Fukuoka Financial Group (8354): FY3/26 briefing: Start of buybacks / Minna Bank become profitable appears distant

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Fukuoka Financial Group (8354): FY3/26 briefing: Start of buybacks / Minna Bank become profitable appears distant

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Fukuoka Financial Group (8354)

FY3/26 briefing: Start of buybacks / Minna

Bank become profitable appears distant

Maintain Rating: UNDERPERFORM | PO: 6,850 JPY | Price: 6,731 JPY

May 21, 13:30 – Fukuoka FG (FFG) held an FY3/26 full-year results briefing. Even without 21 May 2026

rate hikes, profit momentum is on an upward trend from ROE 9% in FY3/27 to 10% in Equity

FY3/28, and unrealized losses on bonds have been significantly reduced, but the start of

share buybacks appears more distant than our expectations, and the pace of earnings Shinichiro Nakamura >>

Research Analyst

improvement at Minna Bank also appears slow. Considering the limited room for change BofAS Japan

in capital policy due to high leverage, there is no undervaluation from a P/B-ROE +81 3 6225 8824

shinichiro.nakamura@bofa.com

perspective, and the investment rating “U/P” is maintained. Key management messages

Yuji Kobayashi >>

are as follows. Research Analyst

(1) Upside in earnings accumulation does not necessarily BofAS+81 3 6225Japan8791

lead to changes in capital policy; share buybacks appear yuji.kobayashi@bofa.com Taisei Okui >>

Research Analystdistant BofAS Japan

FFG assumes in its capital allocation during the current MTP period that the CET1 ratio +81 3 6225 8947

will be around 10% in FY3/27 (currently 10.05%) → in the 10% range at end-FY3/28 taisei.okui@bofa.com

(target range 10-11%). Regarding the impact of upside in the pace of earnings

accumulation from BoJ rate hikes on capital policy: (i) it may reach the mid-10% range

by end-FY3/28, but no particular change in capital policy is assumed, (ii) the upside Stock Data