The Gunma Bank (8334): FY2025 Results Summary — Record Profit for a Third Consecutive Year and ROE of 10.0%

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

The Gunma Bank reported consolidated core business net profit (excluding gains (losses) on cancellation of investment trusts) of 71.1 billion yen for the year ended March 31, 2026, up 15.6 billion yen year-on-year, due to an increase in net interest income. Profit attributable to owners of parent amounted to 58.8 billion yen, up 14.9 billion yen year-on-year, a record high for the third consecutive period, and ROE increased by 2.3 percentage points to 10.0%. The annual cash dividend per share was 62 yen, up 17 yen year-on-year. The Bank also presented progress on its business integration with Daishi Hokuetsu Financial Group, under which the two groups will combine on April 1, 2027 as Gunma Niigata Financial Group, Inc.

Consolidated Results (Full-Year Actual)

Consolidated core business gross profit was 134.6 billion yen, up 26.8 billion yen year-on-year and 5.6 billion yen above the plan announced in September 2025. Net interest income rose 23.1 billion yen to 105.2 billion yen, while non-interest business profit rose 3.7 billion yen to 29.3 billion yen. Ordinary profit was 84.8 billion yen, up 22.8 billion yen year-on-year. OHR (excluding gains (losses) on cancellation of investment trusts) improved 3.9 points to 45.7%.

Item (Consolidated, billions of yen)	Mar. 2026	YoY	Compared to announced plan	Announced plan (Sep. 2025)
Core business gross profit	134.6	+26.8	+5.6	129.0
Net interest income	105.2	+23.1	+5.2	100.0
Gains (losses) on cancellation of investment trusts	3.3	+5.9	+0.6	2.7
Excluding gains (losses) on cancellation of investment trusts	101.8	+17.1	+4.5	97.3
Non-interest business profit	29.3	+3.7	+0.3	29.0
Expenses	60.0	+5.2	-0.2	60.3
Core business net profit	74.5	+21.6	+5.8	68.7
Excluding gains (losses) on cancellation of investment trusts	71.1	+15.6	+5.1	66.0
Net credit costs	3.4	+0.3	+0.1	3.3
Ordinary profit	84.8	+22.8	+6.8	78.0
Profit attributable to owners of parent	58.8	+14.9	+3.8	55.0
OHR (excluding gains (losses) on cancellation of investment trusts)	45.7%	-3.9%	-2.0%	47.7%
ROE (annualized rate)	10.0%	+2.3%	+0.5%	9.5%

On a non-consolidated basis, core business gross profit was 126.1 billion yen (up 25.4 billion yen), core business net profit excluding gains (losses) on cancellation of investment trusts was 65.1 billion yen (up 14.6 billion yen), ordinary profit was 78.7 billion yen (up 21.1 billion yen) and net profit was 54.7 billion yen (up 14.3 billion yen). Non-consolidated net credit costs were 3.2 billion yen and gains or losses on investment securities were 11.3 billion yen.

Deposits, Loans and Yields

Deposits, etc. stood at 8,789.1 billion yen as of March 31, 2026, up 116.7 billion yen (+1.3%) from March 2025, of which deposits were 8,571.0 billion yen (up 108.1 billion yen, +1.2%) and negotiable certificate deposits were 218.0 billion yen (up 8.6 billion yen, +4.1%). Loans increased 381.0 billion yen (+5.5%) to 7,226.1 billion yen, with the loan RORA at 1.32% (+0.38pt versus March 2025). Growth was led by large enterprises (1,095.4 billion yen, +8.4%), cross-border loans (269.1 billion yen, +21.5%), structured finance (241.1 billion yen, +40.0%) and the overseas branch (180.6 billion yen, +18.1%). Individual loans were 2,585.7 billion yen (+3.7%), of which housing loans were 1,535.3 billion yen (+4.9%).

