Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In the days approaching H1 results in 2024, Japanese banks raised H1 guidance. Among the top 50 banks outside the top 10, the increase was significant. </li>
<li>This year, out of those 50 banks, 12 have either reported (2) or raised guidance (10) for H1 in the past five weeks by an average of 47% (median 43%). </li>
<li>Higher loan income, core business profits, and lower credit costs are the main culprits. Expect lots more guidance revisions in the next 10 days.</li>
</ul>


In the days approaching H1 results in 2024, Japanese banks raised H1 guidance. Among the top 50 banks outside the top 10, the increase was significant. 
This year, out of those 50 banks, 12 have either reported (2) or raised guidance (10) for H1 in the past five weeks by an average of 47% (median 43%). 
Higher loan income, core business profits, and lower credit costs are the main culprits. Expect lots more guidance revisions in the next 10 days.


Japan 2025 H1 Bank Guidance/Results - Strong Upward Revisions Like Last Year - Likely More To Come

Hokkoku Financial Holdings / Event-Driven

<ul>
<li>Japanese banks have been in a relative sweetspot for a couple of years. Higher rates, higher inflation, more FX volatility, better earnings, stronger buybacks. Cross-holding sales up but not spectacular.</li>
<li>The BOJ may raise rates but Trump Tariff retaliation/mitigation is a question. Elections the next two weeks and earnings the 2-3 weeks after that may keep things a question. </li>
<li>But buybacks should pick up. Lots announced in spring end at or before Q1 earnings. And I expect substantial new buybacks to be announced throughout the from Q1 results on.</li>
</ul>


Japanese banks have been in a relative sweetspot for a couple of years. Higher rates, higher inflation, more FX volatility, better earnings, stronger buybacks. Cross-holding sales up but not spectacular.
The BOJ may raise rates but Trump Tariff retaliation/mitigation is a question. Elections the next two weeks and earnings the 2-3 weeks after that may keep things a question. 
But buybacks should pick up. Lots announced in spring end at or before Q1 earnings. And I expect substantial new buybacks to be announced throughout the from Q1 results on.


[Japan Buybacks] - Japan Bank Metrics, Cross-Holdings and Banks Part 1

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Juroku Financial Group / Equity Bottom-Up

<ul>
<li>We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations</li>
<li>We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations</li>
<li>We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank</li>
</ul>


We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations
We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations
We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank


Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

<ul>
<li>About 10 days ago I put out a piece saying H1 guidance trends were such that a lot more banks would upgrade guidance before results. </li>
<li>More than two dozen did and the average guidance uplift is VERY high at +59%. The median uplift vs guidance for 35 banks guiding/reporting is +39% for H1. </li>
<li>The big wave of bank earnings is today through late next week. Megas at the end. Stay long banks. Megas. Cheap regionals. </li>
</ul>


About 10 days ago I put out a piece saying H1 guidance trends were such that a lot more banks would upgrade guidance before results. 
More than two dozen did and the average guidance uplift is VERY high at +59%. The median uplift vs guidance for 35 banks guiding/reporting is +39% for H1. 
The big wave of bank earnings is today through late next week. Megas at the end. Stay long banks. Megas. Cheap regionals. 


Japan 2024 H1 Bank Guidance/Results - Better and Better

<ul>
<li>This four-day week saw 10 new guidance revisions (+61% on average), and 21 H1 earnings results (13 which hadn't guided, averaging +41%, 8 which had, averaging 5.7% uplift vs guidance)</li>
<li>It was a Good Week, though banks fell 0.4% as TOPIX fell 1% on the week. </li>
<li>Once again, lower credit costs, higher net interest income, and some equity sales dominated. H2 implied guidance lower in many cases, some because of expected portfolio rebalancing (loss-taking).</li>
</ul>


This four-day week saw 10 new guidance revisions (+61% on average), and 21 H1 earnings results (13 which hadn't guided, averaging +41%, 8 which had, averaging 5.7% uplift vs guidance)
It was a Good Week, though banks fell 0.4% as TOPIX fell 1% on the week. 
Once again, lower credit costs, higher net interest income, and some equity sales dominated. H2 implied guidance lower in many cases, some because of expected portfolio rebalancing (loss-taking).


Japan 2025 H1 Bank Guidance/Results UPDATE - Strong Uplift Continues on Better Core Biz Income

Japan

The Juroku Bank, Ltd. is a regional bank based in Gifu prefecture.  The Bank provides banking services such as deposits, loans, foreign exchange transactions, and securities investments.  The Juroku Bank also provides financial services such as leasing, credit cards, letter of credit, and loans.

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Juroku Financial Group (7380 JP)

Japan 2025 H1 Bank Guidance/Results - Strong Upward Revisions Like Last Year - Likely More To Come

H1Japanese bank guidance revisions trending strong, like in 2024. Average (47%) revisions are a little lower, some due to super low FY23 basis, but...

Travis Lundy

[Japan Buybacks] - Japan Bank Metrics, Cross-Holdings and Banks Part 1

This is the first of several episodes regarding Japanese Banks. I want to make the size palatable and offer base data and framework with which to...

Travis Lundy

Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...

Victor Galliano

Japan 2024 H1 Bank Guidance/Results - Better and Better

This AM has a Nikkei headline saying Japan's 3 megabanks will report ¥2.0trln in Net Profit in H1. That compares to ¥894bn last year, and ¥3.3trln...

Travis Lundy

Japan 2025 H1 Bank Guidance/Results UPDATE - Strong Uplift Continues on Better Core Biz Income

Japanese banks see strong upward revisions and results of H1 which significantly beat previous guidance (40-60% across 20+ names) on strong net...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan 2025 H1 Bank Guidance/Results - Strong Upward Revisions Like Last Year - Likely More To Come

H1Japanese bank guidance revisions trending strong, like in 2024. Average (47%) revisions are a little lower, some due to super low FY23 basis, but...

Travis Lundy

[Japan Buybacks] - Japan Bank Metrics, Cross-Holdings and Banks Part 1

This is the first of several episodes regarding Japanese Banks. I want to make the size palatable and offer base data and framework with which to...

Travis Lundy

Japanese Regional Banks – Adding a Smaller Cap to Our Key Positive Picks

​Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...

Victor Galliano

Japan 2024 H1 Bank Guidance/Results - Better and Better

This AM has a Nikkei headline saying Japan's 3 megabanks will report ¥2.0trln in Net Profit in H1. That compares to ¥894bn last year, and ¥3.3trln...

Travis Lundy

Japan 2025 H1 Bank Guidance/Results UPDATE - Strong Uplift Continues on Better Core Biz Income

Japanese banks see strong upward revisions and results of H1 which significantly beat previous guidance (40-60% across 20+ names) on strong net...

Travis Lundy

Aside from the usual metrics, we add regional banks' cross-shareholdings as a share of market cap; smaller cap Juroku Financial added to buy list...