Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

Senior Bank Analyst - Japanese Banks

Windamee Research

Japanese Banks

Equity Bottom-Up

<p>Next in line to confess their sins after <a href="https://www.smartkarma.com/entities/6599" target="_blank" data-smartkarma-citation="entities:6599:1">Michinoku Bank (8350 JP)</a> (see our Insight <a href="https://www.smartkarma.com/insights/michinoku-bank-8350-jp-clipped-by-a-synthetic-hedge" target="_blank" data-smartkarma-citation="insights:29415">Michinoku Bank  (8350 JP):  Clipped by a Synthetic Hedge</a> ) and admit that their earnings guidance was way too optimistic are the directors of <a href="https://www.smartkarma.com/entities/26193" target="_blank" data-smartkarma-citation="entities:26193:1">First Bank Of Toyama (7184 JP)</a> .  This small secondary regional bank from Toyama Prefecture in the Hokuriku Region of central Japan has cut its full-year earnings forecast for consolidated recurring profits by 33% and net profits by 25%, citing greater than expected losses on sales of equities and rising credit costs.  But this only tells part of the story: the new profit figures suggest heavy net losses may have been incurred in 4Q (January-March 2019) of up to ¥490 million related to the bank’s large securities portfolio.  Two recurring features of this wholly-domestic bank’s past financial results have been losses on its share portfolio and a relentless rise in the level of foreign securities as management has struggled to find alternative sources of revenue to offset declining loan interest and fee income.  The bank’s unrealised gains in its securities portfolio fell ¥11 billion (US$98 million) in 3Q FY3/2019 to just ¥636 million.  Something is terribly wrong here.  <em>Caveat emptor!</em>  (May the buyer beware!)</p>

Next in line to confess their sins after Michinoku Bank (8350 JP) (see our Insight Michinoku Bank  (8350 JP):  Clipped by a Synthetic Hedge ) and admit that their earnings guidance was way too optimistic are the directors of First Bank Of Toyama (7184 JP) .  This small secondary regional bank from Toyama Prefecture in the Hokuriku Region of central Japan has cut its full-year earnings forecast for consolidated recurring profits by 33% and net profits by 25%, citing greater than expected losses on sales of equities and rising credit costs.  But this only tells part of the story: the new profit figures suggest heavy net losses may have been incurred in 4Q (January-March 2019) of up to ¥490 million related to the bank’s large securities portfolio.  Two recurring features of this wholly-domestic bank’s past financial results have been losses on its share portfolio and a relentless rise in the level of foreign securities as management has struggled to find alternative sources of revenue to offset declining loan interest and fee income.  The bank’s unrealised gains in its securities portfolio fell ¥11 billion (US$98 million) in 3Q FY3/2019 to just ¥636 million.  Something is terribly wrong here.  Caveat emptor!  (May the buyer beware!)

First Bank of Toyama (7184 JP):  Never Say Never (Again)

Japan

The Chikuho Bank, Ltd. is a regional bank mainly operating in south part of Fukuoka prefecture.  The Bank also provides financial services including leasing and credit guarantee services.

Jimoto Holdings Inc is a holding company created by the merger of Kirayaka Bank and Sendai Bank. The company mainly operates banking and financial services in Yamagaya and Miyagi prefectures.

The Miyazaki Taiyo Bank, Ltd. is a regional bank based in Miyazaki prefecture. The Bank provides commercial banking services including deposits, loans, and foreign exchange transactions.  The Miyazaki Taiyo Bank also provides financial services such as leasing and credit guarantee.

THE FUKUSHIMA BANK, LTD. is a regional bank based in Fukushima.  The Bank provides commercial banking services including deposits, savings, loans to local individuals and industries, and foreign exchange transactions.  The Fukushima Bank also provides financial services such as leasing, credit card, credit guarantee, and insurance services, and also develops software.

THE TOHOKU BANK, LTD. is a regional bank based in Iwate prefecture.  The Bank provides a variety of banking services including deposits, foreign exchange transactions, and loans to local customers.  The Tohoku Bank also provides financial services such as credit card, credit guarantee, and leases.

THE DAITO BANK, LTD. is a regional bank in Fukushima.  The Bank offers commercial banking services including deposits, loans, foreign transactions, and marketable securities investment.  The Daito Bank also provides financial services such as mutual funds sales, credit cards, leasing, and clerical works for banks.

THE BANK OF KOCHI, LTD. is a regional bank mainly operating in Kochi prefecture. The Bank provides commercial banking services including deposits, loans, and exchange transactions.  The Bank of Kochi also offers financial services, such as leasing and credit cards.

The Fukuoka Chuo Bank Ltd is a regional bank based in Fukuoka.  The Bank provides commercial banking services including deposits, loans, and foreign exchange transactions.  The Fukuoka Chuo Bank also trades securities on its own account and provides insurance and real estate brokerage services.

The Shimane Bank, Ltd. is a regional bank that mainly operates in Shimane prefecture. The Bank provides general banking services such as deposits, loans, and exchange transactions. The Shimane Bank also offers securities brokerage, leasing, and credit card services.

The Minami-Nippon Bank, Ltd. is a regional bank that mainly operates in Kagoshima prefecture.  The Bank provides general banking services including deposits, loans, exchange transactions, and corresponding banking services. Minami-Nippon Bank also provides financial services such as credit cards and leasing.

PT Bank Artha Graha Internasional provides general commercial banking services.

PT Bank Pembangunan Daerah Banten Tbk provides commercial banking services.  The Bank has branch offices located in major cities in Indonesia.

Pureun Mutual Savings Bank provides financial services, such as loans, deposits, savings accounts, bills discounts, installment accounts, and foreign exchange.

