Hokuyo Bank

Basic Information

Stock Code
8524
Industry
Banking
Category Detail
Banks
Prefecture
Hokkaido
Establishment Year
August 1917
Listing Year
October 2012
Official Website
https://www.hokuyobank.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
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Overview

Hokuyo Bank was founded in 1917 and is Hokkaido's largest regional bank as well as the second largest second-tier regional bank. It is a financial institution that excels in community-based financial services and broad-area collaborations.

Current Situation

Hokuyo Bank recorded consolidated revenue of 135.6 billion yen in the fiscal year ending March 2021 and operates 178 branches in Hokkaido. With deposits outstanding at 10.8329 trillion yen and loans outstanding at 7.7625 trillion yen, it leads in funding supply to the regional economy. Boasting the largest funding base in Hokkaido, it has grown as a community-rooted financial institution. It has strengthened customer services through system upgrades and fee-free ATM alliances, while focusing on digitalization. Participating in the TSUBASA Alliance for broad-area collaboration, it strives to enhance social value through financial education and SDGs initiatives. Moving forward, it will formulate mid- to long-term growth strategies centered on supporting regional economic revitalization, aiming to expand its customer base and improve profitability. Having fully repaid public funds, its stable financial foundation is a testament to its reliability.

Trivia

Interesting Facts

  • Hokkaido's largest second-tier regional bank, surpassing the prefectural bank in scale
  • Significant growth from acquiring domestic operations of failed Hokkaido Takushoku Bank
  • Merged with Sapporo Bank in 2008 to become Hokkaido's largest financial institution
  • Participates in broad-area financial network via TSUBASA Alliance
  • clover series IC cards widely adopted by local residents
  • Nippon Life and Meiji Yasuda Life among major shareholders
  • Former Bank of Japan executive president led management for extended period
  • Head office at Hokuyo Odori Center serves as regional landmark
  • Possesses rapid customer response system for earthquakes and disasters
  • Selected as designated financial institution by numerous Hokkaido municipalities
  • Proactive in digitalization with focus on system renewals
  • Long-term commitment to regional financial education initiatives
  • Once used Sanrio's Dakkaduu as image character
  • Featured local celebrity Yo Oizumi in advertisements
  • Successfully repaid public funds early, enhancing credibility

Hidden Connections

  • Hokkaido Electric Power is a major shareholder, fostering strong ties with regional infrastructure.
  • Central player in regional financial restructuring after acquiring operations from former Hokkaido Takushoku Bank.
  • Achieved broad-area expansion by integrating Sapporo Bank via Sapporo Hokuyo Holdings.
  • Maintains personnel exchanges with major local firms like Ishiya Confectionery.
  • Serves as gateway to Chinese market through business cooperation with Dalian Bank.
  • Deploys collaborative businesses with out-of-prefecture regional banks via TSUBASA Alliance.
  • Entrusted with public fund management as designated financial institution for Hokkaido municipalities.
  • Issues linked cards with local transit IC cards SAPICA and Kitaca to strengthen community ties.

Future Outlook

Growth Drivers

  • Demand for supporting recovery and growth in Hokkaido and northern Japan regional economies
  • Progress in digital banking and cashless payments
  • Expansion of synergies from TSUBASA Alliance
  • Strengthening asset management services for aging society
  • Expansion of regional financial education and SDGs-related investment and financing
  • Sophistication of customer services via data analytics and AI
  • Increasing fund management needs from local governments
  • Expansion of support for SME new business creation
  • Growing financial needs from companies expanding overseas
  • Service diversification accompanying financial infrastructure renewal

Strategic Goals

  • Establish financial foundation supporting sustainable regional economic development
  • Expand sustainable investment and financing to 2 trillion yen scale
  • Improve customer satisfaction and operational efficiency through DX initiatives
  • Strengthen and expand trust as regional designated financial institution
  • Acquire broad customer base including youth and seniors
  • Develop financial products contributing to solving environmental and social issues
  • Fulfill social responsibilities through regional financial education support
  • Advanced risk management via AI and big data utilization
  • Service expansion through strengthened diverse partnerships
  • Enhanced social contribution activities via regional community collaborations

