Awa Bank, Ltd. (8388) AI Stock Analysis

• Market Cap: ¥201.26B
• Dividend Yield: 2.53%
• Average Volume (3M): 52.99K
• Price to Earnings (P/E): 13.2
• Beta (1Y): 1.04
• Revenue Growth: 7.67%
• EPS Growth: 11.03%
• Country: JP
• Employees: 1,332
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 100.54
• Shares Outstanding: 40,000,000
• 10 Day Avg. Volume: 54,740
• 30 Day Avg. Volume: 52,990
• PEG Ratio: 0.45
• Price to Book (P/B): 0.34
• Price to Sales (P/S): 1.47
• P/FCF Ratio: 3.11
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: ¥5,898.00 ▲(27.94% Upside)

Awa Bank, Ltd. scores well due to its strong financial performance, particularly in revenue growth and cost management. The technical analysis indicates strong bullish momentum, although caution is advised due to overbought conditions. The valuation is attractive, with a reasonable P/E ratio and a solid dividend yield. These factors combined suggest a positive outlook for the stock, with some potential risks due to technical overbought signals.

Positive Factors

Revenue Growth & Cost Management

Awa Bank shows consistent top-line expansion (Fundamentals revenueGrowth ~11.6% and latest-year growth 8.62%) alongside a 87.9% gross profit margin. That combination underpins durable loan and fee income, funds reinvestment and supports sustainable community lending over months.

Moderate Leverage and Capital Stability

A moderate debt-to-equity ratio of 0.60 and a stable equity ratio indicate a balanced capital structure that supports continued lending while maintaining regulatory buffers. This structural conservatism enhances resilience to shocks and provides flexibility for measured growth over the medium term.

Strong Free Cash Flow Conversion

High free cash flow conversion (FCF/net income ~0.95) and strong FCF growth mean most reported earnings are backed by cash. That durable cash generation supports dividends, loan originations and provisioning capacity, strengthening financial flexibility over the coming months.

Negative Factors

Low Return on Equity

ROE of only 3.95% is materially low for a regional bank and implies limited effectiveness in turning equity into shareholder returns. Persistently low ROE constrains the bank's ability to grow retained capital, attract incremental equity, or fund dividend increases without improving margins or asset yields.

Weak Operating Cash Conversion

An operating cash flow to net income ratio of 0.01 signals potential earnings quality or timing issues: reported profits are not being realized as operating cash. Over the medium term, weak cash conversion can stress liquidity during downturns and limit stable funding for lending or distributions.

Compressing Net Profit Margin

A decline in net profit margin to 16.99% suggests growing pressure on profitability, possibly from higher funding or credit costs. If margin compression persists, it will erode retained earnings and the bank's capacity to absorb loan losses or expand lending without raising prices or cutting costs.

Awa Bank, Ltd. Business Overview & Revenue Model

Company Description

The Awa Bank, Ltd. provides banking products and services to individual and corporate customers in Japan. The company offers general accounts, saving deposits, time deposits, and foreign currency deposits, as well as certificates of deposit; and investment trusts. It also provides housing, remodeling, car, card, education, solar, industrial, and business support loans; life, fire, education, and business insurance products; and safe deposit boxes. In addition, the company offers internet banking, pension, convenience, and management and business support services. As of March 31, 2021, it operated through a network of 101 branches. The company was formerly known as Tokushima Commercial Bank, Ltd. and changed its name to The Awa Bank, Ltd. in 1964. The Awa Bank, Ltd. was founded in 1896 and is headquartered in Tokushima, Japan.

How the Company Makes Money

Awa Bank generates revenue through various streams, primarily derived from interest income and fees. The main source of revenue comes from the interest earned on loans provided to individuals and businesses. This includes personal loans, mortgages, and commercial lending, where the bank charges interest over time. Additionally, Awa Bank earns fee income through service charges on deposit accounts, transaction fees, and commissions from financial products such as investment services and insurance products. The bank may also engage in investment activities, generating returns on its financial assets. Significant partnerships with local businesses and community organizations enhance its ability to attract customers and expand its loan portfolio, supporting its overall revenue growth.

