ENVALITH
株式会社福井銀行 logo

The Fukui Bank,Ltd.

8362・Prime Market・Banks

Official website
株式会社福井銀行 logo
The Fukui Bank,Ltd.8362

Business

The Bank of Fukui, Ltd. is a regional bank founded in 1899 with its base in Fukui Prefecture, operating a comprehensive financial services business together with 11 consolidated subsidiaries. Through its 97 branches and offices (Bank of Fukui on a standalone basis), the bank conducts banking operations centered on deposits, lending, domestic and foreign exchange, and securities sales, while also developing a diverse range of related services including consulting, leasing, credit cards, guarantees, worker dispatching, travel, digital services, and venture capital. In May 2026, the bank merged with its consolidated subsidiary Fukuho Bank (38 branches) through an absorption-type merger, further expanding its customer base and branch network within Fukui Prefecture. Its main customers are individuals, small and medium-sized enterprises, and local governments within Fukui Prefecture, and the bank aims to fulfill its role as a "regional problem-solving business," capturing the benefits of regional economic revitalization driven by the extension of the Hokuriku Shinkansen.

Business Model

The bank's foundation is a traditional deposit-lending model, funding the majority of its operations through retail and corporate deposits (deposit balance of ¥3,331,361 million) and deploying these funds into loans (balance of ¥2,442,519 million) and securities (balance of ¥978,465 million). In addition, it pursues revenue diversification by building up financial instruments intermediary business through its business alliance with Nomura Securities (balance of ¥639,522 million), insurance and investment trust sales, and fee income from consulting, guarantees, leasing, and other services (fee and commission income of ¥11,733 million).

Company Strengths

The bank operates a combined 135-branch network within Fukui Prefecture (pre-merger), comprising 97 branches of Fukui Bank on a standalone basis plus 38 branches of Fukuho Bank, gathering ¥2,201.9 billion in individual deposits and ¥1,129.3 billion in corporate deposits. With the completion of the merger in May 2026, the customer base and branch networks of both banks were integrated, further strengthening the penetration of financial services within the prefecture.

Through the comprehensive business alliance with Nomura Securities that began in May 2023, the balance of financial instruments intermediary business reached ¥639,522 million (up ¥151,939 million year on year). Securities-related service revenue also expanded to ¥1,936 million, building a unique alliance structure that enables the bank to offer customers sophisticated asset management services that would be difficult to provide as a bank alone.

With a history spanning more than 125 years and listing on the Prime Market of the Tokyo Stock Exchange, the bank enjoys high credibility and brand strength within Fukui Prefecture. It has also established a highly transparent governance structure as a company with a Nomination Committee, etc., in which outside directors chair each of the three committees, reflecting a management structure that is mindful of evaluations by institutional investors.

ENVALITH's Perspective

Ordinary profit of ¥13,434 million (up 54.3% year on year) for FY2026 (ending March 2026) was largely driven by a temporary factor: gains on sale of securities (consolidated ¥7,976 million, up ¥6,884 million year on year) associated with the reduction of cross-shareholdings. Excluding this, core net business profit (excluding business integration expenses and gains/losses on cancellation of investment trusts) was ¥14,656 million on a Fukui Bank standalone basis, exceeding the medium-term plan target of ¥13.0 billion. However, the consolidated ordinary profit forecast for FY2027 (ending March 2026) is ¥10,200 million (down 24.0% year on year), a significant projected decline, meaning confirmation of underlying earnings power after the temporary gains fade will be a key focus of investment decisions.

As an external factor, rising interest rates have improved the yield on fund management (1.09% combined for both banks across all branches, up 0.18 percentage points year on year), while deposit interest expenses surged to ¥6,484 million on a consolidated basis (up ¥4,205 million year on year), pushing total funding costs up to ¥8,484 million (up ¥5,558 million year on year). The overall interest margin narrowed to 0.13% combined for both banks (down 0.03 percentage points year on year). Attention should be paid to the risk that, depending on future interest rate trends, margin compression could become a factor weighing on earnings.

For FY2027 (ending March 2026), an increase in operating expenses is expected, mainly due to system integration investment, and the continuation of business integration expenses (¥2,534 million recorded on a Fukui Bank standalone basis in FY2026 (ending March 2026)) will push up costs further. In addition, the consolidated allowance for loan losses has been increased to ¥20,056 million (up ¥1,234 million year on year), and the combined total of disclosed claims under the Financial Reconstruction Act for both banks has risen to ¥45,058 million (up ¥4,452 million year on year), showing an increasing trend. The increase in provision for individual loan losses (consolidated ¥3,092 million) also continues, and trends in credit costs will be a critical variable determining whether the earnings forecast is achieved.

Growth Strategy

Following the completion of the merger with The Fukuho Bank, the company aims to deepen its "Regional Value Circulation Model" and realize integration synergies at an early stage.

The Fukuho Bank was merged into the Company through an absorption-type merger effective May 2, 2026, marking the start of integrated operations as the largest financial group in Fukui Prefecture. In FY2027 (ending March 2027), while advancing investments to unify systems and operations, the Company plans to increase core business revenue (mainly interest on loans) through integration synergies. The Fukuoka Bank's (non-consolidated) net income forecast of ¥14.3 billion is expected to include an extraordinary gain from the elimination of treasury-method shares.

As a business dedicated to solving regional challenges, the strategy is to support customers by addressing their genuine management issues while improving yields and expanding loan balances. In FY2026 (ended March 2026), The Fukui Bank's (non-consolidated) loan yield reached 1.23% (up 0.20 percentage points year on year), with the loan balance reaching ¥2,166,638 million (up ¥123,599 million year on year). In FY2027 (ending March 2027), the Company plans to increase core business revenue, primarily driven by interest on loans.

The balance of financial product brokerage accounts under the comprehensive business alliance with Nomura Securities expanded to ¥639,522 million (up ¥151,939 million year on year). The Company aims to achieve stable growth in fee income by offering a wide range of products, including investment trusts, equities, bonds, and discretionary investment accounts. The balance of individual annuity insurance also expanded to ¥91,396 million (up ¥3,802 million year on year), reflecting progress in diversifying non-interest income.

At the Board of Directors meeting held on May 15, 2026, it was resolved to raise the target dividend payout ratio from approximately 30% to approximately 40%, effective from FY2027 (ending March 2027). The annual dividend for FY2026 (ended March 2026) was ¥108 (an increase of ¥50 year on year), and the annual dividend for FY2027 (ending March 2027) is planned at ¥150 (interim dividend of ¥75). While maintaining the policy of combining a stable annual dividend of ¥50 per share with a performance-linked dividend, the Company will further enhance shareholder returns.

Last updated: July 19, 2026