Credit Risk from Deterioration in Regional Economies and Real Estate Prices
First written in FY2016. 15 of 37 entries say "Worsened", first in FY2020-Q1. Latest entry: FY2026.
The Kita-Nippon Bank moved to the "Worse" side of this theme in 2020, 3 years before the typical company in this theme (2023).
The whole theme swung hardest in 2019: 6 of 14 companies on the "Worse" side.
5 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Due to the sharp deterioration in the economic environment resulting from the recent surge in energy prices and continued inflation caused by the weaker yen, the number of bankruptcies and business closures has been trending upward. We assume that this trend will continue for a certain period and that it will have a certain impact on the credit risk of loans and other assets held by the Group.」
The increase in bankruptcies and business closures was identified as a credit risk factor, and an additional ¥1,650 million was recorded in the allowance for loan losses. In the asset assessment, claims against borrowers in bankruptcy and equivalent claims increased from ¥4.5 billion to ¥7.3 billion, and total risk-monitored claims increased from ¥1,642.2 million to ¥1,791.5 million. - 2026-05-13WorsenedEarnings
「The allowance for loan losses was ¥8,350 million on a consolidated basis at the end of March 2026, an increase of ¥806 million from the end of March 2025.」
The allowance for loan losses increased, as did total claims disclosed under the Financial Reconstruction Commission Act compared with the end of the previous fiscal year. - FY2026-H1WorsenedAnnual report
「Due to the sharp deterioration in the economic environment resulting from the recent surge in energy prices and continued inflation caused by the weaker yen, the number of bankruptcies and business closures has been trending upward. We assume that this trend will continue for a certain period and that it will have a certain impact on the credit risk of loans and other assets held by the Group. Based on this assumption, we are classifying debtors using information currently available in order to prepare for expected losses resulting from this impact. In addition, we recorded an additional ¥1,802 million in the allowance for loan losses during the current interim consolidated accounting period, based on an expected loss rate adjusted as necessary from the historical loss rate.」
Surging energy prices, the weaker yen and inflation, and the increase in bankruptcies and business closures were identified as credit risk factors, and an additional ¥1,802 million was recorded in the allowance for loan losses based on the assumed credit risk. In the asset assessment, doubtful claims increased from ¥10.3 billion to ¥10.5 billion. - FY2025WorsenedAnnual report
「In Japan as well, following the increase in policy rates, we cannot rule out the possibility that the number of companies experiencing deteriorating cash flow and financial conditions will increase as the burden of repaying borrowings rises. We recognize that the likelihood of this risk materializing is high.」
The increased borrowing burden resulting from policy rate hikes was identified as a factor that could cause credit risk to materialize through deterioration in companies' cash flow and financial conditions, and the likelihood of such materialization was considered high. In the asset assessment, doubtful claims increased from ¥10.2 billion to ¥10.4 billion. - FY2025-H1Decrease in total risk-monitored claims and increase in doubtful claimsAnnual report
「Claims against borrowers in bankruptcy and equivalent claims 62 54 Doubtful claims 96 103 Substandard claims 33 32 Normal claims 10,562 10,852」
Compared with 30 September 2023, claims against borrowers in bankruptcy and equivalent claims and substandard claims decreased, while doubtful claims increased from ¥9.6 billion to ¥10.3 billion. Normal claims increased from ¥1.0562 trillion to ¥1.0852 trillion. - FY2024WorsenedAnnual report
「In Japan as well, following the shift in monetary policy in March, we cannot rule out the possibility that the number of companies experiencing deteriorating cash flow and financial conditions will increase as the burden of repaying borrowings rises. We recognize that the likelihood of this risk materializing is high.」
The shift in monetary policy, increased borrowing burdens and rising prices were added as credit risk factors, and the likelihood of credit risk materializing through deterioration in companies' cash flow and financial conditions was considered high. - FY2024-Q3Decrease in total non-performing claims and increase in claims against borrowers in bankruptcyAnnual report
「Claims against borrowers in bankruptcy and equivalent claims ¥6,209 million ¥6,360 million Doubtful claims ¥9,597 million ¥9,460 million Claims delinquent for 3 months or more ¥91 million ¥88 million Restructured loans ¥3,383 million ¥3,223 million Total amount ¥19,281 million ¥19,133 million」
