Bank of Saga Ltd. (8395) AI Stock Analysis

• Market Cap: ¥74.50B
• Dividend Yield: 2.29%
• Average Volume (3M): 54.99K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 1.07
• Revenue Growth: 7.97%
• EPS Growth: 20.44%
• Country: JP
• Employees: 1,294
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 127.48
• Shares Outstanding: 16,935,910
• 10 Day Avg. Volume: 40,980
• 30 Day Avg. Volume: 54,986
• PEG Ratio: 0.26
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.75
• P/FCF Ratio: 1.91
• 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: 66 Neutral
• Price Target: ¥4,855.00 ▲(12.91% Upside)
• Action: Downgraded Date: 03/05/26
• Date: Action: Downgraded 03/05/26

The score is primarily supported by solid financial health (profitability and improved leverage) and attractive valuation (low P/E with a ~2% dividend). Offsetting these positives are mixed technicals, with the stock trading below key short-term moving averages and only neutral momentum readings, alongside concerns about negative revenue growth and prior cash-flow volatility.

Positive Factors

Improving leverage and capital structure

A materially lower debt-to-equity (0.39 in 2025) and a strong equity position provide a durable capital buffer that reduces funding and regulatory risk, supports continued lending capacity, and increases resilience to credit shocks over the medium term.

Healthy profitability and margins

Sustained net profit and solid operating margins indicate efficient core banking operations and pricing power. Consistent margins support internal reinvestment, dividend capacity and tolerance for interest-rate cycles, underpinning long-term earnings stability.

Improving free cash flow generation

Notable free cash flow improvement in 2025 and stable operating cash flow to net income suggest stronger cash conversion. Durable cash generation enhances liquidity, funds organic growth, and reduces dependence on external funding over the medium term.

Negative Factors

Negative revenue growth in 2025

A contracting top line in 2025 signals structural pressure on loan volumes, fee income, or pricing that can limit operating leverage. Persistent revenue decline would constrain earnings growth, making margin maintenance and capital returns harder to sustain long term.

Historical cash-flow volatility

Past swings in cash flow, despite recent improvement, point to inconsistent liquidity generation and potential reliance on non-operating sources in stress periods. Continued volatility can restrict lending flexibility and force precautionary capital buffers.

Moderate returns and prior high leverage

A middling ROE (~6.44%) limits the bank's ability to generate high shareholder returns absent strong revenue expansion. Coupled with a history of higher leverage, this suggests sensitivity to margin compression and constrains rapid capital return or aggressive growth initiatives.

Bank of Saga Ltd. Business Overview & Revenue Model

Company Description

The Bank of Saga Ltd. provides various banking products and services in Japan. The company offers checking accounts, savings accounts, ordinary deposits, notification deposits, time deposits, separate deposits, tax reserve deposits, non-resident yen deposits, foreign currency deposits, etc.; and mortgage, auto, education, and card loans, as well as discount bolls. It also invests in government bonds, municipal bonds, corporate bonds, stocks, and other securities to prepare and fund deposits; offers remittances, transfers, and collections; and provides export, import, and other foreign exchange services, as well as engages in bond contracting and registration, and financial futures trading businesses. In addition, the company is involved in protection and safe deposit box, securities lending, debt guarantee, public bonds underwriting, public bonds sales, card, commercial paper, defined contribution pension, and life insurance agency businesses. As of March 31, 2021, it operated through a network of 103 branches and 78 out-of-brach ATMs. The company was founded in 1882 and is headquartered in Saga, Japan.

How the Company Makes Money

Bank of Saga Ltd. generates revenue primarily through the interest income earned from lending activities, which includes personal loans, mortgages, and business loans. The bank charges interest on these loans, which constitutes a significant portion of its income. Additionally, the bank earns fee-based income from various services such as account maintenance fees, transaction fees, and advisory services. Investment income from securities and other financial instruments also contributes to its revenue. The bank may also engage in partnerships with local businesses and financial institutions to expand its service offerings and customer base, thereby enhancing its overall earnings potential.

