Akita Bank, Ltd.

Aomori Michinoku Bank, Iwate Bank and Akita Bank have decided to enter talks toward a management integration. The move comes as a shrinking population, the burden of system investment tied to the spread of artificial intelligence, and intensifying competition to win deposits and borrowers in an era of positive interest rates all weigh on their businesses. Cross-prefecture realignments are multiplying across the country: Fourth North Financial Group, which is based in Niigata Prefecture, and Gunma Bank plan to integrate in 2027, while Shizuoka Financial Group and Nagoya Bank aim to merge around 2028. The emergence of cutting-edge AI models, which has heightened the need to defend against cyberattacks, is also spurring consolidation. Keitaro Ishikawa, president of Aomori Michinoku Bank, said at a news conference on the second that going it alone feels like an extremely heavy burden. Still, Aomori Michinoku Bank was itself only created in January last year through the merger of Aomori Bank and Michinoku Bank, once rival regional lenders within the prefecture, and voices in the industry said they hope the talks do not end up like those between Aichi Financial Group and Sanju Financial Group, which broke down almost immediately.

With the upward trend in domestic long-term interest rates continuing, the performance of mid-tier regional bank stocks has been strong, with the structure of expanding interest margins through higher lending rates boosting earnings being valued. Among the 33 sectors on the Tokyo Stock Exchange, the banking sector has risen 49.1% since the start of the year, significantly outpacing the TOPIX's 21.9% gain. Among individual stocks, Fukui Bank has risen 2.7 times, Yamagata Bank 2.3 times, and Akita Bank 2.2 times, surpassing the gains of megabanks such as Mitsubishi UFJ Financial Group's 47.6% rise and Sumitomo Mitsui Financial Group's 38.3% rise. On the other hand, lower-tier regional banks, whose profits are squeezed by higher funding costs due to deposit rate hikes, are lagging behind, and selection is progressing. In the market, the view that "bank stocks = buy" has run its course, and it is seen that investors have entered a phase of carefully weighing the pros and cons of rising interest rates.

Akita Bank announced on the 24th that it will implement a 5-for-1 stock split effective October 1, with September 30 as the record date. The move aims to lower the investment amount per unit, broaden the investor base, and improve stock liquidity.

Akita Bank announced its consolidated results for the April-to-June quarter, with net profit rising 48.7% year-on-year to 3.551 billion yen. The figures are based on Japanese accounting standards for the first quarter, and details on the drivers of the profit increase and other income items have not been disclosed.

Iwate Bank President Toru Iwayama has indicated that business integrations and mergers are among the options, given the declining population and rising burden of digital investment. While stating there are no concrete discussions at this time, he said the bank wants to flexibly explore the optimal approach, including partnerships with other industries. Regarding the comprehensive business alliance with Akita Bank, he said the goal of boosting combined ordinary profit by 3.04 billion yen over the five-year period through fiscal 2026 is expected to be achieved, and expressed eagerness to strengthen collaboration. On the business alliance with Daiwa Securities, he explained that the bank aims to enhance its asset-building business and increase both deposits and assets under custody, revealing that about 50 people have been seconded from Daiwa Securities to the Asset Consulting Department launched this April. In Iwate Prefecture, there are three banks in total: Iwate Bank, North Japan Bank, and Tohoku Bank, in which SBI Holdings has a stake. On the topic of prefectural realignment, he merely commented that the three banks may currently be fulfilling their roles well.