| Metric | Current Period | YoY Comparable Period | YoY |
|---|---|---|---|
| Revenue | ¥202.8B | ¥164.9B | +22.9% |
| Operating Income | - | - | - |
| Ordinary Income | ¥33.3B | ¥32.2B | +3.3% |
| Net Income | ¥22.2B | ¥21.8B | +2.2% |
| ROE | 2.7% | 2.9% | - |
FY2026 Q3 results posted Revenue of ¥202.8B (YoY +¥37.9B +22.9%), Ordinary Income of ¥33.3B (YoY +¥1.1B +3.3%), and Net Income of ¥22.2B (YoY +¥0.4B +2.2%). The revenue increase added approximately ¥37.9B versus the prior period, likely driven by higher interest income and fee income. While the Operating Margin remained elevated at 16.4%, ROE stayed at 2.7% due to low asset efficiency, indicating room to improve capital efficiency. Comprehensive Income was a strong ¥67.1B, with about ¥4.5B in Other Comprehensive Income from valuation differences on securities contributing. Net Assets increased by ¥60.8B to ¥816.0B (from ¥755.2B in the prior year), expanding the absolute level of equity. Full-year guidance calls for Revenue of ¥238.2B and Ordinary Income of ¥40.3B, with progress tracking well.
[Profitability] ROE 2.7% (previous year 2.9%), Net Profit Margin 10.9% (down from 13.2% in the prior year), Operating Margin 16.4%. A DuPont breakdown shows Net Profit Margin 10.9% × Total Asset Turnover 0.012x × Financial Leverage 21.18x yields ROE of 2.7%, with low asset efficiency suppressing returns on capital. Net Interest Margin (NIM) stands at 1.10%, a low level, indicating ongoing spread compression. [Cash Quality] Cash and Due from Banks rose significantly to ¥1,950.7B (up +¥679.6B +53.5% from ¥1,271.1B in the prior year), improving short-term liquidity. Deposits totaled ¥14,875.7B (up +4.0% from ¥14,303.6B), securing a stable funding base. Loans were ¥11,682.6B, and the Loan-to-Deposit Ratio was 78.5%. [Investment Efficiency] Total Asset Turnover 0.012x and ROIC 2.8% are low, highlighting the need to improve returns on invested capital. [Financial Soundness] Equity Ratio 4.7% (up +0.2pt from 4.5% in the prior year), with a very high Debt Capital Multiple of 20.18x indicating significant financial leverage. Borrowings were reduced to ¥787.0B (down -10.5% from ¥879.0B), partially improving the funding mix.
As there is no detailed disclosure of the cash flow statement, we analyze funding trends based on changes in the balance sheet. Cash and Due from Banks increased by +¥679.6B YoY to ¥1,950.7B, which is estimated to reflect accumulation of funds supported by higher operating profits and growth in Comprehensive Income. Deposit liabilities increased by +¥572.1B, indicating stable contribution from customer deposit inflows on the funding side. On the asset side, Securities decreased by -¥103.5B, reflecting a portfolio rebalancing or mark-to-market effects. Borrowings decreased by -¥92.0B, reducing reliance on external funding. Net Assets rose by +¥60.8B, with improvements in valuation differences on securities (equivalent to +¥124.3B) lifting Comprehensive Income. Cash coverage of short-term liabilities is estimated at over 2x, indicating sufficient liquidity.
Against Ordinary Income of ¥33.3B, Net Income was ¥22.2B, implying an effective tax rate of approximately 30.9% and a tax burden coefficient of 0.685, which is within a normal range. Comprehensive Income was ¥67.1B, significantly exceeding Net Income, with roughly ¥4.5B of the difference primarily attributable to Other Comprehensive Income (valuation differences on securities). These valuation gains are time-dependent and entail reversal risk amid changing market conditions. The Ordinary Income Margin relative to Revenue is 16.4%, remaining high and indicating solid core profitability. However, as details of Operating Cash Flow (OCF) are undisclosed, we cannot directly verify the cash backing of profits. The Net Profit Margin is 10.9% (previous year 13.2%), a slight decline suggesting cost increases or spread compression. For earnings sustainability, improvements in NIM and a more advanced loan mix will be key.
[Position within Industry] (Reference Information - Our Research) This result falls within the regional financial institutions sector. We compare it with our aggregated industry benchmarks based on public financials of Regional Banks and Second-tier Regional Banks. ROE of 2.7% is below the industry median (approximately 4–5%), placing the bank in the lower tier in terms of capital efficiency. The Net Profit Margin of 10.9% slightly exceeds the industry median (approximately 8–10%), indicating solid profitability. The Equity Ratio of 4.7% is below the industry median (approximately 5–6%), leaving room for improvement in capital adequacy. NIM of 1.10% is on par with the industry median (approximately 1.0–1.2%), reflecting spread compression as a sector-wide issue. The Loan-to-Deposit Ratio of 78.5% is near the upper end of the industry median range (approximately 70–80%), indicating lending deployment leveraging the deposit base. Financial Leverage of 21.18x is high even within the industry, highlighting pronounced reliance on liabilities. Overall, while profitability (margins) is above the industry average, there is considerable room for improvement in capital efficiency and financial soundness. Note: Source: Our compilation; Comparables: Regional Banks and Second-tier Regional Banks (past reporting periods)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information compiled by us based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional as needed before making any decisions.