ENVALITH
株式会社しずおかフィナンシャルグループ logo

Shizuoka Financial Group, Inc.

5831・Prime Market・Banks

Official website
株式会社しずおかフィナンシャルグループ logo
Shizuoka Financial Group, Inc.5831

Business

Shizuoka Financial Group is a holding company established in October 2022 through a sole-share transfer by Shizuoka Bank, comprising 18 consolidated subsidiaries and 2 equity-method affiliates. With its primary base in Shizuoka Prefecture, the group provides banking services centered on deposits, lending, securities investment, and foreign exchange, alongside diverse financial services including the Leasing Business through Shizugin Lease, securities business through Shizugin TM Securities, venture capital through Shizuoka Capital, and M&A and consulting services through Shizugin Management Consulting. Its primary customers are small and medium-sized enterprises and individuals within Shizuoka Prefecture, with overseas bases in Los Angeles, New York, Hong Kong, Singapore, and other locations. In March 2026, the company signed a basic agreement toward a business integration with Nagoya Bank, aiming to expand its business foundation into Aichi Prefecture.

Business Model

The core bank, Shizuoka Bank, raises deposits from individuals and corporations and secures a lending spread by deploying funds into loans to SMEs and individuals (period-end balance ¥11,255,903 million) and securities (period-end balance ¥2,997,542 million). In addition, revenue sources include fee-based services income (consolidated ¥94,993 million) from investment trust and insurance sales, securities brokerage, guarantee services, etc., as well as gains on sales of equity holdings associated with the reduction of policy-holding shares. The company adopts a comprehensive financial model that links the specialized functions of each group company, using banking transactions as a starting point to cross-sell leasing, securities, consulting, and other services to increase revenue per customer.

Company Strengths

Shizuoka Bank's standalone period-end loan balance reached ¥11,255,903 million (up ¥520,830 million year on year), while deposit balances reached ¥12,612.3 billion (up ¥492.6 billion year on year). Balances expanded for both corporate and individual customers, with the customer base as the region's leading bank supporting stable funding and investment opportunities.

Consolidated fee and commission income steadily expanded to ¥94,993 million (up ¥6,543 million year on year). Individual assets under custody, including investment trusts and individual annuity insurance, increased by ¥294.7 billion from the previous fiscal year-end to reach ¥9,161.9 billion, forming a stock-type revenue base. The increase in trust fees at Shizugin TM Securities also supports this trend.

The consolidated CET1 ratio at the end of FY2025 stood at 15.60% (13.45% on a fully phased-in Basel III finalization basis), significantly exceeding the approximately 13% target set in the second medium-term management plan. The company has financial flexibility to utilize this excess capital for reducing policy shareholdings, shareholder returns, and building up risk assets.

ENVALITH's Perspective

Consolidated ordinary profit for FY2026 (ending March 2026) reached ¥130,298 million (up 27.7% year on year), and profit attributable to owners of parent came to ¥90,469 million (up 21.2%), marking a substantial increase in earnings. On a standalone basis, Shizuoka Bank's loan yield stood at 1.60% (up 0.18pt year on year), and the overall interest margin was 0.50% (up 0.12pt), continuing to improve. The company's forecast for FY2027 (ending March 2027) calls for ordinary profit of ¥152,000 million (up 16.7%) and net income of ¥105,000 million (up 16.1%), continuing the earnings growth trend. The Bank of Japan's future additional rate hikes are noted as a key external factor for further expansion of net interest income.

In FY2026 (ending March 2026), gains on sales of equity securities (¥61,997 million on a Shizuoka Bank standalone basis) rose by ¥47,265 million year on year, significantly boosting earnings, but this extraordinary gain is an unstable element subject to market conditions. Meanwhile, the management integration with Nagoya Bank (targeted for April 2028) presents an opportunity for scale expansion, but uncertainties remain regarding due diligence costs, system integration costs, and the process of determining the share exchange ratio. In addition, losses on sales of government bonds and other securities (¥62,964 million on a Shizuoka Bank standalone basis) have expanded, and the risk of profit/loss volatility associated with the rebalancing of the securities portfolio also warrants continued attention.

The annual dividend for FY2026 (ending March 2026) was ¥80 (up 33% from ¥60 in the prior period), with a payout ratio of 47.7% and a dividend-on-equity ratio of 3.4%, marking a substantial strengthening of shareholder returns. The forecast dividend for FY2027 (ending March 2027) is ¥98 (payout ratio of 49.8%), planning for a further dividend increase. The company also conducted share buybacks totaling ¥30,001 million, clearly improving its overall shareholder return stance. On the other hand, ROE (return on equity) improved to 7.5% (from 6.3% in the prior period), but further improvement in capital efficiency remains a challenge as a regional bank. The reduction of policy-holding shares (partly reflected in the increase in gains on sales of equity securities) and the optimization of capital allocation will be key focal points for the medium- to long-term valuation of the stock.

Growth Strategy

Leveraging the interest rate environment, diversifying the group, and integrating with Nagoya Bank to become a top-tier regional bank

On March 27, 2026, a basic agreement was concluded. Discussions are underway regarding a share exchange, expected to take effect around April 1, 2028, under which the Company will become the wholly owning parent company and Nagoya Bank will become a wholly owned subsidiary. Through integration with Nagoya Bank's business base in Aichi Prefecture (loans of ¥4,180,626 million and deposits of ¥5,384,984 million), the aim is to develop into a top-tier regional banking group. The final agreement and share exchange agreement are scheduled to be concluded in March 2027.

Against the backdrop of the Bank of Japan's policy rate hikes, Shizuoka Bank's standalone loan yield improved to 1.60% (+0.18pt year on year), and the overall interest margin improved to 0.50% (+0.12pt year on year). By simultaneously building up loans to small and medium-sized enterprises and individuals (ending balance of ¥11,255,903 million) and managing deposit costs, the Bank aims to achieve a structural expansion of net interest income. In FY2027 (ending March 2027), an increase in loan interest income is expected to continue functioning as the main driver of earnings growth.

In July 2025, Shizugin Saison Card was made a consolidated subsidiary (bringing the number of consolidated subsidiaries to 18), expanding group functions. The Company continues to expand fee income (consolidated ¥94,993 million) and equity in earnings of affiliates (¥1,517 million) through Shizugin TM Securities, Shizugin Management Consulting, SFG Real Estate Investment Advisory, and others. The balance of assets in custody for individual customers increased by ¥294.7 billion from the end of the previous fiscal year to ¥9,161.9 billion, and the Company will continue to build up stock-based revenue.

The annual dividend for FY2026 (ending March 2026) was increased to ¥80 (+¥20 year on year), achieving a payout ratio of 47.7% and a dividend-on-equity ratio of 3.4%. Share buybacks of ¥30,001 million were also carried out. For FY2027 (ending March 2027), a further increase to an annual dividend of ¥98 (payout ratio expected at 49.8%) is planned. By combining the reduction of policy-holding shares (expanding gains on sale of securities) with share buybacks, the Company aims for continued improvement in ROE (7.5%).

Last updated: July 19, 2026