Mito Securities Co., Ltd.

Business Details

Mito Securities is an independent securities company operating financial instruments business as a single segment. It offers a broad range of services including securities trading, brokerage, underwriting, and offering handling. Its main revenue sources are two pillars: flow revenue (equity brokerage commissions, investment trust sales commissions, trading income) and stock revenue (investment trust agency commissions, Fund Wrap fees). The company provides asset formation and asset succession services centered on high-net-worth clients through its face-to-face channel as its main axis, while also developing internet trading as a complementary channel. Domestic operations account for over 90% of its business area.

Recent Overview

An aggregation error was identified in the notes section of the earnings report, leading to a correction of accumulated depreciation

In the FY2026 (ending March 2026) earnings report disclosed on April 28, 2026, an aggregation deficiency was found in the balance sheet-related note "Accumulated Depreciation Deducted from Property, Plant and Equipment." For the current fiscal year (as of March 31, 2026), furniture and fixtures were corrected from ¥894 million to ¥892 million, and leased assets (net) were corrected from ¥27 million to ¥8 million, resulting in a revised total of ¥5,183 million from the previous ¥5,204 million. The impact was limited to the correction of the note disclosure and did not affect the figures in the income statement or balance sheet itself.

Key Products

Growth Drivers

• Accumulation of stock revenue through expansion of Fund Wrap assets under custody balance (highest level since 2015)
• Promotion of transition to a stable revenue-type business model centered on investment trust agency commissions and Fund Wrap fees
• Retention of high-net-worth and elderly clients through introduction of the asset succession special provision "Inheritance Beneficiary Designation Service"
• Operational efficiency improvements such as tablet utilization and RPA implementation by the Digitalization Promotion Office established in April 2023
• Recurring cost reduction and strengthening of business continuity systems through head office relocation

Risks

• Risk that equity brokerage commissions and investment trust sales commissions, which are directly linked to Japanese and U.S. stock market conditions, could result in significant revenue declines during market downturns
• Risk that the competitiveness of the traditional flow-revenue business model could decline due to the progression of commission-free trading by online securities companies
• Aging and shrinking of the customer base due to declining birthrate and aging population, and increasing difficulty in acquiring new customers
• Foreign exchange fluctuation risk inherent in foreign equity and foreign bond trading income
• While the capital adequacy ratio, after correction, stands at 667.3%, significantly exceeding regulatory levels, attention is needed regarding fluctuations in the amount of risk, as indicated by changes in market risk equivalent amounts
• The occurrence of an aggregation error in the notes to the earnings report warrants attention as a risk related to the reliability of internal control systems