Item (billions of yen)	Mar. 2026	Increase/decrease amount	Rate of change
Deposits, etc.	8,789.1	+116.7	(+1.3%)
Deposits	8,571.0	+108.1	(+1.2%)
Individuals	5,759.6	+24.7	(+0.4%)
Corporations	2,164.1	+88.4	(+4.2%)
Public money	414.4	+9.4	(+2.3%)
Negotiable Certificate Deposits	218.0	+8.6	(+4.1%)
Loans	7,226.1	+381.0	(+5.5%)
Large enterprises	1,095.4	+85.5	(+8.4%)
Second-tier enterprises/SMEs	2,754.3	+62.6	(+2.3%)
Individuals	2,585.7	+92.3	(+3.7%)
Housing	1,535.3	+73.0	(+4.9%)
Cross-border loans	269.1	+47.7	(+21.5%)
Structured finance	241.1	+68.9	(+40.0%)
Overseas branch	180.6	+27.6	(+18.1%)

Non-interest Business Profit

Consolidated non-interest business profit rose 3.73 billion yen year-on-year to 29.33 billion yen, a 7th consecutive year of record highs. Corporate service revenue was 10.74 billion yen (up 1.10 billion yen), deposits financial assets, etc. revenue was 9.50 billion yen (up 1.29 billion yen) and others were 9.08 billion yen (up 1.33 billion yen). The goal for FY2026 (Mar. 2027) is to achieve the final year target of the Mid-term business plan of 35 billion yen one year ahead of schedule.

Non-interest business profit (Consolidated, billions of yen)	Result Mar. 2026	YoY	Annual plan Mar. 2027
Total	29.33	+3.73	35.0
Corporate service revenue	10.74	+1.10	13.9
Syndicate loans	( 2.28)	( +0.80)	( 2.3)
Derivatives	( 1.97)	( – 1.10)	( 3.8)
SDGs	( 1.36)	( +0.53)	( 1.6)
Business matching	( 1.14)	( +0.21)	( 1.3)
M&A	( 0.73)	( +0.01)	( 1.3)
Deposits financial assets, etc. revenue	9.50	+1.29	11.4
Gungin Securities	( 4.19)	( +1.16)	( 5.4)
Insurance sales commissions (for individuals)	( 2.64)	( +0.12)	( 2.5)
Investment trusts commissions	( 2.09)	( – 0.12)	( 2.5)
Others	9.08	+1.33	9.7

Expenses, Net Credit Costs and Asset Quality

Consolidated expenses were 60.0 billion yen, up 5.2 billion yen year-on-year, reflecting strengthened strategic investments in areas such as personnel costs, campaigns and digital initiatives. Non-consolidated personnel expenses were 31.3 billion yen (up 2.3 billion yen), non-personnel expenses 22.7 billion yen (up 1.9 billion yen) and taxes 3.6 billion yen (up 0.5 billion yen), with subsidiaries at 4.5 billion yen (up 0.8 billion yen). Consolidated OHR improved from 49.6% in March 2025 to 45.7% in March 2026. Consolidated net credit costs were 3.4 billion yen versus 3.1 billion yen a year earlier, and the plan for March 2027 is 5.5 billion yen. Disclosed Claims under the Financial Reconstruction Law declined to 86.8 billion yen from 93.8 billion yen, with the ratio of non-performing claims falling from 1.35% to 1.19%.

FY2026 Forecast (for the FY ending March 2027)

For the fiscal year ending March 2027, the Bank forecasts consolidated profit attributable to owners of parent of 65.0 billion yen, which means achieving the profit target of 60.0 billion yen for the final year of the Mid-term business plan (FY2027) one year ahead of schedule. Consolidated core business gross profit is planned at 146.7 billion yen and ordinary profit at 95.0 billion yen, with OHR of 44.0% and ROE of 10.5%.

Item (Consolidated, billions of yen)	Mar. 2027	YoY	Mid-term business plan “Growth with Purpose” final year goal (Mar. 2028)
Core business gross profit	146.7	+12.1	—
Net interest income	111.7	+6.5	—
Excluding gains (losses) on cancellation of investment trusts	111.7	+9.9	—
Non-interest business profit	35.0	+5.7	35.0 billion yen
Expenses	64.7	+4.7	—
Core business net profit	82.0	+7.5	—
Excluding gains (losses) on cancellation of investment trusts	82.0	+10.9	80.0 billion yen
Net credit costs	5.5	+2.1	—
Ordinary profit	95.0	+10.2	—
Profit attributable to owners of parent	65.0	+6.2	60.0 billion yen
OHR (excluding gains (losses) on cancellation of investment trusts)	44.0%	-1.7%	45% degree
ROE	10.5%	+0.5%	10% or more

