The Bank of Iwate, Ltd.
8345・Prime Market・Banks
Business
The Iwate Bank, Ltd. is a regional bank based in Iwate Prefecture, established in 1932 (formerly Iwate Shokusan Bank), listed on the Prime Market of the Tokyo Stock Exchange. Centered on Banking operations—deposits, lending, foreign exchange, securities investment, and trust services—conducted through 110 branches and sub-branches, the bank operates as a comprehensive financial group with 7 consolidated subsidiaries engaged in Leasing, Credit Card and Credit Guarantee Business, Consulting Business, Regional Trading Company Business, and Investment Business. Its main customers are small and medium-sized enterprises, individuals, and local public bodies within Iwate Prefecture, and it serves as a core regional financial institution with loans outstanding of ¥2,314,102 million (consolidated) and deposits outstanding of ¥3,455,641 million (consolidated).
Business Model
The business is founded on the traditional banking model of deploying deposits as the primary funding source into loans and securities, earning income from the interest margin. In FY2025, interest income was ¥45,334 million (yield 1.22%) against interest expenses of ¥8,019 million (yield 0.22%), with net interest income of ¥37,315 million forming the core of earnings. On top of this, the multi-layered revenue structure includes net fees and commissions of ¥5,875 million (from assets under custody, foreign exchange, guarantees, etc.), as well as leasing, guarantee, and consulting revenue from group subsidiaries.
Company Strengths
Through 110 branches and sub-branches, the bank maintains a customer base with personal deposits of ¥2,259,551 million. It holds assets in custody of ¥421,609 million (up ¥43,732 million from the end of the previous fiscal year) and loans outstanding of ¥2,314,102 million (consolidated). Its sales foundation, deeply embedded across corporations, individuals, and local public bodies, constitutes a unique asset that is difficult for competitors to replicate in a short period.
Under the 21st Medium-Term Management Plan covering April 2023 to March 2026, the bank surpassed all major KPI targets with actual results of: consolidated net income of ¥8.9 billion (against a target of ¥7.0 billion), consolidated ROE of 4.7% (against a target of 4.0% or higher), consolidated capital adequacy ratio of 11.17% (against a target of approximately 10%), OHR of 59.0% (against a target in the 60% range), and customer service business profit of ¥3.35 billion (against a target of ¥1.0 billion or more), demonstrating a high level of plan execution capability through concrete results.
In addition to the core bank, the group comprises seven consolidated subsidiaries covering Leasing, Credit Card, Credit Guarantee, Consulting, Regional Trading Company, and Investment (CVC and business succession funds) businesses. This has established a system capable of providing one-stop solutions spanning both financial and non-financial areas, including M&A and business succession support for corporate clients, ICT consulting, and entry into renewable energy businesses.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026) (fiscal year 2025), consolidated ordinary revenue reached ¥77,495 million (up 57.5% year on year), and net income attributable to owners of the parent reached ¥8,919 million (up 27.8% year on year), marking record highs for the second consecutive year. As an external factor, the rise in the policy interest rate pushed up interest on loans (¥27,659 million, up ¥6,614 million year on year) and interest and dividends on securities (¥15,996 million, up ¥3,860 million year on year). In addition, a one-time gain on sale of stocks and other securities of ¥16,868 million (up ¥16,736 million year on year) significantly boosted ordinary revenue. On the other hand, a sharp increase in interest on deposits (from ¥2,101 million to ¥6,482 million), losses on sale of government bonds and other bonds (¥12,901 million), and losses on redemption (¥6,736 million) pushed up ordinary expenses to ¥64,644 million (up 64.0% year on year), resulting in core net business profit on a non-consolidated basis of negative ¥2,868 million, a loss. For FY2027 (ending March 2027), the company forecasts consolidated ordinary profit of ¥14,500 million and net income of ¥10,000 million, expecting an increase in profit driven mainly by an increase in fund management income.
Growth Strategy
Under the 22nd Medium-Term Management Plan, the company aims to balance offensive and defensive strategies, targeting consolidated ROE of 6% or higher and net income of ¥130 million or more in FY2028
Loans to corporations, individuals, and local public entities grew across all segments, with the loan balance reaching ¥2,323,787 million as of the end of March 2026 (up ¥117,107 million from the previous fiscal year-end). The loan yield continued to improve, reaching 1.23% (up 0.26 percentage points year-on-year), and the increase in interest income on lending is factored in as a key driver of the earnings forecast for FY2027 (ending March 2027) as well.
Driven by growth in balances of insurance, investment trusts, and public bonds, total assets in custody reached ¥421,609 million (up ¥43,732 million from the previous fiscal year-end). Fee income temporarily declined to ¥1,934 million (down ¥232 million year-on-year), but the company aims to stabilize future fee income through continued balance accumulation. Meeting individual customers' asset formation needs is contributing to the diversification of non-interest income.
The non-consolidated OHR improved to 59.06% (from 66.60% in the previous fiscal year), achieving the 21st Medium-Term Management Plan target of the "60% range." The 22nd Medium-Term Management Plan sets a target of the "mid-50% range," pursuing further efficiency gains. While containing cost increases, with personnel expenses of ¥13,056 million and non-personnel expenses of ¥9,605 million, ROA on a core net business income basis improved to 0.43% (from 0.30% in the previous fiscal year).
In November 2025, the company revised its shareholder return policy, raising the target dividend payout ratio from "approximately 30%" to "40% or more." The annual dividend for FY2026 (ending March 2026) was significantly increased to ¥208 per share (payout ratio of 40.1%) from ¥125 in the previous fiscal year. For FY2027 (ending March 2027), the company forecasts a dividend of ¥58 per share on a post-stock-split basis (equivalent to ¥232 pre-split), maintaining a payout ratio of 40.0%. A 4-for-1 stock split was implemented in April 2026 to broaden the investor base.
The company formulated the 22nd Medium-Term Management Plan (Regional Value Co-Creation Plan - The 2nd), covering the period from April 2026 to March 2029. Under the theme of achieving both "regional co-creation" and "corporate growth," the plan is founded on the basic recognition of shifting to management suited to an era of inflation. The FY2028 KGIs are consolidated ROE of 6% or more, consolidated net income of ¥130 million or more, and ROA (on a core net business income basis) of 0.5% or more. The long-term targets (FY2032) were updated to ROE of 7.5% or more and net income of ¥180 million or more.
Last updated: July 19, 2026