THE OITA BANK,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥4.03B
• EPS: ¥291.11

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Oita Bank (8392) reported consolidated FY2026 Q2 (six months) net income of ¥4.431 billion, up 19.3% YoY, indicating a solid interim improvement in profitability despite limited line-item disclosures. Ordinary income was ¥6.64 billion, broadly consistent with operating income as presented, which is typical in bank reporting where ordinary profit is the primary performance indicator. Based on period-end balances, total assets stood at ¥4,481.1 billion and total equity at ¥225.5 billion, implying a balance-sheet leverage (assets/equity) of roughly 19.9x—normal for a regional bank. Using disclosed figures, half-year ROE is approximately 2.0% (¥4.431b / ¥225.5b), which annualizes to around 3.9% assuming a pro-rata approach; this suggests improved, but still moderate, shareholder returns versus peers. Half-year ROA is roughly 0.10% (¥4.431b / ¥4,481.1b), or about 0.20% annualized, consistent with the sector’s low-yield environment. The implied tax rate, using net income plus income tax as a proxy for pre-tax profits, is about 27%, but we note possible differences versus “ordinary income” due to undisclosed extraordinary items and/or minority interests. The reported equity ratio field is zero due to non-disclosure; however, the tangible equity-to-asset proxy from the balance sheet indicates about 5.0%, which is reasonable for a Japanese regional bank but not a regulatory capital measure. Revenue, cash flow, and detailed cost lines are not disclosed in this dataset; zeros should be read as unreported values under the firm’s XBRL taxonomy rather than actual zeros. Consequently, we assess profitability quality primarily via ordinary income and bottom-line growth, rather than gross/operating margins typically used for non-financials. The +19.3% YoY growth in net income likely reflects a combination of net interest margin stability/expansion, fee and commission resilience, controlled operating expenses, and/or lower credit costs; however, without breakdowns, the precise drivers are not verifiable. Liquidity metrics like current and quick ratios are not meaningful for banks and appear as zeros due to non-disclosure; funding structure should be evaluated via deposits, market funding, and liquidity coverage, none of which are provided here. The cash flow statement is also undisclosed in this extract, preventing an operating cash flow-based earnings quality cross-check. Dividend per share and payout ratio are not disclosed; EPS of ¥291.11 (for H1) suggests decent internal capital generation, but capital policy cannot be evaluated without DPS. Overall, the bank demonstrates improving profitability on a large, levered balance sheet, with capital levels appearing typical of regional peers based on book equity. The principal uncertainties relate to the composition of earnings (net interest vs fees vs securities), the trajectory of credit costs, and the interest-rate risk on the securities book amid BOJ policy normalization. Given data gaps, conclusions are indicative rather than definitive, and monitoring of regulatory capital ratios, credit quality, and ALM metrics remains essential.

Profitability Analysis

ROE_decomposition: Traditional DuPont using revenue is not applicable due to bank accounting and undisclosed revenue. Proxy approach: ROE ≈ Net Income / Equity. Half-year ROE ≈ 4.431 / 225.484 = 1.96%; annualized ≈ 3.9%. Leverage (Assets/Equity) ≈ 4,481.088 / 225.484 = 19.9x. Half-year ROA ≈ 4.431 / 4,481.088 = 0.10% (annualized ≈ 0.20%). Ordinary income to assets (H1) ≈ 6.64 / 4,481.088 = 0.148% (annualized ≈ 0.30%). Implied effective tax rate using NI+Tax proxy ≈ 1.641 / (4.431+1.641) = 27.0%. margin_quality: Net interest margin, fee margin, and securities gains/losses are not disclosed. The uptick in net income (+19.3% YoY) suggests either improved spreads, higher fee income, lower credit costs, or controlled opex, but the mix is unclear. The closeness of ordinary income and operating income points to limited extraordinary distortions in core profitability this period. operating_leverage: Insufficient disclosure on revenue and expenses to quantify operating leverage. Given sector norms, cost discipline (OHR) likely contributed, but confirmation requires non-interest expense data and gross business profit figures.

Growth Assessment

revenue_sustainability: ‘Revenue’ is undisclosed; for banks, core income comprises net interest income and fees. Sustainability will hinge on loan/deposit growth in Oita/neighboring markets, deposit beta management as BOJ normalizes, and fee income resilience. Current half-year results indicate stable to improving core trends, but data granularity is lacking. profit_quality: Net income grew 19.3% YoY, and implied tax rate is within a normal range (~27%), suggesting limited reliance on tax one-offs. However, lack of credit cost and securities valuation disclosure limits assessment of recurring vs. non-recurring earnings. outlook: Assuming steady regional credit demand and a gradual rate normalization path, earnings could remain supported by modest NIM expansion and stable credit costs. Key swing factors are BOJ policy shifts affecting funding costs and securities portfolios, and SME credit conditions in the bank’s footprint.