Business Segments

SME Financing

Overview
Deploys comprehensive financial services focused on supporting the growth of local SMEs.
Competitiveness
Deep customer understanding due to strong community ties
Customers
  • Local SMEs
  • Sole Proprietors
  • Agriculture, Forestry, and Fisheries Businesses
  • Regional Chambers of Commerce
  • Startups
Products
  • Business Financing
  • Equipment Investment Loans
  • Working Capital Loans
  • Credit Guarantee Support
  • Management Consulting

Real Estate and Construction Financing

Overview
Provides funding and project support for the construction and real estate sectors.
Competitiveness
Expertise in Hokkaido market enabling rapid loan approvals
Customers
  • Construction Companies
  • Real Estate Developers
  • Land Development Firms
  • Architectural Design Offices
Products
  • Construction Fund Loans
  • Real Estate Collateral Financing
  • Project Finance

Public Sector and Local Government Support

Overview
Provides financial management and funding support for local governments.
Competitiveness
Proven track record as designated financial institution for Hokkaido and Sapporo City
Customers
  • Hokkaido
  • Sapporo City
  • Local Governments
  • Public Works-Related Companies
Products
  • Designated Financial Institution Services
  • Public Fund Management Services
  • Local Bond Underwriting
  • Public Facility Financing

Securities and Asset Management

Overview
Offers diverse investment products and management services through Hokuyo Securities.
Competitiveness
Regionally rooted securities services
Customers
  • Individual Investors
  • Corporate Investment Departments
  • Asset Management Companies
Products
  • Securities Sales and Intermediation
  • Investment Trusts
  • Asset Management Advice

Card and Leasing Services

Overview
Strengthens corporate funding support and payment services.
Competitiveness
Comprehensive services through group synergies
Customers
  • Corporate Entities
  • SMEs
  • Individual Customers
Products
  • Corporate Leasing
  • Credit Card Issuance
  • Payment Agency Services

Overseas Business Support

Overview
Provides essential financial solutions for overseas business expansion.
Competitiveness
Meticulous support through overseas representative office
Customers
  • Import/Export Companies
  • Hokkaido Product Overseas Expansion Firms
  • Local Subsidiaries
Products
  • Overseas Remittances
  • Trade Finance
  • Support via Bangkok Representative Office

Regional Financial Network

Overview
Promotes improved convenience in regional finance through broad-area collaborations.
Competitiveness
Broad-area alliances via TSUBASA Alliance participation
Customers
  • Credit Unions
  • Other Regional Banks
  • Affiliated Financial Institutions
Products
  • ATM Fee-Free Alliances
  • Financial Information Sharing
  • Regional Revitalization Joint Projects

Financial Education and Social Contributions

Overview
Focuses on education and awareness activities to improve regional financial literacy.
Competitiveness
Strong track record of regional contributions in Hokkaido
Customers
  • Schools
  • Local Residents
  • Local Governments
Products
  • Financial Education Programs
  • Regional Event Support
  • CSR Activities

Digital and IT Services

Overview
Realizes safe and efficient financial services leveraging advanced IT technologies.
Competitiveness
Advanced system infrastructure through IBM collaboration
Customers
  • Individual Customers
  • Corporate Customers
  • Internal Departments
Products
  • Core System Renewal
  • Internet and Mobile Banking
  • IT Outsourcing

Risk Management and Compliance

Overview
Ensures safe business operations through advanced management systems.
Competitiveness
Robust governance as a company with a board of auditors
Customers
  • Internal Management Departments
  • Regulatory Authorities
Products
  • Credit Management
  • Internal Audit Systems
  • Regulatory Compliance Measures

Fund Management and Investment Operations

Overview
Implements efficient management of own capital and optimal customer asset handling.
Competitiveness
Management by staff with extensive expertise and experience in asset operations
Customers
  • Own Funds Management Department
  • Customer Asset Management
Products
  • Securities Trading
  • Investment Portfolio Management

ATM and Payment Network Operations

Overview
Provides high convenience through collaborations with numerous partners inside and outside Hokkaido.
Competitiveness
Hokkaido's largest ATM network and expanding alliance coverage
Customers
  • Customers
  • Affiliated Companies
Products
  • ATM Installation and Management
  • Payment Processing Systems

Competitive Advantage

Strengths

  • Hokkaido's largest funding base and deposit balance
  • Strong community-based customer foundation
  • Broad-area collaboration via TSUBASA Alliance
  • Strong response capabilities to advanced IT system renewals
  • Trust with local governments as designated financial institution
  • Diverse product lineup and service offerings
  • Solid financial foundation with full repayment of public funds
  • Extensive ATM network deployment
  • Active contributions to regional financial education
  • Governance structure as a listed company
  • Investment and financing strategy for SDGs promotion
  • Strong management controls and audit systems
  • Efficient operations under parent holding company
  • Business expansion foundation from historical mergers
  • Multi-faceted services tailored to customer needs

