Kyoto Financial Group, Inc.
5844・Prime Market・Banks
Banking Business
Kyoto FG's sole reportable segment, a comprehensive financial services business centered on lending, securities, and fee-based businesses
| Period | Current | Previous | Change |
|---|---|---|---|
| Ordinary income (consolidated) | ¥366,704 million | ¥167,258 million | ↑ |
| Ordinary profit (consolidated) | ¥137,182 million | ¥50,915 million | ↑ |
| Profit attributable to owners of parent (consolidated) | ¥96,723 million | ¥36,552 million | ↑ |
| Core net business profit (consolidated) | ¥51,282 million | ¥47,915 million | ↑ |
| Loan balance (consolidated) | ¥7,590,931 million | ¥7,268,234 million | ↑ |
| Deposit balance (consolidated) | ¥9,575,076 million | ¥9,261,131 million | ↑ |
| Securities balance (consolidated) | ¥2,650,960 million | ¥3,304,862 million | ↓ |
| Consolidated capital adequacy ratio (domestic standard) | 12.18% | 12.16% | — |
| Earnings per share (consolidated) | ¥338.85 | ¥125.11 | ↑ |
| Net assets per share (consolidated) | ¥3,999.20 | ¥3,734.10 | ↑ |
| ROE (shareholders' equity basis, consolidated) | 17.84% | 7.24% | ↑ |
| Ratio of disclosed claims under the Financial Reconstruction Act (Kyoto Bank, non-consolidated) | 1.26% | 1.36% | ↓ |
Business Details
Centered on The Kyoto Bank, Ltd., the segment generates its main earnings from the Lending Business, Securities Investment Business, and Fee Business. It operates a regionally focused banking business based in Kyoto and Shiga, providing a wide range of solutions from corporate lending and syndicated loans to M&A support and asset formation support. The group companies include Kyogin Securities, Kyoto Capital Partners, and Kyoto M&A Advisory, aiming to provide one-stop, value-added services. The Group's reportable segment consists solely of the Banking Business, and consolidated results substantially match the results of this segment.
Recent Overview
Record profit for the second consecutive year driven by gains on sale of Nintendo shares and other factors; sharp profit decline projected for next fiscal year
In FY2026 (ending March 2026), the company recorded gains/losses related to stocks, etc. of ¥176,642 million, including gains on sale of cross-shareholdings (mainly Nintendo shares), achieving ordinary profit of ¥137,182 million (up 169.4% year on year) and profit attributable to owners of parent of ¥96,723 million (up 164.6% year on year), marking record-high profits for the second consecutive year. On the other hand, the company also recorded losses on sale of government bonds and other bonds of ¥91,108 million to improve the yen bond portfolio. Excluding the impact of the gain on sale of Nintendo shares, underlying net profit is estimated at approximately ¥45.0 billion. For FY2027 (ending March 2027), the company forecasts a sharp decline in profit, with ordinary profit of ¥76,600 million (down 44.1% year on year) and net profit of ¥52,000 million (down 46.2% year on year). Excluding the special dividend of ¥100, the ordinary dividend is planned to increase by ¥25, from ¥80 in the previous fiscal year to ¥105.
Key Products
Growth Drivers
- Expansion of interest on loans and net interest income due to a return to a "world with interest rates" amid the Bank of Japan's policy rate hikes (interest on loans of ¥80,226 million in FY2026, up 25.4% year on year; average yield on loans of 1.07%, up 0.17 percentage points year on year)
- Continued increase in the loan balance centered on corporate lending (The Kyoto Bank non-consolidated balance of ¥7,652.7 billion as of the end of March 2026, up ¥330.4 billion from the previous fiscal year-end)
- Significant increase in gains/losses related to stocks, etc. due to the promotion of sales of cross-shareholdings (¥176,642 million in FY2026) and maintenance of a high level of unrealized gains (unrealized gains on shares of ¥846,720 million)
- Record-high net fees and commissions income for the sixth consecutive year (consolidated ¥20,750 million, up ¥2,318 million year on year) and expansion of corporate transaction-related fees such as syndicated loans and M&A
- Boost in fee income due to an increase in the group's assets under custody balance (¥1,199.3 billion, up ¥241.4 billion from the previous fiscal year-end)
- Expanded contribution to group earnings from the newly consolidated Kyoto M&A Advisory Co., Ltd. (ordinary profit contribution from non-bank group companies of ¥3,793 million, up ¥2,925 million year on year)
Risks
- Risk of margin compression due to accelerating increases in interest on deposits and funding costs accompanying additional interest rate hikes by the Bank of Japan (interest on deposits of ¥28,492 million in FY2026, up 72.1% year on year)
- Risk of valuation losses and losses on sale in the bond portfolio amid rising interest rates, including expanding losses on sale of government bonds and other bonds (¥93,244 million in FY2026)
- Concerns over the sustainability of earnings due to a sharp decline in profit projected for FY2027 (ending March 2027) (ordinary profit forecast of ¥76,600 million, down 44.1% year on year) as one-time factors such as the gain on sale of Nintendo shares fall away
- Risk of declining creditworthiness of borrowers and increasing credit-related expenses due to regional economic contraction, declining birthrate and aging population, and lack of business successors, among other factors (credit-related expenses forecast of ¥3,000 million for FY2027, a significant increase from the actual figure of ¥642 million in the previous fiscal year)
- Risk of shrinking unrealized gains on cross-shareholdings (valuation differences on shares are affected by market conditions and decreased from ¥924,742 million as of the end of March 2025 to ¥846,720 million as of the end of March 2026)
- Adverse impact on loan demand and the asset management environment due to increasing uncertainty in the economic outlook stemming from heightened geopolitical risks and U.S. tariff policy
Last updated: June 19, 2026