THE BANK OF SAGA LTD.
8395・Prime Market・Banks
Banking
The core segment of the Saga Bank Group, and the main pillar of regional finance accounting for approximately 88% of consolidated ordinary income.
| Period | Current | Previous | Change |
|---|---|---|---|
| Ordinary income (Banking segment, including internal transactions) | ¥63,119 million | ¥46,858 million | ↑ |
| Segment profit (ordinary income basis) | ¥11,461 million | ¥10,140 million | ↑ |
| Segment assets | ¥3,214,200 million | ¥3,172,855 million | ↑ |
| Ending loan balance (non-consolidated) | ¥2,369,160 million | ¥2,257,441 million | ↑ |
| Ending deposit balance (non-consolidated) | ¥2,974,002 million | ¥2,917,860 million | ↑ |
| Non-performing loan ratio (Financial Revitalization Act basis, non-consolidated) | 1.87% | 1.99% | ↓ |
| Capital adequacy ratio (non-consolidated, domestic standard, preliminary figure) | 7.81% | 8.13% | ↓ |
| Core net business profit (non-consolidated) | ¥13,442 million | ¥10,034 million | ↑ |
| Total interest margin (non-consolidated) | 0.27% | 0.27% | — |
| Loan yield (non-consolidated) | 1.24% | 1.03% | ↑ |
| Deposit yield (non-consolidated) | 0.20% | 0.05% | ↑ |
| Credit costs (non-consolidated, including general allowance for loan losses) | ¥2,279 million | ¥414 million | ↑ |
Business Details
Operates 75 head office/branch locations and 28 sub-branches across the northern Kyushu area, centered on Saga and Fukuoka. The segment provides a wide range of financial services to individuals, corporations, and local governments through deposit-taking, lending, domestic and foreign exchange operations, and securities investment operations, among others. In FY2026 (ending March 2026), the recording of gains on sale of stocks associated with a tender offer response for a local company significantly boosted ordinary income, while losses on sale of government bonds and other securities were also recorded in connection with a restructuring of the securities portfolio.
Recent Overview
Recording of gains on sale of stocks from a tender offer response for a local company, together with a restructuring of the securities portfolio, significantly boosted ordinary income.
Ordinary income in the Banking segment for FY2026 (ending March 2026) was ¥63,119 million (up 34.7% year on year), mainly due to gains on sale of stocks of ¥14,405 million recorded in connection with responding to a tender offer for shares of a local company. Losses on sale of government bonds and other securities of ¥14,769 million were also recorded as a result of restructuring the securities portfolio, funded in part by the aforementioned gains. Meanwhile, amid a rising interest rate environment, interest income on loans increased significantly to ¥28,215 million (up 27.5% year on year). Interest expenses on deposits also surged to ¥5,395 million (3.5 times the prior-year level). Core net business profit rose to ¥13,442 million (up 34.0% year on year), indicating steady improvement in core earnings power. The non-performing loan ratio improved to 1.87% (from 1.99% at the end of the previous fiscal year).
Key Products
Growth Drivers
- Increase in interest income on loans due to rising market interest rates accompanying the Bank of Japan's monetary policy normalization (non-consolidated FY2026 (ending March 2026): ¥28,215 million, up 27.5% year on year)
- Continued expansion of the loan balance (non-consolidated ending balance of ¥2,369,160 million, up ¥111,719 million from the end of the previous fiscal year), driven particularly by loans to the real estate industry, local governments, and manufacturing
- Expansion of fee income (non-consolidated fee income of ¥9,930 million, up ¥724 million year on year), expanding fee-based revenue
- Increase in the personal asset management balance (¥302,239 million, up ¥38,899 million from the end of the previous fiscal year), expanding asset management-related fee income
- Enhancement of customer value through expansion of consulting and non-financial services (cumulative 735 companies supported through SDGs initiatives, decarbonization support, overseas sales channel expansion support, etc.)
- Strengthening of digital channels through enhanced functionality of the "Sagin App" (addition of time deposit and partial early mortgage repayment functions)
Risks
- Risk of rising funding costs and margin compression due to a sharp increase in interest expenses on deposits (non-consolidated ¥5,395 million, 3.5 times the prior-year level)
- Risk of earnings pressure from a significant increase in credit costs (non-consolidated ¥2,279 million, sharply up from ¥414 million in the prior year) and an increase in provision for individual allowance for loan losses (¥1,815 million)
- Financial impact from valuation differences on securities (non-consolidated valuation difference on other securities of ¥-20,342 million) and the risk of expanding bond valuation losses as interest rates rise
- Concerns over capital adequacy due to a decline in the capital adequacy ratio (domestic standard) (non-consolidated 7.81%, down from 8.13% at the end of the previous fiscal year)
- Contraction of the regional economy and medium- to long-term stagnation of loan and deposit balances due to population decline and the falling birthrate/aging population
- Risk of erosion of the customer base due to intensifying competition with fintech companies and megabanks amid ongoing digitalization
- Impact of geopolitical risks, such as U.S. trade policy and the situation in the Middle East, on the regional economy and the business conditions of client companies
Last updated: June 23, 2026