The Shizuoka Bank, Ltd. :SHZUY-US: Earnings Analysis: Q4, 2017 By the Numbers : June 21, 2017

The Shizuoka Bank, Ltd. reports financial results for the quarter ended March 31, 2017.

We analyze the earnings along side the following peers of The Shizuoka Bank, Ltd. – Mitsubishi UFJ Financial Group, Inc. Sponsored ADR, Sumitomo Mitsui Financial Group, Inc. Sponsored ADR and Mizuho Financial Group, Inc. Sponsored ADR (MTU-US, SMFG-US and MFG-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 342.84 million, Net Earnings of USD 68.13 million.
  • Net interest income margins widened from 51.58% to 56.69% compared to the same period last year.
  • Earnings grew despite decline in operating margins and pre-tax margins compared to same period last year.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-03-31 2016-12-31 2016-09-30 2016-06-30 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 342.84 466.06 435.65 519.38 356.21
Revenue Growth (%YOY) -3.75 10.42 20.8 -6.28 7.29
Earnings (mil) 68.13 64.78 92.96 45.68 59.75
Earnings Growth (%YOY) 14.02 -65.14 501.03 -73.82 -41.23
Net Margin (%) 19.87 13.9 21.34 8.8 16.77
EPS 1.06 1 1.43 0.7 0.92
Return on Equity (%) 3.33 3.04 4.2 2.17 2.98
Return on Assets (%) 0.27 0.24 0.34 0.18 0.25

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Market Share Versus Profits

Revenues History
Earnings History

SHZUY-US‘s change in revenue this period compared to the same period last year of -3.75% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that SHZUY-US is holding onto its market share. Also, for comparison purposes, revenues changed by -26.44% and earnings by 5.17% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth was influenced by the following factors: (1) Year-on-year improvements in net interest income margins from 51.58% to 56.69% and (2) improvement in loan loss provisions. As a result, net interest income after provisions margins improved from 56.84% to 56.99% compared to the same period last year. Loan loss provisions as a percentage of net interest income were -0.53% this period and -10.21% a year ago.

Net Interest Income Margin Versus Loan Loss Provisions Margin

Quadrant label definitions. Hover to know more

High Risk; High Reward Loans, Risky Loan Portfolio, Conservative Loan Portfolio, Safer Loan Portfolio
Net Interest Income Margin History
Loan Loss Provisions Margin History

Margins

Despite a decline in operating’s margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables

Access our Ratings and Scores for The Shizuoka Bank, Ltd.

Company Profile

The Shizuoka Bank, Ltd. engages in the provision of financial banking services. It operates through the following segments: Banking Operations, Leasing Operations, and Others. The Banking Operations segment consists of deposits, loans, investment securities and exchange transactions. The Leasing Operations segment includes lease transactions centered on finance leases. The Others segment includes commissioned computer processing, domestic financial commodity trading and credit guarantee services. The company was founded on March 1, 1943 and is headquartered in Shizuoka, Japan.

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