Quick View
| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥111.0B | ¥99.0B | +12.0% |
| Operating Income | - | - | - |
| Ordinary Income | ¥3.6B | −¥8.1B | +143.8% |
| Net Income | ¥4.5B | −¥9.9B | +145.4% |
| ROE (annualized) | 2.5% | −5.5% | - |
Executive Summary
For Fukushima Bank, the key highlight for the cumulative Q3 period of the fiscal year ending March 2026 was its return to profitability from a loss in the same period of the previous year, primarily driven by its banking business. Ordinary revenue (equivalent to Revenue) was ¥110.98B (¥99.05B in the same period of the previous year, YoY +12.0%), Ordinary Income was ¥3.56B (¥-8.12B in the same period of the previous year), and Net Income attributable to owners of the parent was ¥4.43B (¥-9.90B in the same period of the previous year). The primary factors were a 15.5% increase in Ordinary revenue in the Banking segment and the absence of the ¥2.38B impairment loss recognized in the same period of the previous year. However, ROE remained low at 2.5%, and further verification is required to determine whether the earnings improvement is structural.
Factors Affecting Performance
【Revenue】Ordinary revenue was ¥110.98B, an increase of +12.0% YoY. By segment, Banking generated ¥93.3B (84.1% composition ratio), up +15.5% YoY and driving overall performance, while Leasing (¥16.8B, YoY -3.0%) and CreditCardAndCreditGuarantee (¥0.9B, YoY -6.5%) recorded declines in revenue. The growth in the banking business appears to have been primarily attributable to an improvement in the lending yield (interest income of ¥70.19B versus ¥58.50B in the same period of the previous year).
【Profit and Loss】Ordinary Income was ¥3.56B, a significant improvement from ¥-8.12B in the same period of the previous year. While Ordinary Income in the banking business turned profitable at ¥3.2B (¥-8.48B in the same period of the previous year), CreditCardAndCreditGuarantee continued to incur a loss of ¥-0.1B. The absence of the ¥2.38B impairment loss on fixed assets recognized in the same period of the previous year contributed to the improvement in profit and loss. Special income of ¥0.8B (none in the same period of the previous year) also provided an uplift. The results represent an increase in both revenue and profit.
Segment Analysis
The banking business was the center of the recovery, with Ordinary revenue of ¥93.3B (84.1% composition ratio, YoY +15.5%) and Ordinary Income of ¥3.2B (¥-8.48B in the same period of the previous year). The leasing business contracted slightly, with Ordinary revenue of ¥16.8B (15.1% composition ratio, YoY -3.0%) and Ordinary Income of ¥0.4B (YoY -12.2%). The credit card and credit guarantee businesses generated Ordinary revenue of only ¥0.9B (0.8% composition ratio) and continued to report a small loss, with an Ordinary loss of ¥-0.1B (an improvement from ¥-0.14B in the previous year). Overall, the earnings structure remains highly dependent on the banking business.
Key Financial Metrics
【Profitability】The Net Profit Margin was 4.0% and the Ordinary Income Margin was 3.2%, representing a return to profitability from negative levels in the same period of the previous year; however, these remain low absolute levels for a banking business. 【Cash Flow Quality】Special income of ¥0.8B and the absence of the ¥2.38B impairment loss recognized in the same period of the previous year contributed to the improvement in profit and loss, indicating that part of the earnings includes temporary factors. 【Investment Efficiency】ROE (annualized) was 2.5%, and basic EPS turned positive at ¥12.71 (¥-32.05 in the same period of the previous year). 【Financial Soundness】The Equity Ratio was 3.0% (also 3.0% in the same period of the previous year), and net assets of ¥242.5B against total assets of ¥8,150.2B indicate that the high-leverage structure characteristic of the banking business continues.
Cash Flow Analysis
Although disclosed data from the cash flow statement is limited, the balance sheet provides some indication of fund movements. Loans increased to ¥5,840.16B (¥5,742.17B in the previous year), while deposits also increased to ¥7,766.33B (¥7,617.93B in the previous year), indicating that the traditional banking cycle of using deposit funding for lending continues. Cash and deposits were ¥503.68B, down from ¥555.79B in the previous year, suggesting that part of the funds was allocated to loans and securities (¥1,669.52B versus ¥1,606.43B in the previous year). As detailed disclosure of cash flows from operating activities is unavailable, assessment of the underlying cash-generating capacity to cover dividends and investments is limited.
Earnings Quality
The improvement in profit and loss for the current period consisted of both growth in core banking revenue and temporary factors. Interest income increased to ¥70.19B (¥58.50B in the previous year), indicating an improvement in core net interest income, while the absence of the ¥2.38B impairment loss on fixed assets recognized in the same period of the previous year was also a factor in the improvement in Ordinary Income. In addition, special income of ¥0.8B (including gains on disposal of fixed assets) was recorded and made a meaningful contribution to Profit Before Tax of ¥4.29B. The effective tax rate has an unusual composition, with income taxes of ¥-0.2B, and adjustments including deferred taxes appear to have pushed up Net Income. Comprehensive income was ¥3.7B, of which ¥3.6B was attributable to owners of the parent, resulting in a divergence from Net Income of ¥4.43B due to the impact of valuation differences on securities of ¥-0.7B. Overall, the results reflect the coexistence of core business improvement and temporary factors.
Earnings Forecast and Guidance
For the full year, the Company has provided forecasts of Revenue (Ordinary revenue) of ¥149.0B, Ordinary Income of ¥6.0B, EPS of ¥14.33, and a dividend of ¥5.00, with no revisions to its earnings or dividend forecasts during the current quarter. Cumulative Q3 Ordinary revenue of ¥110.98B reached 74.5% of the full-year forecast, while Ordinary Income of ¥3.56B reached 59.3% of the full-year forecast. The likelihood of achieving the full-year forecast will depend on trends in credit costs and NIM during the second half.
Shareholder Returns
The full-year dividend forecast is ¥5.00 (a single year-end payment, with an interim dividend of ¥0), unchanged from the previous year. Based on total dividends of approximately ¥1.75B against the full-year Net Income forecast of ¥5.00B (based on 34,900 thousand shares outstanding), the Payout Ratio is approximately 35%, within a generally typical range. However, disclosure regarding the core business’s cash-generating capacity, which serves as the source of dividends, is limited, and the quality of future earnings should be monitored continuously.
Risk Factors
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Temporariness of earnings: The improvement in profit and loss for the current period was supported by the absence of the ¥2.38B impairment loss recognized in the same period of the previous year and by special income of ¥0.8B. Accordingly, it cannot be said unequivocally that the improvement was generated solely by recurring earnings power.
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Low capital efficiency: The Equity Ratio is 3.0% and ROE is 2.5%, indicating room for improvement in capital efficiency and the capital base even for a banking business and warranting monitoring.
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Concentration of earnings among segments: The banking business accounts for 84.1% of Ordinary revenue, while the credit card and credit guarantee businesses continue to record Ordinary losses, resulting in an earnings structure concentrated in the banking business.
Industry Benchmark (Reference; Compiled by the Company)
Industry Benchmark (bank)
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 4.0% | – | – |
The Company’s Net Profit Margin of 4.0% reflects the level following its return to profitability, but comparison data with the industry median is limited.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 12.0% | – | – |
The Company’s Ordinary revenue growth rate of 12.0% indicates a recovery from the sluggish performance in the same period of the previous year, but comparison data with the industry median is limited.
※Source: Compiled by the Company
Key Points from the Results
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Quarterly performance returned to profitability for both Ordinary Income and Net Income; however, the fact that part of the improvement depended on temporary factors such as the absence of the impairment loss recognized in the same period of the previous year and special income should be considered when evaluating the results.
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The Equity Ratio of 3.0% and ROE of 2.5% indicate room for improvement in capital efficiency and the capital base even within the banking industry and provide metrics for monitoring future trends.
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Progress toward the full-year forecast was 59.3% for Ordinary Income and 74.5% for Ordinary revenue. As neither the earnings nor dividend forecasts have been revised, management is maintaining its current assumptions regarding second-half performance.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment 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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