[Long-term interest rates exceed 1%] There is room for growth in 3 stocks such as Mitsubishi UFJ due to expectations of an increase in bank profits! Check out a list of profit growth estimates for major banks
Market speculation about additional interest rate hikes following the cancellation of negative interest rates in March by the Bank of Japan has spread, and domestic interest rates are on an upward trend.On the 26th, the yield on 10-year government bonds rose again in the 1% range for 5 consecutive daysAs a result, specter (prices are falling) is getting stronger.
Banks are the leading stocks that benefit from rising interest ratesthat's it. Assuming future interest rate increases,Analysts set target prices around 10% higher than current stock pricesThere are also brands that are doing it.
Therefore, the divergence rate between trial calculations on profit increases due to rising interest rates and analyst evaluations published by megabanks and representative major regional bank groups was compiled in a list.
Banks are the leading stocks that benefit from rising interest ratesthat's it. Assuming future interest rate increases,Analysts set target prices around 10% higher than current stock pricesThere are also brands that are doing it.
Therefore, the divergence rate between trial calculations on profit increases due to rising interest rates and analyst evaluations published by megabanks and representative major regional bank groups was compiled in a list.
◆ $Mitsubishi UFJ Financial Group(8306.JP$
The largest comprehensive financial group in Japan that bundles trust banks, securities, consumer finance, cards, leases, etc. centered around the Bank of Mitsubishi UFJ. Overseas, in addition to having US Morgan Stanley as a company applying the equity method, Thailand's Bank of Ayutthaya and Bank Danamon in Indonesia are also under its umbrella. As of the end of March 2024, loans (total of banks and trust banks, including overseas) were 105.665.2 billion yen, and deposits (same) were 212 trillion 813.9 billion yen.Financial results for the fiscal year ending 25/3 are expected to be 1.5 trillion yen, the highest profit ever for the second year in a row。
Domestic bond management balances excluding matured holdings as of the end of March '24 were 25.74.6 billion yen. According to the investor briefing materials for the financial results for the fiscal year ending March 31, '24If interest rates rise 0.15% and become established, there is a total profit increase effect of 85 billion yen in the 1st year, 120 billion yen in the 2nd year, and 150 billion yen in the 3rd year, which are under the umbrella of Mitsubishi UFJ Bank and Mitsubishi UFJ Trust BankIt says so.
The average target stock price (1755.83 yen) by 12 analysts is 6.29% above the closing price on the 26th (1652 yen)。
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◆ $Japan Post Bank(7182.JP$
$Japan Post Holdings(6178.JP$Prime market-listed company under its umbrella. Agents are set up at post offices operated by Japan Post, a group company, and operations are outsourced. The savings balance as of the end of 2024/3 was 192 trillion 8029.8 billion yen, and domestic savings accounts are at the top. Savings are mainly managed with government bonds, and loan balances remain at 6,84.83 billion yen. In recent years, diversification of management destinations has also been promoted, such as setting up funds for venture investments. For the fiscal year ending 25/3, ordinary profit is expected to increase 5.8% from the previous fiscal year to 525 billion yen, and net income is expected to increase 2.4% to 365 billion yen。
According to investor explanatory materials for the fiscal year ending 2014/3, it is estimated that when interest rates rise, in addition to improving yield on newly held government bonds, additional income can be obtained by transferring deposits, etc. that had been deposited in Bank of Japan current accounts until then to investments. AccompanyingIf an additional 10 trillion yen is invested in 10-year government bonds with a yield of 1%, profits are expected to rise by 100 billion yen per year. The bank reduced the amount of government bonds held from 82.2 trillion yen at the end of fiscal year 15 to 38.1 trillion yen at the end of fiscal year 22,Positions increased in fiscal year 23 as yields rose, and at the end of the fiscal year it was 43.8 trillion yen. The policy is to continue increasing holdings in line with rising interest rates. Also, due to the Bank of Japan's policy interest rate hikeProfit increases of about 115 billion yen per year when interest rates rise 0.25%, and about 125 billion yen per year when short-term interest rates rise 0.25%I'm expecting it.
The average target stock price (1642.73 yen) by 11 analysts is 9.15% above the closing price on the 26th (1505 yen).
$Japan Post Holdings(6178.JP$Prime market-listed company under its umbrella. Agents are set up at post offices operated by Japan Post, a group company, and operations are outsourced. The savings balance as of the end of 2024/3 was 192 trillion 8029.8 billion yen, and domestic savings accounts are at the top. Savings are mainly managed with government bonds, and loan balances remain at 6,84.83 billion yen. In recent years, diversification of management destinations has also been promoted, such as setting up funds for venture investments. For the fiscal year ending 25/3, ordinary profit is expected to increase 5.8% from the previous fiscal year to 525 billion yen, and net income is expected to increase 2.4% to 365 billion yen。
According to investor explanatory materials for the fiscal year ending 2014/3, it is estimated that when interest rates rise, in addition to improving yield on newly held government bonds, additional income can be obtained by transferring deposits, etc. that had been deposited in Bank of Japan current accounts until then to investments. AccompanyingIf an additional 10 trillion yen is invested in 10-year government bonds with a yield of 1%, profits are expected to rise by 100 billion yen per year. The bank reduced the amount of government bonds held from 82.2 trillion yen at the end of fiscal year 15 to 38.1 trillion yen at the end of fiscal year 22,Positions increased in fiscal year 23 as yields rose, and at the end of the fiscal year it was 43.8 trillion yen. The policy is to continue increasing holdings in line with rising interest rates. Also, due to the Bank of Japan's policy interest rate hikeProfit increases of about 115 billion yen per year when interest rates rise 0.25%, and about 125 billion yen per year when short-term interest rates rise 0.25%I'm expecting it.
