Nishi-Nippon Financial Holdings, Inc.
7189・Prime Market・Banks
Business
Nishi-Nippon Financial Holdings is a bank holding company established in October 2016 through a joint share transfer by The Nishi-Nippon City Bank, The Nagasaki Bank, and Nishi-Nippon Credit Guarantee. The group comprises 17 subsidiaries and 4 affiliated companies, and provides a diverse range of financial services—including deposits, lending, exchange, securities investment, and over-the-counter sales of investment trusts and insurance products—with Kyushu and Fukuoka as its main operating base. The Banking segment accounts for the majority of revenue, complemented by financial-related businesses such as Credit Guarantee, securities, leasing, and information systems. The company is listed on the Prime Market of the Tokyo Stock Exchange and on the Fukuoka Stock Exchange.
Business Model
The company's foundation is a traditional deposit-lending model that raises low-cost funds through deposits and negotiable certificates of deposit (period-end balance of ¥10,945,481 million) and deploys them into loans (¥10,239,342 million) and securities (¥1,913,570 million). In addition, it diversifies revenue by accumulating non-interest income such as sales commissions from investment trusts and insurance products, custody asset income from its securities subsidiary (Nishi-Nippon City TT Securities), and credit guarantee fees. Net fees and commissions for FY2026 (ending March 2026) are expected to reach ¥25,183 million.
Company Strengths
Combined loans outstanding for the two banks reached ¥10,289,537 million (up ¥317,829 million year on year), maintaining a diversified loan portfolio centered on real estate, local governments, and individuals. Personal loan balances continued to expand, reaching ¥3,616,780 million (up ¥167,240 million year on year), with the deep customer base in the Kyushu and Fukuoka region serving as a source of competitive advantage.
Group-wide assets in custody maintained high growth, reaching ¥1,674,651 million (up ¥269,490 million year on year, +19.2% versus the prior fiscal year). Assets in custody at Nishi-Nippon City TT Securities also expanded to ¥553,666 million (up ¥128,294 million year on year), with a sales network combining bank counters and the securities subsidiary building a system to capture individual asset management needs.
In the final year (FY2026, ending March 2026) of the previous medium-term management plan "Hisho 2026," all major KPIs were achieved above plan: consolidated net income attributable to owners of the parent of ¥40.1 billion (exceeding the plan of over ¥32.0 billion), consolidated ROE of 6.89% (exceeding the plan of approximately 6%), and consolidated core OHR of 54.9% (achieving the plan of approximately 60%). This also exceeded the initially announced forecast of ¥37.0 billion, and the results, effectively a record-high profit, demonstrate the company's management execution capability.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), operating income was ¥246,860 million (up 25.7% year on year), ordinary profit was ¥58,784 million (up 29.1% year on year), and net income attributable to owners of the parent was ¥40,116 million (up 29.5% year on year), with all metrics increasing substantially to set new record highs. As an external factor, against the backdrop of the Bank of Japan's interest rate hikes, interest on loans surged to ¥122,170 million (up ¥28,617 million year on year) and interest on deposits with banks rose to ¥8,015 million (up ¥2,836 million year on year), with net interest income serving as the main driver of the profit increase. On the other hand, funding costs also increased to ¥41,490 million (up ¥13,731 million year on year), and interest on deposits rose substantially to ¥21,249 million (up ¥14,640 million year on year). Comprehensive income was ¥82,364 million (a significant improvement from ¥-17,250 million in the previous period), and the reversal of net unrealized gains (losses) on other securities from ¥-3,550 million to ¥21,874 million also indicates an improvement in the company's financial condition. ROE (based on net income attributable to owners of the parent) rose to 6.9% (from 5.5% in the previous period).
Growth Strategy
Under "Hisho 2026," the company is pursuing expansion of net interest income by leveraging the interest rate environment, together with diversification of assets in custody and fee income.
Capturing the Bank of Japan's interest rate hike phase, the company achieved both an improvement in loan yield (combined for the two banks: 1.23%, up 0.26pt year on year) and balance expansion (combined for the two banks: ¥10,289,537 million, up ¥317,829 million year on year). For FY2027 (ending March 2026), NCB on a non-consolidated basis forecasts core gross business profit of ¥144,400 million (up ¥34,822 million year on year), anticipating substantial revenue growth.
Group-combined assets in custody reached ¥1,674,651 million (up 19.2% year on year), showing high growth. Through expansion of Nishi-Nippon City TT Securities' balance (¥553,666 million) and strengthened coordination with over-the-counter bank sales, the company aims to steadily build up fee income. Rising asset management needs among individuals serve as an external tailwind.
From FY2027 (ending March 2026), the shareholder return policy will change from "total payout ratio of approximately 40%" to "dividend payout ratio of approximately 40% plus flexible share buybacks." The annual dividend forecast has been raised to ¥140 (from ¥118 in the previous period), clarifying the policy of increasing dividends through profit growth. The dividend payout ratio for FY2026 (ending March 2026) is 41.0% (33.9% in the previous period).
The company continues to maintain a stable non-performing loan ratio of 1.49% (combined for the two banks, unchanged year on year) and a high coverage ratio of 81.29%. The credit cost forecast for FY2027 (ending March 2026) is expected to increase to ¥7,000 million on an NCB non-consolidated basis (from ¥6,112 million in the previous period), but the policy is to keep it at a manageable level relative to loan balance expansion.
Last updated: July 19, 2026