Hokuhoku Financial Group, Inc.
8377・Prime Market・Banks
Business
Hokuhoku Financial Group was established in 2004 through the management integration of Hokuriku Bank and Hokkaido Bank, forming a wide-area regional financial holding company. Its primary operating areas are the three Hokuriku prefectures and Hokkaido, with additional bases in the three major metropolitan areas of Tokyo, Nagoya, and Osaka. The group consists of 13 consolidated subsidiaries and 2 equity-method affiliates, and in addition to banking operations, it offers a broad range of financial service functions including securities (Hokuhoku TT Securities), consulting (Hokuhoku Consulting), leasing, credit cards, venture capital, software development, and servicer operations. Its main customers are small and medium-sized enterprises, individuals, and local governments in Hokuriku and Hokkaido, and it sets the revitalization of the regional economy and the enhancement of corporate value as its basic management policy.
Business Model
The model is based on the traditional interest margin business, in which the two core banks (Hokuriku Bank and Hokkaido Bank) raise deposits and deploy them into loans and securities. In FY2026 (ending March 2026), interest income was ¥187,377 million and interest expenses were ¥45,813 million, resulting in net interest income of ¥141,564 million. Adding Fee Business income of ¥27,372 million forms the overall revenue structure. Through collaboration with non-bank subsidiaries such as Hokuhoku Consulting and Hokuhoku TT Securities, the group is also promoting the expansion of non-interest income in areas such as M&A, business succession, and asset management.
Company Strengths
The company maintains a wide-area network spanning two geographically dispersed major areas—the three Hokuriku prefectures and Hokkaido—while also having a presence in the three major metropolitan areas. The combined loan balance of the two banks reached ¥10,716.8 billion (as of the end of March 2026), and the combined balance of deposits and negotiable certificates of deposit reached ¥14,478.3 billion, forming a strong customer base as a regional financial institution. This scale represents a unique competitive advantage that would be difficult for competing regional banks to replicate in a short period.
The combined disclosed claims ratio under the Financial Reconstruction Act for the two banks declined by 0.25 percentage points, from 1.99% at the end of FY2024 to 1.74% at the end of FY2025. The balance of disclosed claims also decreased by ¥22,609 million year on year to ¥190,722 million. Both Hokuriku Bank and Hokkaido Bank saw declines in doubtful claims and claims requiring monitoring, demonstrating in concrete figures the results of their credit management efforts.
The company has progressively built up a group of non-bank subsidiaries, including Hokuhoku TT Securities (established in 2017), Hokuhoku Consulting (established in July 2024), and Hokkaido Lease, which became an equity-method affiliate in October 2024. The Others segment recorded ordinary income from external customers of ¥24,475 million and segment profit of ¥2,739 million, indicating that a revenue base reducing dependence on banking operations is being established.
ENVALITH's Perspective
Performance Trend
Ordinary income increased 56% over five periods, from ¥177,793 million in FY2022 to ¥277,468 million in FY2026. FY2026 (ending March 2026) growth accelerated to +32.0% year on year. The main driver was an external factor: rising interest rates from the Bank of Japan's monetary policy normalization, which drove a sharp increase in interest on loans to ¥123,286 million (up ¥26,857 million year on year) and interest and dividends on securities to ¥41,934 million (up ¥13,859 million year on year). Credit-related costs also improved (down ¥13,102 million year on year), reflecting the recording of a reversal of allowance for loan losses of ¥6,438 million. Consolidated core net business profit reached a record ¥82,022 million (up ¥26,574 million year on year). The combined OHR of the two banks improved substantially to 51.82% from the 60% range.
Growth Strategy
Under the 6th Medium-Term Management Plan 'NEXT STAGE,' the company aims to simultaneously achieve the fusion of financial and non-financial businesses and improve capital efficiency
Continued build-up of business loan and personal loan balances alongside improvement in loan yields. The combined loan yield of the two banks rose to 1.260% as of Q4 FY2025. In securities, operations continue to pursue both interest rate risk containment and stable earnings, advancing duration shortening (yen-denominated bonds at 1.61 years).
Deepening collaboration with Hokuhoku Consulting (M&A and business succession), Hokuhoku TT Securities (asset management), Hokugin Lease, and others to expand corporate and individual consulting fees. In FY2025, corporate consulting fees rose steadily to ¥6.2 billion (+¥0.6 billion year on year), and individual consulting fees to ¥9.2 billion (+¥0.4 billion year on year).
The basic policy targets a total payout ratio on common stock of around 40% by FY2027, promoting enhanced returns including flexible share buybacks. For FY2026 (ending March 2026), the annual dividend was ¥110 (payout ratio of 22.7%), with share buybacks of ¥9.99 billion implemented. For FY2027 (ending March 2027), an annual dividend of ¥150 (+¥40) and a ¥10.0 billion share buyback were announced (May 11, 2026).
While continuing strategic investment in personnel and non-personnel expenses (combined expenses of the two banks at ¥83.1 billion, +¥3.3 billion year on year), OHR improved significantly to 51.82% (down 8.72 points year on year) driven by top-line growth. For FY2027 (ending March 2027), while expecting an increase in expenses, the company aims to secure core net business profit of ¥81.5 billion (+¥4.2 billion year on year).
Last updated: July 19, 2026