The Bank of Nagoya,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥9.54B
• EPS: ¥185.93

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

Nagoya Bank (TSE: 8522) reported consolidated FY2026 Q2 results under JGAAP with operating income (reported) of ¥12.74bn and net income of ¥9.15bn, up 21.8% YoY. Many line items such as revenue, cash flows, and dividend data are unreported in the XBRL (displayed as zero), which is typical for banks where key income drivers are presented under interest- and fee-related headings rather than "revenue". Based on the provided totals, total assets stand at ¥6,101.1bn, total liabilities at ¥5,493.8bn, and total equity at ¥297.4bn. The equity-to-asset ratio inferred from the balance sheet is approximately 4.9% (297.4/6,101.1), which is within the normal range for Japanese regional banks though regulatory capital ratios (e.g., CET1) are not disclosed here. Leverage (assets/equity) is 20.5x and liabilities/equity is 18.5x, both typical for a deposit-taking institution. The 21.8% YoY rise in net income versus flat operating/ordinary income suggests improvements below the ordinary line (e.g., lower credit costs, better securities-related items, or tax effects). With EPS at ¥185.93 for the half-year, implied average shares outstanding are approximately 49.19 million. Using half-year earnings, simple half-year ROE is about 3.1%, and annualized ROE is roughly 6.1% (assuming similar H2 performance), both reasonable for a regional bank backdrop. Effective tax appears to be around the low-20% range based on net income and reported tax expense, though the exact pre-tax figure is not provided. Liquidity metrics like current and quick ratios are not meaningful for banks; funding stability should instead be assessed via deposit base and liquidity coverage ratios, which are not available here. Cash flow statements are unreported in this set, limiting assessment of operating cash conversion and free cash flow. Dividend indicators (DPS, payout, FCF coverage) are also unreported; therefore, we cannot infer current distribution policy from this data alone. Overall, earnings quality appears stable with healthy bottom-line growth, balance sheet scale is consistent with a mid-sized regional bank, and capital is adequate by book measures; however, the absence of key bank-specific disclosures (NIM, NPL ratio, credit costs, securities AFS valuation, and regulatory capital ratios) constrains precision. Near-term outlook hinges on Bank of Japan policy normalization impacts on NIM, credit costs amid macro conditions, and securities portfolio valuation volatility.

Profitability Analysis

ROE_decomposition: Reported DuPont metrics are not meaningful due to unreported revenue and margins. Using available data: half-year ROE ≈ 3.1% (NI ¥9.15bn / ending equity ¥297.4bn); annualized ROE ≈ 6.1% assuming H2 mirrors H1. Financial leverage is high at 20.5x (assets/equity), which is typical for banks. Net profit margin cannot be computed from the provided "revenue" (unreported). Asset turnover is unreported in the DuPont table but economically for banks is not assessed via sales/assets. margin_quality: Ordinary/operating income of ¥12.74bn vs. net income of ¥9.15bn and tax of ¥2.67bn implies pre-tax around ¥11.81bn and an effective tax rate of roughly 22–23%, suggesting limited extraordinary items or modest adjustments. The YoY delta (net income +21.8% with flat operating/ordinary income) points to improved below-ordinary-line items (e.g., lower credit costs or securities-related gains/losses). operating_leverage: With operating/ordinary income flat YoY and net income rising, operating leverage at the core level appears limited in H1. Expense control cannot be evaluated due to the absence of fee/interest income and G&A breakdowns. Further detail on expenses, credit costs, and fee trends is needed to assess structural operating leverage.

Growth Assessment

revenue_sustainability: Top-line components (interest income, fees) are not disclosed here; thus sustainability of core gross income cannot be determined from this dataset. Banking ‘revenue’ is typically net interest income + fees rather than the unreported IFRS/industrial-style revenue line. profit_quality: Net income grew 21.8% YoY to ¥9.15bn despite flat operating/ordinary income (¥12.74bn), indicating improvement from non-recurring or below-ordinary drivers (e.g., credit costs normalization, securities valuation). Without credit cost and gains/losses detail, persistence is uncertain. outlook: Assuming H2 performance mirrors H1, annualized ROE could reach ~6%. Medium-term growth will depend on loan growth, NIM trajectory as BOJ policy normalizes, fee income development, credit cost discipline, and securities portfolio risk management. Absent NIM/credit cost data, we adopt a neutral stance on sustainability pending fuller disclosures.

