Daily Brief Financials: Resona Holdings, Bank Central Asia, Arealink Co Ltd, Ethereum, Strike, Hokkoku Financial Holdings, Japan Investment Adviser Co, Orient Corp, BlackRock Latin American Inves, San In Godo Bank and more

• The Bank of Japan has raised its short-term interest rate to 0.25% from 0.1% ahead of the core of consensus expectations, and BoJ plans to pare back purchases of JGBs
• We focus on those big-cap Japanese banks that are well geared into higher domestic rates through loan books and BoJ deposits, that also have lesser exposure to rising JGB yields
• We stay broadly positive on Japanese bank shares, despite their performance; we add Chiba to the buy list of Resona, Mizuho, SMFG and Concordia, whilst keeping Kyoto as a sell

• Bank Central Asia (BBCA IJ) booked another set of impressive results in 2Q2024, with continuing momentum behind loan growth driven by corporate and consumer loans, with credit quality under control.
• The bank continued to grow its deposits with CASA growth outpacing overall deposits, which helped underpin an increase in net interest margin to 5.8%, with credit costs at 0.2%
• BCA remains a top pick amongst Indonesian banks, with a long-term track record of producing sector returns, with a strong risk management but dynamic management culture. 

• Revenue: JPY12.9bn (+15.4% YoY), Gross profit: JPY4.4bn (+12.2% YoY), Operating profit: JPY2.5bn (+15.3% YoY).
• Self-Storage segment: Revenue JPY10.0bn (+17.2% YoY), Gross profit JPY3.7bn (+17.8% YoY), Operating profit JPY2.7bn (+17.5% YoY).
• Land Rights Consolidation: Revenue JPY2.1bn (+9.6% YoY), Gross profit JPY538mn (-18.1% YoY), Operating profit JPY340mn (-9.3% YoY).

• We are trading the newly launched U.S. Ethereum spot ETFs.We have decided to allocate ten percentage points of our Crypto Portfolio from our Bitcoin holdings to purchase more Ether for a short-term trade.
• We are buying Ethereum (ETH) at $3,315.18 and selling part of our Bitcoin (BTC) position at $66,203.95.
• This trade will be reflected on the Crypto Portfolio page later today.

• Revenue increased 45.3% YoY to JPY13.3bn, driven by a rise in deals closed and large-scale projects.
• Cost of revenue grew 51.1% YoY to JPY4.7bn, influenced by higher incentive salaries and personnel costs.
• SG&A expenses rose 16.6% YoY to JPY3.6bn due to increased rent expenses from headquarters expansion in March 2023.

• Consolidated ordinary income was JPY21.9bn (-12.7% YoY), ordinary profit JPY3.7bn (-58.8% YoY), and profit attributable to owners JPY2.4bn (-63.8% YoY).
• Consolidated gross profit was JPY8.1bn (-13.5% YoY), with net interest income up JPY196mn, net fees and commissions up JPY418mn, and net other operating income down JPY1.9bn.
• Hokkoku Bank’s core gross profit was JPY9.2bn (+8.1% YoY), core operating profit JPY1.9bn (+41.3% YoY), and ordinary profit JPY3.3bn (-62.8% YoY).

• Revenue increased 67.5% YoY to JPY15.0bn, operating profit rose 92.8% YoY to JPY6.2bn.
• Operating Lease business revenue grew 64.4% YoY, with equity sales reaching JPY61.4bn, up 82.9% YoY.
• Foreign exchange gain of JPY2.2bn recorded, contributing to increased recurring profit and net income in 1H.

• Operating revenue increased 9.3% YoY to JPY63.1bn, driven by core business growth and newly consolidated subsidiaries.
• Operating expenses rose 7.0% YoY to JPY58.0bn, with SG&A and financing expenses contributing significantly to the increase.
• Recurring profit surged 45.3% YoY to JPY5.1bn, with a progress rate of 25.4% against the revised forecast.

BlackRock Latin American Investment Trust’s (BRLA’s) managers Sam Vecht (lead) and Christoph Brinkmann (deputy) remain upbeat about the prospects for the trust and the region, even though FY23 was a year when the MSCI Emerging Markets Index surpassed the performance of most other global indices and BRLA’s results were even better. Latin American central banks have been proactive in raising interest rates to combat inflation and are now lowering rates, which should support both economic activity and asset prices. The region has distanced itself from rising geopolitical conflicts across the globe, a stance that the managers believe will attract both foreign direct investment and increasing interest from regional investors.

• Consolidated ordinary profit increased 83.7% YoY to JPY6.6bn, achieving 58.2% of the 1H target.
• Non-consolidated profit rose 557.4% YoY to JPY4.6bn, driven by higher net interest income and consulting division earnings.
• Loans outstanding grew 10.4% YoY to JPY4.8tn, while deposit balance increased 17.0% YoY to JPY6.6tn.