The Yamanashi Chuo Bank,Ltd.

Business Details

The sole reportable segment of the Bank's group. With Yamanashi Prefecture and the Tokyo area as its primary business base, it centers on deposit and lending operations while also engaging in securities investment, domestic and foreign exchange, over-the-counter sales of government bonds and other public bonds, investment trusts and insurance, and various consulting services. The group provides comprehensive financial services through consolidated subsidiaries including Yamanashi Chuo Hosho, Yamanashi Chugin Lease, Yamanashi Chugin DC Card, Yamanashi Chugin Management Consulting, Yamanashi Mirai Investment, and Yamanashi Chiiki Design (newly consolidated from FY2026 (ending March 2026)).

Recent Overview

Ordinary income rose 42% on higher interest rates and increased gains on equity sales; net profit reached a record-high level

In FY2026 (ending March 2026), interest on loans (non-consolidated ¥34,161 million, up 35.9% year on year), interest and dividends on securities (non-consolidated ¥15,112 million, up 54.3% year on year), and gains on sale of equities and other securities (non-consolidated ¥13,376 million, up 162% year on year) increased substantially, bringing consolidated ordinary income to ¥86,104 million (up 42.3% year on year). On the other hand, interest on deposits (non-consolidated ¥7,908 million, up 246% year on year) and losses on sale of bonds including government bonds (non-consolidated ¥16,798 million) increased. Consolidated ordinary profit reached ¥13,832 million (up 30.2% year on year), and profit attributable to owners of parent reached ¥9,987 million (up 30.2% year on year). The year-end dividend was increased by ¥13 above the initial forecast to ¥72, bringing the annual dividend to ¥131 and the payout ratio to 40.1%. For FY2027 (ending March 2027), consolidated ordinary profit of ¥18,300 million (up 32.2% year on year), net profit of ¥12,500 million (up 25.1% year on year), and an annual dividend of ¥163 are forecast.

Key Products

Growth Drivers

• Increase in interest on loans (non-consolidated ¥34,161 million, up 35.9% year on year) driven by the Bank of Japan's policy rate hikes, and improvement in the overall interest margin (all branches 0.29%, up 0.12 percentage points year on year)
• Increase in interest and dividends on securities (non-consolidated ¥15,112 million, up 54.3% year on year) and buildup of government bond holdings (non-consolidated ¥453,017 million, up ¥140,242 million year on year)
• Expansion of loan balances to corporate and individual customers (non-consolidated term-end balance ¥3,032,868 million, up ¥272,802 million year on year), with ¥1,784,488 million to small and medium-sized enterprises, etc. and ¥594,243 million in consumer loans
• Substantial increase in gains on sale of equities and other securities (non-consolidated ¥13,376 million, up 162% year on year), improving extraordinary gains/losses
• Expansion of over-the-counter sales balances of investment trusts and government bonds (non-consolidated combined total ¥243,581 million, up ¥47,430 million year on year), boosting non-interest income
• Expansion of the regional issue resolution business and strengthening of overall group capabilities through the new consolidation of Yamanashi Chiiki Design

Risks

• Risk of margin compression due to a sharp increase in interest on deposits and funding costs (non-consolidated interest on deposits ¥7,908 million, up 246% year on year) amid additional rate hikes by the Bank of Japan
• Persistently high losses on sale of bonds including government bonds (non-consolidated ¥16,798 million) and interest rate risk in the securities portfolio (unrealized losses on bond valuation differences of ¥43,751 million on a non-consolidated basis)
• Risk of a rebound decline in gains on sale of equities and other securities (non-consolidated ¥13,376 million): for FY2027 (ending March 2027), gains/losses related to equities and other securities are forecast to decline substantially (forecast of ¥60 million, down ¥11,845 million year on year)
• Concern over increased credit costs (FY2027 (ending March 2027) forecast of ¥436 million → non-consolidated forecast of approximately ¥2,300 million) and an expected increase in non-performing loan disposal amounts (non-consolidated forecast up from ¥500 million to ¥2,300 million)
• Risk of impact on manufacturing industries within Yamanashi Prefecture (loan balance ¥396,947 million) from US trade policy and slowing external demand, and downside risk to the regional economy
• Risk of shrinking regional fund demand due to the declining birthrate, aging population, and population decline, and increased operating expenses due to continued DX investment (non-consolidated expenses forecast for FY2027 (ending March 2027) of ¥29,300 million, up ¥1,700 million year on year)
• Constraints on capital management due to a decline in the capital adequacy ratio (domestic standard) (consolidated 9.84%, down 0.37 percentage points year on year) amid increasing risk assets