Breaking Down Hokuhoku Financial Group, Inc. Financial Health: Key Insights for Investors

Discover how Hokuhoku Financial Group, formed in 2003 from the union of Hokuriku Bank and Hokkaido Bank, leverages its 161 branches and global offices to pursue regional revitalization, backed by consolidated assets of ¥13.64 trillion (as of March 31, 2025) and a capital adequacy ratio of 10.15%; in March 2025 the group crystallized its purpose with the mission ' Creating a Bright Future Beyond Regions ' and, in April 2025, launched its 6th Medium-Term Management Plan, NEXT STAGE (Apr 2025-Mar 2028), aligning a vision of delivering comprehensive financial services through an extensive regional network with core values-Prospering together with the region, Fair & Steady Management, and Progressive & Innovative Services-that map measurable financial strength to concrete ESG-driven initiatives and community-focused strategies to confront population decline and boost industrial value.

Hokuhoku Financial Group, Inc. (8377.T) - Intro

• Established: 2003 (merger of Hokuriku Bank and Hokkaido Bank)
• Branch network: 161 branches in Hokkaido and the Hokuriku region, plus representative offices in major cities worldwide
• Consolidated assets (as of March 31, 2025): ¥13.64 trillion
• Capital adequacy ratio (BIS, as of March 31, 2025): 10.15%

• Support regional prosperity by providing diverse, reliable financial services tailored to local economies.
• Empower regional companies and residents to overcome demographic decline and structural challenges through financing, advisory services, and ecosystem-building.
• Integrate ESG considerations across business activities to achieve sustainable growth with stakeholders.

• Be the trusted financial partner that revitalizes local industry and community life in Hokkaido and the Hokuriku region.
• Create a resilient regional economy by enhancing industrial value chains, promoting innovation, and facilitating outward connections to domestic and global markets.
• Realize a sustainable society by embedding environmental and social impact goals into core banking operations.

• Customer-centricity: Prioritize long-term relationships, understanding unique regional needs.
• Local Commitment: Invest in community resilience, SMEs, and regional infrastructure projects.
• Integrity & Governance: Maintain prudent risk management and transparent corporate governance to protect stakeholders.
• Innovation & Collaboration: Foster partnerships (public-private, fintech, universities) to solve demographic and industrial challenges.
• Sustainability: Pursue measurable ESG outcomes, including carbon reduction initiatives, social inclusion, and enhanced disclosure.

• Primary objective: Enhance corporate value by tackling regional issues-population decline, aging, and industrial value improvement-through financial solutions and regional revitalization projects.
• Key focus areas:
  • Strengthening core banking profitability while maintaining adequate capital (10.15% CAR as of Mar 31, 2025).
  • Accelerating ESG-linked financing and advisory services to support decarbonization and social infrastructure.
  • Expanding digital channels and collaboration to improve customer convenience and operational efficiency.
• Target outcomes: Sustainable asset growth around the existing consolidated base of ¥13.64 trillion, improved return metrics through cost optimization and fee income expansion, and measurable regional impact via investment and loan programs.

• Environmental: Support for energy transition projects and green financing to reduce regional carbon footprints.
• Social: Financial products and advisory for SMEs, agricultural cooperatives, and aging-population support services.
• Governance: Strengthened risk controls, capital management (maintaining prudent CAR), and enhanced disclosure practices aligned with investor and community expectations.

Hokuhoku Financial Group, Inc. (8377.T) - Overview

In March 2025, Hokuhoku Financial Group established its mission statement: 'Creating a Bright Future Beyond Regions.' This mission anchors the group's strategic direction, signaling a commitment to transcend regional boundaries, drive innovation, and address social issues by leveraging its position as a broad-based regional financial group.

The mission statement emphasizes the happiness and joy of employees and communities, reinforcing a holistic approach where stakeholder well-being is inseparable from financial performance. Operational and strategic choices are guided by this mission, aligning business models, service design, and partnership priorities toward shared regional prosperity.

• Mission focus: solving regional challenges through finance, advisory services, and ecosystem-building initiatives.
• Scope: act as a catalyst for innovation across prefectures and local economies, not limited to traditional banking boundaries.
• People-first orientation: prioritize employee engagement, community welfare, and inclusive value creation.

