Daishi Hokuetsu Financial Group (7327): FY2025 Results Summary — Consolidated Profit Up ¥12.7 Billion to ¥42.1 Billion

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: the company labels the fiscal year ended March 31, 2026 as “FYE2026/3”; this article follows this site’s convention of classifying the most recently completed fiscal year as FY2025, while keeping the company’s own labels in the text and tables. Daishi Hokuetsu Financial Group reported consolidated profit (attributable to owners of parent) of ¥42.1 billion for the fiscal year ended March 2026, an increase of ¥12.7 billion year on year, and consolidated ROE of 8.0%, up 2.0 points from the previous year. The Bank’s non-consolidated profit increased by ¥13.3 billion year on year to ¥38.5 billion, with both net interest income and non-interest income rising. The company met the profit target for the final fiscal year of Medium-Term Management Plan III (FYE2027/3) one year ahead of schedule, and forecasts consolidated profit of ¥50.0 billion for the fiscal year ending March 2027. Annual dividends per share for the fiscal year ended March 2026 were 63 yen, up 19.33 yen from the previous year.

Consolidated Results (Fiscal Year Ended March 2026)

FG’s consolidated ordinary profit was 611 and profit attributable to owners of parent was 421 (in units of ¥100 million), up 200 and 127 year on year respectively; the materials describe the latter as an increase of ¥12.7 billion year on year, reaching ¥42.1 billion. Both exceeded the earnings forecast revised upward in September 2025 (ordinary profit of 523 and profit of 360, in units of ¥100 million) by 88 and 61 respectively. Against the initial earnings forecast announced in May 2025 (ordinary profit of 480 and profit of 330), ordinary profit was 131 higher and profit was 91 higher. The change in consolidated profit from ¥29.3 billion in FYE2025/3 to ¥42.1 billion breaks down into the Bank non-consolidated contribution of +133, Group companies of +3 and consolidated adjustment and other of -9 (¥100 million).

FG’s Consolidated (¥100M)	FYE2026/3 Financial Results	Year on Year	Earnings forecast (revised upward in 2025/9)	Vs. Forecast
Ordinary profit	611	200	523	88
Profit (attributable to owners of parent)	421	127	360	61
Consolidated ROE (%)	8.0	2.0

At the Bank on a non-consolidated basis, core gross profit, which is the top line, increased by ¥22.6 billion year on year to ¥120.9 billion. Net interest income and non-interest income (fees and commissions as well as profit from other businesses) increased by ¥16.9 billion and ¥5.7 billion, respectively. Expenses increased by ¥2.7 billion year on year to ¥61.3 billion, mainly due to wage increases and higher strategic investments. Consolidated OHR improved to 47.9%.

Bank Non-consolidated (¥100M)	FYE2026/3 Financial Results	Year on Year	FYE2025/3 Financial Results
Core gross profit	1,209	226	983
Net interest income	895	169	726
(Of which, interest on loans and bills discounts)	697	149	548
(Of which, interest and dividends on securities)	528	67	460
(Of which, financing expenses)	474	59	414
Fees and commissions	186	31	154
Profit from other businesses (excluding gains (losses) from government bonds and other bonds)	127	25	101
Expenses	613	27	585
Core business profit	596	198	397
(Excluding gains (losses) from cancellation of investment trust)	596	219	377
Ordinary profit	567	215	351
Extraordinary income (losses)	– 20	– 20	0
Profit	385	133	252
<Net credit cost>	69	34	35
<Gains or losses on securities>	16	61	– 45

Group Companies

Total profit for all Group companies excluding the Bank increased by ¥0.3 billion, reaching ¥4.0 billion on an underlying basis, excluding losses due to special factors. Profit at the securities company rose ¥0.39 billion (+28.2%) year on year as profit and the balance of assets under custody increased through consulting proposals that capitalize on market trends, and profit at the leasing company rose ¥0.12 billion (+17.5%) year on year on growth in the balance of leased assets and higher average yields. Losses attributable to special factors were 5 in FYE2025/3, comprising an impairment loss of ¥0.5 billion associated with the decision to sell the Hokuetsu Card headquarters building, and 15 in FYE2026/3, comprising an impairment loss of ¥0.7 billion resulting from the decision to relocate the headquarters of Daishi Hokuetsu Lease and an increase in credit costs of ¥0.7 billion due to forward-looking provisioning for specific borrowers, aligned with the Bank.

