| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥695.2B | ¥538.3B | +29.1% |
| Operating Income | - | - | - |
| Ordinary Income | ¥140.5B | ¥102.8B | +36.6% |
| Net Income | ¥80.4B | ¥69.2B | +16.1% |
| ROE | 4.2% | 4.3% | - |
For the fiscal year ended March 2026, Revenue (Ordinary Income) was ¥695.2B (YoY +¥156.9B, +29.1%), Ordinary Income was ¥140.5B (YoY +¥37.7B, +36.6%), and Net Income attributable to owners of parent was ¥174.5B (YoY +¥106.3B, +156.0%), recording substantial top-line and bottom-line increases. Expanded interest income and higher fee income drove core operating revenue, which grew strongly by +29.1% YoY. At the Ordinary Income level, improvements in net interest income produced a +36.6% increase, and Net Income attributable to owners of parent reached ¥174.5B, 2.6x the prior year, due to recognition of ¥127.8B of negative goodwill gain. EPS surged to ¥418.06 (prior year ¥163.29), up +156.0%. However, the expansion in Net Income was substantially driven by one-off items, and Operating Cash Flow dropped to -¥271.4B, raising issues around cash realization of profits.
Revenue (Ordinary Income) reached ¥695.2B (YoY +29.1%), a large increase. Investment income totaled ¥464.3B, of which loan interest was ¥285.2B (prior year ¥249.3B) and securities interest/dividends were ¥167.2B (prior year ¥150.5B), both rising in the higher-rate environment. Funding costs were ¥82.3B (prior year ¥39.0B), approximately 2.1x prior year, but net interest income remained ¥382.0B, up ¥36.2B YoY. Fee income was ¥108.9B (prior year ¥96.3B), +13.1%, and net fee income after fee expenses of ¥27.9B was ¥81.0B, remaining robust. Other ordinary income was ¥60.2B (prior year ¥6.7B), a large increase, contributing to revenue diversification.
Expenses (SG&A etc.) were ¥243.9B, a slight increase of +2.5% from ¥238.0B in the prior year, maintaining cost efficiency. The expense ratio to Ordinary Income (CIR) remained around 35%, an efficient level. Ordinary Income was ¥140.5B (YoY +36.6%), reflecting improved core profitability. Extraordinary gains were ¥127.9B, including ¥127.8B of negative goodwill gain related to a subsidiary acquisition, a one-time item. Extraordinary losses were limited at ¥42.3B. Profit before tax was ¥226.1B (prior year ¥100.3B, +125.3%), and after corporate taxes of ¥51.6B, Net Income was ¥80.4B (YoY +16.1%). Net Income attributable to owners of parent increased substantially to ¥174.5B (YoY +156.0%) due to the impact of extraordinary items. In conclusion, core revenue growth and one-time gains produced a sizable increase in revenue and profits.
Profitability: Net profit margin (attributable to owners of parent) improved significantly to 25.1% from 12.6% in the prior year, largely driven by one-off items such as the negative goodwill gain. On an Ordinary Income basis the margin was 20.2%, up +1.1pt from 19.1% last year, indicating improved core profitability. ROE was 4.2%, down from 6.9% in the prior year, reflecting an increase in the equity denominator (¥160.2B → ¥190.9B), with underlying capital efficiency remaining stable. ROA (Ordinary Income basis) improved to 0.4% from 0.3%. The cost/income ratio (CIR) remained around 35%, an efficient level.
Cash quality: Operating Cash Flow was -¥271.4B, substantially below Net Income of ¥80.4B, with Operating CF / Net Income at -3.4x, indicating weak cash realization of accounting profits. This reflects non-cash items such as the negative goodwill gain, working capital movements, and an increase in pension assets. Free Cash Flow was ¥1,182.0B, robust, but largely driven by temporary inflows from reductions/repayments in the securities portfolio within Investing CF, so sustainability should be monitored.
