ENVALITH
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Juroku Financial Group, Inc.

7380・Prime Market・Banks

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株式会社十六フィナンシャルグループ logo
Juroku Financial Group, Inc.7380

Business

The Juroku Financial Group, Inc. is a holding company centered on The Juroku Bank, Ltd., which was founded in 1877, providing a diverse range of financial services including leasing, securities, credit cards, and business succession advisory. It transitioned to a holding company structure in October 2021 and is listed on both the Tokyo and Nagoya Stock Exchanges. With 12 consolidated subsidiaries, it primarily serves individuals, corporations, and local governments in Gifu and Aichi Prefectures. Centered on Banking (The Juroku Bank, with its head office and 159 other branches), it operates in Leasing Business (Juroku Lease), Financial Instruments Business (Juroku TT Securities), Credit Card Business (Juroku Card), and Business Succession & M&A Advisory (NOBUNAGA Succession), positioning itself as a comprehensive regional financial services group that supports sustainable regional growth.

Business Model

The core Banking business is built on a traditional deposit-lending model, in which deposits are raised from regional customers and net interest income is earned through loans and securities investment. In addition, fee and commission income (¥203,810 million in FY2026 (ending March 2026)) from investment trust and insurance sales, corporate solutions, and business succession advisory, as well as gains and losses related to stocks and other securities (¥315,710 million in the same period) from the planned sale of policy-holding shares, supplement earnings. Group companies in leasing, securities, credit cards, and other businesses expand customer touchpoints through cross-selling, diversifying revenue through the Group's comprehensive strength.

Company Strengths

Founded in 1877, Juroku Bank operates its head office plus 159 branches across Gifu and Aichi prefectures, with loans outstanding of ¥5,076,206 million and deposits outstanding of ¥6,381,470 million. With SME loans outstanding of ¥3,848,242 million and housing loans outstanding of ¥2,171,515 million, the bank maintains deep penetration among both individual and corporate customers, forming a customer base that is difficult for competitors to replicate in a short period.

In addition to Banking, the group provides an integrated offering spanning Leasing (Juroku Lease), Securities (Juroku TT Securities, balance of ¥295,321 million), Credit Card (Juroku Card), Business Succession & M&A Advisory (NOBUNAGA Succession, revenue of ¥970 million), and Investment Limited Partnership Management & Administration, among others. Cross-selling across group companies has expanded fee and commission income (Fee Business) to ¥203,810 million (up ¥28,690 million year on year), reflecting progress in revenue diversification.

Juroku Bank's standalone adjusted OHR was 53.35% (an improvement of 3.93 points year on year), and the consolidated adjusted OHR was 54.13%, achieving the second Medium-Term Management Plan target of the "50% range." Consolidated core net business profit rose substantially to ¥399,560 million (up ¥78,110 million year on year), providing numerical confirmation of profitability improvement achieved through both expense control and revenue expansion.

ENVALITH's Perspective

In FY2026 (ended March 2026), both consolidated core net business profit and net income attributable to owners of parent reached record highs. However, the consolidated earnings forecast for FY2027 (ending March 2027) calls for ordinary profit of ¥41,000 million (down 4.1% year on year), indicating an expected decline in profit. It remains uncertain whether the high level of gains/losses related to stocks (¥31,571 million on a consolidated basis in FY2026) will continue, and the high degree of dependence on gains from the sale of policy-oriented shareholdings is a concern regarding the sustainability of earnings. Credit-related costs are also expected to increase substantially, to a forecast of ¥4,000 million in FY2027 (versus an actual ¥1,850 million in FY2026), and the trend in credit costs warrants close monitoring.

As an external factor, against the backdrop of the Bank of Japan's policy rate hikes, the yield on loans continued to improve, reaching 1.07% (up 0.22 percentage points year on year), while the overall interest margin rose to 0.29% (up 0.06 percentage points year on year). On the other hand, interest paid on deposits surged from ¥3,585 million to ¥11,571 million, and total funding costs also expanded from ¥9,445 million to ¥16,809 million. In a phase of further rate hikes going forward, rising funding costs could compress the interest margin, and attention should be paid to the risk that the net increase effect on net interest income may shrink.

The consolidated balance of non-performing loans increased to ¥65,040 million (versus ¥60,868 million in the previous fiscal year), and the ratio to total credit extended rose to 1.24% (versus 1.17% in the previous fiscal year). Claims against bankrupt and reorganizing debtors increased to ¥15,146 million (up ¥1,464 million year on year), and doubtful claims increased to ¥48,112 million (up ¥2,594 million year on year). In addition, impairment losses recorded under extraordinary losses have been on an expanding trend, reaching ¥2,835 million (versus ¥2,417 million in the previous fiscal year). The FY2027 (ending March 2027) forecast for credit-related costs of ¥4,000 million is approximately 2.2 times the FY2026 (ended March 2026) actual figure, and the risk that increased credit costs will weigh on profit needs to be factored in.

Growth Strategy

Long-term vision "16Vision-10" and the Second Medium-Term Management Plan driving evolution into a comprehensive regional financial group

Interest income (consolidated) reached ¥62,179 million, driven by growth in personal loan balances centered on housing loans (housing loan balance of ¥2,171,515 million) and improved loan yield (1.07%, up 0.22 points year on year). Continued management of yield spreads to capitalize on the rising interest rate environment remains an ongoing task.

Non-interest income expanded through assets-in-custody-related fees (¥8,786 million), NOBUNAGA Succession (¥970 million), Juroku TT Securities (¥1,598 million), and other sources. Personal assets in custody (combined for two companies) reached ¥6,088,368 million, with strong sales trends in investment trusts, individual annuity insurance, and similar products.

Net income of consolidated subsidiaries excluding the bank totaled ¥2,511 million (up ¥1,054 million year on year), showing steady expansion. The Juroku Business Succession Support No. 2 Investment Limited Partnership was newly established in August 2025, expanding investment activities to address the successor shortage facing regional small and medium-sized enterprises. Diversification of group functions is progressing.

The adjusted OHR improved substantially to 54.13% on a consolidated basis (from 58.17% in the previous fiscal year) and to 53.35% at Juroku Bank on a standalone basis (from 57.28% in the previous fiscal year). Efficiency improved as revenue growth outpaced the increase in expenses (consolidated expenses of ¥47,161 million, up ¥2,454 million year on year). The company aims to continue balancing cost management with revenue growth in FY2027 (ending March 2027).

A stock split at a ratio of five shares per one share of common stock took effect on April 1, 2026, lowering the per-unit investment amount to improve share liquidity and broaden the investor base. While maintaining a dividend payout ratio of 31.3% (FY2026 (ending March 2026)), the company plans a forecast dividend of ¥50 (post-split) for FY2027 (ending March 2027), equivalent to ¥250 on a pre-split basis.

Last updated: July 19, 2026