The Hyakugo Bank, Ltd.
8368・Prime Market・Banks
Business
The Hyakugo Bank, founded in 1878, is a long-established regional bank headquartered in Tsu City, Mie Prefecture, with Mie and Aichi as its main operating areas. Through 110 branches and other offices, it conducts Deposit Operations, Lending Operations, exchange settlement, and Foreign Exchange Operations, while also focusing on over-the-counter sales of investment trusts and insurance, as well as solution proposals such as business succession and structured finance. With 11 consolidated subsidiaries, the group provides diversified financial services including Leasing Business (Hyakugo Lease), Financial Instruments Business (Hyakugo Securities), Credit Card & Credit Guarantee Business (Hyakugo Card), Regional Industry Research & Consulting (Hyakugo Research Institute), and Information Processing & Digital Solutions (Hyakugo Digital Solutions). Its main customers are individuals in Mie and Aichi (for products such as housing loans) and small and medium-sized enterprises and corporations (for business financing, leasing, and consulting).
Business Model
In the core Banking business, the spread between deposit funding costs and lending/securities investment yields (net interest income) is the primary revenue source, with net interest income reaching ¥77,860 million in FY2025. In addition, the group has a composite revenue structure that builds up fee income from sales of investment trusts, insurance, and securities, equipment leasing income from its leasing subsidiary, and credit card and credit guarantee income. Combined proposals for corporate clients (lending + leasing + consulting) through collaboration with group companies serve as the axis of differentiation.
Company Strengths
With a customer base deeply rooted in Mie and Aichi through 110 head office and branch locations, the loan balance reached ¥5,141,005 million (as of the end of March 2026). The housing loan balance stood at ¥2,502,432 million (up ¥97,828 million from the previous fiscal year-end), and lending to small and medium-sized enterprises is also on an expanding trend. The depth of the regional lending share represents a unique strength that is difficult for competitors to replicate in a short period.
The company has a historical credibility built through growth since the establishment of the 105th National Bank in 1878, having absorbed and merged with multiple banks within Mie Prefecture. Deposits and other balances (including negotiable certificates of deposit) reached ¥6,265,334 million (as of the end of March 2026), establishing a stable funding base from both corporate and individual customers. Long-standing relationships with the region support continued customer transactions.
In addition to Banking, the company has 11 consolidated subsidiaries handling Leasing Business, securities, credit cards, consulting, DX support, and more. Assets under custody are also expanding, with the investment trust balance (standalone) reaching ¥243,524 million (up ¥57,548 million from the previous fiscal year-end) and cumulative insurance sales reaching ¥499,511 million (up ¥38,706 million from the previous fiscal year-end). Comprehensive proposals leveraging the group's overall strength are contributing to revenue diversification.
ENVALITH's Perspective
Performance Trend
Consolidated ordinary revenue for FY2026 (ending March 2026) reached ¥162,399 million (up 30.4% year on year), and profit attributable to owners of parent reached ¥26,839 million (up 48.8% year on year), achieving substantial growth in both revenue and profit. The trend over the past five periods (ordinary revenue: ¥98,683 million → ¥102,884 million → ¥119,487 million → ¥124,491 million → ¥162,399 million; net income: ¥13,402 million → ¥14,493 million → ¥14,281 million → ¥18,042 million → ¥26,839 million) shows accelerating growth. The main drivers of revenue expansion were, as an external factor, improved yield on fund management due to the Bank of Japan's interest rate hikes (yield on fund management across all branches at 1.41%, up 0.28 percentage points year on year), and, as company-specific factors, the expansion of loan balances and securities balances, as well as an increase in gains on sales of shares and other securities (¥22,067 million on a non-consolidated basis). Comprehensive income was ¥89,786 million (a substantial improvement from ¥(55,264) million in the previous period), driven by the recovery in valuation differences on available-for-sale securities (up ¥50,530 million on a consolidated basis). The capital adequacy ratio (consolidated) declined by 0.84 percentage points year on year to 11.49%, but net assets increased substantially to ¥516,650 million (up ¥81,201 million year on year).
Growth Strategy
Under "KAI-KAKU150 FINAL STAGE," the company aims for sustainable growth through expansion of core net operating profit, growth in assets under custody, and promotion of DX.
By combining continued balance growth in housing loans (balance ¥2,502,432 million) and loans to SMEs (balance ¥2,562,177 million) with improved lending yield (1.23%) amid the BOJ's rate hike phase, the Bank aims to maintain and expand net interest income (¥78,597 million on a non-consolidated basis). For FY2027 (ending March 2027), net interest income is projected at ¥77,600 million.
Through balance growth in investment trusts (¥369,668 million on a group-wide basis), insurance (¥499,511 million on a non-consolidated basis), and public bonds (¥55,969 million on a non-consolidated basis), the Bank aims to achieve a recovery in fees and commissions income (projected at ¥8,800 million on a non-consolidated basis for FY2027 (ending March 2027)). Strengthening collaboration with Hyakugo Securities and capturing asset management needs are key.
Excluding the impact of gains/losses on government bonds and other securities (¥△21,076 million on a non-consolidated basis), core net operating profit expanded significantly to ¥37,513 million (up ¥10,412 million year on year). For FY2027 (ending March 2027), a slight decrease to ¥35,600 million is projected, but the Bank will continue to pursue an ongoing improvement in underlying earnings power.
DX is positioned as one of the five basic strategies of the Medium-Term Management Plan, and the Bank continues system investment (intangible fixed assets of ¥5,874 million, up ¥1,191 million year on year) through Hyakugo Digital Solutions. It aims to achieve both operational efficiency and improved customer convenience while improving its expense ratio.
Under the Medium-Term Management Plan formulated in April 2025, the Bank is advancing five strategies: creation of social value, challenge for growth, human capital strategy, DX, and strengthening of its strategic foundation. It targets consolidated ordinary profit of ¥41,200 million and net income of ¥28,900 million for FY2027 (ending March 2027), and will also continue sustainable shareholder returns (projected annual dividend of ¥42 for FY2027 (ending March 2027), with a payout ratio of 35.3%).
Last updated: July 19, 2026