The total amount of risk-monitored claims decreased from ¥1,928.1 million at the end of the previous consolidated fiscal year to ¥1,913.3 million. Doubtful claims, claims delinquent for 3 months or more and restructured loans decreased, while claims against borrowers in bankruptcy and equivalent claims increased from ¥620.9 million to ¥636.0 million. - FY2024-Q2Decrease in total non-performing claims and increase in substandard claimsAnnual report
「Claims against borrowers in bankruptcy and equivalent claims 62 62 Doubtful claims 97 96 Substandard claims 25 33 Normal claims 10,133 10,562」
Compared with 30 September 2022, doubtful claims decreased from ¥9.7 billion to ¥9.6 billion, while substandard claims increased from ¥2.5 billion to ¥3.3 billion. Normal claims increased from ¥1.0133 trillion to ¥1.0562 trillion. The subtotal of risk-monitored claims decreased from ¥1,928.1 million to ¥1,911.6 million. - FY2024-Q1WorsenedAnnual report
「Claims against borrowers in bankruptcy and equivalent claims ¥6,209 million ¥6,268 million Doubtful claims ¥9,597 million ¥9,876 million Claims delinquent for 3 months or more ¥91 million ¥98 million Restructured loans ¥3,383 million ¥3,367 million Total amount ¥19,281 million ¥19,611 million」
The total amount of risk-monitored claims increased from ¥1,928.1 million at the end of the previous consolidated fiscal year to ¥1,961.1 million. Doubtful claims and claims delinquent for 3 months or more also increased. - FY2023-Q3WorsenedAnnual report
「Claims against borrowers in bankruptcy and equivalent claims ¥6,650 million ¥6,404 million Doubtful claims ¥9,425 million ¥9,527 million Claims delinquent for 3 months or more ¥116 million ¥297 million Restructured loans ¥2,361 million ¥2,329 million Total amount ¥18,554 million ¥18,558 million」
Compared with 31 March 2022, doubtful claims increased from ¥9,425 million to ¥9,527 million, claims delinquent for 3 months or more increased from ¥116 million to ¥297 million, and total claims increased by ¥4 million. Meanwhile, claims against borrowers in bankruptcy and equivalent claims and restructured loans decreased. - FY2023-Q2Decrease in doubtful claims and increase in substandard claimsAnnual report
「Claims against borrowers in bankruptcy and equivalent claims 55 62 Doubtful claims 131 97 Substandard claims 5 25 Normal claims 9,654 10,133」
Compared with 30 September 2021, doubtful claims decreased from ¥13.1 billion to ¥9.7 billion, while claims against borrowers in bankruptcy and equivalent claims increased from ¥5.5 billion to ¥6.2 billion and substandard claims increased from ¥500 million to ¥2.5 billion. Normal claims increased from ¥965.4 billion to ¥1.0133 trillion. - FY2023-Q1Decrease in total non-performing claims and increase in doubtful claimsAnnual report
「Total amount ¥18,554 million ¥18,294 million」
The total amount of risk-monitored claims decreased from ¥1,855.4 million at the end of the previous consolidated fiscal year to ¥1,829.4 million. Meanwhile, doubtful claims increased from ¥942.5 million to ¥975.3 million. - FY2022WorsenedAnnual report
「We recognize that the likelihood of this risk materializing has increased further from before.」
In addition to the prolonged pandemic, the Russian invasion of Ukraine, soaring resource prices and concerns over an economic slowdown caused by higher prices were identified as additional credit risk factors. Restructured loans increased from ¥0 million in the previous fiscal year to ¥2,361 million, while substandard claims increased from ¥100 million to ¥2.5 billion. - FY2022-Q3Decrease in total risk-monitored claims and emergence of restructured loansAnnual report
「Total amount ¥19,194 million ¥17,793 million」
The total amount of risk-monitored claims decreased from ¥1,919.4 million at 31 March 2021 to ¥1,779.3 million at 31 December 2021. Meanwhile, restructured loans increased from ¥0 million to ¥157.9 million, indicating that trends differed by category. - FY2022-Q2Decrease in total non-performing claims and increase in total amountAnnual report
「Claims against borrowers in bankruptcy and equivalent claims 50 55 Doubtful claims 123 131 Substandard claims 1 5 Normal claims 9,243 9,654」
From 30 September 2020 to 30 September 2021, claims against borrowers in bankruptcy and equivalent claims, doubtful claims and substandard claims all increased. Meanwhile, the total amount of claims against borrowers in bankruptcy, delinquent claims, claims delinquent for 3 months or more and restructured loans decreased from ¥1,919.4 million at 31 March 2021 to ¥1,908.8 million at 30 September 2021. - FY2022-Q1MitigatedAnnual report
「Total amount ¥19,194 million ¥18,894 million」
The total amount of risk-monitored claims decreased from ¥19,194 million at 31 March 2021 to ¥18,894 million at 30 June 2021. - FY2021WorsenedAnnual report
