Okinawa Financial Group, Inc.
7350・Prime Market・Banks
Banking Business
Banking segment centered on Bank of Okinawa, forming the core of Group revenue
| Period | Current | Previous | Change |
|---|---|---|---|
| Ordinary income (external customers) | ¥51,708 million | ¥42,177 million (estimated) | ↑ |
| Segment profit (ordinary income basis) | ¥13,866 million | ¥9,418 million | ↑ |
| Segment assets | ¥2,898,790 million | ¥2,941,333 million (estimated) | ↓ |
| Depreciation | ¥2,198 million | ¥2,274 million (estimated) | ↓ |
| Increase in tangible and intangible fixed assets | ¥1,571 million | ¥1,669 million (estimated) | ↓ |
| Loans outstanding (non-consolidated, fiscal year-end balance) | ¥2,027,126 million | ¥1,955,275 million | ↑ |
| Deposits outstanding (non-consolidated, fiscal year-end balance) | ¥2,654,768 million | ¥2,707,094 million | ↓ |
| Overall interest margin (non-consolidated) | 0.50% | 0.32% | ↑ |
| Core net business profit (non-consolidated) | ¥17,224 million | ¥11,116 million | ↑ |
| Total risk-managed loans (non-consolidated) | ¥27,240 million | ¥28,983 million | ↓ |
| Risk-managed loan ratio (non-consolidated) | 1.33% | 1.47% | ↓ |
| Capital adequacy ratio (non-consolidated, domestic standard) | 10.52% | 10.52% | — |
Business Details
This is the reporting segment operated by The Bank of Okinawa, Ltd. Through 65 offices, including the head office and 4 branches/sub-branches, the bank conducts Deposit Business, Lending Business, domestic and foreign exchange operations, Securities Investment Business, over-the-counter sales of government bonds, Trust Business, and other operations. Its main customers are individuals, corporations, and local public bodies within Okinawa Prefecture, with interest on loans, interest and dividends on securities, and fee income as its primary revenue sources. It is the core business accounting for the vast majority of ordinary income across all Group segments, with ordinary income from external customers of ¥51,708 million in FY2026 (ending March 2026).
Recent Overview
Interest rate increases and loan growth drove a substantial expansion in net interest income, with ordinary income up ¥4,447 million year on year
In the Banking Business segment for FY2026 (ending March 2026), against a backdrop of rising policy interest rates, loan yield rose to 1.66% (up 0.26 percentage points year on year) and securities yield rose to 1.47% (up 0.36 percentage points year on year), resulting in a substantial expansion of non-consolidated net interest income to ¥38,044 million (up ¥6,548 million year on year). Loans outstanding also expanded to ¥2,027,126 million, up ¥71,851 million from the previous fiscal year-end. Core net business profit improved significantly to ¥17,224 million (up ¥6,107 million year on year). On the other hand, interest expenses on deposits also rose to ¥5,112 million (up ¥3,385 million year on year), reflecting higher funding costs. Risk-managed loans improved to ¥27,240 million (ratio of 1.33%) compared to the previous fiscal year-end, and credit costs also declined to ¥1,088 million (down ¥786 million year on year).
Key Products
Growth Drivers
- Substantial expansion of net interest income driven by rising loan yield (1.66%) and securities yield (1.47%) against a backdrop of higher policy interest rates
- Expansion of interest income driven by continued growth in loans outstanding (up ¥71,851 million from the previous fiscal year-end to ¥2,027,126 million)
- Increase in housing loans and consumer-oriented loans (balance of ¥800,164 million) against a backdrop of a favorable economic climate in Okinawa Prefecture (an expansionary trend centered on tourism-related demand)
- Increase in net fee and commission income (non-consolidated ¥3,401 million, up ¥355 million year on year) driven by strengthened Group collaboration and sales promotion
- Profit-boosting effect from a substantial decrease in credit costs (¥1,088 million, down ¥786 million year on year)
- Expansion of loans to SMEs and others (balance of ¥1,691,719 million, loan ratio of 83.45%) and increased lending to the real estate and various service industries
- Improvement in gains/losses related to stocks and other securities (non-consolidated ¥2,192 million, up ¥2,410 million year on year)
Risks
- Risk of expanding valuation losses on securities (particularly bonds) due to rising domestic interest rates (non-consolidated bond valuation difference of -¥39,503 million, a deterioration of ¥10,604 million from the previous fiscal year-end)
- Risk of rising funding costs and margin compression due to a sharp increase in interest expenses on deposits (¥5,112 million, up ¥3,385 million year on year)
- Risk of deterioration in the domestic economy and business conditions within Okinawa Prefecture due to the impact of U.S. tariff measures and other factors, and risk of increased credit costs due to worsening business conditions among client companies
- Risk of increased costs for disposal of non-performing loans due to an increase in bankrupt and reorganization claims (non-consolidated ¥15,285 million, up ¥2,455 million from the previous fiscal year-end)
- Risk of fluctuation in the funding base due to a decrease in deposit balance (down ¥52,326 million from the previous fiscal year-end to ¥2,654,768 million)
- Increase in operating expenses due to human capital investment such as base pay increases (non-consolidated ¥22,872 million, up ¥630 million year on year)
- Intensifying competition and diversification and sophistication of customer needs due to entry of firms from other industries and accelerating digitalization
Last updated: June 19, 2026