On a non-consolidated basis, the Bank plans core business gross profit of 136.2 billion yen (up 10.1 billion yen), net interest income of 113.0 billion yen (up 7.1 billion yen), expenses of 61.7 billion yen (up 4.1 billion yen), ordinary profit of 88.0 billion yen (up 9.3 billion yen) and net profit of 60.0 billion yen (up 5.3 billion yen). Average balance assumptions for all branches are loans of 7,293.3 billion yen (+4.2%) at a yield of 1.75% (+0.29%), securities of 2,184.7 billion yen (+7.7%) at 2.33% (-0.44%) and deposits of 8,516.2 billion yen (+0.4%) at 0.41% (+0.11%).

Shareholder Returns

The annual cash dividend per share was 62 yen, up 17 yen year-on-year, for a dividend payout ratio of 40.0% and a total shareholder return ratio of 50.1%. The total amount of shareholder return was 29.4 billion yen. The annual cash dividends per share for FY2026 (ending Mar. 31 2027) is planned to be 70 yen, which would be a 6th consecutive year of dividend increases. The Bank’s basic policy on dividends is a progressive dividend system that aims to maintain or increase dividends; it strives to achieve a payout ratio of 40% of profit attributable to owners of parent and will increase dividends through profit growth, while flexibly implementing acquisition of treasury shares based on capital levels, capital efficiency, growth investment opportunities and market trends.

Item	FY2023 (24/3)	FY2024 (25/3)	FY2025 (26/3)	FY2026 (27/3 plan)
Dividend per share (DPS)	¥22.0	¥45.0	¥62.0	(¥70.0)
Total amount of shareholder return	¥ 16.6 bn	¥ 22.2 bn	¥ 29.4 bn	(¥ 26.4 bn)
Total shareholder return ratio	53.6%	50.7%	50.1%	— %
Dividend payout ratio	28.1%	39.5%	40.0%	(40.8%)
EPS	¥78.43	¥113.82	¥154.87	(¥171.73)
Core EPS	¥114.65	¥131.64	¥187.31	(¥216.64)

Capital Policy and Business Integration with Daishi Hokuetsu FG

The Bank aims to further improve its PBR, which has been kept above 1x, and to achieve sustainable EPS growth. Measures include building up highly profitable assets, further increasing non-interest business income to 35 billion yen in FY2027, establishing an optimal capital structure by bringing the core CET1 ratio to the range of 10.5% to 11.5%, improving shareholder returns through the progressive dividend system and flexible share buybacks, and reducing information asymmetry. The core CET1 ratio was 13.5% as of March 2026, and the Bank aims to achieve a core CET1 ratio of 10.5-11.5% by the end of the fiscal year ending March 2028. Separately, the Bank plans to reduce listed shares held for policy purposes by 50% on a book value basis (-20 billion yen) over five years during FY2022-FY2026; the progress rate as of March 2026 was 84% (-16.8 billion yen).

On March 26, 2026 the Bank and Daishi Hokuetsu Financial Group resolved and signed a Share Exchange Agreement and Business Integration Agreement. The new holding company will be named Gunma Niigata Financial Group, Inc. (abbreviation: GNFG), with its head office in the Tekko Building, 1-8-2 Marunouchi, Chiyoda-ku, Tokyo. The share exchange ratio is 1 : 1.125, meaning 1.125 shares of Daishi Hokuetsu Financial Group common stock will be allotted for each share of Gunma Bank common stock. Gunma Bank shares are scheduled to be delisted on March 30, 2027, with the share exchange taking effect on April 1, 2027. There is no plan to merge The Gunma Bank and Daishi Hokuetsu Bank, and both banks will continue to operate as subsidiaries of the integrated holding company. The combined net income of the two companies in FYE 3/2026 was 100.9 billion yen (Gunma Bank 58.8 billion yen and Daishi Hokuetsu 42.1 billion yen), and the group targets net income of over 140.0 billion yen and ROE of over 10.5% in the fiscal year ending March 2030.

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.