Aichi Financial Group, Inc.
7389・Prime Market・Banks
Banking
The core segment of Aichi FG. As a regional financial institution based in Aichi Prefecture, it handles deposit-lending operations and fee-based revenue.
| Period | Current | Previous | Change |
|---|---|---|---|
| Ordinary income (from external customers, Banking segment) | ¥113,104 million | ¥91,391 million | ↑ |
| Segment profit (Banking) | ¥30,737 million | ¥10,279 million | ↑ |
| Loan balance (The Aichi Bank, non-consolidated, period-end) | ¥4,953,134 million | ¥4,854,765 million | ↑ |
| Deposit balance, etc. (The Aichi Bank, non-consolidated, period-end) | ¥6,052,363 million | ¥5,947,309 million | ↑ |
| Capital adequacy ratio (consolidated, domestic standard) | 8.83% | 8.78% | ↑ |
| Loan yield (The Aichi Bank, non-consolidated) | 1.07% | 0.82% | ↑ |
| Total interest margin (The Aichi Bank, non-consolidated) | 0.14% | 0.07% | ↑ |
| Core net business profit (The Aichi Bank, non-consolidated) | ¥20,778 million | ¥14,764 million | ↑ |
| Total risk-monitored loans (consolidated) | ¥82,158 million | ¥89,635 million | ↓ |
| ROE, net income basis (consolidated) | 5.56% | 2.48% | ↑ |
Business Details
Centered on The Aichi Bank, Ltd. (formed in January 2025 through the merger and trade name change of The Aichi Bank and The Chukyo Bank), this segment conducts deposit business, lending business, remittance operations, over-the-counter sales of investment trusts and life insurance products, and securities business. With Aichi Prefecture as its primary operating base, it is promoting a shift toward a consulting/solution-based business model for both corporate and individual customers. It is the core segment, accounting for approximately 90% of the Group's consolidated ordinary income.
Recent Overview
Ordinary income expanded approximately threefold year-on-year, driven by increased net interest income, gains on sales of equities, and the elimination of merger-related costs.
In FY2026 (ending March 2026), the Banking segment's ordinary income was ¥113,104 million (up ¥21,713 million year-on-year), and segment profit increased substantially to ¥30,737 million (up ¥20,458 million year-on-year). Interest income on loans surged to ¥52,803 million (from ¥29,717 million in the prior period), aided by an improved loan yield (from 0.82% to 1.07%) amid the Bank of Japan's rate hikes. Gains on sales of equities and other securities of ¥18,330 million (from ¥13,359 million in the prior period) also contributed to the profit increase. On the other hand, interest expenses on deposits surged to ¥18,240 million (from ¥4,809 million in the prior period), raising funding costs. The Aichi Bank's non-consolidated operating expenses fell significantly to ¥18,444 million (from ¥22,068 million in the prior period) due to the elimination of merger-related integration costs. Credit-related expenses turned to a net gain of ¥(2,473) million (from an expense of ¥1,113 million in the prior period).
Key Products
Growth Drivers
- Increase in interest income on loans: Non-consolidated interest income on loans at The Aichi Bank surged to ¥52,803 million (from ¥29,717 million in the prior period), driven by improved loan yield (from 0.82% to 1.07%) amid Bank of Japan rate hikes and expanded loan balances (up ¥98,368 million year-on-year)
- Increase in gains on sales of policy investment shares: The Aichi Bank's non-consolidated gains on sales of equities and other securities increased to ¥18,330 million (from ¥13,359 million in the prior period), with net gains/losses on equities and other securities (net of three accounts) at ¥16,848 million (from ¥13,018 million in the prior period)
- Elimination of integration-related expenses: Following completion of the merger between The Aichi Bank and The Chukyo Bank (January 2025), system integration costs were eliminated, reducing The Aichi Bank's non-consolidated operating expenses to ¥18,444 million (down ¥3,623 million from ¥22,068 million in the prior period)
- Improvement in credit-related expenses: Reversal gains on allowance for loan losses of ¥2,024 million and reversal gains on allowance for contingent losses of ¥449 million resulted in credit-related expenses turning to a net gain of ¥(2,473) million (from an expense of ¥1,113 million in the prior period)
- Expansion of assets in custody balances: Investment trusts increased to ¥208,038 million (up ¥32,381 million year-on-year) and insurance increased to ¥659,913 million (up ¥56,806 million year-on-year), expanding the fee income base
- Expected scale expansion and enhanced presence in Aichi, Mie, and neighboring regions through the business integration with Sanjuusan Financial Group (targeted for April 1, 2027)
Risks
- Interest rate rise risk: Interest expenses on deposits surged (to ¥18,240 million from ¥4,809 million in the prior period) due to additional Bank of Japan rate hikes, raising the possibility that increasing funding costs will pressure net interest income. The deposit yield rose to 0.30% (from 0.10% in the prior period)
- U.S. trade policy risk: Impact on export-related companies, primarily in the automotive industry, could lead to a deterioration in the Aichi Prefecture economy and the business conditions of client companies. Loans to the manufacturing sector totaled ¥585,074 million
- Securities valuation risk: There are valuation losses on held-to-maturity bonds of ¥(858) million and valuation losses on bonds classified as other securities of ¥(55,963) million (consolidated), raising the risk of expanding unrealized losses in a rising interest rate environment
- Business integration risk: Costs and increased workload associated with due diligence and integration work toward the merger with Sanjuusan Financial Group (targeted for April 1, 2027)
- Trends in risk-monitored loans: Loans requiring caution increased to ¥8,015 million (from ¥7,568 million in the prior period), requiring close monitoring of restructured loans (¥7,990 million). The coverage ratio declined to 86.62% (from 88.24% in the prior period)
- Intensifying competition risk: Intensifying competitive environment due to entry into the region by financial institutions from other prefectures and entry into the financial sector by companies from other industries
Last updated: June 19, 2026