ENVALITH
株式会社佐賀銀行 logo

THE BANK OF SAGA LTD.

8395・Prime Market・Banks

Official website
株式会社佐賀銀行 logo
THE BANK OF SAGA LTD.8395

Business

The Bank of Saga, Ltd. was established in 1955 and operates 75 branches/sub-branches and 28 outposts across the northern Kyushu region, centered on Saga and Fukuoka. Built around its core Banking business, the group forms a six-company structure encompassing Leasing (Sagin Lease), Credit Guarantee Business (Sagin Credit Guarantee), and Information Processing, Administrative Outsourcing, Venture Capital, and Regional Trading Company businesses (Sagin Connect and others). Of consolidated ordinary income of ¥71,846 million, the Banking business accounts for approximately 88%, and the group provides regional financial infrastructure with loans outstanding of ¥2,356.9 billion and total deposits of ¥3,000.9 billion. Listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

The bank deploys deposits collected from regional customers (period-end balance ¥2,967,163 million) into loans (period-end balance ¥2,356,922 million) and securities (period-end balance ¥496,538 million) to earn net interest income. In addition, it builds a revenue base as a comprehensive financial services group by combining fee income from foreign exchange, guarantees, and asset management (consolidated ¥10,391 million) with leasing, credit guarantee, and information processing services provided by group subsidiaries.

Company Strengths

In addition to a staffed network of 75 head office/branch offices and 28 sub-branches, the Bank operates 61 unattended branches. It maintains loans outstanding of ¥2,356,922 million and total deposits outstanding of ¥2,967,163 million, and has a lending base covering a wide range of industries including real estate, local governments, and manufacturing. Its over 70-year operating history underpins long-term trust relationships with regional customers.

The "Sagin SDGs Initiative Support/Declaration Support Service," launched in January 2022, has supported a cumulative total of 735 businesses as of the end of March 2026. The Bank has built up a track record of providing value beyond finance, including expanding the functionality of its decarbonization management support services, introducing the CO2 emissions calculation system "Tansakukun," and supporting overseas sales channel development (supporting 22 companies at a Hong Kong food trade show, where it received the MOST SCANNED EXHIBITOR award).

Net income attributable to owners of parent expanded approximately 2.1-fold over four years, from ¥4,076 million in FY2022 (ended March 2022) to ¥8,585 million in FY2026 (ending March 2026), achieving six consecutive years of profit growth. Against the consolidated net income target of ¥8.0 billion for the first year of the 18th Medium-Term Management Plan (FY2026, ending March 2026), the Bank achieved ¥8.5 billion, exceeding the target. Fee and commission income also expanded steadily on a consolidated basis to ¥10,391 million (up ¥756 million year on year).

ENVALITH's Perspective

Of the ¥71,846 million in ordinary income for FY2026 (ending March 2026), gains on sale of shares and other securities of ¥14,405 million, arising from tendering shares in a tender offer for a local company, made a significant contribution. Losses on sale of government bonds and other securities amounting to ¥14,769 million, incurred in connection with the reconstruction of the securities portfolio funded by this gain, were also recorded, causing other operating expenses to swell to ¥16,923 million. Non-consolidated real net business profit came in at a loss of ¥1,214 million, and the independent improvement of core earnings power excluding extraordinary gains/losses remains a continued focal point for investors. The forecast for FY2027 (ending March 2027) calls for ordinary income of ¥66,000 million (down 8.1% year on year), a decline, as the effect of the drop-off in gains on stock sales is expected to materialize.

As an external factor, the rise in market interest rates accompanying the Bank of Japan's normalization of monetary policy is boosting the expansion of interest income on loans, with non-consolidated interest income rising to ¥28,183 million (up ¥2,846 million year on year). On the other hand, interest expenses on deposits surged to ¥5,395 million (up ¥3,832 million year on year), and total funding costs also expanded to ¥7,521 million (up ¥3,790 million year on year). The overall domestic interest margin improved to 0.24% (up 0.05 points year on year), but close attention is needed regarding the risk that intensifying competition to raise deposit rates going forward could squeeze the margin.

The FY2027 (ending March 2027) consolidated earnings forecast calls for ordinary income of ¥66,000 million (down 8.1% year on year), ordinary profit of ¥14,700 million (up 19.4%), and net income attributable to owners of parent of ¥9,300 million (up 8.3%). While the scale of revenue will shrink due to the drop-off in gains on stock sales, profit is expected to increase. Steady accumulation of core net business profit (non-consolidated forecast of ¥13,000 million) and management of the forecasted amount of non-performing loan disposal of ¥2,100 million (including general allowance for loan losses) are key. Progress toward becoming a "comprehensive service corporate group" under the 18th Medium-Term Management Plan, and improvement in the fee income ratio, will serve as the medium- to long-term evaluation criteria.

Growth Strategy

Under the 18th Medium-Term Management Plan, the Group is pursuing transformation into a "comprehensive service corporate group," aiming for stable earnings expansion.

Amid rising market interest rates, the Bank has achieved both improved loan yields (non-consolidated: 1.24%, up 0.21 points year on year) and expansion of loan balances (non-consolidated period-end balance of ¥2,369,160 million). Targeting non-consolidated core net business income of ¥13,000 million for FY2027 (ending March 2027), the Bank aims to steadily build up net interest income.

Aiming for continued growth in fee and commission income (non-consolidated: ¥6,030 million, up ¥598 million year on year), the Bank is promoting the strengthening of consulting functions through a goal-based approach, building up personal asset management balances (¥302,239 million), and expanding the functionality of the Sagin App (adding fixed deposit and mortgage prepayment functions).

Through initiatives such as cumulative SDGs support for 735 companies, underwriting of SDGs private placement bonds (87 issues / ¥6.6 billion), expanded decarbonization management support services, and startup support via the Sagin Bridge Fund, the Bank aims to deepen its relationships with the region and create new revenue opportunities by providing value beyond financial intermediation.

The Bank is simultaneously advancing the expansion of functions in the Sagin App with the goal of enabling all banking transactions to be completed through the app, and consolidating branches through the branch-in-branch approach (domestic network of 70 locations). It also aims to strengthen face-to-face consulting functions, including the relocation of the Hyogo Branch and the establishment of the new Consulting Plaza Saga Branch in July 2026.

The annual dividend for FY2026 (ending March 2026) has been raised to ¥110 (up 22.2% from ¥90 in the previous fiscal year), with a payout ratio of 21.6% (consolidated). The annual dividend of ¥110 (interim ¥55, year-end ¥55) is expected to be maintained in FY2027 (ending March 2027) as well. While maintaining a policy of stable dividends as a basic principle, the Bank will continue to expand returns in line with business performance.

Last updated: July 19, 2026