Japan Financial Sector: BofA financials weekly, 22 May 2026

Research evidence excerpt

Japan Financial Sector: BofA financials weekly, 22 May 2026

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Japan Financial Sector

BofA financials weekly, 22 May 2026

Industry Overview

22 May 2026 Corrected

Banks (Shinichiro Nakamura) Equity

YoY NP growth rate in initial FY3/27 guidance is around +5% to +25% for majors and Japan

around +10% to +30% for regionals, and is on an upward trend given assumptions of no Banks, Brokerage, Insurance & Other

BoJ rate hikes / one rate hike, Nikkei 225 at ¥55,000, and USD/JPY at 150. (1) While Nonbank

geopolitical risks in the Middle East remain, the probability of a rate hike at June

Shinichiro Nakamura >>

meeting is high, (2) FY3/27 NP guidance exceeds market expectations, with strong Research Analyst

expectations for upward revisions at 1H results, and (3) in FY3/28 ROE, the ROE BofAS Japan

+81 3 6225 8824

premium vs TOPIX will expand further, and focus will shift to FY3/28 outlook after shinichiro.nakamura@bofa.com

FY3/27 1H results, supporting a constructive medium-term view on Japanese bank Natsumu Tsujino, CFA >>

stocks and a focus on majors over regionals. In capital policy, MUFG’s buybacks were Research Analyst BofAS Japan

limited to ¥100.0bn due to a significant shortfall in the CET1 ratio, and buybacks at the +81 3 6225-8720

1H results are also likely to be around ¥250.0bn. Mizuho also set initial buybacks at natsumu.tsujino@bofa.com

¥100.0bn, but as there is no capital impact from the Rakuten Bank reorganization, Yuji Kobayashi >> Research Analyst

buybacks of ¥300.0bn+ can be expected at 1H results. SMFG maintained a CET1 ratio of BofAS Japan

10.3% and implemented buybacks of ¥180.0bn, and ¥200.0bn may also be possible at +81yuji.kobayashi@bofa.com3 6225 8791

1H results. JPB also saw its CET1 ratio decline to 9.9% and postponed buybacks, but