Can the upward revision to the first-half earnings forecast translate into full-year profit?

FY2027-Q1 consolidated ordinary revenue was ¥4.635 billion, ordinary profit was ¥926 million, and quarterly net profit attributable to owners of the parent was ¥653 million. Ordinary profit increased by ¥94 million from ¥832 million in the same period a year earlier, up 11.4% year on year. The full-year forecasts are ordinary profit of ¥2.5 billion, net profit of ¥1.6 billion and annual dividends of ¥40 per share, resulting in first-quarter progress rates of 37.0% for ordinary profit and 40.8% for net profit.

In the earnings revision announced on 4 November, the consolidated ordinary profit forecast for FY2027-H1 was raised from the previous ¥1.1 billion to ¥1.6 billion. The reason for the revision was that net interest income at the bank on a non-consolidated basis is expected to exceed the initial forecast, suggesting that the first-half improvement is centered on the core funds management business. Meanwhile, the full-year ordinary profit forecast remains unchanged at ¥2.5 billion, meaning that even if the first-half forecast is achieved, ¥900 million in ordinary profit will be required in the second half to meet the full-year target.

Accordingly, in the next FY2027-H1 disclosure, it will be necessary to examine not only whether the first-half forecast was achieved, but also the breakdown of the upward revision. In particular, it will be important to determine which items, such as interest on loans, interest and dividends on securities, and interest on deposits, generated the increase in net interest income, and to what extent the ¥1.17 billion first-half net profit forecast reflects the increase in ordinary profit to ¥1.6 billion.

The decision to leave the full-year plan unchanged may reflect continued uncertainty in the second half, including financial market trends and losses on sales of bonds. In FY2027-H1, it will be necessary to determine whether the first-half upside will lead to another upward revision to the full-year forecast, or whether the ¥2.5 billion target will be maintained because of caution over market gains and losses and credit costs.