AB Bank Limited, together with its subsidiaries, provides various financial products and services in Bangladesh and internationally. It offers savings accounts, current accounts, FDR accounts, deposit double schemes, monthly income deposits, monthly savings deposit schemes, and millionaire scheme accounts; and personal, auto, home, and personal overdraft-secured loans, as well as debit and credit cards. The company also provides corporate banking services, including project finance, working capital finance, trade finance, offshore banking, international banking, and Islami banking finance; and structured finance, such as deal structuring, equity financing, and corporate advisory services. In addition, it offers foreign currency accounts in USD/GBP/EUR for non-resident Bangladeshi banking; stock broking services; merchant banking services; and portfolio management, issue management, underwriting, and corporate advisory services. Further, the company provides small and medium enterprise credit, women's entrepreneur products, remittance services, treasury products and services, and structured finance for corporate customers, as well as lockers, Internet, and SMS banking services. It operates through approximately 101 branches, including 1 branch in Mumbai, India, as well as 260 ATMs. The company was formerly known as Arab Bangladesh Bank Limited and changed its name to AB Bank Limited in November 2007. AB Bank Limited was incorporated in 1981 and is based in Dhaka, Bangladesh.

First Security Islami Bank Limited provides commercial banking services in Bangladesh. It offers various deposit products, including current accounts, savings deposits, term deposits, certificates of deposits, and foreign currency deposits. The company also provides short-term, long-term, and import and export financing; letter of guarantee; letter of credit; and specialized schemes, such as tender guarantee, consumer investment scheme, SME investment scheme, lease investment scheme, hire purchase, earnest money investment scheme, mortgage investment, and employees house building scheme, as well as ATM, Visa investment card, EEF, etc. In addition, it offers online, mobile, SMS, ATM, and Internet banking services; utility bill payment services; and lockers services, as well as money transfer, foreign exchange transactions, safe keeping, collection, and foreign remittance services. The company operates 148 branches and 105 ATMs. First Security Islami Bank Limited was founded in 1999 and is headquartered in Dhaka, Bangladesh.

ONE Bank Limited provides various commercial banking products and services in Bangladesh and internationally. Its retail banking products include deposits, such as Pensave, Edusave, MarrySave, one-two-three, school banking, monthly money maker, and corporate deposit schemes; gold and silver saving accounts; pyramid and elegant savings; Non Resident Bangladeshi savings plus and quick millionaire products, as well as money rotator services; loan products consisting of banker�s, personal, home, car, student, consumer, doctor�s, and professional loans, as well as cash line services; and debit and credit cards, as well as inward remittance services. The company�s corporate banking products comprise corporate deposit and corporate salary accounts; and trade, project, and infrastructure finances. It also offers various products and services, including working capital finance and project finance for small and medium enterprises (SME). In addition, the company provides e-statement, Internet banking, SMS banking, and locker services, as well as cash management services. Further, the company, through its subsidiary, ONE Securities Limited, buys, sells, and deals in shares, stocks, and debentures and other securities. As of December 31, 2015, it operated 85 branches, including 31 in rural areas and 5 SME/agriculture branches. ONE Bank Limited was founded in 1999 and is headquartered in Dhaka, Bangladesh.

Social Islami Bank Limited, together with its subsidiaries, provides various commercial banking products and services in Bangladesh. The company offers deposits, such as Al-Wadeeah current accounts, Mudaraba savings accounts, Mudaraba notice deposit accounts, and Mudaraba term deposit accounts; investment products; and cards, electronic fund transfer, centralized processing, remittance, locker, swift, capital market, and school banking service, as well as online, mobile, and offshore banking products. It operates through 111 branches. The company was founded in 1995 and is headquartered in Dhaka, Bangladesh.

Standard Bank Ltd., together with its subsidiaries, provides various corporate and retail banking products and services in Bangladesh. It offers various deposit products, such as current, savings, fixed, and short term deposit accounts, as well as SBL regular income and deposit programs, double income plus, garments workers SHOFOL, and leather and footwear SHEBA accounts. The company also provides auto, house renovation, medical treatment, motor cycle, Hajj, household appliance, and festival loans; general corporate, foreign trade, project, work order, real estate, and syndication and structured finance solutions; and SME, agri, and green banking services. In addition, it offers private foreign currency, NFCD, RFCD, convertible and non-convertible taka, and non-resident blocked taka accounts; remittance, locker, e-tendering, utility bill, capital management, SBSL, treasury, and anti-money laundering services; Internet, SMS, ATM, and mobile banking services; and debit and credit cards. Further, the company provides stock broker/dealer and other related services; and merchant banking services, which include margin loans to clients for investment in securities, issue and portfolio management, underwriting, corporate advisory, etc. It serves clients through a network of 104 branches in Bangladesh. Standard Bank Ltd. was founded in 1999 and is headquartered in Dhaka, Bangladesh.

The Bank of Punjab (Pakistan) operates under the status of a scheduled bank in Pakistan. The bank provides commercial bank services.

Bank Dinar Indonesia Tbk PT provides banking services, incorporated in Indonesia.

THE TOYAMA BANK, LTD. is a regional bank based in Toyama.  The Bank provides banking services such as deposits, foreign exchange transactions, and loans to local customers.

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Bank Of Toyama /Ltd (8365 JP)

First Bank of Toyama (7184 JP): Never Say Never (Again)

Next in line to confess their sins after Michinoku Bank (8350 JP) (see our Insight Michinoku Bank (8350 JP): Clipped by a Synthetic Hedge ) and...

J. Brian Waterhouse

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