ENVALITH
株式会社大分銀行 logo

THE OITA BANK, LTD.

8392・Prime Market・Banks

Official website
株式会社大分銀行 logo
THE OITA BANK, LTD.8392

Business

The Bank of Oita, Ltd. is a regional bank founded in 1892, centered on Oita Prefecture, and listed on the Prime Market of the Tokyo Stock Exchange. It operates 87 head office and branch locations and 6 sub-branches, maintaining a business base not only in Oita Prefecture but also in Fukuoka, Miyazaki, Kumamoto, Osaka, and Tokyo. The group comprises 9 consolidated subsidiaries, with the Banking Business (deposits and loans, securities investment, and fee-based services) at its core, alongside the Leasing Business conducted through Oita Lease Co., Ltd., and the Credit Card Business, Debt Guarantee Business, and Investment and Financing Business conducted through Oita Card and other subsidiaries. In April 2025, the company newly established Oita Capital Partners Co., Ltd. and Oita Platt Co., Ltd., expanding into venture investment and the Regional Platform Business for solving local community issues. Its main customers are individuals, small and medium-sized enterprises, and local governments within Oita Prefecture.

Business Model

The main revenue sources consist of net interest income (¥51,471 million on a consolidated basis), comprising interest on loans (¥31,812 million for the current period) and interest and dividends on securities (¥29,582 million). Adding fee-based services income (¥9,103 million) and gains/losses on equities (¥10,342 million) creates a multi-layered revenue structure. Funding is mainly sourced from individual, corporate, and public deposits (deposits, etc. of ¥3,614,926 million), securing interest margins on a foundation of low-cost, stable funding. The Leasing Business and Credit Card Business complement group revenue.

Company Strengths

Loans outstanding at period-end stood at ¥2,460,618 million (up ¥189,347 million from the previous fiscal year-end). Business loans outstanding reached ¥1,304.8 billion (up ¥125.7 billion from the previous fiscal year-end), while consumer loans outstanding reached ¥859.0 billion (up ¥65.5 billion from the previous fiscal year-end), expanding on both fronts. Enhanced lending through basket funds, structured finance, and the Tokyo/Osaka regions also contributed, steadily increasing the company's lending share as a regional financial institution.

In March 2023, the company began financial instruments intermediary operations based on a comprehensive business alliance with Nomura Securities. The balance of financial instruments intermediary assets reached ¥690.3 billion (significantly exceeding the FY2026 (ending March 2026) target of ¥566.1 billion set under the Medium-Term Management Plan 2024), and securities-related fee income expanded to ¥2,084 million, up ¥338 million from the previous fiscal year. The cross-selling function leveraging the existing customer base has contributed to revenue diversification.

Under the Medium-Term Management Plan 2024, the company set a target of cumulative SDGs Investment and Financing of ¥2,500 million or more (target for FY2027 (ending March 2027)); however, actual results for FY2026 (ending March 2026) reached ¥418.7 billion, significantly exceeding the target. The company demonstrates strong execution capability in loans and investments aimed at solving regional issues, with the number of individual regional vision projects executed reaching 42 (against a target of 8), exceeding the plan. This can be evaluated as concrete evidence of the company's regional co-creation function.

ENVALITH's Perspective

In FY2026 (ending March 2026), both interest and dividends on securities (+¥7,326 million) and interest on loans (+¥6,097 million) increased substantially, pushing net interest income to a record-high level of ¥50.2 billion (up ¥7.6 billion year on year). The continuation of the Bank of Japan's rate hikes has served as an external tailwind, but the forecast for FY2027 (ending March 2027) anticipates a reversal decline stemming from gains/losses on cancellation of investment trusts and gains on sale of equities and other securities (equity-related gains/losses of approximately -¥6.1 billion), with ordinary income projected to decline to ¥97,500 million (down 1.9% year on year). Whether the sustained expansion of net interest income can offset this revenue decline will be the key focus.

