Growth led by lending interest income got off to a faster start than the FY2027 full-year forecast

In FY2027-Q1, ordinary revenue was ¥38,502 million, an increase of ¥7,757 million, or 25.2%, from ¥30,745 million in the year-earlier period. Ordinary profit was ¥9,931 million and quarterly net income attributable to owners of the parent was ¥6,744 million, up 35.8% and 28.8% year on year, respectively. Revenue, ordinary profit and net income all increased at the same time, so this was not an earnings release in which only one stage of profit improved.

The full-year forecasts are ordinary revenue of ¥142,800 million, ordinary profit of ¥33,700 million and net income attributable to owners of the parent of ¥23,000 million. Because the first quarter corresponds to 25% of the fiscal year having elapsed, simple comparisons indicate that progress toward ordinary revenue, ordinary profit and net income, at 27.0%, 29.5% and 29.3%, respectively, all exceeded the time-proportional level. However, banking earnings are subject to seasonality arising from the timing of interest income and gains or losses on securities transactions, so it is too early to conclude from first-quarter progress alone that the full-year forecasts will be exceeded.

In the previous fiscal year, FY2026, ordinary profit was ¥28,081 million and net income attributable to owners of the parent was ¥20,269 million. The FY2027 forecasts call for increases of 20.0% and 13.5%, respectively. The increase in lending interest income was cited as a factor behind the first-quarter earnings growth, while higher deposit interest and losses on sales of Japanese government bonds and other securities were cited among the increases in ordinary expenses. Accordingly, next time it will be necessary to confirm not only the profit amount but also the extent to which the increase in lending interest income exceeded the cost of deposit funding and securities-related losses.

The earnings summary does not disclose a metric equivalent to operating profit for a general operating company, so the assessment needs to focus on ordinary profit. Key issues in judging the sustainability of earnings growth will be how much of the full-year forecasts of ¥16,850 million in ordinary profit and ¥11,500 million in net income can be secured in FY2027-H1, and whether the full-year forecasts are revised or additional details on the earnings drivers are disclosed.