Kyoto Financial Group (5844) Q2 2024 earnings summary

Executive summary

• Consolidated interim net income reached a record JPY19.2bn, up JPY3.3bn YoY; ordinary profit rose JPY4.6bn to JPY26.8bn.

• The medium-term plan targets JPY50.0bn net income and 8% ROE on a shareholder’s-equity basis by FY2025, alongside expansion into consulting, investment and digital businesses.

Financial highlights

• Consolidated gross operating profit was JPY51.5bn, up JPY2.1bn YoY; operating expenses increased JPY0.1bn to JPY28.3bn.

• Bank non-consolidated net income increased JPY3.5bn to JPY18.5bn; ordinary profit rose JPY4.9bn to JPY25.6bn.

• Bank net interest income declined JPY1.1bn to JPY41.0bn, while net fees and commissions increased JPY0.9bn to JPY6.8bn.

• Strategic equity securities gains increased JPY0.9bn to JPY2.4bn; credit costs improved from JPY0.6bn to a JPY1.6bn credit-cost reversal.

Outlook and guidance

• FY2023 consolidated forecasts were revised upward: net income to JPY30.0bn and ordinary profit to JPY42.3bn; both are forecast to increase for a third consecutive year.

• FY2023 bank forecasts include net income of JPY29.0bn, ordinary profit of JPY40.3bn, net interest income of JPY79.4bn and net fees and commissions of JPY12.8bn.

• FY2025 targets include JPY50.0bn net income, ROE of 8% on a shareholder’s-equity basis and 5% on a net-asset basis, with the capital-to-asset ratio around 11%.

• Medium-term targets include credit-risk-asset growth of JPY500bn or more by FY2025 and cumulative funds under management of JPY117bn by FY2031.