Awa Bank, Ltd. Financial Statement Overview

Summary

Awa Bank, Ltd. demonstrates strong revenue growth and efficient cost management, as evidenced by its high gross profit margin. The balance sheet is stable with moderate leverage, although return on equity could be improved. Cash flow generation is strong, but there is room for enhancing cash efficiency relative to net income. Overall, the financial health of the bank is solid, with opportunities for further improvement in profitability and cash flow efficiency.

Income Statement

Awa Bank, Ltd. shows a strong revenue growth rate of 8.62% in the latest year, indicating positive momentum. The gross profit margin is robust at 87.9%, reflecting efficient cost management. However, the net profit margin has slightly decreased to 16.99% from the previous year, suggesting some pressure on profitability. The EBIT and EBITDA margins are healthy, supporting overall profitability.

Balance Sheet

The bank maintains a moderate debt-to-equity ratio of 0.60, indicating a balanced approach to leverage. Return on equity is modest at 3.95%, suggesting room for improvement in generating returns for shareholders. The equity ratio is stable, reflecting a solid capital structure.

Cash Flow

Operating cash flow has improved significantly, but the operating cash flow to net income ratio is low at 0.01, indicating potential inefficiencies in cash generation relative to income. Free cash flow growth is strong, but the free cash flow to net income ratio of 0.95 suggests that most of the net income is being converted into free cash flow, which is positive.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	69.50B	77.69B	74.81B	86.79B	66.67B	64.36B
Gross Profit	69.50B	70.47B	66.26B	79.19B	65.04B	62.24B
EBITDA	16.95B	20.55B	19.27B	17.70B	19.07B	15.10B
Net Income	12.71B	13.20B	11.26B	10.21B	11.11B	8.50B
Balance Sheet
Total Assets	4.03T	4.02T	3.92T	3.85T	3.98T	3.87T
Cash, Cash Equivalents and Short-Term Investments	0.00	427.65B	402.27B	482.87B	690.24B	632.77B
Total Debt	193.44B	199.51B	167.93B	128.11B	279.23B	248.06B
Total Liabilities	3.69T	3.69T	3.59T	3.57T	3.69T	3.57T
Stockholders Equity	338.84B	334.22B	332.62B	278.76B	288.40B	292.89B
Cash Flow
Free Cash Flow	0.00	36.74B	2.49B	-325.82B	92.37B	299.27B
Operating Cash Flow	0.00	38.54B	5.69B	-321.75B	96.67B	301.56B
Investing Cash Flow	0.00	1.99B	-72.30B	93.25B	-37.03B	46.83B
Financing Cash Flow	0.00	65.85B	-13.75B	-3.60B	-2.27B	-2.44B

Awa Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4610.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8388, the sentiment is Positive. The current price of 4610 is below the 20-day moving average (MA) of 4866.75, above the 50-day MA of 4475.70, and above the 200-day MA of 3482.47, indicating a bullish trend. The MACD of 202.49 indicates Negative momentum. The RSI at 69.85 is Neutral, neither overbought nor oversold. The STOCH value of 80.74 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8388.

Awa Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8388	77 Outperform	¥201.26B	13.24	―	2.53%	7.67%	11.03%
8544	75 Outperform	¥214.71B	16.50	―	2.13%	7.77%	5.80%
8336	72 Outperform	¥182.01B	11.54	―	3.00%	10.56%	16.02%
8361	68 Neutral	¥234.35B	12.93	―	2.27%	2.68%	74.80%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8386	66 Neutral	¥234.84B	14.85	―	2.55%	-0.36%	41.38%
7381	64 Neutral	¥209.15B	14.49	―	2.38%	8.43%	38.21%

Awa Bank, Ltd. Corporate Events

Awa Bank Posts Strong Nine‑Month Results, Lifts Full‑Year Forecast and Dividend Plan

For the nine months ended 31 December 2025, Awa Bank reported strong consolidated results, with ordinary income rising 20.6% year on year to ¥70.3 billion, ordinary profit up 24.5% to ¥17.0 billion, and profit attributable to owners of the parent increasing 21.9% to ¥12.2 billion; comprehensive income surged 157.9%, while total assets expanded to ¥4.15 trillion and equity grew, lifting the equity-to-asset ratio to 9.2%. The bank raised its full‑year earnings forecast, now expecting ordinary income of ¥94.2 billion and profit attributable to owners of the parent of ¥15.0 billion, and signaled shareholder‑friendly capital policy with a planned total annual dividend of ¥130 per share for the year ending March 31, 2026, including a commemorative 130th‑anniversary dividend, even as it increased treasury shares, underscoring confidence in its earnings power and capital position.

