Daishi Hokuetsu raises profit forecast again, cites rate environment

Daishi Hokuetsu Financial Group (TSE: 7327) announced an upward revision to its key performance indicators (KPIs) for the fiscal year 2026, the final year of its third medium-term management plan. The group now expects a net profit attributable to owners of the parent of ¥40 billion, up from the previous forecast of ¥35 billion issued in November 2024, and significantly above the initial target of ¥27 billion. This revision also adjusts the target ROE to 7.5% or higher from 6.5%, while OHR is expected to hit 54%, down from previous guidance of 57%. The group attributes the improved outlook to domestic market interest rates trending higher than previously projected, expected gains from sales of policy-held shares, and a more refined approach to risk management following the adoption of the basic internal ratings approach. The group affirmed its commitment to shareholder returns, stating its intent to maintain a dividend payout ratio of around 40%.