ENVALITH
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The Yamagata Bank,Ltd.

8344・Prime Market・Banks

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株式会社山形銀行 logo
The Yamagata Bank,Ltd.8344

Business

The Bank of Yamagata, Ltd. is a regional bank in Yamagata Prefecture tracing its origins to its founding in 1896 (as Ryoyo Bank), operating 84 branches as of the end of March 2026. Together with seven consolidated subsidiaries, it engages primarily in Banking (deposits, lending, securities investment, and foreign exchange), along with Leasing Business through Sangin Lease Co., Ltd., Credit Guarantee Business through Sangin Guarantee Service Co., Ltd., and Data Processing Services, Credit Cards, and Regional Trading Company Business through Yamagin Card Service Co., Ltd. and others. Its main customers are corporations, individuals, and national and local government bodies within Yamagata Prefecture, and it is a regional financial group with loan balances of ¥2,110.0 billion and deposit balances of ¥2,936.0 billion. It is listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

Net interest income (interest on loans and dividends on securities) forms the core of earnings, with net interest income of ¥31,167 million for FY2026 (ending March 2026). Adding net fees and commissions of ¥5,973 million (investment trust and life insurance sales commissions, M&A and business succession fees, etc.) to this, consolidated gross operating profit came to ¥26,369 million. Through collaboration with group companies, the company also secures peripheral income from leasing, credit guarantees, card services, and other areas, providing comprehensive, community-based financial services.

Company Strengths

As of the end of March 2026, loans outstanding stood at ¥2,110.0 billion (up ¥78.4 billion year on year), while deposits and other balances stood at ¥2,936.0 billion (up ¥54.7 billion year on year). By industry, loans are diversified across sectors such as real estate and goods rental/leasing (¥324,011 million) and national/local government (¥381,029 million), forming a stable portfolio, and the ratio of problem loans (risk-monitored loans) remains at a favorable level of 0.97%.

As of the end of March 2026, the balance of problem loans (risk-monitored loans) was ¥20,957 million, representing 0.97% of total credit outstanding (down 0.03 percentage points year on year). The combined total of bankrupt/reorganization claims, doubtful claims, and substandard claims remained limited at ¥20,957 million, while normal claims stood at ¥2,136.3 billion. The high asset quality reflected in these figures stems from rigorous self-assessment and ongoing support for improving the business performance of client companies.

In addition to the bank itself, seven consolidated subsidiaries—including Yamagin Lease (segment assets of ¥16,322 million), Yamagin Hosho Service (segment profit of ¥629 million), and Yamagin Card Service—provide ancillary financial services. The Credit Guarantee Business demonstrates high profitability, with segment profit of ¥629 million against segment assets of ¥5,953 million, fulfilling a role that supplements earnings across the group as a whole.

ENVALITH's Perspective

Consolidated ordinary income for FY2026 (ending March 2026) reached ¥63,330 million (up 19.8% year on year), and profit attributable to owners of parent came to ¥6,528 million (up 48.0% year on year), representing a substantial profit increase. The main external factor was the expansion of net interest income driven by the Bank of Japan's rate hikes (consolidated net interest income of ¥31,167 million, up ¥5,215 million year on year). For FY2027 (ending March 2027), the company forecasts consolidated ordinary profit of ¥12,100 million (up 33.7% year on year) and net profit of ¥7,500 million (up 14.9% year on year), and the trend of increasing profits is expected to continue. The dividend is also being raised from ¥84 (up ¥39 year on year) to a projected ¥98, maintaining a dividend payout ratio of 40.4%, which reflects a shareholder return stance worthy of positive evaluation.

Non-consolidated core net business profit improved substantially to ¥13,339 million (up ¥4,889 million year on year), but actual net business profit remained limited at ¥3,128 million (up ¥2,888 million year on year). Bond-related gains/losses (the five-account balance) recorded a large loss of ¥(10,321) million, and unrealized losses on the securities portfolio also remain (non-consolidated valuation losses on other securities of ¥(15,204) million). The core OHR improved from 70.27% to 61.12%, but remains at a high level, and expense control and expansion of non-interest income remain medium- to long-term challenges.

The economy within Yamagata Prefecture remains in a state of only "gradual recovery," with personal consumption trending flat against a backdrop of elevated prices. The impact of U.S. tariff policy has spread to manufacturing production activity within the prefecture, centered on electronic components, devices, and chemicals, with an adjustment-oriented trend emerging in the latter half of the period. The structural risk of medium- to long-term stagnation in deposit and loan balances due to population decline remains a structural challenge. On the other hand, the implementation of share buybacks (up to 170,000 shares / ¥500,000,000, from May to August 2026) indicates a heightened awareness of improving capital efficiency and can be evaluated as an improvement in the company's shareholder return stance.

Growth Strategy

Advancing region-focused growth through enhanced consulting capabilities, sustainability management, and improved group-wide synergy

Continuing a sales strategy to achieve balanced growth across three areas: business loans, individual housing loans, and loans to national and local government entities. Non-consolidated loans outstanding at the end of March 2026 steadily increased to ¥2,120,392 million (up ¥79,603 million year on year), and this upward trend is expected to continue in FY2027 (ending March 2027).

Continuing to expand assets under custody (up ¥35,184 million year on year to ¥377,757 million) through sales of investment trusts (¥113,296 million), life insurance (¥235,321 million), and public bonds (¥29,140 million). Aiming to secure stable fee and commission income (non-consolidated: ¥7,534 million).

Expanding interest and dividend income through additional purchases of securities, mainly government and municipal bonds (non-consolidated securities balance of ¥852,521 million, up ¥38,169 million year on year). On the other hand, bond-related gains/losses (net of five accounts) remained a significant loss of ¥(10,321) million, and qualitative improvement of the portfolio remains an ongoing challenge.

Set the annual dividend for FY2026 (ending March 2026) at ¥84 (an 87% increase from ¥45 the previous year), with ¥98 forecast for FY2027 (ending March 2027). While maintaining a payout ratio of 40.4%, resolved in May 2026 to conduct a share buyback (up to 170,000 shares / ¥500,000,000). Aiming to achieve both improved capital efficiency and enhanced shareholder returns.

Yamagin Capital Co., Ltd. was dissolved as of March 30, 2026, with liquidation expected to be completed in June 2026. This will concentrate group management resources on core businesses. A renewal of directors and executive officers was implemented as of June 25, 2026, to strengthen the management structure.

Last updated: July 19, 2026