TOMATO BANK, LTD.

Business Details

The core segment comprising the Company (Tomato Bank) and its consolidated subsidiary Tomato Business Co., Ltd. The segment conducts the Deposit Business, Lending Business, domestic and foreign exchange operations, the Securities Investment Business, and other operations. It primarily targets individual and corporate customers within Okayama Prefecture, providing a wide range of financial services from solving management issues of business operators to supporting individual asset formation. This core business accounts for approximately 77% of the Group's total ordinary income.

Recent Overview

A sharp rise in interest on loans and a rise in interest on deposits progressed in parallel, with segment profit up ¥288 million year on year

In FY2026 (ending March 2026), Banking segment ordinary income was ¥20,469 million (an increase of ¥1,086 million year on year), and segment profit was ¥2,575 million (an increase of ¥288 million year on year). Fund management income increased significantly to ¥16,146 million (an increase of ¥1,755 million year on year), while fund procurement expenses also rose sharply to ¥2,863 million (an increase of ¥1,959 million year on year). The loan yield was 1.30% (up 0.16 percentage points year on year), and the overall interest margin improved slightly to 0.18% (up 0.01 percentage points year on year). Core net business income was ¥3,577 million (an increase of ¥535 million year on year, before provision for general allowance for loan losses). Risk-monitored loans increased to ¥34,109 million (an increase of ¥2,376 million year on year), with loans to borrowers in danger of bankruptcy expanding to ¥22,822 million. Allowance for loan losses decreased to ¥4,799 million (a decrease of ¥231 million year on year). Assets in custody balance expanded to ¥1,472,512 million (an increase of ¥41,785 million year on year).

Key Products

Growth Drivers

• Increase in interest on loans: In a rising interest rate environment, the loan yield improved to 1.30% (up 0.16 percentage points year on year), and interest on loans increased significantly on a non-consolidated basis to ¥13,856 million (an increase of ¥1,908 million year on year)
• Expansion of loan balance: The non-consolidated loan balance reached ¥1,080,589 million (an increase of ¥17,925 million year on year) due to an increase in individual loans such as housing loans (¥343,126 million) and consumer loans (¥78,661 million), as well as loans to business operators
• Increase in interest on deposits with banks: Interest on deposits with banks increased significantly to ¥490 million (an increase of ¥251 million year on year) due to the rise in the Bank of Japan's current account deposit rate
• Expansion of assets in custody balance: The assets in custody balance expanded to ¥1,472,512 million (an increase of ¥41,785 million year on year) due to increased sales of investment trusts (an increase of ¥12,365 million year on year) and individual annuity insurance (an increase of ¥4,298 million year on year)
• Increase in government bond balance: The government bond balance within the securities portfolio increased significantly from ¥41,467 million to ¥60,569 million, contributing to an increase in fund management income
• Improvement in core net business income: Core net business income steadily increased to ¥3,292 million (an increase of ¥54 million year on year), with continued improvement in core business earnings power

Risks

• Risk of sharp rise in procurement costs: Interest on deposits increased by ¥1,965 million year on year, from ¥874 million to ¥2,839 million, and further increases in procurement costs during additional Bank of Japan rate hikes could pressure earnings
• Risk of increasing non-performing loans: Total risk-monitored loans increased to ¥34,109 million (an increase of ¥2,376 million year on year), with loans to borrowers in danger of bankruptcy expanding to ¥22,822 million (an increase of ¥2,355 million year on year). There is a risk that deterioration in the management environment of small and medium-sized business operators could lead to increased credit costs
• Risk of valuation losses on securities: Valuation gains/losses on other securities were ¥-1,904 million (as of the end of March 2026), an unrealized loss position, with risk of additional valuation losses due to rising interest rates and market fluctuations. Valuation losses on bonds were substantially in an unrealized loss position at ¥-5,965 million
• Risk of regional economic contraction: Population decline and economic contraction in Okayama Prefecture, due to the declining birthrate, aging population, and outflow of young people to urban areas, could be a long-term factor in declining loan demand. The ratio of loans to Okayama Prefecture-based borrowers is high at 87.24%, indicating a high degree of regional concentration
• U.S. trade policy risk: The impact of shifts in U.S. trade policy could spread to small and medium-sized business operators via large corporations, leading to deteriorating business conditions among client companies and increased credit costs
• Declining trend in fee-based services income: Fee-based services income decreased to ¥3,635 million (a decrease of ¥188 million year on year), making strengthening the earnings base of the fee business a challenge