Rakuten Bank (5838): FY2025 Results Summary — Record-High Profit on Surging Interest Income

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

Rakuten Bank, Ltd. reported record-high results for FY2025 (the fiscal year ended March 31, 2026). Consolidated ordinary income rose 38.4% year on year to JPY 255.5 bn, ordinary profit rose 44.1% to JPY 103.0 bn, and net income (profit attributable to owners of parent) rose 43.9% to JPY 73.0 bn. According to the presentation, ordinary income, ordinary profit and net income all reached record highs, and all three surpassed the revised financial forecasts announced in February. The Bank attributes the growth to higher interest income from the accumulation of well-diversified investment assets and the Bank of Japan’s policy rate hike.

Consolidated Results (Full-Year Actual)

Ordinary income increased by JPY 71.0 bn year on year, of which interest income accounted for a JPY 69.4 bn increase (+54.1%). Gross operating profit rose 35.0% to JPY 165.7 bn, while general and administrative expenses increased 22.8% to JPY 56.9 bn. The presentation notes that the increase in ordinary profit of JPY 31.5 bn breaks down into adjusted net interest income +42.5, adjusted net non-interest income +0.4, general and administrative expenses (10.5) and other ordinary income/expenses (0.8), and that the impact of the Bank of Japan raising the interest rate accounted for +19.1 of the change. Figures include costs for the Rakuten FinTech Group Reorganization PJ of JPY 1,279 mm in FY2024 and JPY 184 mm in FY2025; excluding those costs, ordinary profit was JPY 103.2 bn (+41.8%) and net income JPY 73.2 bn (+41.6%).

Item (JPY bn, consolidated)	FY2024	FY2025	Change	YoY
Ordinary income	184.5	255.5	+71.0	+38.4%
Interest income	128.1	197.6	+69.4	+54.1%
Non-interest income	55.5	57.0	+1.5	+2.7%
Fees and commissions income	46.3	49.4	+3.1	+6.7%
Other operating income	7.5	5.7	-1.7	-23.6%
Trust fees	1.6	1.8	+0.1	+10.6%
Other ordinary income	0.8	0.9	+0.0	+8.3%
Gross operating profit	122.7	165.7	+43.0	+35.0%
Adjusted net interest income	88.4	130.9	+42.5	+48.1%
Adjusted net non-interest income	34.2	34.7	+0.4	+1.3%
General and administrative expenses	46.3	56.9	+10.5	+22.8%
Other ordinary income/expenses	-4.8	-5.7	-0.8	―
Ordinary profit	71.5	103.0	+31.5	+44.1%
Profit attributable to owners of parent	50.7	73.0	+22.2	+43.9%
Loan guarantee expenses	12.6	11.4	-1.1	-8.9%

Against the FY2025 forecasts announced in February, the achievement rate was 100.4% for ordinary income (forecast JPY 254.3 bn), 101.8% for ordinary profit (forecast JPY 101.2 bn) and 102.5% for net income (forecast JPY 71.2 bn).

Business Drivers and Asset Breakdown

The number of bank accounts reached 18.07 mm on a non-consolidated basis as of March 31, 2026, up 1.24 million year on year (+7.3% YoY), and the total deposit balance reached JPY 12.9 tn (+12.9% YoY), an increase of JPY 1.48 trillion. Main accounts — accounts used for direct debit or direct deposit of payroll including salary or bonus — stood at 5.9 mm (+7.6% YoY), giving a main account ratio of 32.8%. On the asset side, loans and monetary claims bought (main assets, non-consolidated) grew 15.8% to JPY 9,018.3 bn, with the categories including middle-risk assets up 21.7% to JPY 3,466.8 bn.

Item (JPY bn, non-consolidated)	Mar. 31, 2025	Mar. 31, 2026	Change (Amount)	Change (Rate)
Loans	4,954.6	5,819.7	+865.0	+17.4%
Personal loans	318.6	327.6	+8.9	+2.8%
Housing loans	786.3	732.6	-53.7	-6.8%
Affiliated loans	225.7	251.0	+25.2	+11.1%
Investment property loans	783.0	948.5	+165.4	+21.1%
ABL (Asset-Based Lending)	1,178.3	1,329.9	+151.6	+12.8%
Business loans	45.4	113.0	+67.6	+148.6%
Others	41.3	166.6	+125.3	+303.2%
Loans to Ministry of Finance	1,575.5	1,950.0	+374.4	+23.7%
Monetary claims bought	2,828.6	3,198.6	+370.0	+13.0%
Trust beneficiary rights of Rakuten Card	2,260.6	2,338.0	+77.4	+3.4%
Monetary claims bought: others	568.0	860.6	+292.6	+51.5%
Total of main assets (Loans + Monetary claims bought)	7,783.2	9,018.3	+1,235.1	+15.8%
Total of categories including middle-risk assets	2,848.0	3,466.8	+618.7	+21.7%

Non-interest income (non-consolidated) was JPY 54.8 bn, up 2.4% year on year, with exchange/settlement commissions of JPY 11.5 bn (+10.5%), direct debit fees of JPY 13.3 bn (+6.1%), debit card fees of JPY 12.4 bn (+2.1%) and other fees and commissions of JPY 11.8 bn (+8.5%). Total settlements rose 9.1% to 977 mm. On a non-consolidated basis, interest income of JPY 192.5 bn represented 77.5% of total income and non-interest income of JPY 54.8 bn represented 22.1%.

