Hachijuni Nagano Bank, Ltd.

Business Details

The core business in which Hachijuni Bank absorbed Nagano Bank effective January 1, 2026, and commenced unified operations as Hachijuni Nagano Bank, Ltd. Centered on the Deposits & Loans Business and domestic/foreign exchange operations, this segment also includes subsidiaries engaged in Credit Card & Credit Guarantee Business and receivables management and collection. With Nagano Prefecture as its main base, it provides a wide range of financial services to individuals, corporations, and local governments. The number of consolidated subsidiaries was 15 (down 1 from the previous period).

Recent Overview

Absorption merger with Nagano Bank completed, commencing unified operations; loans and net interest income expanded significantly

Effective January 1, 2026, the company absorbed Nagano Bank and changed its trade name to Hachijuni Nagano Bank, Ltd. Non-consolidated ordinary revenue was ¥252,951 million (up 26.9% year on year), and ordinary income was ¥75,800 million (up 26.4% year on year). Interest income was ¥164,475 million (up 17.6% year on year), driven mainly by interest on loans of ¥82,588 million and interest on deposits with banks of ¥15,928 million. Gains on sales of government bonds and other bonds of ¥22,992 million (up ¥19,289 million year on year) also contributed. Non-consolidated ROE (on a net income basis) was 6.94% (up 2.06 points year on year). The ratio of total disclosed claims under the Financial Revitalization Act to total credit balance improved to 1.96% on a consolidated basis (from 2.13% in the previous period).

Key Products

Growth Drivers

• Expansion of net interest income driven by increases in interest on loans and interest on deposits with banks against the backdrop of the Bank of Japan's policy rate hikes (non-consolidated net interest income of ¥97,893 million, up ¥14,264 million year on year)
• Significant expansion of the customer base and loan balance through the absorption merger with Nagano Bank (non-consolidated loan balance up ¥762,589 million) and cost efficiencies from the integration of management resources
• Expansion of securities-related gains and losses, including gains on sales of equities and other securities (non-consolidated ¥37,572 million) and gains on sales of government bonds and other bonds (non-consolidated ¥22,992 million)
• Increase in fee and commission income driven by growth in balances of investment-type products such as investment trusts and public bonds (all branches ¥541.5 billion, up ¥156.2 billion year on year)
• Continued growth in loans to corporate businesses and individuals (general corporate loans of ¥4,445.6 billion, consumer loans of ¥1,653.3 billion)

Risks

• Increase in deposit interest cost amid rising interest rates (non-consolidated deposit interest expense of ¥19,209 million, up ¥10,240 million year on year) and rising overall funding costs
• Risk of medium- to long-term contraction in loan demand due to population decline and aging in Nagano Prefecture (ratio of loans within Nagano Prefecture branches declined to 49.4%)
• Expansion of unrealized losses on bonds in the securities portfolio amid rising interest rates (consolidated unrealized losses on bonds in other securities of ¥196,410 million)
• Risk of increased credit costs, as represented by the ratio of total disclosed claims under the Financial Revitalization Act to total credit balance (consolidated 1.96%)
• Risks related to system integration and organizational harmonization costs and operational risk associated with the merger with Nagano Bank (including earnings volatility risk such as losses on sales of government bonds and other bonds of ¥39,374 million)