North Pacific Bank, Ltd.
8524・Prime Market・Banks
Business
The Hokkaido Bank was founded in 1917 and is the core bank of a regional financial group whose sole operating base is the entire Hokkaido region. With six consolidated subsidiaries, it centers on Banking (deposits, lending, securities, and foreign exchange), while also engaging in Leasing Business (Sapporo Hokuyo Lease), Credit Card and Credit Guarantee Business (Sapporo Hokuyo Card and North Pacific), Securities Business (Hokuyo Securities), and Consulting and M&A Advisory Business (Hokkaido Co-Creation Partners). In April 2026, it will make Career Bank Co., Ltd. a wholly owned subsidiary, expanding into the recruitment and staffing business as well. Its main customers are individuals, corporations, and local governments, and it provides comprehensive financial services leveraging its top customer base and branch network within Hokkaido.
Business Model
In the core Banking business, the primary source of earnings is the margin (fund spread) between deposit funding costs and the yield on loans and securities investments. For FY2026 (ending March 2026), interest income was ¥118,491 million, interest expenses were ¥25,379 million, and net interest income was ¥93,111 million. Added to this is net fee and commission income of ¥18,013 million. Group companies complement this through fee income from leasing, guarantee, securities, and consulting operations, forming an earnings structure that realizes cross-selling through customer referral channels with the bank.
Company Strengths
Following the acquisition of the business of Hokkaido Takushoku Bank in 1998 and the merger with Sapporo Bank in 2008, the Bank has built the largest customer base within Hokkaido. It holds loans outstanding of ¥8,036,470 million and deposits and negotiable certificates of deposit balances of ¥11,158,759 million, with loans to local governments accounting for 22.41% of the total, reflecting a deep relationship with the public sector as a strength.
As of the end of March 2026, the consolidated capital adequacy ratio was 13.18% (domestic standard), while the non-consolidated ratio stood at 12.80%. Consolidated capital amounted to ¥379,400 million against risk assets of ¥2,877,100 million, maintaining a sufficient capital buffer. The non-performing loan ratio improved by 0.01 percentage points year on year to 1.13%, keeping asset soundness at a high level.
Subsidiaries such as Hokuyo Securities, Hokkaido Co-Creation Partners, and Sapporo Hokuyo Lease leverage the Bank's customer base to conduct cross-selling. Assets under custody expanded to ¥394,940 million (up ¥88,783 million year on year). Following the full consolidation of Career Bank in April 2026, the Group has incorporated the personnel placement and staffing business, building a track record of diversification into non-financial areas.
ENVALITH's Perspective
Performance Trend
Ordinary revenue expanded roughly 1.9-fold over five fiscal periods, from ¥124,461 million in FY2022 (ended March 2022) to ¥235,927 million in FY2026 (ending March 2026). Growth accelerated sharply in particular in FY2026, up 56.6% year on year. The main external driver was the policy interest rate hike, which substantially boosted interest income on fund management (consolidated ¥118,491 million, up ¥31,964 million year on year). Profit attributable to owners of parent came to ¥25,601 million (up 24.2% year on year), marking five consecutive years of profit growth. Non-consolidated core net business profit of ¥40.8 billion and ROE of 6.78% both represent the highest levels of the past five fiscal periods. For FY2027 (ending March 2027), the company forecasts consolidated ordinary revenue of ¥225,200 million (down 4.5% year on year), ordinary profit of ¥44,400 million (up 18.2%), and net income of ¥29,400 million (up 14.8%); although ordinary revenue is expected to decline, profit is projected to continue expanding.
Growth Strategy
Under the medium-term management plan "Make the HOKKAIDO Way 1st stage," the Bank is pursuing expansion of its deposit and loan share and diversification of non-interest income.
Loans and bills discounted (average balance), centered on corporate lending to large and mid-sized enterprises, expanded by ¥543.6 billion year on year (annualized rate of 7.0%). The loan yield rose to 1.08% (up 0.21 percentage points year on year), and the overall interest margin improved to 0.21% (up 0.10 percentage points), reflecting improved profitability. The Bank plans to continue expanding its deposit and loan share in FY2027 (ending March 2027) to further increase net interest income.
Non-consolidated assets under custody expanded significantly to ¥394,940 million (up ¥88,783 million, or 28.9%, year on year), driven by increased sales of public bonds held in custody and investment trusts as well as higher valuation amounts. The Bank aims to capture NISA and asset-formation demand to diversify and stabilize fee income. Fees and commissions decreased by ¥1.0 billion year on year, and containing the increase in expenses remains a challenge.
Effective April 28, 2026, Career Bank Co., Ltd. (job placement, staffing, employment support, and training services) was made a consolidated subsidiary with a voting equity ratio of 88.26%, at an acquisition cost of ¥1,537 million. By combining the Hokuyo Bank Group's business network and branch network with Career Bank's human resource supply capabilities, the Bank aims to address Hokkaido's labor challenges and establish new sources of revenue.
The Bank actively replaced low-yield bonds by utilizing gains on sales of equity holdings (non-consolidated: ¥53,567 million). It shortened the duration of yen-denominated bonds from 4.46 years to 3.08 years, strengthening resilience against interest rate rise risk. Assuming a policy interest rate of 1.00% and a 10-year JGB yield of 2.40% for FY2027 (ending March 2027), the Bank will continue to optimize its securities portfolio.
Last updated: July 19, 2026