Japan regional banks: 27/3 Q1 results at three banks (31 July)

Research evidence excerpt

Japan regional banks: 27/3 Q1 results at three banks (31 July)

Japan regional banks: 27/3 Q1 Global Markets Research 31 July 2026

results at three banks (31 July)

EQUITY: JAPAN BANKS

Research Analysts77 Bank, Kyoto Financial Group, Hachijuni

Japan banksNagano Bank

Ken Takamiya - NSC

ken.takamiya@nomura.comQuick Note +81 3 6703 1140

Ryotaro Terazawa - NSC

77 Bank [8341] (Buy): Results announced during market hours on 31 July ryotaro.terazawa@nomura.com

First impression positive: Strong core earnings, well-balanced results +81 3 6703 1037

We identify the following three key takeaways.

(1) Overview: Profits attributable to owners of the parent were equivalent to 36% of full-

year guidance and were up 81% y-y, driven by strong core earnings, including core net

business profits. Bond-related losses of ¥7.0bn were offset by equity-related income of

¥11.4bn. We think the bank achieved a set of results that was well-balanced in terms of

growth, profitability, and efficiency. (2) Core earnings: Core net business profits were

equivalent to 30% of full-year guidance and were up 34%, thanks mainly to a rise in net

interest income. The contribution from loans/deposits and securities was well-balanced in

terms of both balances and yields. Yen-denominated average loans outstanding were

particularly strong with a rise of 11%. The yield on securities also improved 43bp, which

contributed to growth in net interest income. Overheads rose only 1%, and the core

overhead ratio (OHR) dropped to 34%. (3) Balance sheet: The balance sheet also

remained healthy. Valuation gains on securities improved from ¥202.1bn at end-March to

¥281.7bn at end-June. The NPL ratio was broadly flat versus end-March at 1.9%.

Kyoto Financial Group [5844] (Neutral): Results released after close on 31 July