KK Hokuhoku Financial Group

Latest Results (20.08.2024):

Net Interest Income

In the first quarter of FY2023, KK Hokuhoku Financial Group reported a decrease in net interest income by ¥0.6 billion. This decline was primarily due to higher foreign currency funding costs, despite an increase in interest on loans and discounts by ¥1.1 billion and a rise in interest on securities by ¥1.9 billion. The Group has reshuffled part of its securities portfolio and expects to improve the balance further in the future.

Net Fee and Commission Income

KK Hokuhoku Financial Group's net fee and commission income remained stable in the first quarter of FY2023. Corporate consulting-related revenue saw an increase, particularly in business matching revenue. However, expenses related to loan insurance and guarantee fees also rose due to the growth in outstanding consumer loans. The Group plans to establish a consulting subsidiary in May 2024 to better meet customers' diversifying needs.

G&A Expenses and Net Credit Costs

General and administrative (G&A) expenses for KK Hokuhoku Financial Group increased by ¥2.7 billion in the first quarter of FY2023. This rise was attributed to investments in human assets, system renewals, digitalization, and costs associated with the new Hoku Hoku Sapporo building. Net credit costs decreased by ¥9 billion year-on-year, thanks to a reversal in the general allowance for loan losses and a decline in specific allowance factors as the economic environment improved post-COVID-19.

Capital Adequacy Ratio

KK Hokuhoku Financial Group maintained a capital adequacy ratio of 9.40% in the first quarter of FY2023, similar to the previous year. This stability was achieved through preferential risk-taking in prime areas and adding capital with retained earnings. The Group continues to focus on maintaining a robust capital base while pursuing growth opportunities.

Earnings Forecast and Shareholder Return

For the fiscal year ending March 2024, KK Hokuhoku Financial Group plans to increase the year-end dividend per common stock to ¥40, up by ¥3 from the initial forecast. This decision reflects the strong trend in core net business profits and improvements in the securities portfolio. The Group also plans to maintain a total return ratio at the 60% level and continue paying a dividend of ¥40 per common stock for FY2024.