Daishi Hokuetsu Financial Group, Inc.
7327・Prime Market・Banks
Banking
Core group segment. Daishi Hokuetsu Bank serves as the main entity handling deposit-taking, lending, securities investment, and over-the-counter sales operations.
| Period | Current | Previous | Change |
|---|---|---|---|
| Ordinary income (from external customers, consolidated segment) | ¥224,425 million | ¥160,032 million | ↑ |
| Segment profit (ordinary profit, consolidated) | ¥56,707 million | ¥35,127 million | ↑ |
| Segment assets (consolidated, period-end) | ¥10,742,705 million | ¥10,902,564 million | ↓ |
| Depreciation (consolidated segment) | ¥5,360 million | ¥6,684 million | ↓ |
| Loan balance (bank non-consolidated, period-end) | ¥5,915,028 million | ¥5,614,300 million | ↑ |
| Deposit balance (bank non-consolidated, period-end) | ¥8,732,529 million | ¥8,780,384 million | ↓ |
| Core net business profit (bank non-consolidated) | ¥59,611 million | ¥39,743 million | ↑ |
| Non-performing loan ratio (bank non-consolidated) | 1.94% | 2.06% | ↓ |
| Total interest margin (bank non-consolidated, all branches) | 0.25% | 0.12% | ↑ |
| Capital adequacy ratio (FG Group consolidated, domestic standard) | 12.07% | 10.59% | ↑ |
Business Details
At the head office, branches, and other outlets of Daishi Hokuetsu Bank, Ltd., in addition to deposit-taking, lending, domestic exchange, and foreign exchange operations, the bank also conducts over-the-counter sales of public bonds such as government bonds, as well as investment trusts and insurance products, providing a wide range of financial products and services to individual and corporate customers in the region, primarily in Niigata Prefecture. This is the core business accounting for the majority of all group segments; of the FY2026 (ending March 2026) consolidated ordinary income of ¥260,253 million, ordinary income from external customers was ¥224,425 million (approximately 86%).
Recent Overview
Driven by rising interest rates and a sharp increase in gains on sale of equities, the bank's non-consolidated ordinary profit reached ¥56.7 billion, up ¥21.5 billion year on year.
In FY2026 (ending March 2026), against the backdrop of rising market interest rates driven by the Bank of Japan's monetary policy normalization, the bank on a non-consolidated basis saw interest on loans (¥69,788 million, up ¥14,908 million year on year) and interest and dividends on securities (¥52,815 million, up ¥6,794 million year on year) increase, expanding core gross business profit to ¥120,973 million (up ¥22,660 million year on year). In addition, gains/losses related to equities and other securities surged to ¥39,101 million (up ¥36,174 million year on year) due to profit-taking sales. On the other hand, gains/losses on government bonds and other bonds deteriorated to ¥(37,461) million (down ¥29,993 million year on year) due to the sale of low-yield bonds aimed at improving the portfolio. Net credit costs increased to ¥6,970 million (up ¥3,457 million year on year), mainly due to the downgrading of a major client. In addition, on March 26, 2026, the company concluded a business integration agreement with Gunma Bank and resolved to carry out a share exchange (issuing 1.125 shares of the company for each share of Gunma Bank), with an effective date of April 1, 2027.
Key Products
Growth Drivers
- Improvement in loan and securities investment yields due to rising market interest rates accompanying the Bank of Japan's monetary policy normalization (all-branch loan yield 1.21%, up 0.22 percentage points year on year; securities yield 2.02%, up 0.44 percentage points year on year)
- Increase in business lending outside the prefecture due to the expansion of structured finance, centered on the Tokyo Head Office (period-end balance ¥2,042,900 million, up ¥328,909 million year on year)
- Expansion of fee-based services income mainly due to increased M&A fees and loan-related fees resulting from strengthened consulting sales (bank non-consolidated ¥18,677 million, up ¥3,199 million year on year)
- Expansion of housing loans and unsecured loans through the use of non-face-to-face channels and enhanced product lineup (consumer lending period-end balance ¥1,587,077 million, up ¥69,787 million year on year)
- Increase in fee income due to expansion of assets under custody balance (bank non-consolidated ¥1,218,753 million, up ¥187,123 million year on year)
- Realization of economies of scale, enhanced consulting functions, and building a sustainable business model through the business integration with Gunma Bank (planned for April 1, 2027)
Risks
- Risk of deterioration in valuation gains/losses on securities due to sharp fluctuations in domestic market interest rates (the bank's non-consolidated valuation gains on other securities, after considering deferred hedges, were an unrealized gain of ¥75,252 million)
- Increase in deposit interest costs during a rising interest rate phase (the bank's non-consolidated deposit interest was ¥15,514 million, a sharp increase of ¥10,594 million year on year)
- Risk of increased credit costs due to downgrading of major clients and other factors (the bank's non-consolidated net credit cost was ¥6,970 million, up ¥3,457 million year on year)
- Decline in loan demand due to contraction of the regional economy accompanying population decline and aging in Niigata Prefecture (period-end balance of business lending within the prefecture decreased slightly by ¥28,181 million year on year)
- Risk of deteriorating business performance and increased credit costs among client companies due to heightened global economic uncertainty, including U.S. tariff policy
- Deterioration in gains/losses on government bonds and other bonds due to the sale of low-yield bonds aimed at improving the portfolio (bank non-consolidated ¥(37,461) million)
- Integration costs, system integration risk, and uncertainty regarding the realization of integration benefits associated with the business integration with Gunma Bank
- Risk of intensified competition from other industries and outflow of the customer base due to advances in digital technology
Last updated: June 12, 2026