Yokohama Financial Group (7186): FY3/26 briefing: NII stronger than BofAe; focus on allocation of excess capital

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Yokohama Financial Group (7186): FY3/26 briefing: NII stronger than BofAe; focus on allocation of excess capital

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Yokohama Financial Group (7186)

FY3/26 briefing: NII stronger than BofAe;

focus on allocation of excess capital

Maintain Rating: NEUTRAL | PO: 1,700 JPY | Price: 1,653 JPY

21 May 2026

May 21, 10:00 – Yokohama FG held an FY3/26 full-year results briefing. The FY3/27 NP

Equityguidance exceeded our forecast by 6% based on the assumption of no BOJ rate hikes,

and performance (net interest income) is solid given the potential for an upward revision Shinichiro Nakamura >>

at 1H results. FY3/28 ROE in MTP was also revised upward to 10%+ based on a policy Research Analyst

BofAS Japan

rate 1.0%, and if based on policy rate 1.5%, FY3/29 ROE 12% could come into view. On +81 3 6225 8824

the other hand, in capital policy, there is an impression that M&A opportunities are being shinichiro.nakamura@bofa.com

actively considered, leaving some uncertainty regarding future excess capital allocation Yuji Kobayashi >>

Research Analyst

(balance between M&A/buybacks). We believe excessive concern is unnecessary given BofAS Japan

the past M&A track record, but we maintain the investment rating “Neutral” based on +81yuji.kobayashi@bofa.com3 6225 8791

P/B-ROE valuation. Key management messages are as follows. Taisei Okui >>

(1) FY3/27 NP guidance ¥129.0bn (ROE9.0%) conservative, BofAS+81 3 6225Japan8947

has upside potential taisei.okui@bofa.com

FY3/27 NP guidance targets ROE 9.0% assuming no BoJ rate hikes, and if there is a rate

hike in June, further upside of +¥3.0bn is expected. In addition, the assumption of fees

and commissions at YoY -13% due to the reaction to strong corporate fee income in the Stock Data