ENVALITH
株式会社高知銀行 logo

THE BANK OF KOCHI,LTD.

8416・Standard Market・Banks

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株式会社高知銀行 logo
THE BANK OF KOCHI,LTD.8416

Business

The Bank of Kochi, Ltd. was founded in 1930 and converted to an ordinary bank in 1989, making it the sole regional bank headquartered in Kochi Prefecture. Through its head office and branch network, it centers its operations on Deposit Business, Lending Business, and Exchange Settlement Business, and has under its umbrella the consolidated subsidiaries Ocean Lease (Leasing Business and Installment Sales Business), Kochi Card (Credit Card Business and Credit Guarantee Business), Kogin Business (store security and cash handling), Kogin Regional Collaborative Investment Limited Partnership (investment), and the unconsolidated regional trading company Kochi Chiiki Shosha. Its main customers are small and medium-sized enterprises, individuals, and local public bodies within Kochi Prefecture, with loans outstanding of ¥732,635 million and deposits outstanding of ¥977,726 million (as of the end of March 2026). Listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

The bulk of funding comes from individual and corporate deposits (period-end balance of ¥977,726 million), with the funds deployed into loans (¥732,635 million) and securities (¥297,267 million). The spread between the investment yield of 1.38% and the funding cost of 0.24% is the main source of earnings. This is supplemented by a composite earnings structure that also includes fee income (Services Transactions) of ¥2,703 million, Leasing Business ordinary income of ¥6,327 million, and Credit Card Business income of ¥389 million.

Company Strengths

The bank operates a network of head office and branches across Kochi Prefecture, maintaining a loan balance of ¥732,635 million and a deposit balance of ¥977,726 million. Personal assets in custody stood at ¥125,817 million (up ¥11,766 million year on year), and the housing loan balance reached ¥98,923 million (up ¥3,541 million year on year), reflecting deep transactional relationships with individual customers. As the only regional bank in the area, its long-accumulated customer base is a unique asset that competitors cannot easily replicate in a short period.

The group has a multi-layered structure centered on Banking (ordinary income of ¥21,811 million), complemented by the Leasing Business (¥6,248 million) and the Credit Card Business (¥386 million). Segment profit in the Leasing Business improved to ¥246 million, up ¥98 million year on year, indicating improved profitability. Group companies are achieving cross-selling with bank customers through Credit Guarantee, Installment Sales, and Card businesses, thereby diversifying the risk of dependence on a single business.

As of the end of March 2026, the consolidated capital adequacy ratio (domestic standard) stood at 9.06% (up 0.06 percentage points from the end of the previous fiscal year), with capital of ¥57.6 billion. Against risk assets of ¥636.2 billion, the total required capital amount was ¥25.4 billion, securing a sufficient buffer. The bank has already made an early repayment of public funds, reflecting a high degree of financial autonomy. As a bank under the domestic standard, it maintains a level well above the regulatory minimum of 4%.

ENVALITH's Perspective

As an external factor, the rise in market interest rates accompanying the Bank of Japan's monetary policy normalization pushed up interest on loans (¥10,942 million, up ¥1,079 million year on year) and interest and dividends on securities (¥4,327 million, up ¥618 million year on year), while funding costs such as interest on deposits (¥2,203 million, up ¥1,553 million year on year) and interest on borrowings (¥286 million, up ¥225 million year on year) expanded sharply, totaling ¥2,654 million (up ¥1,918 million year on year). The overall interest margin remained at just 0.10% on a non-consolidated basis, limiting the benefit of the earnings improvement. The forecast for FY2027 (ending March 2027) calls for a significant improvement to ordinary profit of ¥3,150 million (up 128.2% year on year), but continued increases in funding costs pose an upside risk to this outlook.

Valuation difference on other securities deteriorated markedly to -¥13,729 million on a non-consolidated basis (vs. -¥8,523 million in the previous period) and -¥13,644 million on a consolidated basis (vs. -¥8,459 million in the previous period), with comprehensive income posting a consolidated loss of -¥4,342 million for the second consecutive period. The main cause was valuation losses on the bond portfolio (-¥22,776 million on a non-consolidated basis), as the decline in market value of held bonds amid rising interest rates eroded net assets. The capital adequacy ratio (consolidated simplified method) fell to 3.9% (vs. 4.3% in the previous period), and management of the securities portfolio remains an important ongoing challenge.

Profit attributable to owners of parent for FY2026 (ending March 2026) fell sharply to ¥596 million (down 30.6% year on year), marking a significant decline in profit for the second consecutive period. Despite recording extraordinary income of ¥3,252 million (non-consolidated) from gains on sale of equities, increased expenses such as provision for allowance for doubtful accounts of ¥911 million (consolidated) and losses on sale of government bonds and other securities of ¥2,047 million (non-consolidated) weighed on profit. On the other hand, for FY2027 (ending March 2027), a significant recovery is forecast, with consolidated ordinary profit of ¥3,150 million and profit attributable to owners of parent of ¥2,040 million. Whether the improvement in the interest rate environment and normalization of credit costs will be realized will be the key focus. The dividend payout ratio rose to 52.9% (vs. 34.0% in the previous period), and the sustainability of shareholder returns also warrants attention.

Growth Strategy

Focusing on management efficiency improvement, asset soundness, and enhanced profitability, the Bank is advancing consulting, DX, and human capital reforms

Promoting improvement in loan yield (1.48% on a non-consolidated basis, up from 1.34% in the previous fiscal year) and securities yield (1.33% on a non-consolidated basis, up from 1.18% in the previous fiscal year) by leveraging the rising interest rate environment. Continuing to expand the housing loan balance (¥98,923 million) and personal loan balance (¥120,748 million) while improving the overall interest margin (0.10% on a non-consolidated basis).

Continuing to expand the balance of personal assets in custody to ¥125,817 million (up ¥11,766 million year on year), while strengthening sales of investment trusts (¥43,177 million) and life insurance (¥79,651 million). Building a stable revenue base with low interest rate sensitivity by accumulating Fee Business (Services Transactions) income (¥2,703 million on a consolidated basis).

Maintaining a downward trend in operating expenses, which stood at ¥11,778 million on a consolidated basis (down ¥92 million year on year). Continuing to control personnel expenses (¥5,856 million) and non-personnel expenses (¥4,767 million) on a non-consolidated basis, while promoting operational efficiency through DX initiatives backed by software investment (¥716 million on a non-consolidated basis). Core net business profit (¥2,399 million on a non-consolidated basis) is improving.

The Bank plans to transition to a company with an audit and supervisory committee at the Annual General Meeting of Shareholders on June 26, 2026. Four outside directors will be appointed as members of the audit and supervisory committee, strengthening the board's supervisory function. Four new executive officers are also expected to be appointed, renewing the management structure.

Last updated: July 19, 2026