FY2027-Q1 was strong, but FY2027-H1 will be the key period for assessing the full-year outlook

In the first quarter of the fiscal year ending March 2027, ordinary income was ¥193.081 billion, ordinary income was ¥18.535 billion, and quarterly net income attributable to owners of the parent was ¥13.514 billion. Year on year, ordinary income rose 28.2%, ordinary income rose 27.4%, and net income rose 25.8%, indicating substantial growth in both revenue and profit on the surface. The full-year forecasts are ordinary income of ¥61.0 billion and net income of ¥44.0 billion, meaning that, on a simple calculation, 30.4% and 30.7%, respectively, had been achieved by the end of the first quarter.

Although first-quarter progress was high, financial institutions’ profits fluctuate from quarter to quarter due to interest and dividends on securities, bond trading, valuation differences and funding costs. Accordingly, in FY2027-H1 it will be necessary to assess not only whether progress exceeds 50%, but also whether the half-year run-rate targets of ¥30.5 billion in ordinary income and ¥22.0 billion in net income can be secured, and whether the revenue recorded in the first quarter depended on temporary investment factors. The company had not revised its full-year earnings forecast as of the first quarter.

By business, “The business of Shinkin Central Bank” reported first-quarter revenue of ¥183.336 billion and segment profit of ¥13.053 billion, while “Other” reported revenue of ¥11.555 billion and segment profit of ¥830 million. Because of consolidation eliminations and other adjustments, the segment figures cannot simply be added together to reconcile with consolidated ordinary income, but the structure in which the core business is the main source of profit is evident. In FY2027-H1, it will be important to determine whether profit from this core business is being maintained or expanded year on year.

The annual dividend forecasts are ¥3,000 for general ordinary contributions, ¥1,500 for specified ordinary contributions and ¥6,500 for preferred contributions, with no change from the latest forecasts. The interim results will provide the basis for assessing whether the strong first quarter was temporary, including any revision to the full-year profit forecast, changes to the dividend forecast, growth in both investment income and funding expenses, and year-on-year changes in segment profit.