Assessing the sustainability of the full-year profit-growth plan in FY2027-H1 against the backdrop of higher interest rates

In FY2027 Q1, ordinary revenue rose 30.1% year on year to ¥18.465 billion, ordinary income rose 59.6% to ¥5.001 billion, and net income attributable to owners of the parent rose 58.8% to ¥3.494 billion. The company identified higher interest income and dividends on securities, including interest on loans, and higher other ordinary revenue, including gains on sales of equities and other securities, as profit-growth factors. On the other hand, funding expenses such as deposit interest and other operating expenses such as losses on sales of government bonds and other bonds also increased, so the benefit of higher interest rates is not flowing through directly to profit.

FY2026 full-year ordinary income was ¥12.851 billion and net income attributable to owners of the parent was ¥8.919 billion, compared with FY2027 forecasts of ¥14.5 billion and ¥10.0 billion, respectively. FY2027 Q1 ordinary income of ¥5.001 billion represents 34.5% of the full-year forecast, while net income of ¥3.494 billion represents 34.9%, indicating apparently steady progress. However, market-related gains and losses and credit costs can fluctuate in the second half for a bank, so caution is needed before judging full-year achievement based solely on the Q1 progress rate. FY2026 H1 results were ordinary income of ¥6.417 billion and net income of ¥4.358 billion, making comparison with these levels the first priority next time.

At the next results announcement, we will confirm how much interest on loans and interest and dividends on securities each increased within interest income, and the extent to which higher funding expenses due to deposit interest reduced profit. The current quick report focuses on bank-specific ordinary revenue and ordinary income and does not disclose full-year forecasts for revenue or operating income, or the company's FY2027-H1 plan. Accordingly, whether H1 ordinary income exceeds the prior-year ¥6.417 billion and the company can maintain its ¥14.5 billion full-year forecast will be the practical benchmark for measuring the monetisation of the higher-rate environment.