Breaking Down Suruga Bank Ltd. Financial Health: Key Insights for Investors

From its founding on October 19, 1895 in Numazu to a Tokyo Stock Exchange listing in 1963, Suruga Bank Ltd. (8358.T) has grown from a regional lender into a multi-faceted financial group with 100 domestic branches and a workforce of 1,405 employees (as of March 31, 2025); the bank reported revenue of ¥78.73 billion in 2025 (up 7.61% year-over-year) and a market capitalization of ¥288.58 billion on December 5, 2025 (a 44.71% increase over the prior year), while fiscal 2024 ROE improved to 6.8% as it pursues a target ROE of 8% or higher; with capital stock of ¥30,043 million (June 30, 2025), a P/E ratio of 12.31 (Dec 5, 2025) and a dividend of ¥44.00 yielding 2.52% (Dec 17, 2025), Suruga combines traditional deposit and loan margins, fee income from investment trusts, bonds and insurance, leasing and money-lending operations, credit-card services and system-development fees via subsidiaries, and is actively investing in AI and digital platforms while launching initiatives such as a Regional Revitalization Office (April 2025) and employee programs like the Future Management School (Lite) to drive regional growth, operational efficiency and diversified revenue streams-read on to explore the bank's century-plus history, ownership, mission-driven strategies, business mechanics and how those elements translate into profit.}

Suruga Bank Ltd. (8358.T): Intro

• 1895 - Established in Numazu City, Shizuoka Prefecture.
• 1963 - Listed on the Tokyo Stock Exchange.
• Late 20th century - Expanded branch network to Tokyo and Osaka to serve urban and corporate clients.
• 2024-2025 - Performance rebound with revenue growth and improving profitability metrics.

History and Key Milestones

Ownership and Shareholder Structure

• Major shareholder types: domestic institutions, foreign investors, retail shareholders.
• Listed ticker: 8358.T on the Tokyo Stock Exchange.

Mission and Strategic Focus

How Suruga Bank Works - Business Model

• Retail banking - deposit-taking, mortgage lending, consumer loans.
• SME and corporate banking - working capital loans, term loans, trade finance.
• Fee-based services - consulting, commissions, wealth management products.
• Market and investment activities - securities holdings, interbank placements.

How It Makes Money - Revenue Drivers

• Net interest income - spread between lending yields and funding costs (largest component).
• Non-interest income - fees & commissions from payments, advisory, and wealth products.
• Trading and investment gains - securities sales, bond portfolios, FX-related income.

Key Financial and Operational Considerations

• Profitability recovery: ROE rising to 6.8% in FY2024 indicates improving returns on equity.
• Top-line growth: FY2025 revenue of ¥78.73 billion, up 7.61% year-over-year, signals stronger business momentum.
• Market sentiment: Market cap growth to ¥288.58 billion by Dec 5, 2025 (+44.71% YoY) reflects renewed investor confidence but requires monitoring of asset quality and capital adequacy.

Suruga Bank Ltd. (8358.T): History

• Founded: Regional origins in Shizuoka Prefecture (historic retail/SME focus)
• Listing: Tokyo Stock Exchange - ticker 8358.T
• Workforce scale: 1,405 employees (as of March 31, 2025)

Ownership Structure & Market Position

• Public company listed on the Tokyo Stock Exchange (8358.T).
• Capital stock: ¥30,043 million (as of June 30, 2025).
• Market capitalization: ¥288.58 billion (as of December 5, 2025).
• Price-to-earnings (P/E) ratio: 12.31 (as of December 5, 2025).
• Dividend per share: ¥44.00; dividend yield: 2.52% (as of December 17, 2025).

How It Works & How It Makes Money

• Core activities: retail deposits, mortgage lending, SME loans, fee-based services (payment/transaction services, advisory).
• Interest income: net interest margin from lending vs. funding costs (deposit base and wholesale funding).
• Non-interest income: fees from account services, loan arrangement fees, and ancillary financial products.
• Risk management: loan provisioning and capital buffers supported by the bank's stated capital stock and retained earnings.

Suruga Bank Ltd. (8358.T): Ownership Structure

• Customer focus: deposits, personal and corporate loans, investment trusts, and cash management services tailored to local needs.
• Regional revitalization: established a Regional Revitalization Office in April 2025 to coordinate local projects and financing solutions.
• Innovation and digitalization: active investment in AI and digital transformation to improve service delivery and operational efficiency.
• Financial targets: pursuing an ROE goal of 8% or above as a corporate performance benchmark.
• Human capital: programs such as the Future Management School (Lite) to promote career development and diversity.

• Net interest income: driven by lending spreads on retail and corporate portfolios.
• Fee income: securities brokerage, investment trust sales, and banking service fees.
• Investment and trading: income from securities holdings and market operations.
• Cost control & digitalization: reducing branch costs and improving efficiency via AI and digital platforms.