Investment efficiency: Capital expenditures were ¥14.8B, below depreciation of ¥20.9B, with CapEx/Depreciation at 0.71x, indicating conservative capital allocation. EPS was ¥418.06 (prior year ¥163.29), up +156.0%, and BPS was ¥4,558.40 (prior year ¥3,834.14), up +18.9%.
Financial soundness: Equity Ratio was 5.4%, improved from 4.7% in the prior year, but below the industry standard (~12%), indicating limited capital buffer. Loan-to-deposit ratio was approximately 74.5% (Loans ¥2兆2,289B / Deposits ¥2兆9,924B), leaving ample liquidity cushion with deposit surplus. Borrowings were ¥2,292.5B, up +25.4% from ¥1,828.3B, increasing reliance on market funding. Cash and deposits were ample at ¥2,963.9B, sufficient to fully cover borrowings.
Operating Cash Flow turned sharply negative to -¥271.4B from ¥864.1B in the prior year. Operating CF subtotal (before working capital changes) was -¥227.0B, which included adjustments such as reversing ¥127.8B negative goodwill gain, equity-method investment loss of -¥1.2B, and depreciation +¥20.9B. On working capital, increases in pension assets (-¥48.9B), increases in accrued income, and other operating items pressured cash. Corporate tax payments of ¥44.3B were also a cash outflow. Investing Cash Flow was +¥1,453.4B, a large positive driven mainly by reductions/repayments in the securities position. Purchases of tangible fixed assets were -¥14.8B and intangible fixed assets -¥5.1B, indicating restrained physical investment. Financing Cash Flow was -¥12.6B, with dividend payments of -¥21.9B the main outflow. As a result, cash and cash equivalents increased from ¥1,777.3B at the beginning of the period to ¥2,946.7B at period-end, up ¥1,169.4B, primarily due to temporary cash recoveries in Investing CF.
Of Net Income ¥80.4B, Ordinary Income was ¥140.5B, showing solid core performance, but the expansion to Net Income attributable to owners of parent of ¥174.5B heavily depended on one-off items: Extraordinary gains ¥127.9B (including ¥127.8B negative goodwill gain). The negative goodwill gain is an accounting, non-cash item arising from an acquisition and is not repeatable in subsequent periods. Comprehensive income was ¥324.4B, far exceeding Net Income ¥80.4B, with OCI improvements of +¥244.0B (securities valuation +¥59.4B, deferred hedge gains +¥65.1B, pension-related adjustments +¥27.4B). These are valuation gains driven by market movements and their future cash realization is uncertain. Given Operating CF of -¥271.4B, the earnings expansion is largely accrual-driven, raising concerns over earnings quality. While core revenue power has been strengthened by improved interest income and higher fees, the level of final-period earnings should be adjusted for one-offs when assessing sustainability.
Full-year guidance forecasts Ordinary Income of ¥140.0B (YoY -0.3%), Net Income of ¥86.0B (YoY +7.0%), Net Income attributable to owners of parent of ¥88.0B, and EPS of ¥210.10. Actual Ordinary Income was ¥140.5B, already exceeding the full-year forecast, with a progress rate of 100.4%, slightly above expectation. However, Net Income attributable to owners of parent was ¥174.5B versus the full-year forecast of ¥88.0B, a large divergence because one-off items such as the ¥127.8B negative goodwill gain recognized this period were not built into the company’s projection for the following period. On a Net Income basis, actual ¥80.4B versus full-year forecast ¥86.0B yields a progress rate of 93.5%, nearly at the target. The company’s forecast appears conservative, excluding one-offs, and can be seen as guidance predicated on sustainable core business growth.
