Seven Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥9.61B
• EPS: ¥9.35

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

Seven Bank (8410) reported consolidated FY2026 Q2 results under JGAAP with several key banking-specific items undisclosed in the standard XBRL revenue and cash flow line items. Operating income was ¥14.814 billion, and net income was ¥9.966 billion, representing a YoY decline of 8.9% in profit despite flatly reported operating income. Ordinary income matched operating income at ¥14.814 billion, suggesting stable core earnings, while income tax expense was ¥5.315 billion. Using net income plus taxes as a proxy, the implied effective tax rate is approximately 34.8%. Total assets stood at ¥1,430.049 billion and total equity at ¥233.274 billion, implying a leverage ratio (assets/equity) of roughly 6.13x and a debt-to-equity ratio of about 5.20x. Based on period-end equity, point-in-time ROE is approximately 4.3% (¥9.966b / ¥233.274b), and ROA is about 0.70% (¥9.966b / ¥1,430.049b), which are consistent with a fee- and interest-earning financial institution with a conservative balance sheet. Equity ratio is disclosed as 0.0% in the feed (undisclosed), but derived equity-to-asset ratio is approximately 16.3%, indicating moderate capitalization for a Japanese financial institution. The bank’s top-line items (revenue, cost of sales, gross profit) and cash flow statement are unreported in this dataset, consistent with JGAAP bank presentations where ‘revenue’ is not the primary performance indicator. EPS is ¥9.35, which, when reconciled with net income, implies roughly 1.07 billion shares outstanding, aligning with a large retail-focused financial platform. The lack of disclosed operating, investing, and financing cash flows prevents direct assessment of cash generation and free cash flow this quarter. Nevertheless, the combination of solid ordinary income and stable assets suggests ongoing resilience in core operations. The gap between ordinary income and taxes plus net income indicates normal tax burden rather than an unusual one-off, though the YoY decline in net income warrants monitoring for fee pressure or cost normalization. Liquidity metrics like current ratio and quick ratio are not meaningful for banks and appear as zeros due to non-disclosure, not actual stress. Dividend per share and payout data are not disclosed here; historically, Seven Bank targets stable shareholder returns, but we cannot validate payout for this period from the provided data. Overall, the quarter shows steady core earnings capacity, moderate leverage, and acceptable profitability for a specialized banking model, balanced by the lack of granular revenue and cash flow disclosure in the dataset and a YoY decline in bottom-line earnings.

Profitability Analysis

ROE_decomposition: Using a banking-adapted DuPont: ROE ≈ ROA × Leverage. ROA (NI/Assets) ≈ 0.70% (¥9.966b / ¥1,430.049b). Leverage (Assets/Equity) ≈ 6.13x. Implied ROE ≈ 0.70% × 6.13 ≈ 4.3%, close to the simple NI/Equity estimate (4.3%). Net profit margin and asset turnover reported as 0.00%/0.000 are not applicable for banks given undisclosed revenue. margin_quality: Net income of ¥9.966b versus ordinary income of ¥14.814b implies a normal tax load; no extraordinary gains/losses are visible in the provided data. Implied effective tax rate ≈ 34.8% (¥5.315b / (¥9.966b + ¥5.315b)). Reported gross margin and EBITDA margin are zeros due to non-disclosure rather than true margins. operating_leverage: Insufficient disclosed revenue and cost breakdown to quantify operating leverage. However, ordinary income stability alongside YoY net income decline suggests either mild cost pressure, mix effects, or higher tax/one-offs rather than significant deleveraging on revenues.

Growth Assessment

revenue_sustainability: Top-line revenue figures are not disclosed for banks under this dataset; ordinary income of ¥14.814b indicates steady core operations. No explicit YoY change provided for ordinary income. profit_quality: Net income declined 8.9% YoY to ¥9.966b despite steady ordinary income, suggesting either cost normalization, tax rate effects, or minor non-operating impacts. The proximity of ordinary income to operating income indicates core banking/fee activities remain the main earnings driver. outlook: Given stable ordinary income and moderate leverage, core profitability appears durable. Key watchpoints include ATM transaction volumes, fee income resilience, overseas operations performance (if applicable), and cost discipline. Without cash flow disclosure, conservatively assume steady but modest growth trajectory subject to consumer activity and network utilization.

