The Minaminihon Bank, Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Income: ¥1.44B
• EPS: ¥178.04

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

Minami Nippon Bank (TSE: 8554) reported FY2026 Q2 consolidated results under JGAAP with limited line-item disclosure typical for banks’ XBRL, resulting in many zeros that reflect non-disclosure rather than actual zero values. The bank posted operating income (likely equivalent to core profit basis under bank disclosure) and ordinary income of ¥1,407 million, and net income of ¥1,455 million, implying modest profitability for the half-year. Net income declined 3.8% YoY, indicating some earnings softness versus the prior-year period despite stable operating/ordinary income in the dataset. Based on reported equity of ¥43,176 million and total assets of ¥847,415 million, leverage is high as expected for a regional bank, with assets/equity at roughly 19.6x. From these values, we estimate an equity-to-asset ratio of about 5.1% (calculated, as the disclosed equity ratio field is not populated). Implied ROE for the period is approximately 3.4% (¥1,455m / ¥43,176m), a moderate level for a regional bank and below the typical medium-term targets many peers aim for. The effective tax rate is approximately 24.2% based on income tax of ¥464 million and estimated pre-tax income of ~¥1,919 million, broadly consistent with standard corporate tax norms. Revenue, cost of sales, and gross profit are not meaningful for a bank and are not disclosed; interest expense is also not disclosed, which is common given net interest income is presented on a net basis in bank financials. Cash flow figures (OCF/ICF/FCF) are not provided, so cash conversion and free cash flow coverage cannot be assessed this quarter from the dataset. Balance sheet scale remains stable at ~¥0.85 trillion in assets, with liabilities of ¥789,322 million and equity of ¥43,176 million. Ordinary income matching operating income suggests non-operating items may be limited or net out, though detailed drivers (net interest margin, fees, gains/losses on securities, and credit costs) are not disclosed here. The YoY decline in net income amid flat ordinary income could reflect tax effects, one-off gains/losses in the base period, or credit cost movements; however, insufficient granularity prevents definitive attribution. Dividend data are not disclosed in this dataset; therefore, payout sustainability cannot be evaluated from cash or earnings coverage. Given the bank’s leverage profile, asset quality, securities portfolio valuation, and interest rate sensitivity are the key determinants of forward earnings, but these metrics are not provided. Overall, earnings are positive and capital is positive, but ROE appears modest, and visibility into growth and risk is constrained by limited disclosures in the provided snapshot. Investors should monitor core profitability drivers (net interest margin, loan growth, fee income) and credit costs to assess the sustainability of earnings. Regulatory capital adequacy (not disclosed here) remains a critical metric for solvency and growth capacity.

Profitability Analysis

Using available data, estimated ROE ≈ 3.4% (¥1,455m net income / ¥43,176m equity). DuPont inputs such as net margin and asset turnover are not meaningful for banks given non-disclosure of revenue and different presentation; however, financial leverage is high at ~19.6x (assets/equity), consistent with the sector. Ordinary income equals operating income at ¥1,407m, indicating limited contribution from non-operating items in this snapshot. The net income of ¥1,455m exceeds ordinary income, suggesting either non-operating gains or tax effects; with income tax of ¥464m and implied pre-tax of ~¥1,919m, there appears to be some positive non-operating contribution. Margin quality cannot be decomposed into net interest margin and fee margin due to missing disclosures. Operating leverage assessment is constrained; no revenue or expense breakdown is provided to compare cost growth versus income growth. Interest expense and interest coverage are not applicable in the usual corporate sense for banks; earnings power is better assessed via net interest income and credit cost ratios, which are not disclosed here.

Growth Assessment

Net income declined 3.8% YoY to ¥1,455m; operating/ordinary income is shown as flat YoY in the dataset, implying that the YoY contraction likely stems from items outside the core operating figure (taxes, non-operating items, or one-offs) or simply reflects data gaps. Revenue trends, loan/deposit growth, and fee income expansion are not available, limiting an assessment of top-line sustainability. Without credit cost disclosure, we cannot assess whether profit quality benefited from lower provisions or was pressured by higher provisioning. Securities gains/losses and valuation effects, often important for regional banks, are also not disclosed, constraining outlook analysis. Based on equity of ¥43.2bn and assets of ¥847.4bn, balance sheet scale appears stable; however, growth in risk assets (loans) cannot be confirmed. Near-term outlook will hinge on net interest margin resilience amid rate dynamics, funding cost control, and credit cost normalization; none of these drivers are quantified in the provided data. Consequently, while the bank remains profitable, visibility into sustainable earnings growth is limited in this quarter’s snapshot.