Concrete mission-aligned objectives and KPIs the group has emphasized include financial inclusion, support for regional SMEs, workforce well-being, and measurable community impact. Typical strategic levers are digital transformation, partnership with local governments and enterprises, and targeted lending/ advisory programs to sectors critical to regional revitalization (agriculture, tourism, renewable energy, local manufacturing).

• Strategic alignment: mission shapes capital allocation, risk appetite, and product prioritization toward long-term regional resilience.
• Governance: board and management incorporate mission metrics into executive KPIs and annual planning.
• Stakeholder communication: mission used to guide disclosure, investor dialogue, and community reporting.

To explore how these strategic priorities connect with the group's financial health and investor-relevant metrics, see: Breaking Down Hokuhoku Financial Group, Inc. Financial Health: Key Insights for Investors

Hokuhoku Financial Group, Inc. (8377.T) - Mission Statement

• Vision: Continue to deliver comprehensive financial services with its extensive regional network to contribute to mutual prosperity with customers and the region.
• Mission focus: Tailored financial solutions, regional economic support, and long-term sustainable value creation for stakeholders.
• Geographic emphasis: Strengthening ties across Hokkaido and adjacent areas to address regional challenges and enable inclusive growth.

• Customer-centric product development - designing deposit, lending, and advisory services to match local business cycles and household needs.
• Network leverage - using branches, digital channels, and partner relationships to ensure accessibility across the region.
• Mutual prosperity - prioritizing credit, investment, and advisory activities that support local SMEs, agricultural producers, and community projects.

• Trust and integrity - maintaining high governance and compliance standards to protect customer interests.
• Regional commitment - aligning business performance with measurable regional economic contribution.
• Innovation and resilience - progressively adopting digital tools and risk management practices to sustain service continuity.

• Stable deposit and loan bases enable continued credit supply to regional households and businesses, reinforcing mutual prosperity.
• Maintaining a healthy capital ratio supports resilience and the ability to invest in digital channels and community initiatives.
• Profitability metrics (ROE, net income) fund strategic programs-SME support, regional revitalization projects, and enhanced advisory services.

• Deepening local relationships: expanded advisory for SMEs, agriculture finance, and community-based lending products.
• Digital transformation: improving online banking and remote advisory to complement branch services and reach underserved customers.
• Risk and capital management: preserving capital buffers while selectively deploying capital to high-impact regional projects.
• ESG integration: aligning lending and investment with environmental and social priorities that matter to local stakeholders.

Hokuhoku Financial Group, Inc. (8377.T) - Vision Statement

• Prospering together with the region - prioritize mutually beneficial growth by financing regional SMEs, agriculture, infrastructure, and community projects to raise local economic resilience.
• Fair & Steady Management - ensure ethical governance, sound risk controls, and stable returns that preserve stakeholder trust and the long-term viability of the group.
• Progressive & Innovative Services - adopt digital channels, data-driven credit decisioning, and value-added advisory services to meet evolving customer needs.

• Deepen lending and advisory to regional businesses, targeting productivity and employment gains within Hokkaido and adjacent prefectures.
• Maintain capital and liquidity metrics consistent with regulatory expectations while balancing returns to shareholders.
• Invest in digital platforms and strategic partnerships to expand service reach and efficiency.

• Regional credit allocation - a growing share of new loans targeted at SMEs and regional projects (e.g., >40% of new commercial lending allocated to regional SMEs in recent fiscal years).
• Prudential governance - maintaining common equity and core capital ratios above regulatory minima to support steady management and withstand economic cycles.
• Service innovation - incremental increases in digital transactions (mobile/online volume rising year-on-year), and rollout of advisory products tied to regional revitalization programs.

• Collateralized lending and long-term project financing for local infrastructure and renewable energy initiatives that align with regional revitalization goals.
• Ethics and compliance programs, internal audit enhancements, and conservative provisioning that support the "Fair & Steady Management" mandate.
• Partnerships with fintechs and government bodies to pilot digital lending platforms, cashless payment solutions, and SME support hubs under the "Progressive & Innovative Services" pillar.