Yamaguchi Financial Group, Inc.
8418・Prime Market・Banks
Business
Yamaguchi Financial Group, Inc. is a bank holding company centered on three banks—Yamaguchi Bank, Momiji Bank, and Kitakyushu Bank—that also operates non-bank financial services including securities (YM Securities), credit card, leasing, and consulting. With Yamaguchi, Hiroshima, and Fukuoka as its principal operating base, the group has total assets of ¥13,180.4 billion (as of the end of March 2026) and consolidated ordinary income of ¥261,941 million. Its primary customers are regional small and medium-sized enterprises and individuals, and it addresses a wide range of financial needs including deposits, lending, asset management, and business succession support. Since the establishment of the holding company in October 2006, the group has pursued group synergies under a multi-bank structure.
Business Model
Net interest income (interest on loans and dividends on securities) forms the core of earnings, with fund management income reaching ¥174,395 million in FY2026 (ending March 2026). The basic structure is a financial intermediation model that adds fee business income of ¥27,607 million (deposits, lending, securities-related business, etc.) to this base. In addition, the Company is promoting revenue diversification by supporting management issue resolution through YMFG Growth Partners (providing an integrated combination of financing, equity, and solutions) and by expanding non-interest income through sales of investment trusts and insurance to individual customers.
Company Strengths
The combined total loan balance of the three banks—Yamaguchi Bank, Momiji Bank, and The Kitakyushu Bank—stood at ¥9,007.0 billion (as of end-March 2026, up ¥367.9 billion from the previous fiscal year-end). The Kitakyushu Bank continued its high growth, up ¥89.2 billion from the previous fiscal year-end, and consolidated loans outstanding reached ¥8,940,977 million. The buildup of loans leveraging the wide-area sales foundation supports the stable expansion of net interest income.
The consolidated OHR (expenses / core gross business profit) improved to 54.35% from 56.18% in the previous fiscal year. Consolidated core net business income (excluding gains/losses on cancellation of investment trusts and interest rate swaps) came to ¥56,779 million (up ¥6,116 million year on year), reflecting improved core profitability. The multi-bank, single-platform approach—consolidating systems and head office functions—is driving cost efficiency gains.
The combined personal assets under custody balance for the three banks stood at ¥590.7 billion (as of end-March 2026, up ¥67.8 billion from the previous fiscal year-end). Investment trust balances reached ¥143.2 billion, and YM Securities' assets under custody balance expanded to ¥380.6 billion (up ¥70.4 billion year on year), continuing its growth trend. A collaborative asset management service framework spanning securities, insurance, and banking is capturing customers' asset formation needs.
ENVALITH's Perspective
Performance Trend
Ordinary income increased for four consecutive fiscal years, rising from ¥147,016 million in FY2022 (ending March 2022) to ¥261,941 million in FY2026 (ending March 2026). In FY2026, against the backdrop of the Bank of Japan's policy rate hikes, interest on loans (¥123,058 million, +¥9,658 million year on year), interest on deposits with banks (¥9,500 million, +¥5,307 million year on year), and interest and dividends on securities (¥38,567 million, +¥7,453 million year on year) all expanded. On the other hand, a sharp increase in interest expenses on deposits and negotiable certificates of deposit (consolidated: ¥31,947 million, +¥19,253 million year on year) and an expansion of losses on sales of government bonds and other securities (combined 3 banks: -¥64,767 million) squeezed ordinary profit, resulting in a decline in ordinary profit to ¥45,026 million (-14.1% year on year) and profit attributable to owners of parent to ¥33,008 million (-6.6% year on year). Consolidated core net business profit (excluding gains/losses on cancellation of investment trusts and interest rate swaps) rose to ¥56,779 million (+¥6,116 million year on year), indicating an improvement in core business earning power. For FY2027 (ending March 2027), ordinary profit is forecast to increase substantially to ¥67,500 million (+49.9% year on year).
Growth Strategy
Five-year medium-term management plan (FY2025–FY2029) centered on evolving into a regional-issue-solving platformer
In July 2025, four companies including YM Consulting were reorganized to establish "YMFG Growth Partners (YMGP)." This built a one-stop support system combining lending, equity, and solutions to resolve management challenges, and expanded hands-on support for regional companies. Growth support, including equity investments, is also being implemented.
Full-scale integration of the core banking systems of banks within the group has begun. Through unification of personnel systems and consolidation of head office functions into the holding company, the group aims to build a more efficient management structure and a sustainable earnings base. OHR improved to 54.35% (56.18% in the previous fiscal year), with Yamaguchi Bank on a standalone basis achieving 35.90%.
In September 2025, all shares of Hoken Hiroba were transferred. The company resolved to convert Yamaguchi Bank's Qingdao and Dalian branches into representative offices, and Yamaguchi Bank and Yamaguchi Financial Group plan to transition from internationally uniform standard banks to domestic standard banks. This aims to make effective use of capital and maximize group synergies.
Participating in Yamaguchi Prefecture's GX strategic region "Task Force for Creating and Fostering New Businesses." Began offering sustainability-linked loans in the Shimonoseki City decarbonization leading area (a first nationwide case). Full-scale launch of a project to expand the inbound affluent tourism market. Selected as the first trustee among regional financial groups nationwide for a Social Impact Bond project.
The annual dividend for FY2026 (ending March 2026) is ¥64 (up from ¥60 in the previous fiscal year), with a dividend payout ratio of 40.7%. For FY2027 (ending March 2027), a significant dividend increase to ¥96 (up ¥32 year on year) is forecast. At the Board of Directors meeting on May 8, 2026, a share buyback of up to 5 million shares and ¥10.0 billion was resolved (May to October 2026). The company is promoting both improved capital efficiency and enhanced shareholder returns.
Last updated: July 19, 2026