ¥323.7B, indicating that the banking business effectively generates the majority of income.
[Profitability] Operating profit margin was 28.2%, improved +4.6pt from 23.6% a year earlier, and net profit margin rose to 18.0% (prior year 16.1%, +1.9pt). ROE was 8.3%, up +0.8pt from 7.5% prior, explained by net profit margin 19.0% × total asset turnover 0.019 × financial leverage 24.6x. Bank-specific metrics show a loan-to-deposit ratio of about 90%, indicating substantial contribution from loans, while Net Interest Margin (NIM) is relatively low at approximately 1.36%, making earnings sensitive to interest rate changes. Expense ratio improved to 71.8% (prior year 76.4%), reducing the cost-to-income ratio (CIR) to about 54% (expenses / net operating income). [Cash Quality] Operating Cash Flow / Net Income was −0.40x (−¥82.6B / ¥206.3B), weak due to balance sheet expansion in loans and deposits. OCF / EBITDA was −0.23x (EBITDA ¥357.5B ≒ Ordinary Income ¥323.7B + D&A ¥33.8B), indicating low cash conversion efficiency. [Investment Efficiency] Total asset turnover was 0.019x (Revenue ¥1,148.7B / Total Assets ¥6.12兆円), characteristically low for banks with limited structural improvement potential. Capital expenditures were ¥28.2B, below depreciation of ¥33.8B, with an investment ratio of 0.83x, indicating a maintenance-and-renewal focus. [Financial Soundness] Equity Ratio was 4.1%, satisfying domestic regulatory minimum thresholds but indicating relatively thin capital. Financial leverage of 24.6x is appropriate for the banking business model, supporting total assets ¥6.12兆円 with equity of ¥2,485.7B. Cash and deposits of ¥8,377.4B (13.7% of total assets) provide a liquidity buffer.
Operating Cash Flow was −¥82.6B, a substantial improvement from −¥1,861.8B a year earlier but still negative, driven primarily by balance sheet expansion in loans and deposits characteristic of banking. Subtotal (before working capital changes) was −¥44.9B, and after corporate tax payments of ¥37.7B, operating cash flow remained negative. Investing Cash Flow was +¥461.9B due to sales and recoveries of securities (capital expenditures ¥28.2B and intangible asset investment ¥9.8B were modest), yielding Free Cash Flow of +¥379.3B. Financing Cash Flow was −¥72.5B, mainly due to dividend payments of ¥78.8B (prior year ¥45.4B); share repurchases were negligible at ¥0.1B. Cash and cash equivalents increased by ¥307.2B from opening ¥8,070.2B to closing ¥8,377.4B, with FCF covering dividends. Although OCF/Net Income −0.40x and OCF/EBITDA −0.23x are weak, positive investing CF resulted in FCF/Dividend coverage of 4.8x (¥379.3B / ¥78.8B), indicating healthy dividend coverage. Working capital items noted at period-end include increases in deferred revenue ¥23.8B (prior year ¥18.8B) and accrued expenses ¥55.9B (prior year ¥30.7B).
Ordinary Income of ¥323.7B reflects stable growth supported by expanded Net Interest Income of ¥590.9B from rising rates and resilient fee income of ¥190.7B. In banking, non-operating income/expenses are included in ordinary income and can be considered part of core earnings. Special losses of ¥24.3B were primarily provision for head office rebuilding loss ¥15.8B and impairment loss ¥5.5B, which are one-off. Adding back the special losses of ¥24.3B to profit before tax of ¥299.6B yields a substantive pre-tax core profit of ¥323.9B (≒ Ordinary Income), indicating high quality of earnings. Comprehensive income was ¥193.8B (¥12.5B lower than Net Income ¥206.3B); the ¥−24.8B other comprehensive income breakdown is securities valuation difference −¥45.0B, actuarial adjustments related to retirement benefits +¥20.7B, and deferred hedge gains/losses −¥0.4B. Securities valuation losses stem from market value fluctuations of held bonds amid rising rates and are temporary under a long-term holding policy. Retained earnings rose steadily to ¥1,899.3B (prior year ¥1,759.9B, +¥139.4B), supporting capital strengthening via internal reserves.
Full-year guidance for the fiscal year ending March 2027 projects Ordinary Income ¥366.0B (YoY +13.1%), Net Income attributable to owners of the parent ¥250.0B (approx. +13.4% vs. this year on a comparable basis), EPS 129.37 yen (post 3-for-1 stock split basis), and year-end dividend 78.00 yen (post-split basis, equivalent to 156 yen annualized). Progress toward full-year forecasts: Ordinary Income 88.4% (¥323.7B / ¥366.0B), Net Income attributable to owners of the parent 82.5% (¥206.3B / ¥250.0B), assuming some upside in H2. The company has announced a 1→3 stock split effective October 1, 2026; the post-split year-end dividend of ¥78 equates to ¥234 on a pre-split basis, and annualized for three shares is 156 yen × 3 = 468 yen equivalent, indicating a continued stance of effective dividend increase. The projected payout ratio is about 34% (based on 156 yen / 468 yen), a reasonable level balancing profit growth and shareholder returns.
