The Keiyo Bank,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥9.11B
• EPS: ¥75.59

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

Keiyo Bank (TSE: 8544) reported FY2026 Q2 consolidated results under JGAAP with ordinary income (経常利益/operating income as presented) of ¥13.22bn and net income of ¥9.16bn, up 10.6% YoY. For banks, the ordinary income line is the more relevant profitability indicator than the manufacturing-style revenue/COGS metrics, many of which are not disclosed in XBRL for financial institutions; hence the numerous zeros should be read as unreported rather than actual zeros. Using the disclosed balance sheet, total assets were ¥6.602tn, liabilities ¥6.251tn, and equity ¥326.18bn, implying an equity ratio of about 4.9% and financial leverage (assets/equity) of 20.24x, which is within the typical range for Japanese regional banks. Half-year ROE approximates 2.8% (¥9.16bn / ¥326.18bn), which annualizes to roughly 5.6%, indicating modest but improving profitability consistent with the double-digit YoY growth in net profit. Implied ROA is about 0.14% for the half-year (roughly 0.28% annualized), also typical for a conservative regional banking model in a low-rate environment. The effective tax burden appears roughly 27% based on reported tax expense of ¥3.52bn against pre-tax profit, consistent with a normalized tax profile. EPS is ¥75.59, which implies approximately 121 million shares outstanding for the period (back-solved from net income), acknowledging that the share count was not disclosed in the XBRL extract. The DuPont-style metrics supplied in the dataset (net margin and asset turnover as zero) are not meaningful for banks due to the different income statement structure; the more suitable decomposition is ROE ≈ ROA × leverage, which aligns with the observed figures. Operating leverage cannot be directly assessed given the lack of disclosed revenue and expense breakdowns, but the 10.6% YoY increase in net income suggests either improved core spreads, better fee income, lower credit costs, securities-related gains, or cost control. Liquidity ratios like current and quick ratios are not applicable to banks; solvency should be assessed via regulatory capital ratios (not provided) and the asset-liability mix. Cash flow statement items are unreported in this extract, so free cash flow and OCF-based earnings quality cannot be evaluated. Dividend data are also unreported; hence payout analysis must be inferred from earnings capacity and typical regional bank policies, rather than period-specific disclosures. Overall, the bank shows stable balance sheet scale, moderate leverage, and an uptick in profitability, but limited disclosure in this snapshot constrains deeper analysis of margin drivers, credit costs, and capital adequacy. Key areas to monitor include net interest margin resilience, credit quality trends, and unrealized securities valuation impacts amid interest rate volatility. Given these constraints, conclusions rely on approximations from the available non-zero figures and standard banking analytics rather than full line-item detail.

Profitability Analysis

ROE decomposition for a bank is best expressed as ROE ≈ ROA × financial leverage. Based on disclosed figures, half-year ROA ≈ ¥9.16bn / ¥6.602tn = 0.139%; with leverage of 20.24x, this yields a half-year ROE of roughly 2.8% (annualized ~5.6%). The reported DuPont components (net profit margin and asset turnover) showing as 0%/0x are not applicable, as banks do not report revenue/COGS like non-financials; the meaningful driver set is net interest margin, fee/commission income, credit costs, securities gains/losses, and operating expenses (OHR), none of which are itemized here. Net profit growth of +10.6% YoY indicates improved profitability; without detail, plausible contributors include lower credit costs and/or better securities-related income, alongside stable or improving core spreads. Margin quality assessment is limited by missing line items; however, the effective tax rate appears in a normal range (~27%), suggesting no outsized one-off tax effects. Operating leverage (expense growth vs. income growth) cannot be determined from the data provided; nevertheless, the equality of ordinary income and operating income in the extract suggests a clean period without significant non-operating items. The bank’s profitability level (annualized ROE mid-5%) sits within the typical mid-single-digit band for regional banks, implying room for further efficiency improvements or balance sheet re-pricing to enhance returns.

Growth Assessment

Net income increased 10.6% YoY to ¥9.16bn for 1H, signaling positive earnings momentum. Ordinary income of ¥13.22bn was reported, but YoY change was not disclosed (0.0% in the dataset should be interpreted as unavailable). In the absence of revenue and expense detail, growth quality cannot be disaggregated between net interest income, fees, trading/securities gains, or cost control. The improvement at the bottom line likely reflects a combination of benign credit costs and securities-related performance, possibly aided by gradual rate normalization dynamics. Sustainability depends on: (1) stability of net interest margin amid funding cost changes, (2) resilience of fee income, and (3) avoidance of negative mark-to-market on securities as yields fluctuate. With half-year ROA at ~0.14%, the bank retains capacity to grow earnings through modest asset growth and efficiency gains, provided risk costs remain contained. Outlook hinges on the interest rate environment, loan demand in the bank’s core Chiba/Kanto footprint, and credit normalization; absent detailed guidance, a cautious base case would assume flat-to-modest core growth in the near term.