The most recent analyst rating on (JP:8388) stock is a Buy with a Yen5739.00 price target. To see the full list of analyst forecasts on Awa Bank, Ltd. stock, see the JP:8388 Stock Forecast page.

Awa Bank Announces Share Buyback and Cancellation to Enhance Shareholder Returns

The Awa Bank’s board has approved a share repurchase of up to 200,000 common shares, equivalent to about 0.50% of its outstanding stock, for a total amount not exceeding 1 billion yen through market purchases on the Tokyo Stock Exchange between February 4 and March 18, 2026. Framed as a flexible capital management measure aimed at adapting to changes in the business environment and enhancing shareholder returns, the bank plans to cancel all shares acquired, a move that could support earnings per share and signal confidence in its capital position to investors, while marginally reducing its share count from current levels of roughly 39.9 million shares outstanding.

The most recent analyst rating on (JP:8388) stock is a Buy with a Yen5751.00 price target. To see the full list of analyst forecasts on Awa Bank, Ltd. stock, see the JP:8388 Stock Forecast page.

Awa Bank Raises Dividend Forecast with 130th Anniversary Commemorative Payouts

The Awa Bank, Ltd. has approved a commemorative dividend to mark the 130th anniversary of its founding, revising its year-end dividend forecast for the fiscal year ending March 31, 2026, and adding a similar commemorative payout at the second quarter-end of the following fiscal year. The bank will add ¥10 per share as a commemorative dividend to both the year-end dividend for FY2025–26 and the second quarter dividend for FY2026–27, lifting the forecast full-year dividend for the year ending March 31, 2026 to ¥130 per share, and reaffirming a shareholder return policy targeting a payout ratio of at least 40% of profit through dividends and share buybacks, underscoring its commitment to rewarding long-term investors while reinforcing its earnings base.

The most recent analyst rating on (JP:8388) stock is a Buy with a Yen5751.00 price target. To see the full list of analyst forecasts on Awa Bank, Ltd. stock, see the JP:8388 Stock Forecast page.

Awa Bank Enhances Shareholder Benefit Program to Attract Long-term Investors

The Awa Bank, Ltd. has announced an enhancement to its shareholder benefit program, effective March 31, 2026. This amendment aims to increase the attractiveness of investing in the bank’s shares by offering greater monetary value in its gift catalog for shareholders holding 200 shares or more, thereby supporting sustainable growth and encouraging long-term investment.

Awa Bank Revises Management Targets Amid Strong Performance

The Awa Bank, Ltd. has revised its management targets for its ‘Growing beyond 130th’ plan due to surpassing profit expectations for FY2024. The bank aims to achieve higher profitability and efficiency by FY2027, with increased targets for adjusted OHR, core business net profit ROA, and profit ROE, while maintaining its ESG investment and shareholder return ratio goals.

Awa Bank Announces Dividend Increase Amid Strong Performance

The Awa Bank, Ltd. has announced an increase in its interim dividend to 60 yen per share, up from the previous forecast of 50 yen, reflecting a commitment to returning profits to shareholders. The bank also revised its year-end dividend forecast to 60 yen per share, leading to an annual dividend increase to 120 yen per share, highlighting its strong performance and dedication to shareholder returns.

Awa Bank Reports Strong Financial Performance and Dividend Increase

Awa Bank, Ltd. reported a significant year-on-year increase in its consolidated financial results for the six months ended September 30, 2025, with ordinary income rising by 21% and profit attributable to owners increasing by 14.2%. The bank’s comprehensive income surged by 120.4%, indicating strong operational performance. Additionally, Awa Bank announced a revision in its cash dividend forecast, reflecting a positive outlook for the fiscal year ending March 31, 2026, with an expected increase in annual dividends per share.