Regional bank Shimizu Bank raised its full-year net income forecast for the fiscal year ending March 2027 to ¥2.9 billion and also increased its interim and year-end dividends. The move was well received by the market, sending the bank's share price sharply higher on the 27th.
In materials released after trading ended on the 26th, Shimizu Bank raised its consolidated net income forecast for the fiscal year ending March 2027 from ¥2.5 billion to ¥2.9 billion. It also raised its ordinary profit forecast from ¥3.8 billion to ¥4.7 billion.
The first-half net income forecast was also raised from ¥1.7 billion to ¥2.2 billion, representing an expected increase of approximately 46% from the same period of the previous fiscal year. The improvement is attributed to higher interest income on loans and interest and dividends on securities, among other fund investment revenues, against a backdrop of rising interest rates.
The interim and year-end dividends were each raised from ¥30 to ¥35, bringing the annual dividend to ¥70. The bank indicated that it expects to target a payout ratio of approximately 30% going forward.
The market viewed the dividend increase and stronger-than-expected earnings as an enhancement of shareholder returns, supporting buying interest in regional bank shares. However, the impact on funding costs and bond valuations depending on interest-rate trends remains a point to watch.