「We recognize that the likelihood of this risk materializing has increased further from before.」
It was stated that the prolonged pandemic had caused continued sluggish sales and weakened financial resilience in sectors including food service and tourism, increasing the likelihood of credit risk materializing through bankruptcies and other events. In the asset assessment, doubtful claims increased from ¥11.8 billion to ¥13.2 billion, and claims against borrowers in bankruptcy and equivalent claims increased from ¥4.8 billion to ¥5.9 billion. - FY2021-Q3WorsenedAnnual report
「Total amount ¥16,691 million ¥17,370 million」
The total amount of risk-monitored claims increased from ¥16,691 million at 31 March 2020 to ¥17,370 million at 31 December 2020. - FY2021-Q2WorsenedAnnual report
「Asset assessment amount Claim classification 30 September 2019 30 September 2020 Amount (¥100 million) Amount (¥100 million) Claims against borrowers in bankruptcy and equivalent claims 53 50 Doubtful claims 119 123 Substandard claims 3 1 Normal claims 8,927 9,243」
Doubtful claims increased from ¥11.9 billion to ¥12.3 billion, while claims against borrowers in bankruptcy and equivalent claims and substandard claims decreased. The total amount of loan-related claims also increased from ¥1,669.1 million at 31 March 2020 to ¥1,739.0 million. - FY2021-Q1WorsenedAnnual report
「Total amount ¥16,691 million ¥16,888 million」
The total amount of risk-monitored claims increased by ¥197 million, from ¥16,691 million at 31 March 2020 to ¥16,888 million at 30 June 2020. Claims against borrowers in bankruptcy, delinquent claims and restructured loans also increased. - FY2020WorsenedAnnual report
「Most recently, the global spread of COVID-19 has had a pronounced impact on the real economy and is expected to affect regional economies as well. We recognize that the likelihood of this risk materializing has been increasing. In response, we made a precautionary increase in the allowance for loan losses in our results for the fiscal year ended March 2020 to prepare for future losses.」
The likelihood of deterioration in the regional economy and the creditworthiness of borrowers was considered to have increased due to COVID-19, and the allowance for loan losses was increased as a precautionary measure. - FY2020-Q3MitigatedAnnual report
「Total amount ¥17,199 million ¥16,698 million」
The total balance of risk management loans decreased from ¥17,199 million at 31 March 2019 to ¥16,698 million at 31 December 2019. The possibility of additional credit risk arising from deterioration in the regional economy and real estate prices continues to be described as before. - FY2020-Q2WorsenedAnnual report
「Total amount ¥17,199 million ¥17,344 million」
The total balance of risk management loans increased from ¥17,199 million at 31 March 2019 to ¥17,344 million at 30 September 2019. An increase in balances of loans related to credit risk arising from the regional economy, real estate prices and other factors was indicated. In the asset assessment, doubtful loans declined from ¥13.0 billion to ¥11.9 billion, while normal loans decreased from ¥903.1 billion to ¥892.7 billion. The possibility of additional risks continues to be described as before. - FY2020-Q1WorsenedAnnual report
「Total amount ¥17,199 million ¥17,515 million」
The total balance of risk management loans increased from ¥17,199 million at 31 March 2019 to ¥17,515 million at 30 June 2019. - FY2019MitigatedAnnual report
「At 31 March 2019, non-performing loans on a non-consolidated basis under the Act on Emergency Measures for Early Strengthening of Financial Functions (the Financial Reconstruction Act) had decreased by ¥1.3 billion from the end of the previous fiscal year to ¥17.3 billion, while the non-performing loan ratio had declined by 0.18 percentage points from the end of the previous fiscal year to 1.89%.」
Non-performing loan balances declined from ¥18.6 billion to ¥17.3 billion, and the non-performing loan ratio from 2.07% to 1.89%. Meanwhile, the possibility of additional loans arising from deterioration in the regional economy and real estate prices continues to be described. - FY2019-Q3MitigatedAnnual report
「Total amount ¥18,484 million ¥16,822 million」
The total balance of risk management loans decreased from ¥18,484 million at the end of the previous consolidated fiscal year to ¥16,822 million at the end of the third quarter. - FY2019-Q2MitigatedAnnual report
「Total amount ¥18,484 million ¥18,430 million」
The total balance of non-performing loans and other such loans decreased by ¥54 million from ¥18,484 million at the end of the previous consolidated fiscal year to ¥18,430 million at the end of the interim period. - FY2019-Q1MitigatedAnnual report
「Total amount ¥18,484 million ¥18,377 million」
