Resona (8308) Q4 2024 earnings summary

Executive summary

• Net income attributable to owners rose 34.2% year-over-year to JPY213.3 bn, surpassing the plan by 21.8% and marking a record high for the fourth consecutive year.

• Core net operating profit reached JPY288.5 bn, up 21% year-over-year, with gross operating profit at JPY691.6 bn, driven by higher net interest and record-high fee income.

• Structural reforms, including digital transformation and integration of back-office operations, are underway to enhance efficiency and growth potential.

• Shareholder returns enhanced: annual DPS increased to 25 yen (+3 yen YoY), with a further forecasted rise to 29 yen and a share buyback up to JPY30.0 bn for FY25.

• Capital management focuses on investing in growth and expanding shareholder returns, with new ROE disclosure standards.

Financial highlights

• Net interest income grew to JPY480.4 bn (+JPY58.7 bn YoY), driven by domestic loans and deposits.

• Fee income reached JPY227.9 bn (+JPY14.4 bn YoY), led by succession-related and AUM growth.

• Operating expenses rose by JPY27.5 bn to JPY444.1 bn, but the cost income ratio improved to 64.2% (-2.1 pts YoY).

• Credit costs decreased to JPY11.5 bn, down JPY24.0 bn YoY, with a credit cost ratio of 2.6 bps.

• ROE improved to 9.3% (+2.0 pts YoY); TSE standard ROE at 7.8%.

Outlook and guidance

• FY2025 net income attributable to owners is projected at JPY240.0 bn (+JPY26.7 bn YoY), with a dividend per share planned to increase by 4 yen to 29 yen.

• Core net operating profit forecasted at JPY335.0 bn (+JPY46.5 bn YoY); gross operating profit at JPY734.5 bn (+JPY112.0 bn YoY).

• Average loan balance expected to rise by 4.1% with a 22bps increase in loan rate.

• Cost income ratio (OHR) targeted to reach the upper 50% range, aiming for the 40% range within five years.

• Guidance factors in less stock-related gains and higher credit costs due to an uncertain environment.