THE SHIMANE BANK, LTD.
7150・Standard Market・Banks
Business
The Bank of Shimane, Ltd. is a regional bank headquartered in Shimane Prefecture, serving the San'in region. Through its head office and 20 branches and 13 sub-branches, it engages primarily in banking business, including the Deposit Business, Lending Business, Securities Investment Business, and Domestic Exchange Business. Its consolidated subsidiary Matsue Lease Co., Ltd. handles the Leasing Business, while its equity-method affiliate Shimagin UC Card Co., Ltd. handles the Credit Card Business. In September 2019, the company concluded a capital and business alliance with SBI Holdings, and has been advancing digital transformation and the sophistication of securities management. In April 2025, it established a dedicated investment subsidiary, Shimagin Regional Business Investment Co., Ltd., to support business succession and other initiatives for regional companies. Its main customers are individuals, small and medium-sized enterprises, and local governments in the San'in region.
Business Model
With customer deposits (balance of ¥525,285 million as of March 2026) as the primary funding source, the company generates net interest income by deploying funds into loans (balance of ¥389,701 million) and securities (balance of ¥130,888 million). For FY2026 (ending March 2026), the yield on interest-earning assets was 1.35%, while the cost of funding was 0.30%. Fee income (fees and commissions income of ¥1,054 million) and leasing business revenue (ordinary income from external customers of ¥2,451 million) also function as supplementary revenue sources.
Company Strengths
Acquisition of individual deposits through the smartphone branch "Shima Ho!" has progressed steadily, offsetting the decline in corporate and financial institution deposits. Liquid deposit balances at the end of FY2026 (ending March 2026) stood at ¥294,481 million, up ¥25,059 million year on year, reflecting progress in building a low-cost deposit funding base leveraging digital channels.
Based on the capital and business alliance concluded with SBI Holdings in September 2019, the Bank has implemented several concrete collaborative measures, including joint store operations with SBI MoneyPlaza, mortgage loan intermediation through SBI Sumishin Net Bank, and the next-generation core banking system based on the SBI Regional Revitalization Banking System (launched in July 2025). Diversification of revenue opportunities utilizing Group resources is being pursued.
Loans to local governments at the end of FY2026 (ending March 2026) stood at ¥44,947 million (up ¥8,428 million year on year, accounting for 11.53% of the total), while total loans including those to SMEs stood at ¥389,701 million (up ¥1,564 million year on year). The loan yield rose to 1.57% (up 0.17 percentage points year on year), indicating simultaneous progress in balance expansion and yield improvement.
ENVALITH's Perspective
Performance Trend
Ordinary income for FY2026 (ending March 2026) reached ¥12,245 million (up 18.3% year on year), marking the fifth consecutive year of revenue growth. As an external factor, against the backdrop of the Bank of Japan's additional rate hikes, interest on loans expanded to ¥6,094 million (up ¥762 million year on year), while interest and dividends on securities expanded to ¥1,328 million (up ¥228 million year on year). On the other hand, interest on deposits surged to ¥1,673 million (up ¥975 million year on year), and operating expenses also swelled to ¥5,721 million (up ¥1,004 million year on year). As a result, ordinary income fell sharply to ¥417 million (down 51.2% year on year), and net income attributable to owners of parent declined sharply to ¥370 million (down 39.0% year on year). For FY2027 (ending March 2027), the company forecasts ordinary income of ¥330 million and net income of ¥270 million, projecting a further decline in earnings, and the situation remains one in which a bottoming-out of profitability is difficult to foresee.
Growth Strategy
Pursuing both earnings stabilization and financial soundness improvement simultaneously through the medium-term plan 'Furusato San'in Revitalization Project' and deepened collaboration with SBI.
Continuing to promote individual deposit acquisition through smartphone branches and expansion of digital services in collaboration with the SBI Group. The individual deposit balance was maintained at ¥376,082 million, contributing to strengthening the low-cost funding base. This is positioned as a pillar of earnings stabilization for FY2027 (ending March 2027) as well.
Continuing to increase loans to local governments (¥44,947 million, up ¥8,428 million year on year) and loans to SMEs. The non-consolidated period-end loan balance steadily expanded to ¥393,265 million (up ¥2,098 million year on year), aiming for earnings growth by combining this with margin improvement amid the rate-hike environment.
Utilizing Shimagin Regional Business Investment Co., Ltd., established in April 2025, to support business succession and growth in the San'in region. This is a medium- to long-term initiative aimed at diversifying revenue beyond lending and leasing, and it was brought into the scope of consolidation and began full-scale operation from FY2026 (ending March 2026).
Net unrealized valuation losses on other securities continued to deteriorate to ¥(12,614) million (compared with ¥(9,675) million in the previous period), and efforts continue to improve valuation gains/losses on the securities portfolio centered on government and municipal bonds. The FY2027 (ending March 2027) plan also factors in additional rate hikes by the Bank of Japan, and a reduction in valuation losses is expected as interest rates rise.
Last updated: July 19, 2026