| Metric | Current Period | Prior Year Comparable | YoY |
|---|---|---|---|
| Revenue | ¥10500.0B | - | +3.2% |
| Operating Income | ¥-180.0B | - | - |
| Ordinary Income | ¥845.8B | ¥448.9B | +88.4% |
| Net Income | ¥555.0B | ¥787.9B | -29.6% |
| ROE | 8.8% | 11.8% | - |
The fiscal year ended March 2026 recorded Ordinary Revenue of ¥1,050.0B (equivalent to Revenue, +3.2% YoY), Operating Income of ¥-180B, Ordinary Income of ¥845.8B (+¥396.9B YoY, +88.4%), and Net Income attributable to owners of the parent of ¥555.0B (▲¥232.9B YoY, ▲29.6%). While Ordinary Income rose substantially, Operating Income was negative with an Operating Income margin of ▲1.7%, and Net Income declined YoY, resulting in a down year on a Net Income basis. By segment, the Life Insurance Business accounted for 88.2% of the total with Ordinary Revenue of ¥2,531.6B (+9.4%), driven by improved investment income and increased provisioning to policy reserves. The Non-life Insurance Business reported Ordinary Revenue of ¥191.3B (+13.3%) with improvements in underwriting results and investment income. The Banking Business recorded Ordinary Revenue of ¥129.8B (+11.0%) with higher revenue but profit deceleration due to increased funding costs in a rising rate environment. The large increase in Ordinary Income was mainly due to expanded profits in the Life Insurance segment (segment profit ¥59.4B, up ¥38.8B from ¥20.6B the prior year), with Non-life improving to ¥12.5B (from ¥7.2B, +¥5.3B) and Banking declining to ¥16.7B (from ¥18.9B, ▲¥2.2B). Operating Cash Flow (OCF) was ¥445.49B (▲70.3% YoY) and remains ample, but Investment Cash Flow was a large outflow of ¥-1,191.51B, resulting in Free Cash Flow of ¥-746.02B. Comprehensive Income narrowed to ¥28.99B (prior year ¥75.73B), with widening unrealized gains/losses on securities (▲¥28.2B) pressuring equity. ROE declined to 8.8% from 12.5% a year earlier, but the company returned capital via a dividend of ¥3.8 per share plus share buybacks of ¥69.85B, yielding a Payout Ratio of 47.7%.
[Revenue]
Ordinary Revenue was ¥2,871.03B (equivalent to corporate Revenue) and grew strongly by +9.6% YoY. By segment, the Life Insurance Business of ¥2,531.62B (88.2% of total, +9.4% YoY) was the primary driver, supported by healthy premium growth and improved investment income. The Non-life Insurance Business recorded ¥191.32B (+13.3%) with high growth driven by higher net written premiums and improved underwriting conditions. The Banking Business posted ¥129.84B (+11.0%), with increases in deposit interest income and fee income. Other businesses (nursing care & venture capital) decreased slightly to ¥18.25B (▲6.0%). The top line maintains stable growth led by increases in insurance contracts and expansion of investment assets in Life Insurance.
[Profitability]
Operating Income deteriorated to ¥-180B from the prior year, reflecting financial holding company presentation (insurance and banking gross/revenue structures) and market factors, while Ordinary Income improved substantially. Ordinary Income doubled to ¥845.8B (prior year ¥448.9B, +88.4%), primarily driven by improved Life Insurance investment income (higher interest/dividend income from changing interest rate conditions) and improvements in both underwriting and investment in Non-life Insurance. Life Insurance segment profit expanded to ¥59.4B (prior year ¥20.6B), aided by timing factors in provisioning to policy reserves and better investment returns. Non-life improved to ¥12.5B (prior year ¥7.2B) due to better underwriting margins and higher investment income. Banking segment profit declined to ¥16.7B (prior year ¥18.9B) as rising funding costs (higher deposit rates) compressed net interest margins. Extraordinary items were net negative ¥3.82B (extraordinary gains ¥0.63B, extraordinary losses ¥4.45B including impairment losses of ¥0.03B), modest in scale. Pre-tax profit was ¥-200B and income taxes were ¥23.25B, with adjustments to deferred tax assets leading to post-tax profit of ¥555.0B. Net Income decreased YoY by ▲29.6%, mainly due to the absence of prior-year extraordinary gains (¥63.0B) and higher tax burdens. In summary: revenue up but net profit down (Ordinary Income stage shows revenue and profit growth; Net Income stage shows revenue growth but profit decline).
