Financial Results of Japan's Banks for Fiscal 2025

Abstract

The three main features of the financial results of Japan's banks for fiscal 2025 are as follows:

First, net income increased for major financial groups and regional banks, while it decreased for shinkin banks. For all types of banks, net income was boosted by an improvement in pre-provision net revenue (PPNR) excluding profits/losses from investment trusts due to cancellations, which indicates core profitability, and in realized gains/losses on stockholdings, while losses on sales of bonds, reflecting rising yen interest rates, exerted downward pressure.

Second, PPNR excluding profits/losses from investment trusts due to cancellations increased for all types of banks. It was boosted by an increase in net interest income, mainly due to rising yen interest rates, and an increase in net non-interest income.

Third, capital adequacy ratios increased for domestic banks, while they declined for internationally active banks. Nonetheless, for all types of banks, they remained sufficiently above the regulatory requirements.

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