Kyushu Financial Group (7180): FY2025 Results Summary — Record Net Income of ¥37.6 Billion in Fifth Straight Year of Growth

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

Kyushu Financial Group, the holding company for The Higo Bank and The Kagoshima Bank, reported gross business profit of ¥129.9 billion and net income of ¥37.6 billion for FY2025, which the company describes as effectively record-high earnings and the fifth consecutive fiscal year of revenue and profit growth since FY2021. ROE rose to 5.4% on a shareholders’ equity basis and 5.1% on a net asset basis. For FY2026 the group targets net income of ¥45.0 billion and an ROE of 6.0%, and it has raised its target dividend payout ratio to 35% while approving a ¥12.0 billion share repurchase. In this presentation “FY2025” refers to the fiscal year ended March 31, 2026, matching this site’s FY2025 classification.

Consolidated Results (Full-Year Actual)

The company attributes the increase in revenue and profit to growth in interest and dividend income and to improved other business profit. Interest and dividend income rose to ¥1,133 (100 mil. yen) and gross business profit increased by ¥223 (100 mil. yen) year on year, while expenses rose by ¥54 (100 mil. yen). Ordinary income reached ¥537 (100 mil. yen) and net income ¥376 (100 mil. yen), up 24% from the previous fiscal year according to the presentation.

Item (KFG consolidated, 100 mil. yen)	FY2025	FY2024	YoY
Ordinary revenue	2,632	2,512	119
Gross business profit	1,299	1,076	223
Interest and dividend income	1,133	1,037	96
Fees and commissions	182	174	8
Other business profit	(18)	(137)	118
(gains/losses on government and other bonds)	(44)	(131)	87
Expenses (-)	861	806	54
Core business profit	483	401	81
Net business profit	415	264	150
Equity securities-related profit/loss	111	163	(51)
Ordinary income	537	429	107
Net income	376	303	73
(Credit costs)	47	23	24

Results by Banking Unit (Two Banks Combined)

On a two banks combined basis (Higo Bank and Kagoshima Bank), interest and dividend income rose to ¥1,147 (100 mil. yen) from ¥1,043 (100 mil. yen), with interest on loans in the Domestic Division climbing to ¥1,040 (100 mil. yen) from ¥814 (100 mil. yen) and domestic funding cost rising to ¥255 (100 mil. yen) from ¥88 (100 mil. yen). The presentation cites a yield on loans of 1.16% at March 2026 versus 0.96% a year earlier, and a yield on funding of 0.33% versus 0.25%. The total balance of deposits including NCDs reached ¥108,285 (100 mil. yen) and the loan balance ¥93,477 (100 mil. yen).

Item (Two banks combined, 100 mil. yen)	FY2025	FY2024	YoY
Ordinary revenue	2,180	2,080	99
Gross business profit	1,201	977	224
Interest and dividend income	1,147	1,043	103
Fees and commissions	153	148	5
Other business profit	(100)	(215)	114
Expenses (-)	784	730	54
Core business profit	460	378	82
Net business profit	393	236	156
Equity securities-related profit/loss	128	173	(45)
Ordinary income	531	416	114
Net income	373	298	75
(Credit costs)	44	21	23

Asset Quality, Expenses and Capital

Credit costs on a consolidated basis were ¥4.7 billion with a ratio of credit costs of 0.05%, which the company describes as low and stable; the FY2026 plan assumes ¥5.0 billion and 0.05%. The ratio of loans disclosed pursuant to the Financial Reconstruction Act (two banks combined) was 1.61% at March 31, 2026. The consolidated OHR improved to 66.2% in FY2025 with a FY2026 plan of 60.0%, an improvement of 6.2 pp. The consolidated capital adequacy ratio was 11.34%, down 0.33 pp from the end of the previous fiscal year, as risk assets grew to ¥61,184 (100 mil. yen) on higher corporate and individual lending, against core capital of ¥6,940 (100 mil. yen). Cross-shareholdings stood at ¥18.1 billion on an acquisition book value basis, or 2.4% of net assets, with a plan to reduce the ratio to the lower 2% range by March 31, 2027.

FY2026 Forecast

The group forecasts consolidated net income of ¥45.0 billion for FY2026, which it describes as effectively record-high earnings. The forecast assumes an interest rate scenario in which the policy rate reaches 1.25% at fiscal year-end, based on two rate hikes of 0.25% each — one in the middle of the fiscal year and one at fiscal year-end.

Item (100 mil. yen)	FY2025 (Results)	FY2026 (Forecast)	Change
Ordinary income (KFG consolidated)	537	650	113
Net income (KFG consolidated)	376	450	74
Ordinary income (Two banks combined)	531	645	114
Net income (Two banks combined)	373	445	72
Credit costs (Two banks combined)	44	50	6
Ordinary income (Higo Bank)	–	315	–
Net income (Higo Bank)	–	220	–
Credit costs (Higo Bank)	–	20	–
Ordinary income (Kagoshima Bank)	–	330	–
Net income (Kagoshima Bank)	–	225	–
Credit costs (Kagoshima Bank)	–	30	–

Shareholder Returns

The shareholder return policy, revised effective FY2026, is to maintain a progressive dividend policy with a target payout ratio of 35% and to enhance returns through the flexible execution of share repurchases. In FY2025 the company repurchased 9,399,900 shares for up to ¥10.0 billion between October 17, 2025 and March 12, 2026. For FY2026 it disclosed on May 14, 2026 a plan to repurchase up to 12.0 million shares for up to ¥12.0 billion between June 1, 2026 and March 31, 2027. The FY2026 forecast combines dividends of ¥16.1 billion with share repurchases of ¥12.0 billion for a total return ratio of 62%.

Item	FY2025 (Results)	FY2026 (Forecast/Plan)
Dividend per share (yen)	29 (incl. ¥2 commemorative dividend for the 10th anniversary)	38
Total dividends (100 mil. yen)	124	161
Payout ratio	33.1%	Around 35%
Share repurchases	¥10.0B	¥12.0B
Total return ratio	59.5%	62.1%

Medium-Term Management Plan and Corporate Value Initiatives

FY2025 was measured against the Group’s 4th Medium-Term Management Plan “Leap Forward.” The company says it achieved most KPIs related to regional communities, customers and employees. GDP of the three Southern Kyushu prefectures reached ¥16.9 trillion against a plan of ¥16.4 trillion; the balance of assets under management at Kyushu FG Securities was ¥4,841 (100 mil. yen) against a plan of ¥4,300 (100 mil. yen); the cumulative total of ESG investments and loans reached ¥9,021 (100 mil. yen) against a plan of ¥7,000 (100 mil. yen); and the overall engagement score was 76 points against a plan of 74. Income from the regional value co-creation business was ¥46.0 (100 mil. yen) against a plan of ¥56.0 (100 mil. yen), with a FY2026 plan of ¥70.0 (100 mil. yen).

On the PBR logic tree, FY2025 results included an ROE of 5.4% (shareholders’ equity basis) against a plan of 4.5%, and PBR of 0.62x against a plan of 0.70x. Net income is planned to rise from ¥376 (100 mil. yen) in FY2025 to ¥450 (100 mil. yen) in FY2026, with ROE moving from 5.4% to 6.0%, and the company is aiming for an ROE of approximately 9.0% under the next (5th) Medium-Term Management Plan. The 2030 “Co-creation Vision” net income target of ¥50.0 billion is expected to be achieved ahead of schedule, and the vision is scheduled to be reviewed in line with the formulation of the next MTMP.

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.