Assessing 1Q progress toward the FY2027 ¥1.4 trillion net profit forecast

In 1Q of the fiscal year ending March 2027, ordinary revenues were ¥2.5209 trillion, ordinary income was ¥598.973 billion and quarterly net income attributable to owners of the parent was ¥422.909 billion. Compared with ordinary income of ¥368.583 billion and net income of ¥290.521 billion in the year-earlier quarter, ordinary income increased 62.5% and net income increased 45.5% on a calculated basis. Ordinary revenues, a top-line equivalent, also rose 18.3% from ¥2.130048 trillion in the year-earlier quarter, indicating expansion in revenue scale as well as profit.

Full-year net income for the fiscal year ended March 2026 was ¥1.248632 trillion. The net profit forecast for the fiscal year ending March 2027 presented in the earnings summary for that fiscal year was ¥1.3 trillion, but this had been raised to ¥1.4 trillion as of 1Q of the fiscal year ending March 2027. 1Q net income of ¥422.909 billion represents 30.2% of the latest full-year forecast, exceeding the level implied by simple quarterly equal allocation.

The first threshold for the next interim results will be whether cumulative first-half net income reaches ¥700.0 billion. This represents 50% of the ¥1.4 trillion full-year forecast, and exceeding this level by midyear would make it easier to assess the likelihood of achieving the full-year forecast. Conversely, if the increase in 2Q over 1Q is limited and cumulative first-half net income remains in the low ¥600 billions, it will be necessary to consider whether the high growth in 1Q was temporary.

The 1Q results materials do not provide a breakdown of the increase in net income by amount for non-interest business, the interest-rate environment, credit-related costs, gains and losses related to equities and other instruments, or other factors. For the fiscal year ended March 2026, the company identified non-interest business, the effect of the weaker yen, higher yen interest rates and gains on sales of cross-shareholdings as factors behind profit growth, but it has not been confirmed whether these continued into the first half of the fiscal year ending March 2027. Next time, standalone 2Q profit, credit costs, gains and losses related to equities and other instruments, and changes in non-interest revenue will be reviewed separately.