Rakuten Bank (5838) Q2 2025 earnings summary

Executive summary

• Achieved record highs in ordinary income (JPY 83.6bn, +26.9% YoY), ordinary profit (JPY 31.0bn, +37.8% YoY), and net income (JPY 22.1bn, +37.5% YoY) for 1H FY2024, driven by strong interest income growth and increased customer accounts.

• Number of bank accounts reached 16.19 million (+12.6% YoY), with main accounts ratio at 32.4%.

• Total deposit balance rose to JPY 11.1tn (+16.4% YoY), maintaining position as Japan's No.1 digital bank.

• Upward revision of full-year forecasts: ordinary income to JPY 178.5bn (+29.4% YoY), ordinary profit to JPY 65.0bn (+34.5% YoY), and net income to JPY 46.2bn (+34.2% YoY).

• Cancellation of the planned Rakuten FinTech Group reorganization following Rakuten Group's withdrawal of the proposal.

Financial highlights

• Interest income surged 39.7% YoY to JPY 55.3bn, outpacing non-interest income growth (+7.0% YoY).

• Gross operating profit increased 28.4% YoY to JPY 56.8bn.

• G&A expense ratio improved to 37.7% (-5.8pts YoY), reflecting enhanced management efficiency.

• ROE (annualized) reached 16.2% (+2.5pts YoY); capital adequacy ratio improved to 11.44%.

• Credit cost ratio stayed low at 0.06% despite a rise in credit costs due to more non-guaranteed personal loans.

Outlook and guidance

• Revised FY2024 and FY2025 guidance reflects strong 1H performance, with all key profit metrics expected to grow over 30% YoY.

• Profit per share forecasted at JPY 265.03 for the fiscal year ending March 31, 2025.

• No further costs anticipated for the FinTech Group reorganization in 2H FY2024.

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