Japan Bank Industry: Positive on banks; Rakuten / JPHD / Shizuoka / Yokohama to Buy, 77 to U/P

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Japan Bank Industry: Positive on banks; Rakuten / JPHD / Shizuoka / Yokohama to Buy, 77 to U/P

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Japan Bank Industry

Positive on banks; Rakuten / JPHD /

Shizuoka / Yokohama to Buy, 77 to U/P

Rating Change

Focus shifting to upward revisions at 1H FY3/27 results 06 July 2026

and FY3/28 ROE as the neutral rate rises Equity

JapanFollowing FY3/27 company guidance, we remain positive overall on banks over the

Banks

medium term. The main reasons are (1) policy of raising rates about once every 6

months remains unchanged, and there is high probability that neutral rate priced in by

Shinichiro Nakamura >>

equity market (1y-ahead 1m rate) will approach 1.75% by year-end (BofAe assume Research Analyst

1.5%), (2) FY3/27 NP guidance exceeds market forecasts, and expectations for upward BofAS+81 3 6225Japan8824

revisions at 1H results are also high (mainly due to BoJ rate hikes / upside in loan shinichiro.nakamura@bofa.com

balances / upside in capital markets businesses / upside in share prices), and (3) after Yuji Kobayashi >>

FY3/27 1H results, the focus on FY3/28 ROE (13% for megas / Resona; P/B of around 2x ResearchBofAS JapanAnalyst

on the regression line) may strengthen. In terms of rotation within the bank sector, +81 3 6225 8791

yuji.kobayashi@bofa.com

expectations for upward revisions at FY3/27 1H results have risen due to strong large-

corporate / capital markets transactions and upside in share prices / yen depreciation,

and interest in bank stocks is also turning up on expectations for continued BoJ rate

Exhibit 1: Rating changeshikes. As a result, preference appears to be gradually shifting toward major banks, which

Ratings and POs (¥)

can absorb overseas money from the perspective of market capitalization / trading value.