| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥523.6B | ¥362.7B | +44.3% |
| Operating Income | - | - | - |
| Ordinary Income | ¥91.1B | ¥41.9B | +117.7% |
| Net Income | ¥63.4B | ¥32.2B | +96.6% |
| ROE | 2.0% | 1.0% | - |
The Company posted higher revenue and earnings, centered on its banking business, with growth in net interest income driven by the rising interest rate environment. Ordinary revenue was ¥523.6B (+44.3% YoY), ordinary income was ¥91.1B (+117.7%), and net income attributable to owners of the parent was ¥63.4B (+96.6%). Net interest income (interest income - interest expenses) expanded to ¥268.7B from ¥178.3B in the same period of the previous year, an increase of +50.7%, while expenses (personnel expenses, property expenses, etc.) grew only +4.8%, resulting in a significant improvement in the expense ratio. Meanwhile, other ordinary income (loss) deteriorated to ▲¥101.0B from ▲¥52.1B in the previous year, reflecting increased market-related headwinds and partially offsetting the earnings growth.
【Revenue】Ordinary revenue was ¥523.6B, up +44.3% YoY. The Banking Business accounted for ¥470.2B (+49.1%, 89.8% of total revenue) and led growth, while the Leasing Business generated ¥46.3B (+10.4%) and Other Businesses (including the credit card business) generated ¥7.1B (+31.5%), with all businesses reporting higher revenue. Growth in the Banking Business was primarily attributable to an increase in interest income (¥403.98B, compared with ¥260.22B in the previous year, +55.2%).
【Profit and Loss】Ordinary income was ¥91.1B (+117.7%). While net interest income expanded to ¥268.7B (¥178.3B in the previous year), expenses (G&A expenses of ¥109.95B against gross operating profit of ¥196.1B) grew only +4.8% YoY, improving the expense ratio by -11.7pt to 56.1% from 67.8% in the previous year. On the other hand, other ordinary income (loss) deteriorated to ▲¥101.0B from ▲¥52.1B in the previous year, as market-related gains and losses worsened, partially offsetting the earnings increase. Extraordinary income and extraordinary losses were limited at ¥0.3B and ¥0.1B, respectively. After deducting income taxes and other taxes of ¥27.9B (effective tax rate: 30.6%) from profit before tax of ¥91.3B, net income attributable to owners of the parent was ¥63.4B (+96.6%). Higher revenue and earnings.
The Banking Business is the core business, accounting for the majority of the Company-wide ordinary income of ¥91.1B, with ordinary revenue of ¥470.2B (+49.1%) and segment income of ¥92.7B (¥42.3B in the previous year, +119.2%). The Leasing Business reported ordinary revenue of ¥46.3B (+10.4%) and a segment loss of ▲¥0.5B (▲¥0.7B in the previous year); although it remained in the red, the loss narrowed. Other Businesses (including the credit card business) generated ordinary revenue of ¥7.1B (+31.5%) and segment income of ¥0.4B (¥0.8B in the previous year). After adjustments, including the elimination of intersegment transactions, of ▲¥1.5B (▲¥0.5B in the previous year), consolidated ordinary income was ¥91.1B, indicating that earnings dependence on the Banking Business has increased further.
【Profitability】ROE was 2.0%. The net income margin attributable to owners of the parent (relative to ordinary revenue) was 12.1%, improving +3.2pt from 8.9% in the previous year, while the ordinary income margin expanded +5.9pt to 17.4% from 11.5%. The expense ratio (G&A expenses as a percentage of gross operating profit) was 56.1%, improving -11.7pt from 67.8% in the previous year, indicating that expense growth was contained relative to revenue growth. 【Cash Quality】Extraordinary income and extraordinary losses were limited at ¥0.3B and ¥0.1B, respectively (including impairment losses of ¥0.1B), and net income was largely composed of recurring earnings. However, comprehensive income of ¥96.7B exceeded net income of ¥63.4B by +¥33.3B, representing a relatively large divergence. 【Investment Efficiency】Loans and bills discounted were ¥5,420.5B (¥5,464.9B in the previous year, -0.8%), and deposits were ¥6,446.2B (¥6,464.6B in the previous year, -0.3%). The loans-to-deposits ratio was 84.1% (84.5% in the previous year), remaining virtually flat. 【Financial Soundness】Total assets were ¥88,473.3B (¥90,407.1B in the previous year, -2.1%), while net assets were ¥3,247.9B (¥3,212.6B in the previous year, +1.1%). The equity ratio based on net assets was 3.7% (3.6% in the previous year), and the BIS capital ratio was 3.6% (3.5% in the previous year); both showed only modest improvement.
