Chugin Financial Group,Inc.
5832・Prime Market・Banks
Banking Business
Comprehensive financial services segment centered on The Chugoku Bank, forming the core of the Group's earnings
| Period | Current | Previous | Change |
|---|---|---|---|
| Ordinary income (segment total) | ¥228,350 million | ¥192,033 million | ↑ |
| Segment profit (ordinary profit) | ¥52,480 million | ¥35,796 million | ↑ |
| Segment assets | ¥11,322,941 million | ¥11,004,719 million | ↑ |
| Interest income | ¥169,846 million | ¥150,095 million | ↑ |
| Depreciation | ¥3,578 million | ¥2,825 million | ↑ |
| Ordinary income from external customers | ¥226,071 million | ¥190,249 million | ↑ |
| Interest expense | ¥76,453 million | ¥74,688 million | ↑ |
Business Details
Through its head office, domestic branches, and overseas branches, The Chugoku Bank, Ltd. provides a wide range of financial services including deposits, lending, securities investment, foreign exchange, trust operations, and M&A intermediary services. As a regional financial institution serving the East Setouchi area centered on Okayama Prefecture, the bank focuses on local business funding and personal loans as its core business, while also promoting strategic asset expansion such as structured finance and non-Japanese lending. This is the core segment, accounting for approximately 90% of the Group's total ordinary income.
Recent Overview
Ordinary profit rose 46.6% year on year to ¥52,480 million, driven by a substantial increase in net interest income and equity-related gains
In the Banking Business segment for FY2026 (ending March 2026), interest income increased substantially to ¥169,846 million (up ¥19,751 million year on year), reflecting rising domestic interest rates and strategic asset expansion. Interest on loans increased to ¥107,607 million (non-consolidated), and interest and dividends on securities increased to ¥55,357 million (non-consolidated). Equity-related gains also rose substantially year on year to ¥14,665 million (non-consolidated). Credit costs decreased substantially to ¥6.1 billion (non-consolidated), down from ¥13.4 billion in the prior period, and the OHR improved to 51.4% (from 55.3% in the prior period). The ending balance of loans reached ¥6,834.4 billion (non-consolidated) and securities reached ¥3,104.1 billion (non-consolidated), both of which continued to build up.
Key Products
Growth Drivers
- Expansion of net interest income driven by rising domestic interest rates following the Bank of Japan's policy rate hikes (loan yield improved to 1.60%, securities yield to 1.86%, and overall interest margin to 0.23%)
- Buildup of loan and securities balances through strategic asset expansion (average loan balance up ¥303.2 billion year on year, average securities balance up ¥326.5 billion year on year)
- Increase in fee income driven by strong performance in Assets Under Custody Sales to individuals and investment banking services to corporate clients (non-consolidated fee income of ¥23.4 billion, up ¥1.8 billion year on year)
- Growth in equity-related gains amid a favorable market environment (non-consolidated equity-related gains of ¥14,665 million, up ¥9,315 million year on year)
- Substantial improvement in credit costs (non-consolidated credit costs of ¥6.1 billion, down ¥7.3 billion from ¥13.4 billion in the prior period), boosting the bottom line
Risks
- Increase in funding costs (rise in deposit interest due to Bank of Japan rate hikes: non-consolidated deposit interest of ¥34,304 million, up ¥16,161 million year on year)
- Credit concentration risk to large borrowers (large per-transaction loan amounts in market-based loans such as structured finance and non-Japanese lending)
- Deterioration in local corporate earnings and impact on personal consumption due to slowing overseas economies and persistently high prices
- Risk of expanding valuation losses on domestic currency bonds (non-consolidated domestic currency bond valuation losses of ¥192.4 billion, worsening by ¥88.3 billion year on year) and deterioration in bond-related gains/losses amid rising interest rates (non-consolidated bond-related losses of ¥18,240 million)
- Heightened geopolitical risk (US-China tensions, the situation in Ukraine, Middle East issues) leading to market instability and impact on foreign currency funding costs
Last updated: June 15, 2026