Hokuhoku Financial Group: We reiterate Buy rating, take positive view of business foundation improvements

研报英文原文证据摘录

Hokuhoku Financial Group: We reiterate Buy rating, take positive view of business foundation improvements

Global Markets Research

19 June 2026Hokuhoku Financial Group

8377.T 8377 JP / EQUITY: JAPAN BANKS

RatingWe reiterate Buy rating, take positive view of

Remains Buybusiness foundation improvements

Target price

Increased from 5,500 JPY 7,800Growth in net interest income remains strong

Closing price JPY 6,459We reiterate Buy rating, take positive view of business foundation improvements 18 June 2026

We revise our forecasts for Hokuhoku Financial Group in light of 26/3 results and strong

Implied upside +20.8%earnings from core operations. While the stock has continued to outperform the sector, we

retain our bullish stance based on stronger improvements in core earnings and ROE than

sector peers. We obtain our target price of ¥7,800 using a P/B of 1.2x, referencing our

27/3 ROE forecast of 9.1%.

Relative performance chart

Positive factor (1): Improvements in business foundations

Hokuhoku Financial Group beat its guidance for 26/3, and ROE improved to 8.7%, above

the average for 7.8% for regional banks under our coverage. We take a highly positive

view of the 2ppt improvement in ROE despite a 17% rise in net assets (BPS), the

denominator for ROE. Here our focus is on improvements in business foundations in

particular. The sharp growth in BPS has been due to improvements in valuation

gains/losses on securities (Figure1) on success with cutting losses on yen-denominated

bonds at an early stage and shortening durations (1.61 years at end-26/3).

We also like the way that the company increased deposits by 3% while still keeping

deposit interest rates below those at other banks at 0.18% (Figure2). In particular, it has