THE TOCHIGI BANK, LTD.
8550・Prime Market・Banks
Business
The Tochigi Bank, Ltd. was founded in 1942 and is headquartered in Utsunomiya City, Tochigi Prefecture. As a regional financial institution, it conducts Banking Operations—including deposits, lending, exchange, and securities investment—through its head office and a network of 78 branches. The company has 6 consolidated subsidiaries and, with Banking Business as its core, provides a diverse range of financial services including Financial Instruments Business through Tochigin TT Securities, as well as leasing, credit guarantees, credit cards, and sales of renewable energy power generation. Its main customers are individuals, small and medium-sized enterprises, and local public bodies in Tochigi and Saitama Prefectures, and it plays a role in supporting the regional flow of funds. The company is listed on the Tokyo Stock Exchange (First Section listing in 1984).
Business Model
The bank raises deposits from individuals and corporations (¥3,171,026 million as of the end of FY2026 (ending March 2026)) and deploys them into loans (¥2,452,258 million) and securities (¥420,322 million) to earn interest margins. In addition, it adopts a composite earnings model that builds up fee business income (consolidated ¥11,314 million) from over-the-counter sales of insurance and investment trusts, securities brokerage, etc., as well as income from group subsidiaries in leasing, card business, and other areas.
Company Strengths
In FY2025 (ended March 2025), the company sold low-yield bonds ahead of schedule to create risk-taking capacity, and in FY2026 (ending March 2026) expanded loans outstanding by ¥264,959 million from the previous fiscal year-end to ¥2,457,837 million (non-consolidated). The yield on fund management rose to 1.06% (up 0.26 percentage points year on year), and non-consolidated fund management income reached ¥36,511 million (up ¥9,422 million year on year).
Through enhanced visit-based sales activities and a diverse financial product lineup including investment trusts and individual annuities, non-consolidated assets under custody expanded to ¥486,134 million (up ¥38,924 million from the previous fiscal year-end). Fee and commission income (non-consolidated) also increased to ¥9,713 million (up ¥523 million year on year), demonstrating the depth of the non-interest income base.
In addition to the Banking Business, the company operates six subsidiaries including Tochigin TT Securities (Financial Instruments Business, ordinary income of ¥2,801 million), as well as leasing, credit guarantee, card, and renewable energy businesses. Ordinary income from external customers in the Other segment reached ¥4,021 million (up ¥826 million year on year), and segment profit was ¥579 million (up ¥432 million year on year), reflecting a significant improvement in profitability. The group's complementary functions are being steadily strengthened.
ENVALITH's Perspective
Performance Trend
Ordinary income remained roughly flat, moving from ¥41,646 million in FY2022 (ended March 2022) to ¥45,087 million in FY2025 (ended March 2025), but then accelerated sharply to ¥54,551 million in FY2026 (ending March 2026), up 21.0% year on year. The main driver of this revenue expansion was, as an external factor, the increase in interest on loans (¥29,696 million, up ¥7,000 million year on year, consolidated) and interest on deposits with banks (¥3,519 million, up ¥1,698 million year on year, consolidated) resulting from the Bank of Japan's policy rate hikes. In addition, the drop-off of the loss on sale of securities that had been recognized ahead of schedule in the previous period (Other business expenses fell from ¥31,840 million in the prior period to ¥2,622 million in the current period, consolidated) significantly reduced ordinary expenses, resulting in a swing to profitability with ordinary profit of ¥10,019 million and net income of ¥8,289 million. For FY2027 (ending March 2027), the company forecasts ordinary income of ¥60,800 million and net income of ¥9,000 million. Regarding dividends, the company plans to increase the annual dividend from ¥26 per share (payout ratio of 33.0%) to ¥30 per share (forecast payout ratio of 35.0%).
Growth Strategy
Under the 12th Medium-Term Management Plan (2026–2030), the company is pursuing a dividend payout ratio target of 40% while continuing to expand loans and assets in custody
Promoting multi-layered loan growth targeting individuals and SMEs, mid-sized and large corporations, and local governments. The non-consolidated loan balance at the end of FY2026 (ending March 2026) reached ¥2,457,837 million (up ¥264,959 million from the previous fiscal year-end), achieving substantial growth. The forecast for continued profit growth in FY2027 (ending March 2027) assumes continued expansion of the loan balance.
Through strengthened over-the-counter sales of investment trusts and individual annuities and the enhancement of the visit-based sales system, the non-consolidated balance of assets in custody expanded to ¥486,134 million (up ¥38,924 million from the previous fiscal year-end). Fee and commission income (non-consolidated) also increased to ¥9,713 million, reflecting ongoing efforts to diversify the revenue base away from dependence on interest income.
The company revised its shareholder return policy starting from FY2027 (ending March 2027), announcing a policy to target a dividend payout ratio of approximately 40% during the period of the 12th Medium-Term Management Plan (April 2026 to March 2030). The annual dividend for FY2026 (ending March 2026) was ¥26 (payout ratio of 33.0%), and the forecast for FY2027 (ending March 2027) is ¥30 (payout ratio forecast of 35.0%), reflecting a phased increase. The company also plans to flexibly conduct share buybacks in light of capital levels and market conditions.
The company continues to invest retained earnings in branch investments as well as DX and AI investments, aiming to improve customer service and strengthen its management structure. Tangible fixed assets increased to ¥30,765 million (up ¥5,597 million from the previous fiscal year-end), reflecting active capital expenditures including ¥5,977 million in construction in progress. Operating expenses (consolidated) increased to ¥24,970 million, but this has been absorbed by revenue growth.
Last updated: July 19, 2026