Hachijuni Nagano Bank (8359) Q1 2027 earnings summary

Executive summary

• Integration of legacy banks' expertise and networks has strengthened initiatives to support SMEs and local communities, with measures in place to prevent unfair disadvantages due to increased market share in Nagano Prefecture.

• Ordinary income rose by ¥17,973 million year-over-year to ¥90,605 million, driven by higher interest on loans, gains on government bonds, and equity securities sales.

• Ordinary profit increased by ¥13,541 million year-over-year to ¥36,681 million; profit attributable to owners of parent rose by ¥7,297 million to ¥23,719 million.

• Defined and implemented policies to prevent unfair disadvantages, especially for SME lending, including refusal of transactions, unjustified interest rate hikes, and deterioration of guarantee conditions.

• Established a robust organizational structure for monitoring and preventing unfair disadvantages, with regular reviews and reporting to financial authorities.

Financial highlights

• Core service-related income remains in deficit due to upfront expenses, but post-merger synergies are expected to drive improvement, with a ¥200 million surplus projected for FY2028/3.

• FY2026/3 results exceeded plan, mainly due to increased funding profits and realized synergy effects, with overall synergy impact at -¥900 million, outperforming plan by ¥2.4 billion.

• Ordinary income: ¥90,605 million (up 24.7% year-over-year).

• Ordinary profit: ¥36,681 million (up 58.5% year-over-year).

• Profit attributable to owners of parent: ¥23,719 million (up 44.4% year-over-year).

Outlook and guidance

• Post-merger, positive synergies are expected to materialize, improving profitability and supporting sustainable provision of core services.

• Full-year forecast: Ordinary profit ¥106,000 million (up 30.0% year-over-year), profit attributable to owners of parent ¥73,000 million (up 13.0% year-over-year), basic EPS ¥160.21.

• No changes to previously announced consolidated earnings forecast.

• Strategic personnel reallocation and business expansion are expected to further enhance consulting and solution offerings.