CCI Group (7381): FY2025 Results Summary — Record Profits on a Securities Portfolio Overhaul and Higher Loan Yields

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

CCI Group, Inc. reported higher sales and profits for FY2025 (the fiscal year ended March 2026), with ordinary income of 167,102 million yen (+86.5% year on year), ordinary income of 19,756 million yen (+60.6%) and net income of 12,632 million yen (+55.5%). The materials describe this as the first increase in sales and profits in two fiscal years and record highs in profits. ROE (core-capital basis) was 5.9% (TSE standard: 5.5%), exceeding the medium-term business strategy target of 5.1%. For FY2026 the company forecasts net income of 17,000 million yen (+34.5%).

Consolidated Results (Full-Year Actual)

According to the materials, operating profits from core business increased due to an increase in yields resulting from a hike in policy interest rates and an increase in outstanding loans. The company significantly replaced the securities portfolio, recording a gain on sale of shares of ¥64.3 billion while recording a loss on sale of bonds of ¥60.1 billion. Expenses increased due to new construction in Hirooka Terrace, but ordinary income increased from the previous fiscal year due to an increase in operating profits from core business. For Hokkoku Bank on a non-consolidated basis, the materials note higher sales and profits year on year (the first increase in sales and profits in four fiscal years) and operating profits from core business increasing for the second consecutive year.

Note on labelling: the presentation slide lists two separate line items that are both labelled “Ordinary income” for each entity. Both lines are reproduced below exactly as shown in the materials.

Item (Millions of yen)	2025/3	2026/3	Change	Rate of change
CCI consolidated — Ordinary income	89,576	167,102	+77,526	+86.5%
CCI consolidated — Ordinary income	12,298	19,756	+7,458	+60.6%
CCI consolidated — Net income	8,120	12,632	+4,512	+55.5%
Hokkoku Bank (non-consolidated) — Ordinary income	72,862	147,024	+74,162	+101.7%
Hokkoku Bank (non-consolidated) — Ordinary income	11,511	17,670	+6,159	+53.5%
Hokkoku Bank (non-consolidated) — Net income	8,323	12,769	+4,446	+53.4%
Hokkoku Bank (non-consolidated) — Core net operating profit	11,325	20,744	+9,419	+83.1%

The consolidated equity ratio was 10.37% at 2024/3, 9.85% at 2025/3 and 9.10% at 2026/3.

Deposits, Loans and Yields

Loans and bills discounted (year-end balance) rose to 3,048.6 billion yen, +15.9% versus the previous fiscal year, with the materials noting that loans to urban areas and large enterprises increased and that yields were generally in line with forecasts. Deposits (year-end balance) were △1.9% versus the previous fiscal year. Interest on loans was 1.245% and the yield on deposits was 0.167% at 2026/3, for a 2026/3 yield spread of 1.078% (against a 2023/3 yield spread of 0.936%). On credit costs, the materials state that although the temporary additional provision due to the impacts of the earthquake has been completed, credit costs have increased in light of domestic and overseas economic and financial conditions; the credit-related cost ratio was 0.18% at 2026/3.

Revenue by Business Segment

The materials present revenue by business segment on a 100 millions of yen basis, together with a likelihood assessment for each business on a three-point scale (A: low uncertainty and low earnings volatility; B: moderate in both uncertainties and variability; C: highly variable results due to high uncertainties). Commercial loans and leasing, consumer loans and market investment are assessed A; cashless, consulting, digital systems and regional revitalization are assessed B; investment and investment is assessed C.

Business segment (100 millions of yen)	2025/3	2026/3	2027/3
Commercial loans and Leasing	161	227	311
Consumer loans	96	103	110
Market investment	203	248	251
Cashless	16	17	19
Consulting (including BPO, investment advisory and international consulting)	23	26	30
Investment and investment	▲14	16	30
Digital Systems	0	9	12
Regional revitalization	0	1	7

FY2026 Forecast

Item (Millions of yen)	2026/3 Actual	2027/3 Earnings forecast	2026/3 Ratio	Rate of change
Ordinary income	19,756	26,500	+6,744	+34.1%
Net income	12,632	17,000	+4,368	+34.5%
ROE	5.9%	7.7%	+1.8pt

The forecast assumes an interest rate scenario at end of March 2027 of a short-term policy rate of 1.25% and a long-term 10-year JGB yield of 2.50%. Interest on loans is planned at 48.1 billion yen (+12.1 billion yen compared to 26/3) and interest on deposits at (△) 14.5 billion yen (+6.6 billion yen compared to 26/3). Within net fees and commissions, consulting is planned at 3 billion yen (+400 million yen compared to 26/3) and cashless at 1.9 billion yen (+200 million yen compared to 26/3). In the market division, income and other income is planned at 24.4 billion yen (+3.3 billion yen compared to 26/3) and capital income at 600 million yen (△ 3 billion yen compared to 26/3). Personnel expenses are planned at 18.1 billion yen (+2.6 billion yen compared to 26/3) and non-personnel expenses at 24.1 billion yen (△ 1.2 billion yen compared to 26/3). On credit costs, the materials state that from FY3/2027 onward the forecast is ¥3 billion as a normal plan, while the forecast is around ¥5 billion based on the above assumptions.

