First Read Japan Banks Positive: Confirmation of resilient earnings capacity; next focus is establishing core profit

Research evidence excerpt

First Read Japan Banks Positive: Confirmation of resilient earnings capacity; next focus is establishing core profit

Global Research

30 July 2026ab

First Read

EquitiesJapan Banks

Positive: Confirmation of resilient earnings Japan

capacity; next focus is establishing core profit Banks

Koichi Niwa

Analyst

koichi.niwa@ubs.com

Overview of results +81-3-5208 6245

The results announced today by the two companies reaffirmed the strength of banking Makoto Ishii

sector fundamentals. Mizuho revised up its full-year profit forecasts and announced Associate Analyst

additional share buybacks, showing confidence in its earnings through capital returns. makoto.ishii@ubs.com

SMTG also secured profit growth in yen funding-related profit as well as in multiple fee- +81-3-5208 3097

related areas. Overall, the results were positive, but expectations for bank shares are

already high. For further re-evaluation from here, the companies likely need to show

that tailwinds from the external environment have become established as core profit

growth through increases in lending and fee income and cost discipline.

Mizuho FG (8411) results - favourable impression: positive view of additional

share buybacks

What are the key takeaway from the results? Two points. (1) The expansion in

gross profit substantially exceeded the increase in expenses, demonstrating

operating leverage, and (2) the company expanded the scope of its share buybacks

to a cumulative annual upper limit of ¥200bn (up ¥100bn versus May).

How would we expect investors to react? We expect a positive reaction.

Investors are likely to react positively to the company’s ability to translate

favourable market conditions into earnings opportunities, as well as the agility of

its capital policy.