As an individual cash flow statement has not been disclosed, funding trends are assessed based on changes in balance sheet balances. On the asset side, securities decreased to ¥15,854.7B (¥17,133.2B in the previous year, -7.5%), loans and bills discounted declined to ¥5,420.5B (¥5,464.9B in the previous year, -0.8%), and cash and due from banks decreased to ¥15,912.2B (¥16,309.7B in the previous year, -2.4%). On the liabilities side, deposits remained virtually flat at ¥6,446.2B (¥6,464.6B in the previous year, -0.3%), while call money declined to ¥7,566.6B (¥8,806.1B in the previous year, -14.1%) and negotiable certificates of deposit decreased to ¥3,310.0B (¥3,970.0B in the previous year, -16.6%), indicating a reduction in short-term market funding and a preference for a stable funding structure centered on deposits. Total assets contracted 2.1% YoY to ¥88,473.3B, suggesting that balance sheet adjustment through reductions in securities and loans has progressed.
Extraordinary income and extraordinary losses were limited at ¥0.3B and ¥0.1B, respectively (including impairment losses of ¥0.1B), and profit before tax of ¥91.3B and net income of ¥63.4B were largely supported by recurring earnings. The primary driver of earnings growth was the expansion of net interest income to ¥268.7B from ¥178.3B in the previous year. However, other ordinary income (loss) deteriorated to ▲¥101.0B from ▲¥52.1B in the previous year, indicating greater volatility in market-related gains and losses and the inclusion of volatile factors in the quality of ordinary income. Comprehensive income was ¥96.7B, exceeding net income of ¥63.4B by +¥33.3B. This difference was primarily attributable to valuation gains on deferred hedge income and losses of +¥75.2B (+¥41.9B in the previous year), which exceeded the increase in valuation losses on valuation differences on available-for-sale securities (cumulative ▲¥1,032.9B, compared with ▲¥991.9B in the previous year). The expansion of unrealized gains on interest rate hedges generated the divergence between net income and comprehensive income.
Against the full-year ordinary income forecast of ¥375.0B, Q1 results were ¥91.1B, representing progress of 24.3%. Against the full-year net income forecast of ¥255.0B (EPS ¥169.67), Q1 EPS was ¥42.20, representing progress of 24.9%. Both were tracking near the benchmark for evenly distributed quarterly progress (25%). While the full-year ordinary income plan calls for growth of +15.9% YoY, Q1 results were up +117.7%, indicating progress substantially ahead of the plan. The Company made no revisions to its earnings forecast or dividend forecast during the quarter.
The Company’s full-year dividend forecast is ¥68.00 per share, with no revision made during the quarter. Based on the full-year net income forecast of ¥255.0B (EPS ¥169.67), the payout ratio is approximately 40.1%, calculated as ¥68.00/¥169.67. The Company holds 7,296 thousand treasury shares, equivalent to 4.6% of issued shares of 156,977 thousand shares.
Volatility in market-related gains and losses: Other ordinary income (loss) deteriorated to ▲¥101.0B from ▲¥52.1B in the previous year, with fluctuations in interest rates and bond markets representing a source of volatility in quarterly performance.
Relatively low capital levels: The BIS capital ratio was 3.6% (3.5% in the previous year), while the equity ratio based on net assets was also only 3.7% (3.6% in the previous year); both showed only modest improvement.
Dependence on short-term market funding: The Company holds call money of ¥7,566.6B and negotiable certificates of deposit of ¥3,310.0B as short-term funding. Although these balances have been reduced by -14.1% and -16.6%, respectively, from the previous year, fluctuations in refinancing costs could affect earnings in a rising interest rate environment.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Income Margin | 12.1% | – | – |
The Company’s net income margin of 12.1% improved from 8.9% in the previous year; however, its relative positioning cannot be shown because industry median data has not been compiled.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 44.3% | – | – |
The Company’s revenue growth rate of 44.3% represents a substantial increase from the previous year; however, its relative positioning cannot be shown because industry median data has not been compiled.
Source: Compiled by the Company
Starting point for profitability improvement: The expense ratio (relative to gross operating profit) improved to 56.1% from 67.8% in the previous year, a decrease of -11.7pt, confirming improved cost efficiency during the expansion of net interest income.
Progress against the full-year plan: As of Q1, ordinary income progress was 24.3% and EPS progress was 24.9%, both within the standard quarterly progress range. No revisions were made to the earnings forecast or dividend forecast.
Volatile factors in the earnings composition: Other ordinary income (loss) deteriorated to ▲¥101.0B from the previous year. The trend in market-related gains and losses will be an important area of focus in assessing the sustainability of the earnings growth trend driven by the expansion of net interest income.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
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