Suruga Bank Ltd.
8358・Prime Market・Banks
Business
Suruga Bank, founded in 1887 and headquartered in Numazu City, Shizuoka Prefecture, is a regional bank listed on the Prime Market of the Tokyo Stock Exchange. Centered on the parent bank, the group comprises five consolidated subsidiaries engaged in lending, guarantees, leasing, credit cards, administrative outsourcing, and other businesses. In addition to deposit-taking, lending, and exchange operations, its main businesses include over-the-counter sales of securities, investment trusts, and insurance. Loans outstanding reached ¥2,398,794 million (as of the end of March 2026), with a diverse lending lineup encompassing personal rental property loans, corporate real estate loans, structured finance, and Collaboration Loans, etc. Through a capital and business alliance with Credit Saison Co., Ltd., the bank is also working to build a new business model that combines the retail know-how of both banks and non-bank financial institutions.
Business Model
The bank relies primarily on customer deposits (period-end balance of ¥3,197,222 million) as its main funding source, earning income principally from interest on loans to individuals and corporations (period-end balance of ¥2,398,794 million). Against a loan yield of 2.96% (consolidated), the deposit yield stands at 0.24%, securing an overall interest margin. In addition, the bank diversifies revenue through fee income from sales of investment-type products (balance of ¥179,595 million) and fees and commissions on services (¥9,246 million). Subsidiaries complement the parent bank through guarantee, leasing, card, and other businesses, providing financial services across the group as a whole.
Company Strengths
The company achieved all KPIs set under the previous mid-term management plan "Re:Start 2025 Phase 2." Non-consolidated ordinary profit reached ¥34.5 billion (against a target of ¥17.0 billion), profit attributable to owners of parent reached ¥34.7 billion (against a target of ¥13.5 billion), and the actual credit cost ratio was -37bps (against a target of approximately 10bps), with all results significantly exceeding their respective targets.
The loan balance at the end of FY2026 (ending March 2026) expanded significantly to ¥2,391,572 million (up ¥207,729 million from the end of the previous fiscal year). Meanwhile, the disclosed claims ratio under the Financial Reconstruction Act declined to 6.29% (from 8.56% at the end of the previous fiscal year), and claims in bankruptcy and rehabilitation, etc. decreased from ¥102,360 million to ¥76,726 million. The company achieved both loan expansion and reduction of non-performing loans simultaneously.
Non-consolidated expenses were reduced to ¥33,228 million (down ¥1,979 million from the previous fiscal year), and OHR improved significantly to 50.8% (from 58.7% in the previous fiscal year). Core net business profit expanded to ¥32,135 million, up ¥7,407 million from the previous fiscal year. The improvement in cost structure has directly contributed to enhanced profitability efficiency.
ENVALITH's Perspective
Performance Trend
Ordinary income remained flat from ¥92,072 million in FY2022 to ¥91,092 million in FY2025, but FY2026 (ending March 2026) saw a clear acceleration to ¥109,912 million (up 20.6% year on year). Interest income on fund management expanded to ¥78,127 million (up ¥9,702 million year on year), driven primarily by external factors such as improved loan yields amid rising interest rates (2.69% → 2.80%) and an increase in loan balances (up ¥205,959 million from the previous fiscal year-end). Profit attributable to owners of parent surged to ¥34,728 million (up 72.1% year on year), with earnings per share of ¥198.55 (versus ¥106.84 in the previous period). Key indicators broadly improved, including actual credit costs of ¥-8,981 million, an OHR of 50.8%, and ROE (on a net income basis, consolidated) of 11.2%. Comprehensive income also increased significantly to ¥51,720 million (versus ¥16,449 million in the previous period), aided by an improvement in valuation differences on available-for-sale securities (¥12,215 million).
Growth Strategy
Under the medium-term management plan, expanding into corporate, structured finance, and collaboration lending areas while targeting ROE of 11% or more
Corporate real estate loan balance reached ¥240,000 million (up ¥79,500 million from the previous fiscal year-end), while Structured Finance balance reached ¥364,900 million (up ¥101,800 million), representing rapid expansion. The company is diversifying revenue sources away from dependence on high-yield personal loans, achieving both maintenance of overall loan yield and balance expansion. Continued expansion is expected in FY2027 (ending March 2027) as well.
The balance of loans structured in cooperation and partnership with other companies (loan participations, purchases of receivables from other companies, etc.) expanded to ¥245,900 million (up ¥70,300 million from the previous fiscal year-end). The balance has been built up while keeping the delinquency rate at 0.00% and containing credit costs, functioning as a model that achieves both risk diversification and revenue expansion.
Disclosed claims under the Financial Reconstruction Act totaled ¥151,046 million (down ¥36,745 million from the previous fiscal year-end), with the disclosed claims ratio declining to 6.29% (from 8.56% at the previous fiscal year-end). Excluding claims under organized negotiation, the ratio improved to 3.86% (from 5.02% at the previous fiscal year-end). Reversal gains on allowance for doubtful accounts and gains on collection of written-off claims have contributed to earnings, with a virtuous cycle continuing in which asset quality improvement directly leads to profit expansion.
In addition to a significant dividend increase to an annual dividend of ¥60 (from ¥29 in the previous fiscal year) and the execution of ¥17,623 million in share buybacks, as a subsequent event the company resolved to cancel 25,000,000 shares and established a new acquisition framework of ¥12,000 million. The company has set targets of consolidated ROE of 11.0% or more and a real capital adequacy ratio of approximately 10% toward FY2028, driving improvements in capital efficiency and shareholder value.
The balance of investment products expanded to ¥179,595 million (up ¥33,550 million from the previous fiscal year-end), with the investment product ratio rising to 6.7% (from 5.4% at the previous fiscal year-end). Balances increased across categories including custody of government bonds, investment trusts, personal annuity insurance, and single-premium whole life insurance. Fee and commission income reached ¥8,048 million (up ¥502 million from the previous fiscal year), with progress being made in diversifying the fee income base.
Last updated: July 19, 2026