Financial Health

Total assets stand at ¥6.602tn with liabilities of ¥6.251tn and equity of ¥326.18bn, yielding an equity ratio of approximately 4.9% and liabilities/equity of ~19.2x. Such leverage is typical for regional banks and should be assessed in the context of regulatory capital ratios (CET1/total capital), which are not provided here. Liquidity metrics like current and quick ratios are not meaningful for banks; liquidity health should be evaluated via loan-to-deposit ratios, high-quality liquid assets (HQLA), and maturity gaps—none of which are disclosed in this snapshot. The balance sheet scale and leverage imply a conservative ROA/ROE profile consistent with peers. Interest coverage is not applicable in the conventional sense for banks; interest expense is part of core operations and is not separately disclosed here. Without NPL ratios or allowance coverage, credit risk absorption capacity cannot be quantified from this extract. Overall solvency appears stable based on equity/assets, but assessment remains incomplete without risk-weighted capital and liquidity coverage disclosures.

Cash Flow Quality

Operating, investing, and financing cash flows are unreported in the provided XBRL extract; therefore, OCF/Net Income, free cash flow, and working capital dynamics cannot be evaluated. For banks, cash flow statement analysis is less diagnostic than for non-financials; earnings quality is better assessed via net interest income durability, credit cost normalization, and realized/unrealized securities gains—none of which are itemized here. The reported net income growth (+10.6% YoY) with a normalized tax rate (~27%) suggests the absence of large tax-driven one-offs, but we cannot rule out securities valuation impacts or one-time credit cost swings. Working capital measures are not applicable for banks in the traditional sense. In short, earnings quality assessment is constrained and should be supplemented with disclosures on credit costs, NIM, and AFS/HTM securities valuation.

Dividend Sustainability

Dividend per share, payout ratio, and FCF coverage are not disclosed in this dataset (zeros indicate unreported). With EPS of ¥75.59 for the half-year, capacity for distributions appears supported by current earnings, but sustainability depends on core profitability (NIM and fees), credit cost trajectory, and capital requirements under regulatory frameworks. Without regulatory capital ratios (e.g., CET1) or management policy disclosure, we cannot determine headroom for dividends or buybacks. Typical regional bank practice emphasizes stable dividends aligned with earnings and capital conservation; however, no period-specific policy signals are available here. An updated view requires: disclosed annual DPS guidance, payout ratio targets, and capital adequacy metrics.

Risk Assessment

Business Risks:

• Net interest margin compression if funding costs rise faster than asset yields
• Credit cycle normalization leading to higher loan loss provisions
• Securities portfolio valuation losses amid interest rate volatility
• Concentration risk in the regional economy (Chiba/Kanto) affecting loan demand and credit quality
• Fee income softness from muted retail/corporate activity

Financial Risks:

• Capital adequacy uncertainties due to absent CET1/total capital disclosures
• Liquidity risk from potential deposit mix shifts or market funding reliance (not disclosed)
• Duration and basis risk in the AFS/HTM securities books
• Sensitivity to unrealized losses impacting OCI and equity
• Operational risk and compliance costs affecting efficiency (OHR)

Key Concerns:

• Limited visibility into drivers of the 10.6% YoY net income growth
• Absence of credit quality metrics (NPL ratio, coverage) to gauge risk costs
• No disclosure of regulatory capital ratios, constraining solvency assessment
• Unreported dividend and cash flow data, limiting payout sustainability analysis

Investment Implications

Key Takeaways:

• Net income improved 10.6% YoY to ¥9.16bn for 1H, lifting annualized ROE to ~5.6%
• Balance sheet leverage of 20.24x and equity/assets of ~4.9% are in line with regional bank norms
• Profitability appears to have improved without apparent tax distortions, but drivers are not disclosed
• Lack of regulatory capital, NIM, and credit cost detail is the main constraint on deeper assessment

Metrics to Watch:

• Net interest margin and loan/deposit repricing trends
• Credit costs (provisions), NPL ratio, and coverage
• Securities portfolio unrealized gains/losses and duration
• Operating efficiency (OHR) and expense discipline
• Regulatory capital ratios (CET1, total capital) and leverage ratio
• Loan and deposit growth in the core region

Relative Positioning: Based on available figures, Keiyo Bank exhibits profitability and leverage typical of Japanese regional banks, with mid-single-digit annualized ROE and a modest equity buffer; without detail on capital and credit metrics, its relative standing versus peers cannot be conclusively ranked.

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