The materials also explain the approach to planning: based on uncertainties in each business and differences in future outlook, the probability is assessed on a three-point scale and reflected in revenues and expenses; in businesses where there is little likelihood, revenues are expected conservatively while expenses are set at a level that takes into account uncertainty. For businesses with large uncertainties, plans are considered based on conservative assumptions, and as a result the overall plan is at a level with a high degree of achievement certainty.

Shareholder Returns and Capital Management

For 2026/3 the dividend payout ratio was 41.0% with total dividends of 5.2 billion yen and purchase of treasury stock of 4 billion yen. For 2027/3 the plan is a dividend payout ratio of 39.3%, total dividends of 6.6 billion yen and purchase of treasury stock of 10 billion yen. For 2028/3 and 2029/3 the materials state approximately 40%, with dividends based on sustainable earnings growth and flexible share buybacks. The materials also note that the company plans to maintain a dividend payout ratio of around 40% and that share buybacks are implemented flexibly, taking into account share price trends and RS. Cost of capital is shown as approximately 7-9%, and the guideline for the equity ratio is around 9%.

Item	2026/3 Actual	2027/3	2028/3	2029/3
Dividend payout ratio	41.0%	39.3%	Approx. 40%	Approx. 40%
Total dividends	5.2 billion yen	6.6 billion yen
Purchase of treasury stock	4 billion yen	10 billion yen
ROE	5.9%	7.7%	8.0%or more	8.0%or more
Core capital	214.9 billion yen	221 billion yen	231 billion yen	248 billion yen
Risk assets	2.3604 trillion yen	2.385 trillion yen	2.5 trillion yen	2.655 trillion yen
Equity ratio	9.1%	9.3%	Around 9%	Around 9%

Medium-Term Business Strategy 2026

The company updates its strategies and target figures from a medium- to long-term perspective every year based on the status of business strategies and the market environment. The main interest rate scenario assumes the policy interest rate increases by 0.25% at the end of June and December 2026 and June 2027, reaching 1.5%. The company targets ROE of 8% in fiscal 2028 and beyond; the materials state that the target timing for achieving an ROE of 8% has been moved forward from March 2030 to March 2028. ROE is calculated based on the amount of net income attributable to owners of the parent to Basel III core capital based on domestic banks.

Item	2026/3 Actual	Achievement rate	2027/3 (A year later)	2028/3 (Two years later)	2029/3 (Three years later)
Banking business revenue	60.6 billion yen	125.4%	72.9 billion yen	83.4 billion yen	87.5 billion yen
Revenue from new businesses	14.3 billion yen	67.4%	15.3 billion yen	18.5 billion yen	20.9 billion yen
Consolidated Operating Income	19.8 billion yen	110.0%	26.5 billion yen	28.5 billion yen	32 billion yen
Net income (consolidated)	12.6 billion yen	114.5%	17 billion yen	18.5 billion yen	21 billion yen
ROE	5.9%	+0.8pt	7.7%	8.0%or more	8.0%or more

The key points of the update are: (1) revision of the target timing for achieving ROE of 8% to March 2028; (2) review of asset allocation, including holdings of equities, foreign bonds, multi-assets and other assets, and expansion of investments in private assets, with rebalancing and replacement of yen-denominated bonds using capital gains generated from the sale of equities and other assets; (3) reflection of earnings from new business areas such as digital and systems and regional revitalization; and (4) indication of business feasibility based on the accumulation of business models and experience in each business area.

Topics

On the securities portfolio, the materials describe a significant restructuring in response to a positive interest rate environment, with divestment of Japanese equities and low-yield foreign bonds and improved flexibility of the JPY bond portfolio alongside enhancement of carry income through balance accumulation. Group-wide asset allocation is being revised based on CCIAP’s strategy to enhance group ROE, reducing risk assets through equity sales while expanding loans, private assets and JPY bond investments.

On systems, the next-generation core banking system “BankWill” is to be launched in January 2027, entering final system integration testing four months ahead of schedule, with system assets (human resources and programmes) owned by The CC Innovation, Ltd. System resale was released in August 2025; the materials state there are 10 inquiries from financial institutions, including first-tier regional banks, second-tier regional banks and shinkin banks, and that four to five banks, including Hokkoku Bank, have a high degree of certainty. Services provided are the next-generation core banking system, subsystems, and system transition support consulting.

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.