Shizuoka Financial Group (5831): 1Q results: Share buyback size below expectations, but guidance revision and DPS hike positives

研报英文原文证据摘录

J P M O R G A N

Asia Pacific Equity Research

07 August 2026

Shizuoka Financial Group (5831)

1Q results: Share buyback size below expectations, but

guidance revision and DPS hike positives

Somewhat positive: 1Q FY2026 net profit was ¥32.7 billion (+45% YoY, +58%

QoQ), beating our estimate (¥27 billion). Net capital gains, the net of losses on

bond sales and gains on stock sales, exceeded our assumption. Management raised

FY2026 net profit guidance by ¥10 billion to ¥115 billion (+27% YoY), in line with

our estimate (¥116 billion). However, the share buyback announced is capped at

¥30 billion, short of our expectation of ¥40 billion.

Upward guidance revision reflects net interest income: Management raised

recurring profit guidance by ¥15 billion, of which ¥12.5 billion reflects an

improved outlook for net interest income in light of 1Q net interest income

progress, the impact of the June BOJ rate hike, and further improvement in the

outlook for returns on investment securities. Management also raised planned

DPS from ¥98 to ¥108. The dividend payout ratio based on guidance is

unchanged at around 50%. In addition, the share buyback announced is capped

at ¥30 billion, the same as the amount implemented in FY2025. The total

payout ratio based on guidance is 75.5%, slightly lower than the 80.6% in

FY2025. The CET1 ratio including unrealized gains on securities, which

Shizuoka focuses on, rose 55bps QoQ to 14.0% on an increase in the market

value of its stock holdings.

1Q results lag peers’ in some respects: See Figure 1 for quarterly earnings

trends. Net fees and commissions exceeded our assumption, but net interest

income fell short. Lending-related fees to large companies appear to have

contributed to strong fee revenue in 1Q. In terms of net interest income, the

yield on domestic loans was 1.47%, +5bps QoQ versus our estimate of +8bps

QoQ for other top regional banks. We also estimate Shizuoka's QoQ increase

in the yield on domestic deposits was 2–3bps larger than other top regional

banks’. In addition, Shizuoka incurred credit costs of ¥2.4 billion in 1Q.

Shizuoka Bank's non-consolidated credit costs were ¥2.2 billion, slightly high

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