Competitive Advantages

  • Holds 34.79% deposit market share in Hokkaido, establishing top position
  • Expands service reach through 'TSUBASA Alliance' with major regional banks
  • Stable revenue base from designated financial institution relationships with regional governments
  • Achieves efficient and secure operations via latest core system renewal
  • Improves payment convenience with diverse IC card 'clover' series for customers
  • Comprehensive response to diverse customer needs with rich financial product lineup
  • Maintains funding strength and risk diversification through broad financial networks
  • Strengthens trust from regional community via financial education and CSR activities
  • Sustainable growth supported by prudent risk management and solid financial base
  • Geographical advantage with head office at Hokuyo Odori Center in Sapporo
  • Expanding customer touchpoints through diverse financial channels
  • Proven record of designation as sole financial institution by multiple local governments
  • Improved market credibility following full repayment of public funds
  • Superior competitive edge through close relationships with local companies
  • Deep understanding of local economy backed by long-cultivated sales expertise

Threats

  • Risk of declining deposit and loan demand due to population decline in regional economy
  • Intensifying funding competition from megabanks and online banks
  • Pressure on net interest margins from low interest rate environment
  • Increasing regulatory and compliance risks
  • IT system failures and cybersecurity risks
  • Loan loss risks accompanying regional economic fluctuations
  • Concerns over customer attrition from delays in digitalization
  • Reduced funding reliance from local government budget cuts
  • Impact on international operations from overseas economic uncertainties
  • Heightened competition from new entrant financial providers
  • Impact of natural disasters and regional risks on financial assets
  • Deteriorating business stability from overall decline in regional bank profitability

Innovations

2023: Core System Renewal and Digitalization Push

Overview
Introduced efficient and secure core systems in collaboration with IBM.
Impact
Improved customer service convenience and reduced operational costs

2024: Expansion of Fee-Free ATM Alliances

Overview
Added fee-free ATM alliances with multiple credit unions in Hokkaido.
Impact
Enhanced customer convenience and strengthened regional financial network

2022: Strengthening Electronic Payment Services

Overview
Launched composite services combining IC cash cards and transit IC cards.
Impact
Dramatically improved convenience of daily payments for local residents

2021: Setting Sustainable Investment and Financing Targets

Overview
Set target of 2 trillion yen in sustainable investment and financing by 2030.
Impact
Contributes to solving environmental and social issues while enhancing corporate value

2023: Participation in Financial Education Promotion Council

Overview
Collaborated with local financial institutions to strengthen regional financial education.
Impact
Contributes to improving financial literacy among local residents

2020: Business Alliance with Dalian Bank

Overview
Alliance agreement with China's Dalian Bank to support Hokuyo's overseas expansion.
Impact
Promotes international operations and overseas advancement of regional companies

2024: Enhancement of Internet and Mobile Banking Functions

Overview
Improved smartphone app for better customer convenience.
Impact
Increased user numbers and transaction activity

2023: Strengthening Disaster Response Systems

Overview
Systematized rapid deposit withdrawals in case of earthquake damage.
Impact
Contributes to building trust among local residents

2022: AI Implementation for Credit Review Efficiency

Overview
Automated loan review processes using AI.
Impact
Succeeded in shortening review times and reducing credit risks

2024: Customer Strategy Enhancement via Data Analytics

Overview
Accurately captures customer needs through big data analysis.
Impact
Advanced new service development and marketing initiatives

Sustainability

  • Target to achieve 2 trillion yen in sustainable investment and financing by 2030
  • Active participation and support in regional environmental conservation activities
  • Social contributions through promotion of financial education
  • Strengthening initiatives for women's empowerment and diversity
  • Review of operations to reduce CO2 emissions
  • Enhanced funding supply for regional disaster countermeasures
  • Promotion of regional investments for sustainable economic growth
  • Implementation of lending and investments considering ESG evaluations
  • Promotion of investments in energy-saving equipment
  • Investments in recycling promotion businesses and environmental technologies
  • SME support mindful of regional job creation
  • Collaborative efforts with regional financial institutions to achieve SDGs goals