The average target stock price (1642.73 yen) by 11 analysts is 9.15% above the closing price on the 26th (1505 yen).
![[Long-term interest rates exceed 1%] There is room for growth in 3 stocks such as Mitsubishi UFJ due to expectations of an increase in bank profits! Check out a...](https://sgsnsimg.moomoo.com/sns_client_feed/181000001/20240626/e2c291b1bef128db4fa2a3443f99a99d.jpg/big?area=105&is_public=true)
◆ $Fukuoka Financial Group(8354.JP$
The largest regional banking group in Kyushu, centered around the Fukuoka Bank, with the Kumamoto Bank, the Eighteenth Shinwa Bank (Nagasaki Prefecture), and the Fukuoka Chuo Bank under its umbrella. The deposit balance as of the end of 2024/3 was 21.399.8 billion yen, and the total loan balance (including within the group, for the government, etc.) was 18.690.1 billion yen, boasting the highest asset scale in the regional bank group. Everyone's banks that specialize in smartphones are also developing.For the fiscal year ending 25/3, ordinary profit is expected to increase 74.8% from the previous fiscal year to 99.5 billion yen, and net profit is expected to increase 12.0% to 68.5 billion yen。
The balance of domestic bond management as of the end of March '24 was 2,708.6 billion yen. According to the company briefing materials for the March '24 financial results announcement,It is expected to be positive about 10 billion yen due to the cancellation of negative interest rates by the Bank of Japan, and if interest rates rise 0.1%, it is expected to be positive in terms of about 7 billion yen in annualized terms after 3 years (of which about 3 billion yen due to short-term interest rate increases, and about 4 billion yen due to medium- to long-term interest rate increases)。
The average target stock price (4707.50 yen) by 8 analysts is 10.48% above the closing price on the 26th (4261 yen)。
The largest regional banking group in Kyushu, centered around the Fukuoka Bank, with the Kumamoto Bank, the Eighteenth Shinwa Bank (Nagasaki Prefecture), and the Fukuoka Chuo Bank under its umbrella. The deposit balance as of the end of 2024/3 was 21.399.8 billion yen, and the total loan balance (including within the group, for the government, etc.) was 18.690.1 billion yen, boasting the highest asset scale in the regional bank group. Everyone's banks that specialize in smartphones are also developing.For the fiscal year ending 25/3, ordinary profit is expected to increase 74.8% from the previous fiscal year to 99.5 billion yen, and net profit is expected to increase 12.0% to 68.5 billion yen。
The balance of domestic bond management as of the end of March '24 was 2,708.6 billion yen. According to the company briefing materials for the March '24 financial results announcement,It is expected to be positive about 10 billion yen due to the cancellation of negative interest rates by the Bank of Japan, and if interest rates rise 0.1%, it is expected to be positive in terms of about 7 billion yen in annualized terms after 3 years (of which about 3 billion yen due to short-term interest rate increases, and about 4 billion yen due to medium- to long-term interest rate increases)。
The average target stock price (4707.50 yen) by 8 analysts is 10.48% above the closing price on the 26th (4261 yen)。
![[Long-term interest rates exceed 1%] There is room for growth in 3 stocks such as Mitsubishi UFJ due to expectations of an increase in bank profits! Check out a...](https://sgsnsimg.moomoo.com/sns_client_feed/181000001/20240626/d0de4c73f667c769a875974123aad530.jpg/big?area=105&is_public=true)
There are two main factors that lead to an increase in bank profits due to rising interest rates.
The first oneProfit margins and expansion at the time of loansThat's it.As interest rates rise, it becomes easier to widen the difference between loan interest rates and deposit interest rates. It can be said that it is the same logic that it is easier to obtain margins for expensive products. However, whether banks can raise loan interest rates in line with rising interest ratesInfluenced by the bargaining power of each bank and the financial status of the loan recipient. It can be said that it takes time for banks that have a high fixed interest rate ratio among loans to reap the benefits of rising interest rates.
The second one isProfit from management of domestic bonds (mainly government bonds) increasedIt's something to do.If the yield on the managed bonds rises, income gains will increase. However, since an increase in the interest rate level is equivalent to a drop in the price of the bond itself,Capital gains decrease in the process of rising interest ratesIt is also expected. popularlyThe longer the maturity of bonds, the greater the price movement, and the greater the loss due to price declines associated with rising interest ratesIt is assumed. For this reason,Banks that have adopted management policies with shorter duration (bond investment payback period) are less affected by falling bond prices due to rising interest rates, making it easier to obtain the effects of rising yields at an early stage。
ー MooMoo News Mark
Source: each company's website, moomoo
Source: each company's website, moomoo
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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