The total balance of risk management loans decreased from ¥18,484 million at the end of the previous consolidated fiscal year to ¥18,377 million at the end of the first quarter. - FY2018MitigatedAnnual report
「At 31 March 2018, non-performing loans on a non-consolidated basis under the Act on Emergency Measures for Early Strengthening of Financial Functions (the Financial Reconstruction Act) had decreased by ¥2.7 billion from the end of the previous fiscal year to ¥18.6 billion, while the non-performing loan ratio had declined by 0.36 percentage points from the end of the previous fiscal year to 2.07%.」
Non-performing loan balances declined from ¥21.3 billion to ¥18.6 billion, and the non-performing loan ratio from 2.43% to 2.07%. The possibility of additional loans arising from deterioration in the regional economy and real estate prices continues to be described. - FY2018-Q3MitigatedAnnual report
「Total amount ¥21,126 million ¥19,118 million」
The total balance of risk management loans decreased from ¥21,126 million at 31 March 2017 to ¥19,118 million at 31 December 2017. - FY2018-Q2MitigatedAnnual report
「Bankrupt and quasi-bankrupt loans ¥9,600 million ¥7,800 million Doubtful loans ¥12,700 million ¥11,500 million Loans requiring special attention ¥200 million ¥100 million Normal loans ¥854,900 million ¥869,000 million」
From 30 September 2016 to 30 September 2017, bankrupt and quasi-bankrupt loans declined from ¥9.6 billion to ¥7.8 billion, doubtful loans from ¥12.7 billion to ¥11.5 billion, and loans requiring special attention from ¥200 million to ¥100 million, while normal loans increased from ¥854.9 billion to ¥869.0 billion. - FY2018-Q1MitigatedAnnual report
「Total amount ¥21,126 million ¥21,028 million」
The total balance of risk management loans decreased from ¥21,126 million at the end of the previous consolidated fiscal year to ¥21,028 million at the end of the first quarter. It also states that there have been no material changes in business and other risks relating to credit risk arising from the regional economy, real estate prices and other factors. - FY2017MitigatedAnnual report
「At 31 March 2017, non-performing loans on a non-consolidated basis under the Act on Emergency Measures for Early Strengthening of Financial Functions (the Financial Reconstruction Act) had decreased by ¥2.7 billion from the end of the previous fiscal year to ¥21.3 billion, while the non-performing loan ratio had declined by 0.30 percentage points from the end of the previous fiscal year to 2.43%.」
While non-performing loan balances and the non-performing loan ratio declined from the end of the previous fiscal year, the possibility of additional non-performing loans resulting from deterioration in the regional economy and real estate prices continues to be described. - FY2017-Q3RestatedAnnual report
「During the nine months ended 31 December, there were no material changes in the business and other risks of the Bank Group described in the annual securities report for the previous fiscal year. Nor were there any matters relating to newly arisen business and other risks.」
It states that there have been no material changes or new risks relating to credit risk arising from deterioration in the regional economy, real estate prices and credit quality. - FY2017-Q2RestatedAnnual report
「During the six months ended 30 September, there were no material changes in the business and other risks of the Bank Group (the Bank and its consolidated subsidiaries) described in the annual securities report for the previous fiscal year. Nor were there any matters relating to newly arisen business and other risks.」
It states that there have been no material changes or new risks relating to risks concerning the regional economy, real estate prices and credit quality. - FY2017-Q1RestatedAnnual report
「During the first three months of the current fiscal year, there were no material changes in the business and other risks of the Bank Group (the Bank and its consolidated subsidiaries) described in the annual securities report for the previous fiscal year. Nor were there any matters relating to newly arisen business and other risks.」
It concludes that there have been no material changes or new risks relating to risks concerning the regional economy, real estate prices and credit quality. - FY2016First statedAnnual report
「However, depending on future trends in the regional economy, fluctuations in real estate prices and the resulting deterioration in the credit quality of the Bank's borrowers or decline in collateral values, additional non-performing loans and credit-related expenses may increase, potentially adversely affecting the Bank Group's operating results and financial position.」
While presenting current figures such as a non-performing loan ratio of 2.73%, it describes the possibility of additional non-performing loans and credit-related expenses.