HS Holdings Co., Ltd.
8699・Standard Market・Securities & Commodity Futures
Banking Business
Overseas financial business segment operating banking operations in three countries: Mongolia, Kyrgyzstan, and Russia
| Period | Current | Previous | Change |
|---|---|---|---|
| Operating revenue (external customers, segment) | ¥2,615 million | ¥2,908 million | ↓ |
| Operating loss | -¥284 million | -¥652 million | ↑ |
| Equity in earnings of affiliates | ¥16,411 million | ¥15,447 million | ↑ |
| Investment in equity-method affiliates (period-end) | ¥64,988 million | ¥57,308 million | ↑ |
| Segment assets (period-end) | ¥78,570 million | ¥71,514 million | ↑ |
| Ordinary income of Banking Business (including equity in earnings of affiliates) | ¥16,528 million | ¥14,796 million | ↑ |
Business Details
The segment comprises three banks under its umbrella: Khan Bank JSC (Mongolia), Kyrgyzkommertsbank (OJSC Kyrgyzkommertsbank, Kyrgyz Republic), and Solid Bank (JSC Solid Bank, Russian Federation). Deposit-taking and lending operations form the core, alongside digital banking, foreign exchange transactions, and fee-based businesses. Following amendments to Mongolia's Banking Law, Khan Bank JSC was reclassified as an equity-method affiliate from the first quarter of FY2024 (ending March 2024). As a result, only Kyrgyzkommertsbank's results are recorded in the consolidated segment's operating revenue, while the performance of Khan Bank JSC and Solid Bank is reflected through equity in earnings of affiliates.
Recent Overview
Equity in earnings of affiliates expanded to ¥16,411 million, while operating loss narrowed to -¥284 million
In the Banking Business segment for FY2026 (ending March 2026), segment operating revenue was ¥2,615 million (down ¥292 million year on year), while operating loss improved to -¥284 million (from -¥652 million in the prior period). Khan Bank JSC performed well, with loan balances up 20.9% and net income up 8.8% on a local currency basis. Solid Bank's performance improved significantly due to increased non-interest income from foreign exchange transactions and other sources. Equity in earnings of affiliates expanded to ¥16,411 million (up ¥964 million year on year). Ordinary income of the Banking Business, including equity in earnings of affiliates, was ¥16,528 million (up ¥1,732 million year on year).
Key Products
Growth Drivers
- Increase in Khan Bank JSC's loan balance on a local currency basis (up 20.9% versus prior period-end) and increase in interest income (up 15.0%)
- Improved performance at Solid Bank driven by a substantial increase in non-interest income from foreign exchange transactions
- Expansion of corporate and individual lending against the backdrop of high economic growth in Mongolia (real GDP up 6.8% year on year)
- Expansion of individual services and fee income growth through Khan Bank JSC's promotion of digital banking
- Expansion of equity in earnings of affiliates (¥16,411 million in FY2026 (ending March 2026), up ¥964 million year on year)
Risks
- Due to amendments to Mongolia's Banking Law, the shareholding ratio in Khan Bank JSC must be reduced to 20% or below by the end of December 2026, and further reductions in voting rights ratio could have a significant impact on consolidated performance (ordinary income and below)
- Risk of expanded economic sanctions against Solid Bank due to the prolonged Russia-Ukraine situation (including ruble exchange rate and crude oil price fluctuations)
- Profit pressure at Kyrgyzkommertsbank from additional provisioning and increased IT investment, along with a net loss on a local currency basis (policy rate raised to 12% in February 2026)
- Impact on Khan Bank JSC's loan quality and performance from declining exports to Mongolia due to China's economic slowdown
- Impact on consolidated net assets from fluctuations in various countries' currencies against the yen (foreign currency translation adjustments stood at -¥2,990 million at period-end)
Last updated: June 24, 2026