Shizuoka Financial Group (5831) investor relations material

Executive summary

• Consolidated net income for FY2025 reached JPY 90.5 bn, up JPY 15.9 bn year-over-year, driven by higher net interest income and improved balance sheet profitability through bond replacement and preventive loan loss allowances.

• Ordinary profit hit a record JPY 130.3 bn, up JPY 28.2 bn YoY, with gains on stocks and securities sales offsetting increased credit-related costs.

• Ordinary income rose 28.5% YoY to JPY 438.5 bn, mainly from higher interest income and securities gains.

• FY2026 targets consolidated net income of JPY 105.0 bn (+JPY 14.5 bn YoY) and ROE of 8.4%, maintaining growth momentum through core business expansion.

• Strategic focus on maximizing net interest income, investing in human capital and IT, and enhancing shareholder returns with a projected dividend of JPY 98 per share.

Financial highlights

• Core gross operating profit rose JPY 29.0 bn YoY to JPY 226.8 bn; net interest income increased JPY 23.0 bn YoY, mainly from domestic loan growth and higher JPY rates.

• Total assets reached JPY 16,016.0 bn, up JPY 301.1 bn from the prior year, mainly due to increased loans.

• Loans and bills discounted increased by JPY 520.8 bn to JPY 11,255.9 bn; deposits rose by JPY 492.6 bn to JPY 12,612.3 bn.

• Net operating profit fell JPY 16.3 bn YoY to JPY 75.1 bn, reflecting higher expenses and bond sale losses.

• ROE (net assets) improved to 7.5% (+1.2 pt YoY); payout ratio rose to 49.8%.

Outlook and guidance

• FY2026 forecasts ordinary profit of JPY 152.0 bn (+JPY 21.7 bn YoY) and net income of JPY 105.0 bn (+JPY 14.5 bn YoY).

• FY2027 forecast: ordinary profit of JPY 152.0 bn (+16.7% YoY), net income of JPY 105.0 bn (+16.1% YoY), and basic EPS of JPY 196.94.

• ROE expected to reach 8.4% (net assets) and 10.2% (shareholder equity); OHR targeted at 53.6% (46.0% core basis).

• Dividend per share projected at JPY 98, with continued treasury share buybacks to support ROE targets.