ZENKOKU HOSHO Co.,Ltd.

Business Details

Provides credit guarantee services such as housing loans, card loans, and education loans to affiliated financial institutions nationwide. Operates nationwide as an independent entity not dependent on any specific financial institution or industry, diversifying guarantee risk geographically and by business type. Guarantee fees are collected either as a lump sum at the start of the guarantee or on a monthly balance-linked basis, and are invested in highly safe assets such as deposits and government bonds. After subrogated payment, the company acquires indemnity claims and seeks recovery through voluntary sale or auction utilizing real estate collateral. Also promotes expansion of the guarantee business domain and diversification of revenue sources in the debt management and collection field through group companies.

Recent Overview

Operating revenue increased while operating profit slightly declined; ordinary profit increased, supported by equity-method investment gains

In FY2026 (ending March 2026), operating revenue reached ¥58,739 million (up 3.1% year on year), achieving an increase in revenue. However, the provision for debt guarantee losses increased from ¥4,430 million to ¥5,983 million, expanding operating expenses, and operating profit slightly declined to ¥41,382 million (down 1.4% year on year). On the other hand, an increase in interest received (from ¥3,970 million to ¥4,731 million) and the new recognition of ¥1,193 million in equity-method investment gains led to an increase in ordinary profit to ¥46,554 million (up 4.6% year on year). Net income for the period was ¥32,526 million (up 1.4% year on year). In investing activities, the company spent ¥48,074 million on the acquisition of investment securities, and cash and cash equivalents at period-end decreased from ¥92,384 million to ¥55,524 million. The company formulated a new Medium-Term Management Plan, "Go for 50: Opening the Future with the Power of Guarantee" (FY2026–FY2030), setting forth as its long-term vision the formation of a comprehensive group in the housing and financial fields centered on Housing Loan Guarantee.

Key Products

Growth Drivers

• Steady trends in the housing loan market driven by rising loan amounts amid increasing housing prices
• Expansion of guarantee demand driven by an increase in existing home transactions, particularly in urban areas
• Inorganic buildup of guaranteed debt balances through the ABL lending method (long-term loans receivable of ¥23,544 million as of end of March 2026)
• Strengthening of region-focused sales structure and responsiveness to affiliated financial institutions' needs through introduction of the East-West area system for sales offices
• Expansion of the guarantee business domain and diversification of revenue sources through group companies such as Minori Credit Guarantee and Akebono Debt Collection
• Synergy creation and expansion into adjacent businesses through CVC investments and Capital/Business Alliances (two companies)
• Expansion of non-operating income driven by increased interest received (¥4,731 million in FY2026, ending March 2026) and equity-method investment gains (¥1,193 million)
• Growth of core business and acquisition of new revenue sources based on the new Medium-Term Management Plan "Go for 50" (FY2026–FY2030)

Risks

• Long-term contraction of the new housing construction market due to the declining birthrate, aging population, and population decline
• Persistently high housing prices due to soaring material and labor costs, and a year-on-year decrease in new housing starts
• Downward pressure on guarantee demand due to reduced consumer purchasing intent resulting from rising housing loan interest rates
• Rising credit cost risk, as indicated by the increase in provision for debt guarantee losses (from ¥4,430 million to ¥5,983 million) and the expansion of indemnity claims receivable balance (from ¥17,268 million to ¥19,880 million)
• Risk of spillover to the domestic economy from a downturn in overseas economic conditions amid U.S. trade policy and unstable international circumstances
• Impact on net assets from continued share buybacks (¥7,000 million acquired in the current period; treasury shares balance of ¥14,673 million at period-end)
• Liquidity management risk associated with a significant decrease in cash and cash equivalents (from ¥92,384 million to ¥55,524 million) due to expanded investing activities (¥48,074 million in acquisitions of investment securities)
• Contraction of the overall housing loan market due to medium- to long-term progression of domestic population decline and aging