On Tuesday, Morgan Stanley reaffirmed its Overweight rating on Resona Holdings, Inc (8308:JP) (OTC: RSNHF) stock, with a steady price target of JPY1,040.00.
The financial institution's latest earnings report showed a marginal year-over-year decline in consolidated net profit by 0.9% to JPY158.9 billion, achieving a 105.9% progress rate. Core revenue closely mirrored this performance, registering JPY158.7 billion and a 105.8% progress rate.
The analysis of the company's half-yearly profits indicated a drop in the first half of the year, but a notable recovery in the second half, leading to overall growth in earnings momentum.
Loans, excluding government lending, grew by 3.08% year-over-year, although the yield on these loans saw a slight decrease of 3 basis points. Fee income, on the other hand, experienced an increase of JPY4.8 billion compared to the previous year.
Credit costs for the consolidated entity amounted to JPY35.6 billion, staying within the allocated budget of JPY38.0 billion. The report also detailed the appraisal differentials on other marketable securities, which included a JPY38.0 billion decrease in foreign bonds, a JPY29.2 billion decrease in Japanese government bonds after hedging with an average maturity of 9.2 years, and a significant increase in share value by JPY768.7 billion.
Resona Holdings' financial results reflect a resilient performance amidst varying market conditions, with a strong recovery in the latter half of the year bolstering its overall earnings momentum. The company's ability to keep credit costs within budget and the growth in fee income contribute to the positive outlook maintained by Morgan Stanley.
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