Senior Bank Analyst - Japanese Banks, Windamee Research

J. Brian Waterhouse

J. Brian Waterhouse has been covering the Japanese financial sector as an analyst continuously since 1976, working for CLSA, Japaninvest, Rabobank, HSBC Securities, James Capel, Marine Midland Bank of New York and National & Grindlays Bank.  He has been ranked No.1 overall in Japanese banks research in Japan by Asiamoney for 6 of the past 9 years and was runner-up in 2015.  He was awarded the coveted Starmine prize as top Japanese bank stock picker in 2012 and 2014 and was runner-up in 2013.  He frequently appears on TV, radio and in international print media as a commentator on Japanese banking.

Senior Bank Analyst - Japanese Banks

Shimane Bank (7150 JP):  Another Flag Raised

Shimane Bank (7150 JP):  A Paler Shade of Red

Tottori Bank (8383 JP):  Trapped in the Sands

Windamee Research

Japanese Banks

Equity Bottom-Up

<p>Interim results announced on Wednesday by tiny secondary regional bank <a href="https://www.smartkarma.com/entities/16643" target="_blank" data-smartkarma-citation="entities:16643:1">Tochigi Bank (8550 JP)</a> were unremarkable in themselves, although they fell short of guidance.  However, the bank has slashed its full-year guidance and now expects FY3/2019 consolidated net profits of just ¥0.5 billion, or ¥4.8/share, citing losses on US$-denominated securities and rising credit costs.  This profit warning suggests a very substantial 89% YoY decline in FY3/2019 net profits.  An examination of the bank’s financial statements, meanwhile, reveals other weaknesses that should cause any potential investor to pause for thought.  Tochigi Bank may just be the first of a succession of small Japanese banks to run into trouble on their foreign securities portfolios as US$ interest rates rise.  <em>Caveat emptor! </em> (May the buyer beware)</p>

Interim results announced on Wednesday by tiny secondary regional bank Tochigi Bank (8550 JP) were unremarkable in themselves, although they fell short of guidance.  However, the bank has slashed its full-year guidance and now expects FY3/2019 consolidated net profits of just ¥0.5 billion, or ¥4.8/share, citing losses on US$-denominated securities and rising credit costs.  This profit warning suggests a very substantial 89% YoY decline in FY3/2019 net profits.  An examination of the bank’s financial statements, meanwhile, reveals other weaknesses that should cause any potential investor to pause for thought.  Tochigi Bank may just be the first of a succession of small Japanese banks to run into trouble on their foreign securities portfolios as US$ interest rates rise.  Caveat emptor!  (May the buyer beware)

Tochigi Bank (8550 JP):  Hoisting the First Flag