| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥399.0B | ¥229.0B | +74.2% |
| Operating Income | - | - | - |
| Ordinary Income | ¥91.8B | ¥58.1B | +57.9% |
| Net Income | ¥63.4B | ¥41.5B | +52.6% |
| ROE | 1.9% | 1.3% | - |
While both ordinary income and net income increased significantly, benefiting from the rising interest rate environment, profit growth was somewhat slower than revenue growth due to a sharp increase in other operating expenses. Revenue (ordinary income) was ¥399.0B (+74.2% YoY), ordinary income was ¥91.8B (+57.9%), and net income attributable to owners of the parent was ¥63.2B (+53.6%). Interest income expanded to ¥212.0B (+27.8%) and absorbed the increase in interest expenses (+80.1%), while other operating expenses surged from ¥13.7B to ¥123.7B, causing the ordinary income margin to decline to 23.0% from 25.4% in the same period of the previous year, a decrease of 2.4pt.
【Revenue】Ordinary income was ¥399.0B, up +74.2% YoY. The main components were interest income of ¥212.0B (+27.8%) and fees and commissions of ¥36.4B (+15.7%), with growth in interest income driving the increase in revenue. The Keiyo Bank Group’s only reporting segment is banking, and no business-level breakdown is disclosed.
【Profit and Loss】Ordinary expenses were ¥307.2B, up +79.7% YoY. Although the increase in interest expenses to ¥52.5B (+80.1%) was absorbed by growth in interest income, other operating expenses surged to ¥123.7B from ¥13.7B in the previous year, causing ordinary income growth (+57.9%) to fall below revenue growth (+74.2%). Extraordinary losses were limited to ¥0.3B, indicating limited impact from temporary factors. Ordinary income was ¥91.8B, while net income attributable to owners of the parent was ¥63.2B (+53.6%), with an effective tax rate of 30.7%. In conclusion, the Company achieved higher revenue and profit, but the increase in other operating expenses caused profit growth to lag revenue growth.
【Profitability】The net profit margin based on net income attributable to owners of the parent was 15.8%, down 2.1pt from 17.9% in the previous year. ROE was 1.9%; while growth in interest income supported profitability, the increase in other operating expenses partially offset the improvement.【Cash Flow Quality】Comprehensive income was ¥90.2B, of which ¥87.0B was attributable to owners of the parent, exceeding net income of ¥63.2B. An increase of ¥26.2B in valuation difference on securities contributed to this result, with comprehensive income exceeding net income.【Investment Efficiency】Total assets were ¥6,762.48B (+1.6% YoY), and net assets were ¥331.75B (+0.4%). Due to the characteristics of the banking industry, profit-generation efficiency relative to total assets remains structurally low.【Financial Soundness】The equity ratio (net assets/total assets) was 4.9%, nearly unchanged from 5.0% in the previous year, while the BIS capital ratio was 4.8%, unchanged from the previous year. The deposit-to-loan ratio was 79.3%, down from 80.8% in the previous year, as deposits grew (+3.1%) at a faster pace than loans (+1.1%).
As cash flow statement data has not been disclosed, funding trends are assessed based on changes in the balance sheet. Deposits were ¥5,806.00B (+3.1% YoY), while loans were ¥4,601.58B (+1.1%), with deposits increasing at a faster pace than loans and the deposit-to-loan ratio declining to 79.3% from 80.8% in the previous year. Cash and deposits increased to ¥1,004.89B (+15.6%), confirming an increase in liquid assets. Meanwhile, securities decreased to ¥1,477.6B (-7.1% YoY), suggesting that adjustments to the bond portfolio may be under way amid rising interest rates. Borrowings decreased to ¥301.80B (-12.5% YoY), indicating that a funding structure centered on deposits has been maintained.
Profit for the current period was affected by only ¥0.3B in extraordinary losses, indicating limited impact from temporary factors, with recurring interest and fee income serving as the primary sources of earnings. However, other operating expenses expanded sharply from ¥13.7B in the previous year to ¥123.7B, and fluctuations believed to be related to valuation and sales losses on securities may have pressured ordinary income. Other operating expenses represented 31% of ordinary income of ¥399.0B, and volatility in this item could determine the range of future fluctuations in ordinary income. The gap between ordinary income and net income was primarily attributable to income taxes of ¥28.1B, corresponding to an effective tax rate of 30.7%; no other major source of divergence apart from the tax burden was identified. Comprehensive income attributable to owners of the parent was ¥87.0B, exceeding net income of ¥63.2B. While improvement in the valuation difference on securities has accumulated as an accrual, it should be noted that this has the nature of unrealized gains that have not been converted into cash flow.
Progress against the full-year forecast was 32.9% for ordinary income, at ¥91.8B/¥279.0B, and 33.2% for net income attributable to owners of the parent, at ¥63.2B/¥190.0B. Both exceeded the quarterly straight-line progress rate of 25%, indicating performance ahead of the initial plan. During the quarter, there were no revisions to either the earnings forecast or dividend forecast, and management maintained its existing plan. The quality of progress will depend on the sustainability of interest income and the magnitude of fluctuations in other operating expenses, which are believed to be related to gains and losses on securities.
The Company’s forecast annual dividend is ¥66, and the payout ratio based on forecast EPS of ¥162.35 is 40.7%. Although a simple comparison with the previous year’s actual interim dividend of ¥19 is not possible, the forecast payout ratio remains in the 40% range and does not represent an excessive burden relative to earnings. Treasury stock increased to ¥102.3B from ¥52.5B in the previous year, confirming the implementation of share repurchases. While shareholder returns through dividends and share repurchases are progressing, the balance between retained earnings and shareholder returns will remain an area to monitor, given that the equity ratio (net assets/total assets) is 4.9% and the BIS capital ratio is 4.8%, both remaining broadly flat.
Earnings volatility risk: Other operating expenses surged from ¥13.7B in the previous year to ¥123.7B, and fluctuations believed to be related to valuation and sales losses on securities restrained ordinary income growth (+57.9%) relative to revenue growth (+74.2%). Volatility in this item may become a source of future fluctuations in ordinary income.
Thin capital buffer: The equity ratio (net assets/total assets) was 4.9%, while the BIS capital ratio was 4.8%, both remaining flat year on year. Continued share repurchases support shareholder returns but also tend to restrain the accumulation of equity capital.
Net interest margin and funding structure risk: Interest expenses increased to ¥52.5B (+80.1% YoY), outpacing the growth in interest income (+27.8%), while the deposit-to-loan ratio declined to 79.3% from 80.8% in the previous year. If funding costs continue to rise, they may pressure growth in interest income.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 15.9% | – | – |
As median data has not been prepared, the Company’s relative position within the industry cannot currently be determined.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 74.2% | – | – |
As median data has not been prepared, the Company’s relative position within the industry cannot currently be determined.
※Source: Compiled by the Company
The top line increased significantly, led primarily by interest income, and progress toward the full-year forecasts for both ordinary income and net income exceeded the quarterly straight-line progress rate of 25%, reaching 32.9–33.2%.
Due to the sharp increase in other operating expenses (from ¥13.7B in the previous year to ¥123.7B), the ordinary income margin declined to 23.0% from 25.4% in the previous year despite revenue growth of +74.2%. A key feature is that revenue growth and margin improvement have not moved in tandem.
The deposit-to-loan ratio declined to 79.3% from 80.8% in the previous year, with deposit growth leading loan growth, while the equity ratio (net assets/total assets) of 4.9% and BIS capital ratio of 4.8% remained flat. The balance between continued share repurchases and maintenance of capital levels remains a structural issue.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
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