Financial Health

Total assets are ¥847,415m and total equity is ¥43,176m, implying an equity-to-asset ratio of ~5.1% and leverage of ~19.6x, in line with a regional bank profile. Total liabilities are ¥789,322m. Current and quick ratios are not relevant for banks and are undisclosed. Regulatory capital adequacy ratios (CET1/Total capital, domestic standard) are not provided, preventing a more precise solvency assessment. The disclosed debt-to-equity ratio of 18.28x is consistent with banking leverage, but we note that regulatory risk-weighted measures, not simple leverage, govern solvency buffers. Liquidity health cannot be evaluated from cash and equivalents or high-quality liquid assets (HQLA), as these are not disclosed. Funding mix (deposits vs. market funding) is not provided; therefore, structural liquidity and interest rate risk in the banking book cannot be assessed here.

Cash Flow Quality

Operating, investing, and financing cash flows are not disclosed in this dataset, so OCF/Net income and free cash flow (FCF) analysis cannot be performed. The reported OCF/Net Income ratio of 0.00 and FCF of 0 reflect non-disclosure, not actual zero cash flows. Working capital metrics for banks are not meaningful in the corporate sense and are not provided. Earnings quality therefore cannot be cross-validated through cash conversion this quarter. In bank analysis, we would typically triangulate with interest margin cash generation, securities cash flows, and provisioning trends; these are absent here.

Dividend Sustainability

Annual DPS and payout ratio are not disclosed in the dataset (zeros indicate non-reporting). With net income of ¥1,455m and equity of ¥43,176m, theoretical payout capacity exists but cannot be assessed without an explicit dividend policy, DPS, and cash flow data. FCF coverage is not calculable due to missing OCF and capex. Many regional banks target stable or gradually rising dividends tied to earnings and capital buffers, but no policy or historical payout series is provided here. As such, dividend sustainability and outlook cannot be determined from the provided information.

Risk Assessment

Business Risks:

• Net interest margin compression amid funding cost increases or limited asset repricing
• Credit cost volatility from SME/retail exposure in the regional economy
• Market risk from securities portfolio (JGBs, municipals, foreign bonds, and equities) amid rate and spread moves
• Fee income softness if transaction volumes or asset management flows weaken
• Competitive pressures from megabanks and fintech in deposits and payments

Financial Risks:

• High leverage inherent to banking (assets/equity ~19.6x) amplifies earnings and capital sensitivity
• Interest rate risk in the banking book (duration mismatch) not quantified here
• Capital adequacy unknown due to lack of regulatory capital ratios disclosure
• Liquidity and funding profile not disclosed; potential exposure to deposit outflows cannot be assessed
• Earnings reliance on non-operating items suggested by net income exceeding ordinary income this period

Key Concerns:

• Limited disclosure in the dataset prevents decomposing core earnings drivers
• YoY decline in net income (-3.8%) despite flat ordinary income raises questions about non-core items and tax effects
• Low apparent ROE (~3.4%) versus sector aspirations
• Absence of cash flow, dividend, and capital adequacy data constrains visibility into sustainability

Investment Implications

Key Takeaways:

• FY2026 Q2 net income ¥1,455m (-3.8% YoY) with ordinary income ¥1,407m indicates modest profitability
• Estimated ROE ~3.4% on equity of ¥43.2bn; leverage ~19.6x
• Equity-to-asset ratio ~5.1% (calculated) suggests typical regional bank capitalization but regulatory ratios are unknown
• Earnings mix and drivers (NIM, fees, credit costs, securities) are not disclosed, limiting quality assessment
• Dividend and cash flow data are unavailable; payout sustainability cannot be evaluated

Metrics to Watch:

• Net interest margin and loan/deposit growth trends
• Credit cost ratio and NPL ratio
• Securities portfolio duration/gain-loss profile and OCI sensitivity
• Regulatory capital ratios (CET1/Total capital under domestic standard) and leverage ratio
• Fee income contribution and cost-to-income ratio
• Dividend policy and payout trajectory

Relative Positioning: Based on limited data, Minami Nippon Bank exhibits positive but modest profitability and high leverage consistent with regional bank peers; however, without disclosures on NIM, credit costs, and capital adequacy, its relative earnings quality and capital strength versus other regional banks cannot be conclusively assessed.

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