The Kita-Nippon Bank, Ltd.
8551・Prime Market・Banks
Banking Business
The core segment of Kitanihon Bank. Deposit-taking and lending, and securities investment business rooted in Iwate Prefecture, account for the majority of revenue.
| Period | Current | Previous | Change |
|---|---|---|---|
| Ordinary income (Banking Business segment) | ¥26,925 million | ¥23,069 million | ↑ |
| Segment profit (ordinary profit, Banking Business) | ¥6,098 million | ¥5,300 million | ↑ |
| Segment assets (Banking Business) | ¥1,560,515 million | ¥1,523,513 million | ↑ |
| Depreciation (Banking Business) | ¥957 million | ¥856 million | ↑ |
| Increase in tangible and intangible fixed assets (Banking Business) | ¥2,024 million | ¥788 million | ↑ |
| Interest on loans (non-consolidated) | ¥15,702 million | ¥13,245 million | ↑ |
| Interest and dividends on securities (non-consolidated) | ¥6,089 million | ¥4,774 million | ↑ |
| Interest on deposits (non-consolidated) | ¥2,904 million | ¥939 million | ↑ |
| Total interest margin (all-branch basis, non-consolidated) | 0.38% | 0.30% | ↑ |
| Total disclosed claims under the Financial Revitalization Law (non-consolidated) | ¥17,912 million | ¥16,416 million | ↑ |
| Non-performing loan ratio (non-consolidated) | 1.58% | 1.46% | ↑ |
| Capital adequacy ratio (domestic standard, non-consolidated, preliminary) | 9.57% | 9.75% | ↓ |
Business Details
Through the Bank's head office and branch network, the segment conducts Deposit Business, Lending Business, Securities Investment Business, domestic exchange business, Foreign Exchange Business, corporate bond trustee and registration services, and other operations. Its main customers are individuals, small and medium-sized enterprises, and local public bodies, with its core business base centered on Iwate Prefecture, spanning from Hachinohe to Sendai. This is the core segment, accounting for approximately 88% of the Group's consolidated ordinary income, with net interest income (interest on loans and interest and dividends on securities) forming the mainstay of revenue. Kitagin Capital Partners Co., Ltd., established in July 2025, is classified under the "Other" segment.
Recent Overview
Revenue and profit increased due to growth in interest on loans and interest and dividends on securities. Funding costs also rose.
In the Banking Business segment for FY2026 (ending March 2026), ordinary income increased to ¥26,925 million (up ¥3,856 million year on year) and ordinary profit rose to ¥6,098 million (up ¥798 million year on year), achieving growth in both revenue and profit. Interest on loans increased significantly to ¥15,702 million (up ¥2,457 million year on year), and interest and dividends on securities rose to ¥6,089 million (up ¥1,315 million year on year), driving substantial expansion in fund investment income. On the other hand, against the backdrop of interest rate hikes by the Bank of Japan, interest on deposits surged to ¥2,904 million (up ¥1,965 million year on year), pushing up funding costs. A net provision for specific loan loss reserves of ¥1,156 million was recorded, and actual credit costs increased to ¥810 million (from ¥203 million in the previous fiscal year). Core net business profit rose to ¥6,197 million (up ¥1,496 million year on year), and the overhead ratio (OHR) improved to 69.63% (an improvement of 5.02 percentage points), reflecting enhanced profitability.
Key Products
Growth Drivers
- Improvement in loan yield (1.41%, up 0.20 percentage points year on year) and increase in interest on loans (¥15,702 million, up ¥2,457 million year on year), driven by the Bank of Japan's gradual policy rate hikes
- Increase in the balance of business loans and housing loans (total non-consolidated loans outstanding of ¥1,123,487 million, up ¥14,041 million from the end of the previous fiscal year)
- Significant improvement in securities yield (2.33%, up 0.46 percentage points year on year) and lengthening of modified duration (5.66 years), leading to an increase in interest and dividends on securities (¥6,089 million, up ¥1,315 million year on year)
- Expansion of the balance of assets under custody, centered on investment trusts and over-the-counter insurance sales (balance related to life insurance and investment trusts of ¥126,691 million, up ¥6,867 million from the end of the previous fiscal year)
- Strengthening of investment operations such as business succession and project finance through Kitagin Capital Partners Co., Ltd., established in July 2025
- Diversification of the revenue base outside the region through expansion of loans outside Iwate Prefecture (¥457,094 million, up ¥12,165 million from the end of the previous fiscal year, a change rate of 2.73%)
Risks
- Risk of rising funding costs and margin compression due to a sharp increase in interest on deposits (¥2,904 million, up ¥1,965 million year on year) resulting from changes in the Bank of Japan's monetary policy
- Risk of rising credit costs due to an increase in credit costs (non-consolidated actual credit costs of ¥810 million, versus ¥203 million in the previous fiscal year) and an increase in disclosed claims under the Financial Revitalization Law (¥17,912 million, non-performing loan ratio of 1.58%)
- Risk of declining loan demand due to uncertainty over the economic outlook in Iwate Prefecture (weakening consumer sentiment due to price increases, and the impact of U.S. tariff policy)
- Risk of expanding unrealized losses in the event of rising interest rates, due to the lengthening of the modified duration of the securities portfolio (5.66 years)
- Risk of long-term stagnation in deposit and loan balances due to the shrinking regional economy resulting from the declining birthrate, aging population, and population decline
- Risk of deteriorating capital efficiency due to increased risk assets, as the capital adequacy ratio (domestic standard, non-consolidated preliminary figure) declined to 9.57%, down 0.18 percentage points from the end of the previous fiscal year
Last updated: June 19, 2026