ENVALITH
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The Chiba Kogyo Bank, Ltd.

8337・Prime Market・Banks

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株式会社千葉興業銀行 logo
The Chiba Kogyo Bank, Ltd.8337

Business

The Chiba Kogyo Bank, Ltd. is a regional bank founded in 1952 and based in Chiba Prefecture, operating banking, leasing, and other businesses together with four consolidated subsidiaries. Its main operating base is Chiba Prefecture, with a population of over 6.2 million, and its primary customers are individuals, small and medium-sized enterprises, and local governments. In banking, it provides comprehensive financial services including deposits, lending, domestic and foreign exchange, and sales of investment trusts, accounting for the majority of consolidated ordinary income of ¥68,872 million (FY2026 (ending March 2026)). Chiba Sogo Leasing Co., Ltd. handles the leasing business, while Chiba Kogin Computer Soft Co., Ltd. and Chibakuru Co., Ltd. and others provide complementary functions such as systems, regional trading, and consulting. In April 2027, the company plans to establish a holding company, "Chiba Financial Group, Inc.," through a joint share transfer with The Chiba Bank, Ltd.

Business Model

The foundation is a traditional bank-type revenue model in which deposits (¥3,043,848 million) are funded at low cost and deployed into loans (¥2,511,632 million) and securities (¥591,813 million). Net interest income of ¥32,339 million forms the core of earnings. In addition, fee income (¥7,732 million) from consulting-based sales such as investment trusts and insurance, and leasing income (¥8,482 million) from Chiba Sogo Leasing, supplement earnings, forming a complementary revenue structure.

Company Strengths

The bank boasts a loan balance of ¥2,511,632 million (up ¥95,773 million year on year) and a deposit balance of ¥3,043,848 million (up ¥166,829 million year on year), and maintains a broad transaction base with small and medium-sized enterprises, individuals, and local public bodies within Chiba Prefecture. It has built a loan portfolio diversified across multiple industries, led by ¥736,148 million (29.31% of the total) extended to the real estate industry.

The balance of assets in custody, including investment trusts, reached ¥233.8 billion (up ¥47.0 billion, +25.3% year on year), reflecting steady results from asset-formation proposals to individual customers through consulting-based sales activities. Of the ¥12,784 million in fee and commission income, investment trust sales commissions and corporate-related fees have trended firmly, demonstrating a solid non-interest income base.

The consolidated capital adequacy ratio (domestic standard) as of the end of March 2026 stood at 9.14%, well above the minimum required level of 4% under the domestic standard. Capital amounted to ¥168.4 billion, against risk-weighted assets of ¥1,840.9 billion. This already exceeds the medium-term management plan target of 8.5% or higher, securing financial stability ahead of the management integration with Chiba Bank.

ENVALITH's Perspective

Interest income on fund management for FY2026 (ending March 2026) expanded significantly to ¥39,786 million (up 28.6% year on year), primarily driven by an increase in interest on loans. For FY2027 (ending March 2027), consolidated ordinary profit is projected at ¥14,600 million (up 14.8% year on year) and profit attributable to owners of parent at ¥9,600 million (up 11.4% year on year), continuing the trend of earnings growth. As an external factor, the Bank of Japan's continued stance toward further rate hikes serves as a tailwind, while the sharp rise in interest on deposits (¥6,322 million, versus ¥1,833 million in the previous fiscal year) is putting upward pressure on funding costs. The pace of pass-through to lending rates will be key to sustaining improvement in the interest margin.

Consolidated fee and commission income was ¥12,784 million, a slight decrease from ¥12,954 million in the previous fiscal year. On a non-consolidated basis, an increase in guarantee fees and group credit life insurance premiums pushed down fee and commission income by ¥651 million year on year. In addition, non-consolidated disposal of non-performing loans turned upward to ¥1,100 million (versus ¥119 million in the previous fiscal year), comprising ¥851 million in loan write-offs and ¥89 million in provision for specific allowance for loan losses. Although the actual credit cost has improved, trends in credit-related expenses are highly susceptible to economic fluctuations, and it will be necessary to continuously monitor whether the FY2027 (ending March 2027) forecast for provision for loan losses of ¥1.2 billion (versus ¥1.3 billion in the previous fiscal year) is achieved.

On March 25, 2026, the company concluded a business integration agreement with The Chiba Bank, and plans to establish a joint holding company, "Chiba Financial Group," on April 1, 2027. As part of the capital structure realignment ahead of the integration, the 1st Series 7th Class Preferred Shares (481,500 shares, total acquisition amount of approximately ¥24.0 billion) were acquired and retired on April 1, 2026. Furthermore, the acquisition of the 2nd Class, 2nd Series 6th Class, and 2nd Series 7th Class Preferred Shares is scheduled between July 2026 and January 2027, making the management of the capital adequacy ratio (8.94% non-consolidated, 9.14% consolidated) an important issue. The two banks are currently examining the approach to capital support following the integration, and the specifics of the integration terms and capital policy will directly affect shareholder value.

Growth Strategy

Strengthening regional financial capabilities through the medium-term management plan "Happiness Design Kizuna Project 2028" and business integration with The Chiba Bank

Concluded a business integration agreement on March 25, 2026. Subject to approval at the extraordinary general meeting of shareholders scheduled for December 23, 2026, and approval from relevant authorities, a joint holding company is planned to be established on April 1, 2027 through a joint share transfer scheme. This will realize "strengthening of regional financial capabilities through two brands of trust and respect" and contribute to the sustainable development of the Chiba prefectural economy.

Loans outstanding to small and medium-sized enterprises (non-consolidated) steadily expanded, up ¥55.2 billion year on year to ¥1,391.2 billion, and investment trusts and other assets in custody increased by ¥47.0 billion year on year (+25.3%) to ¥233.8 billion. Consulting-based sales activities that uncover funding needs and respond to diverse financial needs are strengthening the earnings base.

Under the strategic reinforcement initiative "Transformation of Sales Processes through DX Implementation" in the medium-term management plan, the Group is promoting digitalization investment, including system renewal. Expenses (non-consolidated) for FY2026 (ended March 2026) increased to ¥26,581 million (up ¥1,305 million year on year), but the core OHR improved to 65.93% (67.40% in the previous fiscal year). The Group aims to achieve both operational efficiency and enhanced earning power.

Based on the long-term financial base strategy, the Group is promoting a reduction in the preferred share issuance ratio. The 1st Series 7th Type Preferred Shares (481,500 shares) were acquired and cancelled on April 1, 2026 (total acquisition amount of approximately ¥24.0 billion). In addition, the 2nd Type, 2nd Series 6th Type, and 2nd Series 7th Type Preferred Shares are scheduled to be acquired between July 2026 and January 2027. The Group aims to bring the preferred share issuance ratio below 20% by the end of fiscal year 2027.

The forecast dividend on common stock for FY2027 (ending March 2027) is planned to double to ¥20 per share (from ¥10 in the previous fiscal year). The consolidated dividend payout ratio is expected to rise from 7.2% in FY2026 (ended March 2026) to 11.9% in FY2027 (ending March 2027). The Group aims to enhance shareholder returns in line with business expansion.

Last updated: July 19, 2026