The Life Insurance Business delivered segment profit of ¥59.4B (prior year ¥20.6B, +188.3%), a substantial expansion. Investment income remained largely stable at ¥226.53B (prior year ¥228.25B), while underwriting revenue expanded; margin improvement and timing factors in provisioning to policy reserves contributed to profit growth. Policy reserve balance increased to ¥163,143B (prior year ¥158,342B, +¥4,801B), reflecting solid long-term contract base. The Non-life Insurance Business reported segment profit of ¥12.5B (prior year ¥7.2B, +73.6%), with higher net written premiums, improved loss ratio (net claims paid ¥102.2B, prior year ¥91.6B), and expense efficiency improving profitability. Investment income increased from ¥1.7B to ¥2.3B, also contributing. The Banking Business posted segment profit of ¥16.7B (prior year ¥18.9B, ▲11.6%). Asset management income rose to ¥117.66B (prior year ¥96.76B, +21.6%), but funding costs increased significantly to ¥54.45B (prior year ¥44.25B, +23.0%), compressing NIM. Fee income declined to ¥10.18B (prior year ¥14.47B, ▲29.6%), and increased costs could not be absorbed, resulting in lower profits. Other businesses (nursing care & venture capital) recorded a segment loss of ¥0.74B (prior year profit ¥0.64B); due to small scale their impact on the group is limited.
[Profitability] Operating Income margin was ▲1.7% (positive in the prior year), Net Income margin was 5.3% (down from 7.8% prior year). Although operating-stage profitability is negative, Ordinary Income stage improved. ROE was 8.8% (prior year 12.5%) and declined, but under a high-leverage structure with an Equity Ratio of 2.6% (prior year 2.9%) the company maintains a certain level. ROA on an Ordinary Income basis improved to 0.4% (prior year 0.2%). [Cash Quality] Operating Cash Flow was ¥445.49B versus Net Income of ¥55.5B, implying CF is 8.0x profits and remains ample, though the financial industry’s account dynamics (securities, insurance liabilities, deposits) heavily influence CF. OCF/Revenue ratio was 42.4% (prior year 57.3%), a high level indicating solid cash-generating ability. [Investment Efficiency] Capital expenditures were ¥4.53B versus depreciation of ¥19.15B, yielding a CapEx/Depreciation ratio of 0.24x, indicating low investment intensity. Intangible investment of ¥24.16B focused on software, advancing IT infrastructure. Total asset turnover was 0.044x (flat YoY), reflecting the asset structure of financial firms. [Financial Soundness] Equity Ratio was 2.6% (prior year 2.9%), D/E ratio was 36.8x (prior year 33.9x), indicating high leverage but inclusion of insurance liabilities and deposits means simple comparisons to non-financial corporates are not appropriate. Cash and deposits were ¥483.16B (prior year ¥1,202.17B, ▲59.8%) significantly reduced due to reallocation into investment assets, but liquidity is preserved under ALM management driven by regulation.
Operating Cash Flow was ¥445.49B (prior year ¥1,502.19B, ▲70.3%); the YoY decline was mainly due to working capital changes (duration-related movements in securities and insurance liabilities). OCF subtotal (pre-tax profit + non-cash items) was ¥124.89B, and after corporate tax payments of ¥-14.19B and interest payments of ¥-78.24B, ample cash was generated. Investment Cash Flow was ¥-1,191.51B (prior year ¥-1,202.01B), primarily due to acquisition of short-term investment securities of ¥-2,441.79B; this reflects routine flows from replacing investment assets in insurance and banking operations, while CapEx was small at ¥4.53B. Intangible investment of ¥24.16B was focused on software/IT to support business expansion. Free Cash Flow was ¥-746.02B (prior year ¥300.18B), a large negative reflecting the financial industry’s asset replacement flows which cause FCF to swing materially year-to-year. Financing Cash Flow was ¥25.74B (prior year ¥-10.65B), involving bond issuance of ¥100.0B and redemptions of ¥-10.0B, and share buybacks of ¥-69.85B, continuing shareholder returns. As a result, cash and deposits decreased by ¥-719.01B to an ending balance of ¥483.16B, but no issues regarding regulatory capital or liquidity management have been identified.
Recurring earnings expansion was driven by improved Life Insurance investment returns and improvements in Non-life underwriting and investment, with total reported segment profit at ¥88.65B (prior year ¥46.70B), a large increase. Equity-method gains of ¥0.03B (prior year ¥0.08B) were recorded as non-operating income but were immaterial. One-off items included extraordinary gains of ¥0.63B (including ¥0.19B in government subsidies) and extraordinary losses of ¥4.45B (including ¥0.03B impairment and ¥2.86B provision to price fluctuation reserves); the net ¥-3.82B represents about 7% of full-year profit and is minor. The prior year included extraordinary gains of ¥63.29B (mainly reversal of policy reserves), and the absence of these gains was the primary cause of the Net Income decline. Comprehensive Income of ¥28.99B (prior year ¥75.73B) was substantially below Net Income of ¥55.5B, impacted by unrealized securities valuation losses of ¥-28.2B and actuarial gains/losses of +¥1.71B; bond valuation losses in the rising rate environment are pressuring equity. Accruals show OCF significantly exceeding Net Income, a structure typical for financial firms due to presentation differences versus non-financial corporates, but cash generation remains healthy.
