Raising earnings forecasts and target prices on the 3 megabanks to reflect capital markets activity and growing loan demand

Research evidence excerpt

Raising earnings forecasts and target prices on the 3 megabanks to reflect capital markets activity and growing loan demand

Equity Research

13 July 2026 | 3:15AM JST

JAPAN BANKS

Raising earnings forecasts and target prices on the 3 megabanks to

reflect capital markets activity and growing loan demand

We raise our earnings forecasts and 12m target prices for the three megabanks Makoto Kuroda

+81(3)4587-9920 |

(MUFG, SMFG, and Mizuho), to reflect capital markets activity and growing loan makoto.kuroda@gs.com

Goldman Sachs Japan Co., Ltd.

demand. We currently expect that the expansion in loan demand (April-June loans

Hibiki Takumawere up +6.1% yoy total, of which major banks were +8.4% yoy; BOJ Loans and +81(3)4587-4935 |

Deposits statistics released July 8), the impact of the December rate hike last year, hibiki.takuma@gs.comGoldman Sachs Japan Co., Ltd.

and the rise in short-term interest rates into the June rate hike will positively

contribute to net interest income. Additionally, we see robust capital

markets-related revenue (accelerated corporate governance improvement efforts by

Japanese companies, bond issuances, etc.) and the rise in market indicators such as

TOPIX all suggest a smooth start to the fiscal year, while downside risks such as the

Middle East situation remain. For FY3/27E for SMFG and Mizuho, we assume and

reflect that net income will exceed initial guidance by the net interest income impact

of the June rate hike (BOJ policy rate assumption 0.75%), and for MUFG, we reflect

the upward revision of our US team’s Morgan Stanley estimates (US analyst: Richard

Ramsden) in equity-method investment income. Furthermore, we raised our net

interest income forecasts for FY3/28 and FY3/29, when the full contribution of the