Financial Health

liquidity: Current/quick ratios are not applicable for banks and appear as zeros due to non-disclosure. Liquidity should be assessed via LCR/NSFR and deposit mix, which are not provided. Cash & equivalents are unreported. solvency: Equity-to-asset ratio ≈ 4.9% (¥297.4bn/¥6,101.1bn). Liabilities/equity is 18.5x; assets/equity 20.5x, typical for regional banks. Regulatory capital ratios (CET1/total capital) are not disclosed; thus, solvency should be interpreted cautiously. capital_structure: Balance sheet is predominantly funded by liabilities (deposits and wholesale funding, details not provided). Debt-to-equity of 18.47x is consistent with sector norms. No information on hybrid capital, subordinated debt, or unrealized AFS valuation effects is available.

Cash Flow Quality

earnings_quality: OCF, investing CF, and financing CF are unreported in this data. For banks, OCF is less indicative of earnings quality than credit cost trends and realized/unrealized securities gains, which are not provided. The tax and net income relationship suggests limited distortions in H1. FCF_analysis: Free cash flow is not meaningful for banks in the industrial sense and is unreported here. Capital generation is better evaluated via retained earnings and regulatory capital build. working_capital: Traditional working capital metrics are not applicable to banks; loan/deposit dynamics and liquidity buffers should be used instead, but are not available in this dataset.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are unreported. Using EPS of ¥185.93 (H1), any dividend assessment requires the bank’s disclosed full-year DPS target or historical policy (e.g., payout or DOE), which are absent here. FCF_coverage: Not assessable; FCF is not reported and is not a primary dividend capacity metric for banks. Coverage should be evaluated against net income and regulatory capital constraints. policy_outlook: Without guidance, historical policy, or capital ratio disclosures, we cannot infer dividend sustainability. Monitoring final FY dividend guidance, payout/DOE approach, and capital buffers relative to Basel requirements is essential.

Risk Assessment

Business Risks:

• Net interest margin compression or volatility due to BOJ policy path and yield curve movements
• Credit cost normalization from low levels amid macro slowdown or sector-specific stress (SME exposure typical for regional banks)
• Securities portfolio valuation losses (JGBs and foreign bonds) as rates rise; OCI volatility
• Fee income softness if market-related businesses weaken
• Regional concentration risk in Aichi/Chubu economy

Financial Risks:

• Capital adequacy uncertainty due to lack of disclosed CET1/total capital ratios
• Funding concentration in deposits and potential deposit beta increase as rates normalize
• Interest rate risk in the banking book (duration gap) with potential MTM losses
• Limited loss-absorbing capacity if unrealized valuation reserves decline
• Counterparty and market risk from securities and derivatives positions

Key Concerns:

• Absence of NIM, loan growth, and credit cost disclosure limits visibility on core earnings trajectory
• Unreported regulatory capital ratios constrain assessment of dividend headroom and growth capacity
• Potential sensitivity to rate volatility via AFS/HTM portfolios not quantified

Investment Implications

Key Takeaways:

• H1 FY2026 net income ¥9.15bn (+21.8% YoY) with flat operating/ordinary income suggests improved below-ordinary-line items
• Balance sheet scale ¥6.1tn assets; equity ¥297.4bn implies ~4.9% equity-to-asset ratio and 20.5x leverage
• Annualized ROE roughly ~6% based on H1, within sector norms for regional banks
• Data gaps (NIM, credit costs, capital ratios, CF, dividends) limit precision of quality and sustainability assessments
• Dividend capacity and policy cannot be assessed from the provided dataset; watch year-end guidance

Metrics to Watch:

• Net interest margin and loan/deposit growth
• Credit costs (net and gross), NPL ratio, coverage ratio
• Securities portfolio duration and unrealized gains/losses (OCI)
• Regulatory capital (CET1, total capital, leverage ratio) and buffers vs. minimums
• Cost-to-income ratio and fee income trajectory
• Dividend policy (payout/DOE) and any share buyback plans

Relative Positioning: Based on limited data, Nagoya Bank appears broadly in line with Japanese regional bank peers: mid-single-digit annualized ROE, typical leverage, and a conventional balance sheet profile; however, the lack of capital and core income detail prevents finer differentiation.

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