Full Year guidance is Ordinary Revenue ¥1,050.0B (+3.2% YoY), Operating Income ¥-180B, and Net Income ¥-160B (previously disclosed). Progress against these targets: Ordinary Revenue achieved 100% of guidance; Ordinary Income cannot be evaluated as guidance was not disclosed; Net Income outperformed guidance substantially — actual Net Income of ¥555B exceeded the guidance loss of ¥-160B by 347%. The variance between initial assumptions and results is presumed primarily due to stronger-than-expected insurance investment income and tax effects. For the next fiscal year (FY2027 ending March 2027), a Net Loss attributable to owners of the parent is expected, and a Payout Ratio cannot be calculated; however, under a stable dividend policy a dividend of ¥8.0 per share is planned. Achievement of forecasts depends heavily on interest rate and market conditions, insurance contract trends, and Banking NIM movements; in particular, fluctuations in AOCI will affect capital, so quarterly monitoring of the investment environment is important.
Year-end dividend was ¥3.8 per share (not recorded in prior year, actual this period), yielding a Payout Ratio of 47.7%. Share buybacks totaled ¥69.85B, making the Total Return Ratio (dividends + buybacks) relative to Net Income effectively high. The dividend policy aims for stable growing dividends; although a Net Loss is expected next year, a dividend of ¥8.0 per share is planned (an increase of ¥4.2 YoY). Cash and deposits of ¥483.16B decreased ▲59.8% YoY, but with OCF of ¥445.49B liquidity is considered secured, and dividend sustainability is judged maintainable within OCF levels and regulatory capital constraints. Continued total returns depend on stable growth of Ordinary Revenue, potential for further Ordinary Income improvement, management of AOCI volatility, and a stable interest-rate environment; in times of market stress, capital allocation adjustments remain an option.
Concentration risk on the Life Insurance Business: Life Insurance accounts for 88.2% of Ordinary Revenue, so new business acquisition/retention and changes in the investment environment directly affect group performance. Deterioration in new business value, higher lapse rates, or lower investment yields could materially impact segment profit. Policy reserves total ¥163,143B and large in scale; if interest assumptions or guaranteed rates change causing increased provisioning to reserves, profits would be pressured.
Market interest rate and valuation reserve volatility risk: Unrealized gains/losses on securities worsened to ¥-101.31B (prior year ¥-73.11B), and AOCI overall was ¥-99.79B (prior year ¥-73.29B), pressuring equity. In a rising rate environment, unrealized losses on bonds can expand and reduce equity. Comprehensive Income of ¥28.99B is far below Net Income of ¥55.5B, and valuation reserve volatility can destabilize capital efficiency and ROE.
Banking NIM compression and funding cost risk: Banking funding costs increased to ¥54.45B (prior year ¥44.25B, +23.0%), substantially pressuring margins in a rising rate environment. Fee income declined ▲29.6%, limiting revenue diversification; if NIM does not improve, banking profits may decline further. Outstanding corporate bonds were ¥1,805.0B (prior year ¥1,105.0B, +63.3%), raising refinancing cost risk at maturity.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | -1.7% | 8.8% (4.0%–20.0%) | -10.6pt |
| Net Income Margin | 5.3% | 4.3% (0.6%–11.3%) | +1.0pt |
Operating Income margin is well below the industry median, but Net Income margin exceeds the median, reflecting the financial holding company presentation and earning power at the Ordinary Income stage.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.2% | 2.1% (-4.5%–6.9%) | +1.1pt |
Revenue growth outperforms the industry median, supported by solid growth in Life and Non-life Insurance.
※ Source: Company aggregation
Large improvement in Ordinary Income and expanded Life Insurance profits: Ordinary Income rose +88.4% YoY to ¥84.58B, driven mainly by Life Insurance segment profit expanding to ¥59.4B (prior year ¥20.6B). Improved investment income and timing factors in provisioning to policy reserves contributed, with Non-life improving on both underwriting and investment fronts. Sustainability going forward depends on interest rates and maintenance of new business value, but the earnings base has been strengthened.
Comprehensive Income and AOCI volatility pressuring equity: Comprehensive Income of ¥28.99B is substantially below Net Income of ¥55.5B, and unrealized gains/losses on securities of ¥-28.2B pressured equity. Worsening AOCI of ¥-99.79B (prior year ¥-73.29B) reflects bond valuation losses from rising rates and contributed to the decline in Equity Ratio to 2.6%. Capital sensitivity to interest rate fluctuations is high, so market monitoring is essential.
Continued shareholder returns and stable dividend policy: The company paid ¥3.8 per share and repurchased ¥69.85B, and plans a dividend increase to ¥8.0 per share next year. OCF of ¥445.49B continues to support ample cash generation, and dividend sustainability is judged maintainable. Despite a forecast Net Loss next year, the company maintains a stable dividend policy and will flexibly manage capital allocation considering regulatory capital and liquidity.
This report was automatically generated by AI analyzing XBRL earnings briefing data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your responsibility; please consult experts as necessary.