ENVALITH
株式会社ちゅうぎんフィナンシャルグループ logo

Chugin Financial Group,Inc.

5832・Prime Market・Banks

Official website
株式会社ちゅうぎんフィナンシャルグループ logo
Chugin Financial Group,Inc.5832

Business

Chugin Financial Group, Inc. is a bank holding company established in October 2022 through a sole-share transfer by the Chugoku Bank. Centered on the Chugoku Bank (established in 1930), the group comprises 27 subsidiaries and 1 affiliate, including Chugin Lease, Chugin Securities, Chugin Guarantee, Chugin Card, Chugin Asset Management, Chugin Capital Partners, C Cube Consulting, and Chugin Energy. Its main customers are individuals, small and medium-sized enterprises, and local governments in the East Seto Inland Sea region centered on Okayama Prefecture, and it provides a wide range of financial services spanning deposits, lending, securities investment, trust services, M&A intermediation, leasing, securities, asset management, and energy-related businesses. Listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

The core of earnings is The Chugoku Bank's net interest income (interest on loans and securities), with consolidated net interest income of ¥93,619 million in FY2026 (ending March 2026). This is supplemented by fees and commissions income of ¥21,781 million from assets under custody sales to individuals and M&A intermediary services for corporate clients, among others. Group companies in leasing, securities, guarantees, cards, and other businesses leverage the bank's customer base to pursue cross-selling, forming a structure aimed at diversifying revenue across the group as a whole.

Company Strengths

Since its establishment in 1930, The Chugoku Bank has operated as a regional financial institution centered on the East Seto Inland Sea area of Okayama Prefecture. With domestic branches, sub-branches, and overseas branches, it boasts loan balances of ¥6,797,024 million and deposit balances of ¥8,503,902 million (as of the end of March 2026). Leveraging this customer base, group companies in leasing, securities, guarantees, and other businesses are achieving cross-selling.

The consolidated total capital adequacy ratio stood at a high 13.35% (international standard, as of the end of March 2026), maintaining strong financial soundness. Leveraging this capital buffer, the company has built up assets across three areas—core business (local business financing and personal loans), strategic investment (renewable energy, real estate, aircraft, etc.), and market-based investment—achieving a loan balance of ¥6,797.0 billion (up ¥225.6 billion year on year) and a securities balance of ¥3,107.3 billion (up ¥331.3 billion year on year).

Driven by strong performance in assets under custody sales to individuals, corporate investment banking services, and housing loan fees, consolidated fee and commission income reached ¥26,064 million (up ¥1,901 million year on year). The assets under custody balance at Chugin Securities reached ¥616.3 billion as of the end of March 2026 (up ¥107.7 billion year on year), and in April 2025 the company rolled out an asset management support desk across all branches, building a foundation for expanding non-interest income through group-wide collaboration.

ENVALITH's Perspective

Consolidated ordinary income for FY2026 (ending March 2026) reached ¥56,038 million (up 46.2% year on year), achieving a substantial profit increase, and came in ¥6.0 billion above the initially announced forecast. As an external factor, the effect of rising domestic interest rates in lifting net interest income is clear, but the sharp increase in interest paid on deposits (¥34,304 million on a non-consolidated basis, up ¥16,161 million year on year) is exerting upward pressure on funding costs, and there is a possibility that the room for further margin expansion going forward will be limited. The ordinary income forecast for FY2027 (ending March 2027) of ¥65,000 million (up 15.9% year on year) continues to project growth, but it should be noted that changes in the interest rate environment could be a factor causing upward or downward swings in performance.

Consolidated provision for allowance for doubtful accounts in FY2026 (ending March 2026) was ¥6,737 million (a substantial decrease from ¥14,034 million in the previous fiscal year), reflecting improved credit costs that contributed to boosting profit. On the other hand, the balance of disclosed claims under the Financial Reconstruction Act at The Chugoku Bank on a non-consolidated basis increased to ¥122.6 billion (up ¥9.7 billion from the end of the previous fiscal year), and the non-performing loan ratio also rose to 1.76% (1.67% at the end of the previous fiscal year). Doubtful claims increased to ¥65.7 billion (up ¥9.6 billion from the end of the previous fiscal year), and whether the low level of credit costs will persist depends on future economic conditions going forward. Given the forecast increase in credit costs to ¥7.5 billion (up ¥1.4 billion year on year) for FY2027 (ending March 2027), continued close monitoring of credit cost trends is necessary.

Return on equity (ROE) for FY2026 (ending March 2026) improved to 6.8% (from 4.8% in the previous fiscal year), and net assets per share rose to ¥3,491.02 (from ¥3,030.68 in the previous fiscal year). Dividends achieved a substantial increase to ¥90 per share annually (from ¥62 in the previous fiscal year, with a payout ratio of 40.2%), and the forecast for FY2027 (ending March 2027) is ¥102 per share annually (payout ratio of 40.2%). On the other hand, the consolidated capital adequacy ratio stands at 5.4% (up from 4.9% in the previous fiscal year), which is low for a regional bank, and the effectiveness of capital control targeting a Common Equity Tier 1 ratio of 11-12%, together with the continuity of dividend expansion through profit growth and agile share buybacks (¥3,001 million executed in FY2026 (ending March 2026)), will be key points of evaluation for investors.

Growth Strategy

Targeting achievement of the revised Medium-Term Management Plan KPI (net income of ¥40 billion or more) through expansion of net interest income and fee income together with group diversification

Continuing to accumulate quality assets through capital control, expanding local business funding, individual loans, and securities balances. Loans outstanding at the end of FY2026 (ending March 2026) reached ¥6,797,024 million (up ¥225,566 million from the previous fiscal year-end), and securities outstanding reached ¥3,107,354 million (up ¥331,265 million). For FY2027 (ending March 2026), The Chuo Bank (standalone) core gross business profit is projected at ¥133.1 billion (up ¥12.8 billion year on year).

Achieved revenue growth across all categories, including Assets Under Custody Sales-related business (investment trusts, insurance, public bonds, and Financial Instruments Intermediary Business), investment banking, and remittance/collection fees. The Chuo Bank (standalone) fee income reached ¥23.4 billion (up ¥1.8 billion year on year), expanding for the third consecutive fiscal year. Chugin Securities' assets under custody balance continued to expand, reaching ¥616.3 billion (up ¥107.7 billion from the end of March of the previous year), and efforts to strengthen the response to customer asset management needs on a group-wide basis will be reinforced.

Expanding non-banking businesses such as Regional Energy & Decarbonization-related Business (newly established and consolidated Godo Kaisha Chugin Energy No.1), DX/SX consulting (C Cube Consulting), and recruitment services (Chugin Human Innovations). Total ordinary income of group companies reached ¥4.65 billion (up ¥0.26 billion year on year), demonstrating steady growth. Efforts are underway to reduce dependence on Banking Business earnings and promote diversification of the business portfolio.

Targeting a dividend payout ratio of approximately 40% relative to net income attributable to owners of the parent, continuing to expand dividends through profit growth. The annual dividend for FY2026 (ending March 2026) was ¥90 (up ¥28 year on year), and the forecast for FY2027 (ending March 2026) is ¥102 per year (up ¥12). Flexible share buybacks (¥3,001 million executed in FY2026 (ending March 2026)) will continue, using a Common Equity Tier 1 ratio of 11-12% as a benchmark, aiming to improve the total payout ratio.

Last updated: July 19, 2026