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Resona Holdings Inc 8308

Morningstar Rating
JPY 1,066.50 +4.00 (0.38%)
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Company Report

Resona Gets Lift From Rising Interest Rates in Japan

Resona’s lack of large overseas operations is a double-edged sword—unlike the megabanks, it cannot greatly expand lending abroad to compensate for the poor returns available in Japanese commercial banking; but on the other hand, with its domestic focus, Resona effectively escapes increasingly stringent Basel III rules on risk weightings, allowing it to act as a potential consolidator of regional banks even if doing so expands its balance sheet and lowers its capital ratios. Resona’s acquisition of Kansai Urban Banking and Kobe-based Minato Bank in 2017 expanded its assets and revenue by about 20%, and we expect efficiency gains will continue to be achieved as these two units are further integrated with Resona’s Kinki Osaka Bank under the Kansai Mirai Financial Group holding company.

Price vs Fair Value

8308 is trading within a range we consider fairly valued.
Price
JPY 1,062.50
Fair Value
JPY 763.00
Uncertainty
Medium
1-Star Price
JPY 2,551.84
5-Star Price
JPY 113.60
Economic Moat
Nmtz
Capital Allocation
Jgsdjxy

Bulls Say, Bears Say

Bulls

The integration of Kinki Osaka Bank and Kansai Urban Banking into Kansai Mirai Bank will lead to cost savings and efficiency gains that boost Resona’s profit.

Bears

Investor expectations for Resona to benefit more from rising yen interest rates than other major Japanese banks may be disappointed.

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News

Trading Information

Previous Close Price
JPY 1,062.50
Day Range
JPY 1,062.001,078.50
52-Week Range
JPY 675.101,107.00
Bid/Ask
JPY 1,066.00 / JPY 1,068.00
Market Cap
JPY 2.46 Tril
Volume/Avg
6.8 Mil / 11.0 Mil

Key Statistics

Price/Earnings (Normalized)
35.35
Price/Sales
3.24
Dividend Yield (Trailing)
2.07%
Dividend Yield (Forward)
2.16%
Total Yield
3.05%

Company Profile

Resona Holdings is one of the top six Japanese banking groups by assets. Although its banking units are categorized in Japan as "city" banks for historical reasons, it is only around a third of the size of the three megabank groups and effectively a super-regional bank operating mainly in the Kansai region (54% of its branches) and the Tokyo metropolitan area (43% of branches), with a strong focus on retail and small and medium-size enterprises, rather than lending to large corporates. Its overseas operations are limited, which allows it to operate in compliance with domestic capital standards alone.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
28,237

Competitors

Valuation

Metric
8308
MFG
MUFG
Price/Earnings (Normalized)
35.3533.9243.50
Price/Book Value
0.900.821.02
Price/Sales
3.242.713.32
Price/Cash Flow
15.71
Price/Earnings
8308
MFG
MUFG

Financial Strength

Metric
8308
MFG
MUFG
Quick Ratio
Current Ratio
Interest Coverage
Quick Ratio
No chart available

Profitability

Metric
8308
MFG
MUFG
Return on Assets (Normalized)
0.30%0.34%0.54%
Return on Equity (Normalized)
8.52%9.46%11.53%
Return on Invested Capital (Normalized)
Return on Assets
8308
MFG
MUFG
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