ZENKOKU HOSHO (7164) Q2 2027 earnings summary

Executive summary

• H1 operating revenue rose 3.0% to ¥23,756m and profit attributable to owners of parent increased 7.0% to ¥12,487m.

• New guarantees granted rose 17.2% to ¥1,066.4bn, supported by housing-loan activity at regional and shinkin banks and screening DX adoption.

• Ordinary profit grew 6.7% to ¥17,992m, supported by improved asset-management yields and equity-method income.

Financial highlights

• Operating profit was ¥14,956m, up 0.2% YoY; operating expenses rose 8.1% to ¥8,800m, while credit-related expenses declined 12.9% to ¥2,249m.

• Outstanding guarantee exposure reached ¥21.6tn at September 2026; subrogation repayments were ¥7,811m, up 1.7% YoY.

• Comprehensive income rose 11.6% to ¥14,139m; six-month EPS was ¥93.96 versus ¥87.08 a year earlier.

• Operating cash flow was ¥11,951m, investing cash outflow ¥17,171m and financing cash outflow ¥10,228m; cash and equivalents fell ¥15,448m to ¥40,076m.

• Purchases of securities and investment securities were ¥34,886m and ¥30,748m, respectively.

Outlook and guidance

• FY2027/3 forecast unchanged: revenue ¥60,600m, operating profit ¥42,000m, ordinary profit ¥47,200m and net profit ¥32,700m.

• Forecast assumptions include guarantee exposure of ¥22.5tn (+5.0%), new guarantees of ¥1,960bn (+2.1%) and subrogation repayments of ¥17.0bn (+2.8%).

• Forecast EPS is ¥245.92 and dividend per share is ¥123; ROE target is 14%.

• Rising rates are expected to support guarantee demand and investment income; credit-cost impact is expected to remain limited, partly due to mortgage repayment caps and collateral recoveries.