Financial Health

liquidity: Traditional current/quick ratios are inapplicable to banks; reported zeros reflect non-disclosure. Liquidity should be assessed via deposits, high-quality liquid assets, and regulatory LCR/NSFR, which are not provided. No immediate red flags from balance-sheet size alone. solvency: Book equity to assets ≈ 225.484 / 4,481.088 = 5.0%. Balance-sheet leverage ~19.9x aligns with regional peers. Regulatory capital ratios (CET1, total capital) are not disclosed; conclusions on solvency adequacy are therefore tentative. capital_structure: Liabilities to equity ≈ 4,298.139 / 225.484 = 19.1x. Funding likely dominated by customer deposits (not disclosed here). Securities portfolio scale and duration are not provided; these are crucial for assessing interest rate risk and unrealized AFS losses.

Cash Flow Quality

earnings_quality: Cash flow statement is undisclosed in this dataset (zeros indicate non-reporting). For banks, OCF volatility can be driven by balance-sheet flows (loans/deposits) rather than earnings quality. Without operating cash flow, accrual-based earnings cross-check is not possible. FCF_analysis: Free cash flow is not a meaningful metric for banks and is not disclosed here. Capital generation should be assessed via retained earnings and regulatory capital accretion. working_capital: Working capital metrics are not applicable to banks; reported zeros reflect non-disclosure. Asset-liability management and liquidity buffers are more relevant.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are undisclosed. EPS for H1 is ¥291.11. If earnings are seasonally even, full-year EPS could approximate ~¥582, but this is an assumption and not relied upon for conclusions. FCF_coverage: Not assessable; free cash flow data are not disclosed and less relevant for banks. Dividend capacity typically hinges on retained earnings and regulatory capital headroom. policy_outlook: Regional banks commonly target stable or gradually rising dividends aligned with capital adequacy. Without CET1/total capital ratios or DPS history, we cannot opine on policy trajectory. Monitoring disclosure at FY-end is essential.

Risk Assessment

Business Risks:

• Net interest margin pressure if deposit betas rise faster than asset yields during BOJ normalization
• Lower loan growth due to demographic headwinds in Oita Prefecture and surrounding regions
• Fee income softness if retail investment activity slows or bancassurance weakens
• Competition from megabanks, regional peers, and digital challengers compressing spreads
• Operational and cyber risk from ongoing digitalization and system upgrades
• Natural disaster risk in Kyushu impacting borrowers and collateral values

Financial Risks:

• Interest rate risk and potential unrealized losses on JGB and bond portfolios as yields rise
• Credit cost normalization from historically low levels, particularly in SME and real estate exposures
• Market funding and liquidity risk under stress despite deposit-based funding
• Capital adequacy pressure if earnings weaken or risk-weighted assets rise (Basel III finalization)
• Valuation risk on equity holdings and strategic investments affecting other comprehensive income

Key Concerns:

• Absence of disclosure on credit costs and securities gains/losses masks earnings quality
• Regulatory capital ratios (CET1, total capital) not provided, limiting solvency assessment
• Sensitivity of the securities book to further yield curve shifts is unknown

Investment Implications

Key Takeaways:

• H1 FY2026 net income rose 19.3% YoY to ¥4.431b, signaling improved profitability
• Balance-sheet leverage ~19.9x and book equity/asset ratio ~5.0% are in line with regional peers
• Half-year ROE ~2.0% (annualized ~3.9%) and ROA ~0.10% (annualized ~0.20%) indicate modest but improving returns
• Implied tax rate ~27% suggests limited reliance on tax-driven one-offs
• Major data gaps (revenue mix, credit costs, capital ratios, cash flows, DPS) constrain deeper conclusions

Metrics to Watch:

• Net interest margin and deposit beta behavior as BOJ policy evolves
• Loan growth and fee income trends (trust, settlements, investment products)
• Credit costs, NPL ratio, and coverage ratio
• Securities portfolio duration, unrealized gains/losses, and OCI sensitivity
• Cost-to-income (overhead ratio) and branch/IT efficiency initiatives
• Regulatory capital (CET1 ratio, total capital), leverage ratio, and risk-weighted asset growth
• Dividend policy (DPS, payout ratio) and retained earnings accretion

Relative Positioning: Performance appears broadly consistent with Japanese regional bank norms: leverage typical, profitability modest but improving; precise relative ranking versus peers cannot be established without core income, credit cost, and capital ratio disclosures.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis