| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥77.1B | ¥52.5B | +26.1% |
| Operating Income / Operating Profit | ¥62.8B | ¥39.2B | +60.4% |
| Ordinary Income | ¥252.3B | ¥195.5B | +29.0% |
| Net Income / Net Profit | ¥61.5B | ¥38.4B | +60.1% |
| ROE | 2.4% | 1.6% | - |
The Q2 results for the fiscal year ending March 2026 delivered revenue ¥77.1B (YoY +¥24.6B +46.9%), Operating Income ¥62.8B (YoY +¥23.7B +60.4%), Ordinary Income ¥252.3B (YoY +¥56.8B +29.0%), and Net Income attributable to owners of the parent ¥61.5B (YoY +¥23.1B +60.1%), achieving both top-line and bottom-line growth. The Banking business led performance with Ordinary Revenue ¥958.6B (+27.8%) and Segment Profit ¥234.8B, where expansion of investment income amid a rising rate environment (¥727.8B, up from ¥518.3B +40.4% YoY) was the primary driver. Funding costs increased to ¥141.0B (from ¥43.2B +226.4%), but growth in net interest income outpaced this, and gross business profit significantly exceeded prior-year levels. The Leasing business performed steadily with Ordinary Revenue ¥132.2B (+9.5%) and Segment Profit ¥6.4B. Operating margin improved materially to 81.5% (from 74.6% +6.9pt) and net profit margin to 79.8% (from 73.2% +6.6pt), lifting EPS to ¥62.29 (from ¥47.28 +31.7%).
【Revenue】 Revenue (operating revenue) was ¥77.1B, up +46.9% YoY. By segment, Banking accounted for Ordinary Revenue ¥958.6B (+27.8%), representing 81.6% of the total and driving overall performance. In Banking, investment income rose substantially to ¥727.8B (from ¥518.3B +40.4%); the breakdown shows interest on loans ¥565.1B (from ¥432.5B +30.7%) and interest/dividends on securities ¥114.7B (from ¥57.7B +98.8%), reflecting loan repricing and improved yields on held securities in a rising-rate environment. Fee and commission income was ¥248.5B (from ¥249.5B -0.4%), essentially flat. Leasing posted Ordinary Revenue ¥132.2B (+9.5%) and continued stable growth, while Other segments (securities operations, credit card operations, etc.) recorded Ordinary Revenue ¥83.4B (+39.0%) showing strong expansion. Regional and business breakdowns were not disclosed, but the strong Banking growth suggests improvements in the interest-rate environment were the main source of revenue expansion.
【Profitability】 Operating Income was ¥62.8B, up +60.4% YoY. Ordinary Income was ¥252.3B (+29.0%), and the ¥189.5B gap versus Operating Income is mainly composed of non-operating income such as equity-method investment gains of ¥0.1B. Funding costs rose to ¥141.0B (from ¥43.2B +226.4%), a 3.3x increase, but growth in investment income (+¥209.5B) more than offset this, expanding net interest income to approximately ¥586.8B. Operating expenses (general and administrative expenses in Banking) were restrained at ¥496.7B (from ¥453.9B +9.4%), allowing growth in gross business profit to flow to Operating Income. Extraordinary items were minor (extraordinary gains ¥0.0B; extraordinary losses ¥0.4B, including impairment losses ¥0.2B, etc.). Pre-tax profit was ¥251.9B less income taxes ¥78.5B (effective tax rate 31.2%), resulting in Net Income attributable to owners of the parent of ¥61.5B (+60.1%). The divergence between Ordinary Income and Net Income is due to tax burden and non-controlling interests attributable profit ¥0.1B; temporary factors are limited. In conclusion, expansion of investment income driven by rising rates and cost control produced both revenue and profit growth.
Banking recorded Ordinary Revenue ¥958.6B (+27.8%) and Segment Profit ¥234.8B (from ¥186.3B +26.0%), sustaining a high segment profit margin of 24.5%. Expansion of investment income was the main growth driver; loans were ¥4兆8,444.5B (from ¥4兆6,800.3B +3.5%) and securities ¥8,698.6B (from ¥7,164.0B +21.4%), increasing assets under management and realizing margin expansion in the rising-rate phase. Leasing posted Ordinary Revenue ¥132.2B (+9.5%) and Segment Profit ¥6.4B (from ¥4.9B +30.6%), reflecting accumulation of lease assets and improved margins. Other segments (securities operations, credit card operations, etc.) saw Ordinary Revenue ¥83.4B (+39.0%) and Segment Profit ¥11.3B (from ¥4.4B +156.8%), a rapid expansion likely supported by strengthened fee businesses. Profitability differences across segments remain large, and Banking continues to be the core profit generator.
【Profitability】Operating margin improved to 81.5% (from 74.6% +6.9pt) and net profit margin to 79.8% (from 73.2% +6.6pt). Banking-specific KPIs: NIM (net interest margin) is estimated at ~1.21%, slightly below the industry average (1.3–1.5%) but improving YoY. CIR (cost-to-income ratio) is estimated at ~67% (versus gross business profit), indicating room for efficiency gains. ROE improved to 2.4% (estimated 1.6% prior year) but remains low in capital efficiency terms. 【Cash Quality】Operating Cash Flow / Net Income ratio is 1.59x, OCF/EBITDA multiple 2.52x, and accrual ratio -0.1%, indicating strong cash backing of profits. 【Investment Efficiency】Capex / Depreciation ratio is 0.75x, indicating restrained tangible investment, while intangible asset acquisitions increased to ¥24.3B (from ¥12.2B +99.2%), signaling active digital investment. 【Financial Soundness】Equity Ratio is 3.8% (from 3.6% +0.2pt), remaining low with limited buffer relative to regulatory benchmarks (domestic commercial banks 4%+). Loan-to-Deposit Ratio (LDR) is 82.9% (loans ¥4兆8,444.5B / deposits ¥5兆8,451.1B), within an appropriate range with stable liquidity. D/E ratio is 24.98x, reflecting high leverage but within tolerable bounds given banking structural characteristics.
Operating Cash Flow was ¥275.1B, down -83.4% from ¥1,657.4B a year earlier, but operating cash subtotal (before working capital changes) was ¥322.9B (from ¥1,691.4B), after deducting corporate tax payments of -¥47.8B. The decline was mainly due to working capital changes in loans and deposits in Banking (other operating CF net +¥230.2B, from +¥79.0B), reflecting cash outflows from loan growth. Investing Cash Flow was -¥1,701.6B (worsened -67.7% from -¥1,014.8B), driven primarily by expanded securities investment (securities balance +¥1,534.6B). Capex was -¥34.5B and intangible asset acquisitions -¥24.3B, indicating continued growth investments. Financing Cash Flow was -¥47.9B (from -¥45.7B), including dividend payments -¥51.5B (from -¥38.6B) and dividends to non-controlling interests -¥0.4B, partially offset by proceeds from sale of treasury stock +¥1.1B. Share buybacks were -¥0.0B (effectively zero). Free Cash Flow was -¥1,426.6B, largely negative, but in Banking the structure records loan and securities operations in investing cash flow, so this reflects growth-driven funding needs. Cash and deposits decreased by ¥76.7B from ¥7,079.7B to ¥7,003.0B but the company maintains a sufficient liquidity buffer.
Of Ordinary Income ¥252.3B, Operating Income was ¥62.8B and the ¥189.5B difference is primarily due to net interest income (investment income less funding costs) of the Banking business being accounted for in non-operating results. Extraordinary items were minor (extraordinary gains ¥0.0B; extraordinary losses ¥0.4B), indicating low reliance on one-off items. Equity-method investment gains ¥0.1B are within recurring income. Operating Cash Flow / Net Income 1.59x, OCF/EBITDA 2.52x, and accrual ratio -0.1% demonstrate high accrual quality and strong cash backing. The difference between Comprehensive Income ¥184.9B and Net Income attributable to owners of the parent ¥61.5B (gap ¥123.4B) is composed of other comprehensive income items including securities valuation differences -¥62.3B, deferred hedge gains/losses +¥29.5B, and actuarial adjustments related to retirement benefits +¥44.2B, indicating the impact of market-related valuation changes. Earnings quality is judged to be recurring with high sustainability.
Progress against Full Year guidance: Ordinary Income at ¥252.3B vs plan ¥285.0B is 88.6% achieved; Net Income attributable to owners of the parent ¥61.5B (annualized estimate ¥173.4B) vs plan ¥191.0B is 90.8% achieved, both well ahead of standard progress (50% baseline for 100% FY expectation) as of Q2. However, Banking could see credit costs or seasonal factors in H2, so maintaining NIM and cost control will be key to achieving full-year targets. Revenue (operating revenue) is ¥77.1B in H1 vs full-year forecast ¥133.0B, a progress rate of 58.0% and on track. EPS is ¥62.29 for H1 vs full-year forecast ¥68.59, requiring continued pace of earnings in the remaining periods. Dividend guidance is ¥13.75 annualized, consistent with the H1 dividend outlay of ¥25.0 (interim ¥10.5 + year-end forecast ¥14.5 included). The FY plan’s YoY growth for Ordinary Income is +12.9%, conservative versus the H1 YoY of +29.0%, suggesting a high probability of achievement.
Annual dividend is ¥25.0 (interim ¥10.5 + year-end forecast ¥14.5), a substantial increase of ¥17.5 from prior-year ¥7.5. Payout Ratio is 32.7% (based on Net Income attributable to owners of the parent ¥61.5B); on a full-year basis, total dividend is estimated ¥51.5B / full-year net income forecast ¥191.0B = 26.9%, a sustainable level. No share buybacks were executed (-¥0.0B), concentrating returns on dividends. Total Return Ratio is approximately 27–33%, with a cautious capital policy prioritizing internal reserves. DOE (dividend on equity) is estimated around 1.8–2.0%; given low Equity Ratio of 3.8%, dividend sustainability depends on profit growth and regulatory capital accumulation. Free Cash Flow is negative at -¥1,426.6B, but in Banking loan and securities operations are booked in investing cash flow; dividend sustainability should be assessed based on Operating Cash Flow (¥275.1B) and retained earnings rather than FCF alone. Cash and deposits of ¥7,003.0B provide ample liquidity buffer and no short-term concern over dividend payment capacity.
Earnings volatility due to low NIM: NIM is estimated at 1.21%, below the industry average (1.3–1.5%), exposing the company to spread compression if deposit beta rises. Funding costs surged +226.4% YoY; if deposit rate increases outpace loan repricing, growth in net interest income could slow. Quantitatively, a 10bp rise in deposit beta could increase annual funding costs by approximately ¥5.8B, pressuring gross business profit.
Insufficient capital buffer due to low Equity Ratio: Equity Ratio 3.8% provides only +0.8pt headroom versus regulatory benchmark (domestic commercial banks 4%+). Rapid growth in risk-weighted assets or credit losses could crystallize capital constraints. Total assets ¥6,595.98B vs equity ¥2,539.2B implies leverage of 25.98x and significant sensitivity. A 1% decline in Equity Ratio equates to roughly ¥250B capital reduction, roughly five years’ worth of current total dividends (≈¥51.5B), constraining dividends and growth investment capacity if realized.
Interest rate risk (IRRBB) and securities valuation volatility: Securities balance expanded to ¥8,698.6B (+21.4%), representing 13.2% of total assets. In a rising-rate environment, valuation losses on held bonds may increase; the company recorded securities valuation differences of -¥62.3B in other comprehensive income. If duration is long, a 10bp rise in 10-year JGB yields could produce valuation losses on holdings on the order of ¥50–100B, potentially impairing equity. Additionally, mismatches in interest rate sensitivity between deposits ¥5兆8,451.1B and loans ¥4兆8,444.5B (shorter-term deposits vs longer-term fixed loans) could amplify net interest income volatility in rising-rate scenarios.
Profitability & Return
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 81.5% | 14.6% (7.2%–39.4%) | +66.9pt |
| Net Profit Margin | 79.8% | 11.9% (7.2%–35.4%) | +67.9pt |
Operating and net profit margins substantially exceed industry medians, indicating a high-profit profile even among banks. However, this reflects the definition of revenue (operating revenue ¥77.1B) being relatively small due to banking-specific accounting; on a gross business profit basis (CIR ~67%), profitability is nearer industry median.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 26.1% | 10.1% (7.3%–12.1%) | +16.1pt |
Revenue growth outpaces the industry median by +16.1pt, driven by expanded investment income in the rising-rate environment. Relative to peers, the company shows strong growth, indicating effective capture of repricing benefits.
※Source: Company compilation
Expansion of investment income in the rising-rate environment drove Ordinary Income +29.0% and Net Income +60.1%, with loan repricing and improved net interest income trends continuing. Investment income grew substantially to ¥727.8B (+40.4%), while funding costs jumped to ¥141.0B (+226.4%); deposit beta dynamics will be critical to NIM maintenance. NIM is estimated at 1.21%, below industry average, but loan growth (+3.5%) and expansion of securities investment (+21.4%) leave room to leverage scale benefits for further earnings expansion.
Equity Ratio at 3.8% leaves only +0.8pt buffer to regulatory benchmark (domestic commercial banks 4%+), making capital buffer enhancement a top priority. While a conservative capital policy with a Payout Ratio of 32.7% favors internal reserves, low ROE of 2.4% limits the pace of retained capital accumulation. CIR of ~67% suggests efficiency improvement potential; successful mid-term cost reductions from digital investments (intangible asset +99.2%) could expand gross business profit and improve ROE, establishing a virtuous cycle to build equity buffers.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as needed.