Group company indicator	FYE2025/3	FYE2026/3
Total profit for all Group companies excluding the Bank (¥100M)	37	40
Securities: Balance of assets under custody (¥100M)	4,913	6,382
Leasing: Balance of leased assets (¥100M)	771	846
Recruiting agency: Recruiting agency fee (Millions of yen)	139	162
Regional trading company: No. of clients supported in sales channel development, cumulative total (Client)	730	842

Loans, Deposits and Asset Quality

The end-balance of loans and bills discounted increased by ¥300.7 billion (+5.3%) year on year, primarily due to an increase in business loans outside the prefecture; business loans rose ¥322.4 billion (+9.4%) and consumer loans rose ¥69.7 billion (+4.5%). The yield on loans and bills discounted rose due to higher market interest rates and a hike in the short-term prime rate. Although the end-balance of deposits, etc., increased year on year for both deposits by individuals (+¥5.8 billion, +0.1%) and corporations (+¥30.4 billion, +1.2%), the overall balance decreased by 478, or -0.5%, to 87,325 (in units of ¥100 million), primarily due to a decline in public money and other accounts. The ending balance of assets under custody increased 18.1% across insurance, investment trusts and public bonds. Gains on the sale of stocks, etc., were used to reduce holdings of low-yielding domestic and foreign bonds; even after recording ¥39.1 billion in gains (losses) on stocks, valuation gains or losses on securities amounted to ¥75.2 billion, an increase of ¥68.6 billion year on year. The non-performing loan ratio stood at 1.94%, down 0.12 percentage points year on year, while net credit cost rose by ¥3.4 billion year on year to ¥6.9 billion, driven by an increase in credit cost associated with forward-looking provisioning for specific borrowers.

Item	FYE2025/3	FYE2026/3
Loans and bills discounted, end-balance (¥100M)	56,143	59,150
Yield on loans and bills discounted	0.99%	1.21%
Deposits, etc., end-balance (¥100M)	87,803	87,325
Assets in custody, ending balance (¥100M)	10,316	12,187
Securities, end-balance (¥100M)	28,892	24,926
Yield on securities	1.58%	2.02%
Valuation gains or losses on securities (¥100M)	65	752
Non-performing loan ratio	2.06%	1.94%
Net credit cost (¥100M)	35	69

Earnings Forecast for the Fiscal Year Ending March 2027

For the fiscal year ending March 2027, the final year of the Medium-Term Management Plan, FG’s consolidated profit is projected to be ¥50 billion, an increase of ¥7.8 billion from the previous year. The forecast assumes the policy interest rate increases from 0.75% to 1.00% in December 2026. The change factors from FYE2026/3 profit of 421 to FYE2027/3 profit of 500 (¥100 million) comprise a Bank non-consolidated contribution of +75, Group companies of -2 and consolidated adjustment and other of +5. On April 27, 2026 the company announced a third upward revision of the final-year target of Medium-Term Management Plan III, raising consolidated profit to ¥50 billion from the ¥40 billion target announced in March 2025, with consolidated OHR of the 50% level and consolidated ROE of 8.7% or higher. Stated reasons include Group-wide consultative sales activities driving growth in both net interest income and service revenue, growth in Market Division revenue from improvements to the securities portfolio, domestic market interest rates surpassing expectations, and further accumulation of risk assets accompanying the change to the Foundation Internal Ratings Based (FIRB) approach.

Item (¥100M)	Earnings Forecast for Fiscal Year Ending March 2027	Year on Year
FG’s Consolidated: Ordinary profit	736	124
FG’s Consolidated: Profit (attributable to owners of parent)	500	78
Bank Non-consolidated: Core gross profit	1,242	32
Bank Non-consolidated: Net interest income	954	58
Bank Non-consolidated: Net fees and commissions and profits from other businesses, etc., excluding gains (losses) from government bonds and other bonds	287	-26
Bank Non-consolidated: Expenses	672	59
Bank Non-consolidated: Personnel expenses	325	12
Bank Non-consolidated: Non-personnel expenses	297	38
Bank Non-consolidated: Core business profit	569	-26
Bank Non-consolidated: Ordinary profit	676	109
Bank Non-consolidated: Profit	461	75
Bank Non-consolidated: <Net credit cost>	50	-19
Bank Non-consolidated: <Gains or losses on securities>	115	98
Group companies excluding the Bank: Group company revenue	37	-2