Key Indicators and Financial Soundness

ROE improved to 21.7% in FY2025 from 18.0% in FY2024 and 14.1% in FY2023. The G&A expense ratio (general and administrative expenses divided by gross operating profit, non-consolidated) improved to 32.3%, a 3.2 ppt improvement from FY2024, even though general and administrative expenses increased 23.4% year on year. The consolidated capital adequacy ratio (domestic standard) was 10.7% as of March 31, 2026, with common equity minus regulatory adjustments of JPY 376 bn and total risk weighted assets of JPY 3,503 bn. The credit cost ratio remained at a low level at 0.09%.

Indicator	FY2025 / Mar. 31, 2026	Reference
Number of bank accounts (non-consolidated)	18.07 mm	+7.3% YoY
Total deposit balance (non-consolidated)	JPY 12.9 tn	+12.9% YoY
Number of main accounts (non-consolidated)	5.9 mm	+7.6% YoY; main account ratio 32.8%
ROE (consolidated)	21.7%	FY2024: 18.0%
G&A expense ratio (non-consolidated)	32.3%	3.2 ppt improvement from FY2024
Capital adequacy ratio, domestic standard (consolidated)	10.7%	Mar. 2025: 10.6%
Credit cost ratio (non-consolidated)	0.09%	FY2024: 0.07%
Ordinary profit per employee	JPY 86 mm	FY2024: JPY 66 mm

FY2026 Forecast

For FY2026 the Bank forecasts consolidated ordinary income of JPY 314.6 bn (+23.1%), ordinary profit of JPY 115.6 bn (+12.1%) and net income of JPY 81.3 bn (+11.2%). Excluding costs for the Rakuten FinTech Group Reorganization PJ (forecast at JPY 2,908 mm in FY2026), ordinary profit is forecast at JPY 118.5 bn (+14.7%) and net income at JPY 83.3 bn (+13.8%). The consolidated forecast is based on the assumption of a 0.75% Bank of Japan policy interest rate, excluding any further rate hikes.

Item (JPY bn, consolidated)	FY2025 (Results)	FY2026 (Forecasts)	YoY Change	% Change
Ordinary income	255.5	314.6	+59.0	+23.1%
Ordinary profit	103.0	115.6	+12.5	+12.1%
Ordinary profit, excluding FinTech Group Reorganization PJ costs	103.2	118.5	+15.2	+14.7%
Net income (profit attributable to owners of parent)	73.0	81.3	+8.2	+11.2%
Net income, excluding FinTech Group Reorganization PJ costs	73.2	83.3	+10.1	+13.8%

The presentation also shows a simple simulation in which an additional 25 bp policy rate hike, based on the balance sheet as of March 31, 2026, would lift income by JPY 28.1 bn on floating rate assets (approx. 79% of total, +25 bp) and raise costs by JPY 13.6 bn on floating rate deposits (approx. 84% of total, +12.5 bp at a 50% pass-through rate), for an illustrative annualized net interest income impact of approximately +JPY 14.5 bn.

Shareholder Returns

The Bank’s stated dividend policy is “No Dividends Maintained.” It intends to deliver shareholder returns through enhanced corporate value driven by business expansion, prioritizing further growth over dividends for the near term: future profits will be allocated to both further growth and the maintenance of the capital adequacy ratio, which stood at 10.7% as of March 31, 2026. Over the mid term, the Bank states that it will assess its capital management, including paying dividends, in light of its strategy, remaining committed to pursuing capital efficiency and maintaining solid equity capital to enhance shareholder returns.

Medium- to Long-Term Vision and Topics

Against the medium- to long-term vision formulated in April 2022 and indexed to FY2020, FY2025 results show the number of bank accounts at 18.0 mm (FY2020: 10.5 mm; FY2026 target approx. 25.0 mm, CAGR +11.4% versus a target of more than +15%), total deposit balance at JPY 12.9 tn (FY2020: JPY 5.7 tn; FY2026 target approx. JPY 20.0 tn, CAGR +17.5% versus a target of more than +20%), consolidated ordinary income at JPY 255.5 bn (FY2020: JPY 103.3 bn; FY2026 target approx. JPY 200.0 bn, CAGR +19.8% versus a target of more than +10%) and consolidated ordinary profit at JPY 103.0 bn (FY2020: JPY 27.5 bn; FY2026 target approx. JPY 70.0 bn, CAGR +30.1% versus a target of more than +15%). The Bank states that at present it prioritizes the FinTech reorganization over setting new medium- to long-term targets in a positive interest rate environment.

On February 25, 2026, Rakuten Bank, Ltd. and Rakuten Group, Inc. agreed to re-commence discussions toward the reorganization of Rakuten’s FinTech business and executed a Memorandum of Understanding, after discussions that began on April 1, 2024 had been discontinued on September 30, 2024 and Rakuten Group proposed a re-examination on January 14, 2026. The effective date of the reorganization is expected in October 2026, subject to change depending on the results of future discussions including approvals and licenses from regulatory authorities. The Bank anticipates that its shares will continue to be listed on the Tokyo Stock Exchange Prime Market after the implementation of the reorganization.

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.