Will the recovery in net interest income continue into the first half of FY2027?

In FY2026, ordinary income was ¥159,056 million, ordinary profit was ¥29,031 million, and net income attributable to owners of the parent was ¥21,293 million. By contrast, in the first quarter of FY2027, ordinary income was ¥45,686 million, ordinary profit was ¥14,301 million, and quarterly net income was ¥9,937 million. Ordinary profit increased 53.3% year on year, while net income increased 47.4%. The full-year forecasts are ¥42,100 million for ordinary profit and ¥28,500 million for net income, making the simple 50% progress benchmarks ¥21,050 million and ¥14,250 million, respectively.

The increase in first-quarter profit was primarily attributed to a ¥5,115 million year-on-year increase in funds investment income, driven by higher interest on loans and interest and dividends on securities, and a ¥4,754 million increase in other operating income, mainly due to higher income from financial derivatives. On the other hand, other operating expenses increased by ¥3,214 million, mainly due to higher losses on sales of Japanese government bonds and other bonds, while funding costs increased by ¥1,664 million, mainly due to higher deposit interest. In the interim period, it will be necessary to assess the extent to which growth in asset investment income exceeds funding costs and bond-related expenses.

As the banking business is a single reportable segment, the company does not disclose comparisons of revenue and operating profit or profit by business, as general companies do. Accordingly, at the next earnings release, funds investment income, funding costs, other operating income and expenses, and credit costs will need to be reviewed separately, in addition to the full-year progress rate for ordinary profit. The 50% progress benchmark is not the company's basis for revising its forecast, but a mechanical reference point that does not take first-half seasonality into account.