Financial Health

liquidity: Traditional current/quick ratios are not meaningful for banks and are undisclosed. Funding/liquidity health cannot be inferred from the provided zeros. solvency: Total assets: ¥1,430.049b; total equity: ¥233.274b; total liabilities: ¥1,213.488b. Derived equity ratio ≈ 16.3% (equity/assets), indicating moderate capitalization. Debt-to-equity ≈ 5.20x is typical for a bank with large customer liabilities. capital_structure: Leverage (A/E) ≈ 6.13x; this supports ROE in the mid-4% range at current ROA. No detail on Tier 1/Capital adequacy ratios is provided; solvency assessment relies on balance sheet proportions only.

Cash Flow Quality

earnings_quality: With operating, investing, and financing cash flows undisclosed, accruals analysis is not possible. Earnings quality must be inferred from stability of ordinary income and alignment of tax expense with pre-tax. FCF_analysis: Free cash flow is unreported. For banks, traditional FCF is less meaningful; cash generation should be assessed via net interest/fee income and changes in interest-earning assets and deposits—data not provided. working_capital: Working capital metrics (current assets/liabilities) are undisclosed and not meaningful for banks. No conclusion can be drawn from the zeros.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are undisclosed in this dataset (zeros). Based on EPS of ¥9.35, payout cannot be computed. FCF_coverage: Unassessable due to missing cash flow data. No OCF/FCF figures available. policy_outlook: Seven Bank historically emphasizes stable shareholder returns as a retail/ATM-focused financial institution; however, without current DPS disclosure we refrain from drawing conclusions for FY2026 Q2. Monitor management guidance and full-year dividend forecasts.

Risk Assessment

Business Risks:

• Transaction volume sensitivity to consumer activity and retail footfall impacting ATM-related fee income
• Competitive dynamics from cashless payments reducing ATM usage over time
• Regulatory changes affecting fees, interchange, and compliance costs
• Dependence on network partners and store footprint for ATM placement and utilization
• Overseas ATM operations exposure (if applicable) to FX and local regulatory regimes

Financial Risks:

• Margin pressure from low interest rate environment and deposit competition
• Operational cost inflation (maintenance, system upgrades, security) compressing spreads
• Potential credit/counterparty risks in settlement and cash handling, albeit typically low for this model
• Tax rate variability impacting net income given mid-30% implied ETR
• Data limitations preventing full assessment of liquidity/cash flows

Key Concerns:

• YoY net income decline of 8.9% despite stable ordinary income
• Lack of disclosure on cash flows and revenue composition this quarter
• Structural headwinds from accelerating cashless adoption potentially dampening volume growth
• Visibility on dividend trajectory is limited due to undisclosed DPS/payout

Investment Implications

Key Takeaways:

• Core earnings stable with ordinary income at ¥14.814b; net income ¥9.966b (-8.9% YoY)
• Moderate capitalization with derived equity ratio ≈ 16.3% and leverage ≈ 6.13x
• Point-in-time ROE ≈ 4.3% and ROA ≈ 0.70%, typical for a conservative, fee-centric banking model
• Effective tax rate implied around 34.8%, a headwind to bottom-line growth
• Data gaps on cash flows and dividends constrain full-quality assessment

Metrics to Watch:

• ATM transaction volumes and fee income trends (domestic and overseas)
• Cost efficiency metrics (OPEX/ordinary income) and technology/maintenance costs
• Tax rate and any one-off items affecting net income
• Capital adequacy disclosures (e.g., CET1, total capital ratio) in regulatory filings
• Management guidance for full-year earnings and dividend policy

Relative Positioning: Within Japanese financials, Seven Bank occupies a specialized niche focused on ATM network and related services rather than traditional loan-deposit intermediation. Profitability (ROE mid-4%) and leverage (~6x) are consistent with a low-risk, fee-driven model, though structurally exposed to secular cashless adoption headwinds relative to peers with broader lending franchises.

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