ENVALITH
株式会社大垣共立銀行 logo

The Ogaki Kyoritsu Bank, Ltd.

8361・Prime Market・Banks

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株式会社大垣共立銀行 logo
The Ogaki Kyoritsu Bank, Ltd.8361

Business

The Ogaki Kyoritsu Bank, Ltd., founded in 1896 and headquartered in Ogaki City, Gifu Prefecture, serves as the core entity of the OKB Group, which functions in a holding-company-like capacity. With 122 head office/branch locations and 33 sub-branches, the group's main business base is the Tokai region. Centered on Banking (Deposit and Lending Business, Securities Investment Business, and Fee-Based Services (Remittance, Guarantees, Securities-Related, etc.)), the group also operates Leasing through Kyoyu Lease Co., Ltd., Credit Guarantee Business through OKB Credit Guarantee Co., Ltd., and complementary financial services such as OKB Securities, Computer-Related and Administrative Outsourcing Business, Credit Card Business, and Venture Capital Business, through a total of 10 consolidated subsidiaries. Its main customers are small and medium-sized enterprises and individuals in the Tokai region. The company is listed on the Prime Market of the Tokyo and Nagoya Stock Exchanges.

Business Model

The core earnings driver is the traditional deposit-and-lending model, whereby funds procured as deposits from regional customers are deployed into loans (balance of ¥4,469,609 million as of the end of FY2025 (ending March 2025)) and securities (balance of ¥1,063,482 million). Net interest income of ¥44,170 million accounts for the majority of consolidated gross operating profit of ¥53,497 million. This is supplemented by fee income of ¥22,263 million (Over-the-Counter Sales of Government Bonds, Investment Trusts, and Insurance, Fee-Based Services (Remittance, Guarantees, Securities-Related, etc.), etc.), plus earnings from Leasing, Credit Guarantee Business, and securities operations at group companies, forming a multi-layered revenue structure.

Company Strengths

Tailwinds from the Bank of Japan's interest rate hikes (policy rate raised to 0.50% in January 2025) drove consolidated net interest income up ¥2,998 million year on year to ¥44,170 million. The average yield on loans rose from 0.82% to 0.88%, and interest on deposits with banks also increased substantially. On a non-consolidated basis, net interest income for the cumulative nine months of the current fiscal year grew 21.4% year on year, an accelerating pace.

Under the medium-term management plan "Always" (launched in FY2024, with the final year being FY2027 (ending March 2027)), the company exceeded all financial targets in its very first year: consolidated net income of ¥14,718 million (target: ¥12,000 million or more), ROE of 4.4% (target: 3.5% or more), core OHR of 71.5% (target: 75% or below), and capital adequacy ratio of 9.99% (target: 9.0% or more).

Disclosed claims under the Financial Reconstruction Act declined year on year across all categories: claims against bankrupt and reorganized debtors at ¥9.9 billion, doubtful claims at ¥44.0 billion, and substandard claims at ¥5.2 billion. On a non-consolidated basis, credit-related costs improved significantly to ¥303 million (down ¥1,997 million year on year), while impairment losses on securities remained at zero. Asset quality remains at a high level.

ENVALITH's Perspective

In FY2026 (ending March 2026), consolidated net interest income expanded robustly to ¥55,167 million (up ¥10,997 million year on year), and the overall interest margin also improved to 0.23% (from 0.09% in the previous period). However, non-consolidated gains/losses on Japanese government bonds and other securities (5-account basis) posted a large loss of ¥(26,297) million, and core banking profit was ¥(9,401) million, a deficit. The bank is in a transitional phase of realizing unrealized losses on its bond portfolio (non-consolidated unrealized valuation losses on bonds of ¥(50,721) million), and as long as this structural loss recognition continues, evaluation on a core banking profit basis will remain difficult.

Net income of ¥19,382 million for FY2026 (ending March 2026) was significantly boosted by temporary and non-recurring gains, namely gains on sales of stocks and other securities of ¥28,149 million (non-consolidated) and a reversal gain on the retirement benefit trust of ¥5,600 million. The forecast for consolidated net income for FY2027 (ending March 2026) [sic] is only ¥20,600 million, up 6.2% year on year, and there is a risk that the level of gains on sales of stocks and other securities could fluctuate depending on progress in reducing cross-shareholdings. Sustained expansion of core net business profit (¥16,895 million on a non-consolidated basis) will be the key axis for evaluating structural earnings power.

The instability in the Middle East following the U.S. and Israeli military strikes on Iran in February 2026 raises concerns about the impact on manufacturing suppliers in the Tokai region, centered on the automotive industry. Non-consolidated loans outstanding to the manufacturing sector already turned slightly negative, at ¥489,630 million (down ¥2,435 million from the end of the previous fiscal year), and continued close attention is needed to the risk that rising energy costs and increased transportation costs could worsen the business conditions of client companies, leading to higher credit costs. Although the non-performing loan ratio currently remains at a low 1.20%, sensitivity to changes in the external environment remains high.

Growth Strategy

Aiming for sustainable growth through a three-pronged approach: adapting to the "world with interest rates," promoting DX, and improving capital efficiency.

As the final year of the medium-term management plan spanning FY2024 to FY2026, the Company is advancing its growth strategy, human capital strategy, management foundation strengthening, and DX strategy. In FY2026 (ending March 2026), consolidated net income reached ¥19,382 million, accelerating progress toward the plan's targets. For FY2027 (ending March 2027), consolidated ordinary profit of ¥30,500 million and net income of ¥20,600 million are forecast, while efforts to clarify direction for the next era proceed in parallel.

The Company has continued to sell down cross-shareholdings, recording gains on sale of securities and other assets of ¥28,149 million on a non-consolidated basis in FY2026 (ending March 2026). The annual dividend was substantially increased to ¥150 (from ¥90 in the previous fiscal year), achieving a payout ratio of 32.1%. In October 2026, a 5-for-1 stock split will be implemented to broaden the investor base. The Company aims to achieve an early improvement in PBR as part of management conscious of capital costs.

Against the backdrop of the Bank of Japan's gradual rate hikes, the yield on loans (1.10%, up 0.23 percentage points year on year) and the yield on securities (2.09%, up 0.83 percentage points year on year) have risen. The overall interest margin improved to 0.23% (from 0.09% in the previous fiscal year). Through the accumulation of corporate loans (in wholesale, retail, real estate, and other sectors) and the expansion of individual customer assets under deposit (¥1,165,082 million on a non-consolidated basis), the Company aims to expand both net interest income and fee income.

By leveraging digital technology, the Company aims to streamline administrative operations and create sales resources, thereby enhancing the value provided to regional customers. It is deepening collaboration with group companies in areas such as computer-related operations, credit cards, and securities business, aiming to raise non-interest income. The expansion of assets under custody at OKB Securities (¥135,243 million, an increase of ¥28,277 million from the end of the previous fiscal year) has also emerged as a result linked to the DX strategy.

Last updated: July 17, 2026