Rakuten Bank (5838) Q1 2025 earnings summary

Executive summary

• Achieved record growth with over 16 million accounts and deposit volume exceeding ¥11 trillion as of July 2024, maintaining position as Japan's No.1 digital bank.

• Q1 FY2024 saw consolidated ordinary income of ¥40.8bn (+25.0% YoY) and ordinary profit of ¥15.2bn (+34.2% YoY), driven by strong interest and fee income.

• Net income attributable to owners of parent rose to ¥10.9bn (+35.0% YoY), with ROE annualized at 16.4%.

• Main accounts, which are more profitable, now represent 31.5% of total accounts, supporting higher per-account earnings.

• New services launched, including JRE BANK in partnership with East Japan Railway, and expanded digital offerings.

Financial highlights

• Interest income surged 35.8% YoY to ¥26.1bn, benefiting from asset accumulation and higher loan balances.

• Non-interest income grew 9.1% YoY to ¥14.4bn, with fees and commissions income up 9.6% YoY.

• Gross operating profit increased 27.4% YoY to ¥28.0bn; G&A expense ratio improved to 37.9% (-4.8pts YoY).

• Total assets reached ¥14.0tn as of June 2024, with deposits at ¥10.9tn (+15.3% YoY).

• Profit per share for the quarter was ¥62.59, up from ¥47.37 a year earlier.

Outlook and guidance

• FY2024 consolidated forecasts: ordinary income ¥162.5bn (+17.8% YoY), ordinary profit ¥53.2bn (+10.1% YoY), net income ¥37.8bn (+9.7% YoY), EPS ¥216.64.

• Excluding FinTech reorganization costs, ordinary profit forecast is ¥58.2bn (+20.2% YoY), net income forecast is ¥41.3bn (+19.7% YoY).

• Forecast includes ¥5 billion in expenses for the Rakuten FinTech Reorganization Project.

• Medium- to long-term vision targets 25 million accounts and ¥20tn in deposits by FY2026.

• No change to previously announced full-year guidance.