Full-year guidance was raised on higher interest rates and loan growth, with the sustainability of net interest income in focus in FY2027-H1

Consolidated ordinary profit for FY2026 was ¥37.532 billion, up 33.7% year on year. Initial FY2027 guidance was ¥44.4 billion for ordinary profit, ¥29.4 billion for profit attributable to owners of the parent, and ¥32 in annual dividends. In the latest earnings forecast revision, these were raised to ¥51.1 billion, ¥33.9 billion, and ¥36.5, respectively. The ¥6.7 billion increase in ordinary profit guidance represents an upward revision of approximately 15.1% from the initial forecast.

FY2027-Q1 ordinary revenue was ¥73.688 billion, ordinary profit was ¥11.223 billion, and profit attributable to owners of the parent was ¥8.295 billion, representing year-on-year increases of 68.1%, 38.2%, and 40.3%, respectively. Higher interest on loans and interest and dividends on securities lifted funds investment income. The latest guidance revision also cited an increase in average loan balances and higher net interest income resulting from the policy rate hike. The loan balance at the end of Q1 was ¥824.45 billion and the period-end funding balance was ¥1,123.36 billion, making it necessary to assess loan volume as well as interest-rate factors.

Meanwhile, ordinary revenue increased 68.1% in Q1, while ordinary profit rose only 38.2%. Profit was held back by higher funding costs resulting from increased interest paid on deposits and higher other operating expenses due to increased losses on sales of government bonds and other bonds. In FY2027-H1, it will be necessary to assess, on an absolute-value basis, how much the increase in interest on loans exceeded the increase in interest paid on deposits, and how much the yield and balance of the securities portfolio contributed.

Q1 results of ¥11.223 billion represented approximately 22.0% of revised full-year ordinary profit guidance of ¥51.1 billion. On a simple 50% first-half run rate, cumulative first-half ordinary profit of ¥25.55 billion would be one comparison benchmark, but banking results are affected by timing differences in interest income and securities trading, so this level cannot be treated as the company's first-half target. At the next results announcement, it will be important to see whether the company discloses first-half net interest income, deposit funding costs, average loan balances, and the interest-rate assumptions underlying its full-year forecast together.