Annual dividend was ¥60 (interim ¥28, year-end ¥32), a significant increase of +140% from ¥25 in the prior year. Payout Ratio on Net Income was 30.6%, and on Net Income attributable to owners of parent was about 12.6%, both conservative levels. Total dividend amount was ¥21.9B, and dividend coverage versus Free Cash Flow of ¥1,182.0B is approximately 54x, indicating extremely solid coverage and high dividend sustainability. Share buybacks were ¥0.0B, effectively zero, and Total Return Ratio remained around 30%, similar to the dividend payout level. The company projects a full-year dividend of ¥43, below the current-period ¥60, indicating the company is excluding one-off gains in setting dividend policy. Given a low Equity Ratio of 5.4%, management appears to prioritize internal retention to build capital. Cash and deposits of ¥2,963.9B are ample and provide no immediate concern for dividend payment capacity.
Interest rate risk: Of investment income ¥464.3B, securities interest/dividends were ¥167.2B and loan interest ¥285.2B, indicating high interest-rate sensitivity. While rising rates have boosted income, funding costs have also risen (funding costs ¥82.3B, YoY +111.3%), and in a declining-rate environment net interest margin could contract. Securities holdings of ¥8,798.0B (YoY -23.2%) are subject to market rate movements affecting valuation gains/losses, and the ¥59.4B improvement in Other Comprehensive Income could reverse. Deferred hedge gains of ¥107.7B reflect hedging effects, and rapid rate movements could materially affect equity.
Liquidity & funding risk: Borrowings increased to ¥2,292.5B (YoY +25.4%), raising dependence on market funding. Deposits of ¥2兆9,924B are a stable funding source, but with a loan-to-deposit ratio of 74.5% and loans at ¥2兆2,289B, utilization of deposit funds for lending is increasing. Cash and deposits of ¥2,963.9B are ample, but Operating CF is -¥271.4B, raising concerns about sustained internal cash generation. In a deteriorating market environment, refinancing costs may rise and funding constraints could emerge.
Capital adequacy risk: Equity Ratio of 5.4% is well below the industry standard (~12%), providing a limited buffer. ROE of 4.2% indicates low capital efficiency, and with equity of ¥1,909.6B versus total assets of ¥35,105B, financial leverage is 18.4x. Economic downturns, rising credit costs, or market shocks could erode capital and raise the risk of breaching regulatory capital requirements. Although comprehensive income added ¥244.0B this period to strengthen capital, OCI volatility is reversible, so sustainable capital accumulation requires ongoing internal retention.
Revenue & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 11.6% | 11.9% (7.2%–35.4%) | -0.3pt |
Current Net Profit Margin is in line with the industry median, indicating standard profitability for a bank.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 29.1% | 10.1% (7.3%–12.1%) | +19.1pt |
Revenue growth outpaced the industry median by +19.1pt, driven by favorable interest-rate environment and expanded fee income.
※ Source: Company compilation
Structural improvement in core revenue: Expanded net interest income drove Ordinary Income up +29.1% YoY and fee income increased +13.1%. With an expense ratio around 35%, the cost structure remains efficient and profitability at the Ordinary Income level has been steadily strengthened. However, funding costs rose approximately 2.1x YoY, so the impact of rate movements on net margin warrants attention.
One-off items and earnings quality: Net Income attributable to owners of parent of ¥174.5B depended heavily on ¥127.8B negative goodwill gain, and on a core basis the substantial profit increase largely diminishes when one-offs are excluded. Operating CF at -¥271.4B is far below Net Income, indicating accrual-driven profit growth; cash realization and sustainability of earnings require cautious assessment. The company’s conservative full-year guidance, excluding one-offs, is reasonable; going forward, stable growth of core net profit will be the focus.
Capital policy and financial soundness: Equity Ratio of 5.4% is below industry norms, and the +25.4% increase in borrowings and greater market funding reliance should be monitored. With a payout ratio of 30.6% and restrained total returns, the policy to prioritize internal retention for capital buildup is understandable from a financial-soundness perspective. Cash and deposits of ¥2,963.9B provide abundant liquidity, but if Operating CF remains negative, restoring sustainable cash generation will be a challenge.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as appropriate.
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