[Preservation Edition] Regional Bank Ranking Benefiting from Interest Rate Hikes | How much will net profit increase with a policy rate hike of +0.25% to +1.0%? We have …

■ What you will learn in this article

・ How much regional bank net profit will increase when the policy rate rises by +0.25% to +1.0% (estimate)
・ Rankings based on two metrics: “Amount” and “Growth Rate”
・ Upward revisions and dividend increases announced by Ehime Bank and Saga Bank on October 23

This is written for: People who own regional bank stocks and those who want to know in numbers how bank stocks change due to interest rate hikes.

The information was confirmed as of October 25, 2026. Among the figures in this article, the rankings are not based on financial results but are “estimates (hypotheses)” based on Ponasa’s simplified model. This does not constitute a recommendation to buy or sell specific stocks.

■ Facts: Policy rate and the next meeting

・ The Bank of Japan raised the policy rate from around 1.0% to around 1.25% on September 18, 2026
・ The next Monetary Policy Meeting is October 29-30

■ Facts: Upward revision and dividend increase on October 23 due to the effect of interest rate hikes

・ Ehime Bank: Raised its net profit forecast for the fiscal year ending March 2027 from 6.5 billion yen to 7.7 billion yen, and increased its annual dividend forecast from 48 yen to 58 yen
・ Saga Bank: Raised its first-half ordinary profit forecast and increased its first-half dividend from 55 yen to 65 yen

In both cases, the main reason is an increase in interest income from loans (fund profit) due to the rise in yen interest rates.

■ The 5 target banks (Facts: Financial results summary, closing price on October 23)

・ Fukuoka FG: Loans 20.3 trillion yen, Deposits 22.2 trillion yen (Loan-to-deposit ratio 91.6%), Current fiscal year net profit forecast 100 billion yen. PER 12.57x, PBR 1.12x, Dividend yield 3.16%
・ Chiba Bank: Loans 14.1 trillion yen, Deposits 16.8 trillion yen (Loan-to-deposit ratio 83.7%), Net profit forecast 105.8 billion yen. PER 17.73x, PBR 1.46x, Dividend yield 2.69%
・ Shizuoka FG: Loans 11.3 trillion yen, Deposits 12.6 trillion yen (Loan-to-deposit ratio 89.2%), Net profit forecast 105 billion yen. PER 13.36x, PBR 1.20x, Dividend yield 3.73%
・ Kyushu FG: Loans 9.2 trillion yen, Deposits 10.8 trillion yen (Loan-to-deposit ratio 85.5%), Net profit forecast 45 billion yen. PER 13.74x, PBR 0.79x, Dividend yield 2.60%
・ Tohoku Bank: Loans 0.72 trillion yen, Deposits 0.90 trillion yen (Loan-to-deposit ratio 79.8%), Net profit forecast 1.6 billion yen. PER 8.19x, PBR 0.43x, Dividend yield 3.45%

■ Assumptions for the estimate (Ponasa’s simplified model)

・ Loan yields increase by 56.9% of the interest rate hike (Variable 65% * reflection 80%, Fixed 35% * annual 20% renewal * reflection 70%)
・ Deposit costs increase by 39.75% of the interest rate hike (Ordinary deposits etc. 75% * follow 40%, Time deposits 25% * annual 60% renewal * follow 65%)
・ Interest on securities etc. increases by 12% of the interest rate hike
・ Taxes are 30%, period is 1 year from the interest rate hike

Calculation formula: Increase in net profit = (Loans * 56.9% – Deposits * 39.75% + Securities * 12%) * Interest rate hike * 70%

■ Estimate: Profit increase “Amount” ranking (Net profit, annual)

+0.25% / +0.50% / +0.75% / +1.00% in order

1st place Fukuoka FG: approx. 6 billion yen / approx. 12.1 billion yen (+12.1%) / approx. 18.1 billion yen / approx. 24.2 billion yen
2nd place Shizuoka FG: approx. 3.1 billion yen / approx. 6.2 billion yen (+5.9%) / approx. 9.2 billion yen / approx. 12.3 billion yen
3rd place Chiba Bank: approx. 3 billion yen / approx. 6.1 billion yen (+5.7%) / approx. 9.1 billion yen / approx. 12.1 billion yen
4th place Kyushu FG: approx. 2.1 billion yen / approx. 4.3 billion yen (+9.5%) / approx. 6.4 billion yen / approx. 8.5 billion yen

■ Estimate: Profit “Growth Rate” ranking (at +0.50%)

1st place Tohoku Bank: +16.6% (approx. 270 million yen. Because the original profit is small at 1.6 billion yen, the percentage becomes large)
2nd place Fukuoka FG: +12.1% (approx. 12.1 billion yen)
3rd place Kyushu FG: +9.5% (approx. 4.3 billion yen)

■ Why is there a difference?

・The higher the loan-to-deposit ratio (the ratio of loans to deposits), the more likely it is that the increase in interest received will exceed the increase in interest paid.
・For banks with small initial profits, even a slight increase in profit results in a large growth rate.

■ Looking at this alongside stock price indicators (How to interpret)

・Kyushu FG has a PBR of 0.79x, and Tohoku Bank has a PBR of 0.43x; both are below 1x.
・There is a school of thought that banks with a PBR below 1x have room for re-evaluation if their profit growth or shareholder returns are recognized.
・On the other hand, there are often reasons for the low valuation (such as profit levels, scale, or concerns about growth). Tohoku Bank is a small bank with a market capitalization of approximately 13.7 billion yen, so it is important to note that its stock price can be highly volatile.

■ Ponasa’s Perspective

When you run the numbers, the reality of “interest rate hikes are positive for banks” varies significantly from bank to bank. Some banks, like Ehime Bank and Saga Bank, are already seeing the effects of interest rate hikes manifest in upward revisions and dividend increases. In the November interim financial results, I would like to compare how much net interest income has actually increased against these estimates.

■ Summary

・The policy interest rate has been around 1.25% since September 18. The next meeting is October 29–30.
・Ehime Bank and Saga Bank announced upward revisions and dividend increases on October 23 due to the effects of interest rate hikes (Fact).
・With a 0.5% interest rate hike, the increase in net profit is largest for Fukuoka FG at approximately 12.1 billion yen, while the highest growth rate is +16.6% for Tohoku Bank (Estimate).
・The factors creating the difference are the loan-to-deposit ratio and the size of the initial profit.

■ Thank you for reading until the end.
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※ This is not a recommendation to buy or sell. Please make your own investment decisions.