• Regional revitalization financing via the new Regional Revitalization Office (Apr 2025) to support local infrastructure, SMEs, and community projects.
• Digital/AI investments aimed at customer experience enhancement, credit-screening automation, and operational cost reduction.
• Workforce development through programs like Future Management School (Lite) to build leadership and diversify talent pipelines.
• Profitability improvement: focus on expanding fee income, optimizing loan portfolio yields, and containing expense ratios to move ROE toward the 8% target.

Suruga Bank Ltd. (8358.T): Mission and Values

• Mission: Support regional growth by providing accessible financial services, tailored lending, and investment solutions to individuals and SMEs.
• Core values: customer centricity, prudence in credit risk, community commitment, and innovation via digital transformation.

• Branch network: 100 domestic branches to ensure regional accessibility and face-to-face advisory services.
• Retail products: time deposits, savings accounts, foreign-currency deposits, and consumer and mortgage loans.
• Investment offerings: investment trusts (mutual funds), public bonds, and agency-distributed insurance products.
• Subsidiaries & related businesses: consumer finance/money-lending, leasing, credit guarantee services, and IT/system development arms that extend product reach and fee income streams.
• Digital transformation: investment in AI, cloud-based IT platforms, and online channels to enhance customer experience, automate credit screening, and improve operational efficiency.

• Branch footprint: 100 branches across Shizuoka, Kanagawa, Tokyo, Osaka.
• Product mix: deposit products (time/savings/foreign currency), loans (retail, mortgages, SME), investment trusts, public bonds, insurance.
• Subsidiaries: consumer finance (money lending), leasing, credit guarantee, system development.
• Digital investment: active projects in AI-based credit scoring and cloud IT platforms to reduce manual processing and speed service delivery.
• Equity-to-asset ratio: maintained at a stable level reflecting conservative capital management (historically in the mid-single digit percentage range, demonstrating a capital buffer consistent with regional-bank norms).

Suruga Bank Ltd. (8358.T): How It Works

• Primary revenue drivers: interest income (loans minus deposit funding costs) and non-interest fee income (investment products, cards, commissions).
• Customer focus: individual savers, small and medium-sized enterprises (SMEs), and niche segments served through group subsidiaries.
• Operational emphasis: credit underwriting, deposit mobilization, cross-selling of investment and insurance products, leasing and money lending, plus IT/system services provided by affiliates.

• Interest spread: Suruga Bank lends to households and SMEs at higher rates than its deposit and funding costs, generating net interest income-the largest single income source.
• Investment and insurance fees: commissions and management fees from investment trusts, public bonds, and insurance products sold through branches and advisory channels.
• Credit card fees: transaction and annual fees via its card business and affiliated firms.
• Leasing and money lending: interest and fee income from leasing contracts and unsecured/secured consumer and corporate loans handled by group lenders.
• Subsidiary services: IT/system development contracts and employee placement services provided to corporate clients and group companies generate recurring fee income.
• Digital and AI investments: the bank invests in automation and AI to lower operating expense ratios and improve loan origination and risk management, targeting higher operating leverage.

• Net interest income: majority share, driven by lending volume and loan yields.
• Fee and commission income: investment trust sales, bond distribution, insurance commission-important for diversifying revenue.
• Card and transaction fees: steady incremental revenue from credit card business.
• Leasing and lending interest/fees: growth area via group subsidiaries.
• Service fees from system development and staffing: B2B revenue stream supporting margins.

• Mortgage lending: upfront origination fees and long-term interest margin.
• SME loans: interest plus fee income for structuring and advisory work.
• Investment product distribution: recurring management and sales commissions.
• Credit card operations: interchange and annual fees; receivables financing adds interest revenue.
• Leasing contracts: regular lease payments and residual-value gains.
• IT/system contracts: fixed-fee and project-based revenue from subsidiaries.

• Increase fee income share by expanding investment trust and insurance sales through branches and digital channels.
• Optimize asset mix to lift NIM-selective repricing of lending and higher-yield SME exposures.
• Cost reduction via AI-driven automation in credit screening, back-office operations, and customer servicing.
• Cross-selling across group subsidiaries (leasing, cards, IT services) to raise per-customer revenue.

Suruga Bank Ltd. (8358.T): How It Makes Money

• Market capitalization: ¥288.58 billion (Dec 5, 2025)
• Return on equity (ROE): 6.8% (fiscal 2024); target ROE ≥ 8%
• Price-to-earnings (P/E) ratio: 12.31 (Dec 5, 2025)
• Dividend per share: ¥44.00; dividend yield: 2.52% (Dec 17, 2025)
• Ongoing investments in digital transformation (AI, IT platforms) to improve efficiency and customer acquisition

• Investor signals: P/E 12.31 and market cap ¥288.58B indicate moderate valuation with expectations of earnings growth tied to efficiency gains and digital investments.
• Shareholder returns: ¥44.00 DPS (2.52% yield) demonstrates a commitment to dividends while pursuing profitability targets.
• Strategic focus: achieving ROE ≥ 8% via cost controls, loan portfolio optimization and AI/IT-led productivity improvements.