The ratio of loans to borrowers within Oita Prefecture stood at 71.6% (down 2.3 percentage points from the previous fiscal year-end), indicating that regional concentration remains high, and there is a risk that deteriorating demographics and stagnation in the regional economy within the prefecture could directly impact credit costs. The consolidated capital adequacy ratio (domestic standard) was 9.53% (preliminary figure), down 0.58 percentage points from the previous fiscal year-end, as the increase in risk assets accompanying aggressive loan expansion (consolidated risk assets of ¥2,058.3 billion, up ¥192.3 billion from the previous fiscal year-end) has pushed down the ratio. The gap versus the medium-term management plan target of approximately 9.5% is minor, but capital management will be a challenge as loan expansion continues further.

The consolidated earnings forecast for FY2027 (ending March 2027) projects ordinary profit of ¥17,800 million (up 21.0% year on year) and profit attributable to owners of parent of ¥12,200 million (up 15.1% year on year), continuing the trend of profit growth. The main driver is the improvement in gains/losses on government bonds and other securities (the "five-account balance"), improving by approximately ¥6.5 billion (from -¥23.9 billion in the previous fiscal year to an improvement of +¥17.4 billion). Non-consolidated core net business profit (excluding gains/losses on cancellation of investment trusts) is projected to decrease to ¥17.6 billion from ¥20.1 billion in the previous fiscal year, but net business profit is forecast to improve substantially to ¥11.7 billion (from ¥2.3 billion in the previous fiscal year). All of the financial targets under the Medium-Term Management Plan 2024 (net profit exceeding ¥10 billion, consolidated ROE exceeding 5.0%, consolidated capital adequacy ratio of approximately 9.5%, and non-consolidated OHR of approximately 65%) are expected to be achieved or exceeded.

Growth Strategy

With "Finance + α" as the basic theme, the company pursues growth through four pillars: deepening its core business, regional co-creation, DX, and sustainability.

Through promotion of basket funds, structured finance, and increased lending in the Tokyo and Osaka areas, the company achieved a corporate loan balance of ¥1,304.8 billion (up ¥125.7 billion from the previous fiscal year-end) and a personal loan balance of ¥859.0 billion (up ¥65.5 billion). For FY2027 (ending March 2027), continued growth in interest on loans is positioned as the main driver.

The company is reducing holdings of government bonds, municipal bonds, and corporate bonds while optimizing asset allocation toward equities, foreign securities, and other assets. Interest and dividends on securities increased significantly to ¥29,583 million (up ¥7,326 million year on year). For FY2027 (ending March 2027), gains/losses on bonds including government bonds (5-account basis) are expected to improve to ¥(6.5) billion, an improvement of ¥17.4 billion from ¥(23.9) billion in the previous fiscal year.

In FY2026 (ending March 2026), the company achieved and exceeded all four indicators: consolidated net income exceeding ¥10.0 billion, consolidated ROE (on a shareholders' equity basis) exceeding 5.0%, consolidated capital adequacy ratio of approximately 9.5%, and non-consolidated OHR of approximately 65%. For FY2027 (ending March 2027), the company forecasts net income of ¥12.2 billion, ROE of approximately 6.0%, and OHR of approximately 63%, further exceeding the target levels.

In April 2025, the company established Oita Capital Partners Co., Ltd. (venture investment and support for regional companies) and Oita Platt Co., Ltd. (a platform for solving regional issues). The number of consolidated subsidiaries expanded from 7 to 9. Efforts are now in full swing to achieve the cumulative SDGs Investment and Financing target of ¥2,500 million or more (target for FY2027, ending March 2027).

From FY2026 (ending March 2027... note: fiscal year 2026 refers to FY ending March 2027), the total payout ratio target has been raised from 30% or more to 35% or more, with a dividend payout ratio of 30% or more explicitly indicated as a benchmark. The annual dividend for FY2026 (ending March 2026) was ¥170 (a substantial increase from ¥110 in the previous fiscal year), with a dividend payout ratio of 24.3%. For FY2027 (ending March 2027), an annual dividend of ¥50 (post stock split; equivalent to ¥250 pre-split) and a dividend payout ratio of 31.1% are planned.

Last updated: July 19, 2026