Annual dividend is 137 yen (year-end dividend 79 yen, interim dividend 58 yen), with a payout ratio of 40.4%, within an appropriate range. Total dividends amounted to ¥78.8B (prior year ¥45.4B, +73.6%), reflecting strengthened shareholder returns linked to higher earnings. Share repurchases were negligible at ¥0.1B, indicating a dividend-focused shareholder return policy. With Free Cash Flow of ¥379.3B, dividend coverage is 4.8x, indicating high dividend sustainability. For FY2027, a post-split year-end dividend of ¥78 (pre-split equivalent ¥234, annualized equivalent 156 yen × 3 = 468 yen) is planned, clarifying intent to continue effective dividend increases. Shares outstanding are 67.30 million (after deducting treasury stock 2.885 million, 64.415 million), and weighted average shares during the period were 64.191 million; post-split the outstanding shares will be approximately 193.245 million, expected to improve liquidity and governance. The total return ratio is 40.4% based on dividends alone, and including buybacks remains about 41%, leaving ample room for capital build-up via internal reserves.
Compression risk of Net Interest Margin: NIM of 1.36% is low, and spread compression due to rising deposit rates or intensified loan competition would directly hit earnings. Operating at a loan-to-deposit ratio of about 90% raises interest sensitivity, limiting resilience to market rate volatility. A 1bp contraction in spread on loans of ¥4.34兆円, assuming a 1.36% margin, corresponds to an annual revenue decline of ¥4.3B, warranting close monitoring.
Limited equity buffer: Equity Ratio of 4.1% is near domestic regulatory minimums, raising concerns that capital buffers may be insufficient if credit or interest rate risks materialize. Equity of ¥2,485.7B against total assets of ¥6.12兆円 (Equity Ratio 4.1%) may not provide ample buffer during financial crises or large borrower defaults, making internal capital accumulation a medium-term priority.
Weak operating cash generation: Operating CF −¥82.6B and OCF/Net Income −0.40x reflect cash outflows from balance sheet expansion; adverse changes in interest rates or lending conditions could further weaken operating CF. Although FCF is sustained by positive investing CF (securities sales/recoveries), reliance on investing CF means core operating cash generation is weak, which could strain sustainable dividends and investments if investing CF normalizes.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 18.0% | 11.9% (7.2%–35.4%) | +6.1pt |
Our Net Profit Margin of 18.0% exceeds the industry median of 11.9% by +6.1pt, indicating relatively high profitability among regional banks.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 16.4% | 10.1% (7.3%–12.1%) | +6.3pt |
Revenue growth of 16.4% outpaces the industry median of 10.1% by +6.3pt, showing faster-than-peer earnings expansion in the rising interest rate environment.
※Source: Company aggregation
The bank has strengthened its earnings structure by capturing benefits from a rising interest rate environment while enforcing cost discipline, improving the expense ratio to 71.8% (prior year 76.4%) and CIR to about 54%. The time lag between loan yield improvements and deposit rate hikes supported spread expansion; depending on future interest rate developments, there is room for sustained Net Interest Income growth. However, absolute NIM of 1.36% is low, and competition or further deposit rate increases at a loan-to-deposit ratio of about 90% could compress spreads, so interest sensitivity management will be key to performance stability.
Operating CF is −¥82.6B and OCF/Net Income −0.40x, indicating weak cash conversion. Nevertheless, positive investing CF (+¥461.9B from securities sales/recoveries) secured FCF of +¥379.3B and dividend coverage of 4.8x, supporting dividend sustainability. Next fiscal year assumes a post-split year-end dividend of ¥78 (annualized equivalent 156 yen × 3 = 468 yen), indicating expectation of effective dividend increases tied to profit growth. Equity Ratio of 4.1% is near regulatory minimums, making the balance between internal capital accumulation and shareholder returns a medium-term discussion point.
The Banking segment accounts for the majority of earnings, with other businesses contributing only about 11%. Future growth drivers include expanding fee and non-interest income, efficiency gains through digitalization, and loan balance growth via regional corporate support. Special losses of ¥24.3B (head office rebuild and impairment) were one-off, and core earnings remain strong. Guidance for FY2027 targets Net Income attributable to owners of the parent ¥250B (≈ +13–15%), with growth scenarios continuing under both interest rate and cost control assumptions.
This report was generated automatically by AI analyzing XBRL financial statement data and is a financial analysis document. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our company based on public financial statements. Investment decisions should be made at your own responsibility and, if necessary, after consulting a professional.