Shareholder Returns

Based on the shareholder return policy, the year-end dividend for the fiscal year ended March 2026 increased by 9 yen from the revised forecast of 27 yen to 36 yen, bringing the annual dividend to 63.00 yen, up 19.33 yen year on year. The dividend payout ratio for the fiscal year ended March 2026 was 40.0%. For the fiscal year ending March 2027 the company forecasts an annual dividend of 76 yen, an increase of 13 yen, comprising an interim dividend of 38 yen and a year-end dividend of 38 yen. Dividend amounts are converted retroactively based on the stock splits implemented in October 2024 and October 2025; the company carried out a three-for-one stock split in October 2025, taking the total number of issued shares to 275,657,868. Under the shareholder return policy, dividends per share shall in principle be progressive and the payout ratio will be around 40%, and the company will flexibly repurchase its own shares in light of overall business performance and market conditions. The company notes that the shareholder return policy of the new financial group, which is set to be established in April 2027, will be determined in consultation with Gunma Bank.

Dividend per share	Interim dividend	Year-end dividend	Annual total
FYE2025/3	18.66 yen	25.00 yen	43.66 yen
FYE2026/3	27.00 yen	36.00 yen	63.00 yen (+19.33 yen yoy)
FYE2027/3 (forecast)	38 yen	38 yen	76 yen

Medium-Term Management Plan III and KPIs

Medium-Term Management Plan III “Stage for a leap forward” covers the period from April 2024 to March 2027. Of the “Financial Challenges” KPIs, targets were achieved in all four items, and of the “Environmental and Social Challenges” KPIs, targets were achieved in 10 of 12 items. Consolidated capital ratio rose to 12.07%, against a target range of 11–12%; from the fiscal year ended March 2025 the credit risk measurement method was changed from the Standardized Approach to the Foundation Internal Ratings Based (FIRB) approach. Risk-weighted assets before floor adjustment were 3.1 trillion yen for FYE2026/3 (actual) and are planned at over 3.5 trillion yen for FYE2027/3. Synergies from the management integration of Daishi Bank and Hokuetsu Bank exceeded the initial plan formulated in October 2018, reaching ¥13.6 billion for the single fiscal year (+¥2.1 billion versus plan), split between top-line synergy of +76, cost synergy of +76 and negative synergy of -17 (¥100 million). On cross-shareholdings, in May 2026 the company brought forward its reduction target by two years: it now aims to reduce the ratio of cross-shareholdings on a market-value basis to consolidated net assets to less than 20% by FY2027 (by the end of March 2028), and further to less than 10% as soon as possible.

“Financial Challenges” KPI	FYE2025/3 Results	FYE2026/3 Results	Vs. target	FY2027/3 Plan
Consolidated Profit (attributable to owners of parent)	¥29.3B	¥42.1B	+¥6.1B	¥50.0B
Consolidated OHR	56.3%	47.9%	– 4.1pt	50% range
Consolidated ROE	5.9%	8.0%	+0.9pt	≥ 8.7%
Consolidated Capital Ratio	10.59%	12.07%	+1.07pt	11–12%

Business Integration with Gunma Bank

The materials describe progress on the business integration with Gunma Bank, planned for April 1, 2027 (tentative). The new holding company will be named Gunma Niigata Financial Group, Inc. (GNFG), with Michiro Ueguri, currently President and Representative Director of Daishi Hokuetsu Financial Group, as Chairman and Representative Director, and Akihiko Fukai, currently President and Representative Director of Gunma Bank, as President and Representative Director (Group CEO). The head office will be located in the Tekko Building, 1-8-2 Marunouchi, Chiyoda-ku, Tokyo. The integration will be effected through a share exchange. A merger of Gunma Bank and Daishi Hokuetsu Bank is not planned, both banks will continue to operate as subsidiaries of the integrated holding company, there are no plans to consolidate or close any branches due to the business integration, and neither bank’s trade name, corporate mark, nor head office location will change. The stated objective is to maximize top-line synergy and elevate the group to rank among the top regional banks in both scale and quality.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.