Resona (8308) Q1 2025 earnings summary

Executive summary

• Net income attributable to owners of parent rose 56.4% year-over-year to JPY55.3 bn, achieving 33.5% of the full-year target.

• Gross operating profit for 1Q FY2024 increased by JPY20.1 bn (13.0% YoY) to JPY174.9 bn, driven by higher interest income from domestic loans and deposits, increased fee income, and improved net gains on bonds.

• Fee income and net interest income both contributed significantly to profit growth, with historic-high 1Q profit.

• Credit costs improved by JPY6.8 bn YoY, resulting in a small gain, mainly due to a decline in general reserve and improved credit costs at overseas subsidiaries.

• Strategic investments in human resources and IT expanded, while the cost income ratio improved to 63.4%.

Financial highlights

• Net income before income taxes and non-controlling interests was JPY76.3 bn, up JPY29.4 bn (62.7% YoY).

• Ordinary income reached JPY250.9 bn (up 21.1% YoY); ordinary profit was JPY77.0 bn (up 64.5% YoY).

• EPS increased by 58.7% YoY to 23.83 yen; BPS rose 6.5% YoY to 1,176.44 yen.

• Comprehensive income dropped sharply to JPY5.6 bn from JPY111.2 bn YoY, mainly due to a significant decrease in unrealized gains on available-for-sale securities.

• Share buyback of 19.5 million shares (JPY20.0 bn) completed and cancelled.

Outlook and guidance

• Full-year net income target is JPY165.0 bn, with a dividend forecast of 23.0 yen per share and net income per share forecast at JPY71.11.

• Corporate loan balance expected to increase by JPY2.5 tn over two years, nearly meeting the three-year target ahead of schedule.

• If policy interest rates rise to 0.50%, ROE is projected to reach 9-10%.

• No revision to earnings targets or dividend forecasts.