Bank of Saga Ltd. Financial Statement Overview

Summary

Financial statements indicate solid profitability and improving leverage (debt-to-equity down to 0.39 in 2025), but weaker revenue momentum (negative revenue growth in 2025) and historical cash-flow volatility temper the strength.

Income Statement

The income statement shows a stable net profit margin of around 13.8% in 2025, with a slight decline in revenue growth rate compared to previous years. EBIT and EBITDA margins are healthy, indicating efficient operations. However, the negative revenue growth rate in 2025 suggests potential challenges in revenue generation.

Balance Sheet

The balance sheet reflects a strong equity position with a debt-to-equity ratio improving to 0.39 in 2025 from higher levels in previous years. Return on equity is moderate at 6.44%, indicating decent profitability. The equity ratio is stable, suggesting a solid capital structure, but the historical high leverage in 2022 poses a risk.

Cash Flow

Cash flow analysis shows a positive trend in free cash flow growth, with a significant improvement in 2025. The operating cash flow to net income ratio is stable, but historical volatility in cash flows, particularly in 2023, indicates potential liquidity management challenges.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	48.58B	51.67B	47.57B	44.47B	40.69B	37.78B
Gross Profit	48.58B	47.91B	44.30B	42.01B	40.30B	37.34B
EBITDA	7.80B	11.71B	8.70B	8.41B	7.66B	4.93B
Net Income	6.26B	7.50B	6.22B	5.49B	4.08B	2.46B
Balance Sheet
Total Assets	3.26T	3.18T	3.16T	3.01T	3.16T	3.05T
Cash, Cash Equivalents and Short-Term Investments	0.00	270.96B	201.84B	72.97B	301.83B	377.50B
Total Debt	42.38B	45.20B	57.33B	72.13B	208.39B	168.55B
Total Liabilities	3.14T	3.06T	3.04T	2.90T	3.05T	2.92T
Stockholders Equity	119.52B	116.37B	122.56B	108.76B	115.78B	126.41B
Cash Flow
Free Cash Flow	0.00	20.36B	-26.20B	-190.17B	-4.59B	230.85B
Operating Cash Flow	0.00	22.94B	-24.61B	-188.82B	-3.58B	6.54B
Investing Cash Flow	0.00	95.41B	14.54B	-43.72B	-67.45B	-67.86B
Financing Cash Flow	0.00	18.00B	143.86B	-1.18B	86.57B	324.17B

Bank of Saga Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4300.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8395, the sentiment is Neutral. The current price of 4300 is below the 20-day moving average (MA) of 5019.25, below the 50-day MA of 4611.40, and above the 200-day MA of 3284.57, indicating a neutral trend. The MACD of 101.49 indicates Positive momentum. The RSI at 50.06 is Neutral, neither overbought nor oversold. The STOCH value of 53.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:8395.

Bank of Saga Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8387	72 Outperform	¥88.83B	1.54	―	3.05%	8.75%	-12.68%
8362	71 Outperform	¥80.67B	5.15	―	2.49%	7.08%	-46.44%
8344	69 Neutral	¥80.71B	10.96	―	2.89%	-0.24%	95.49%
8541	69 Neutral	¥69.35B	6.31	―	2.34%	-0.97%	27.62%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8395	66 Neutral	¥74.50B	7.94	―	2.29%	7.97%	20.44%
8550	52 Neutral	¥97.56B	6.95	―	2.12%	10.91%	-1225.48%

Bank of Saga Ltd. Corporate Events

Bank of Saga Books ¥12 Billion Gain From Exit of Hisamitsu Stake

The Bank of Saga Ltd. has sold all 2,356,000 common shares it held in Hisamitsu Pharmaceutical Co., Inc. into a tender offer conducted by TAIYO KOSAN CO., INC., at a price of ¥6,082 per share. The transaction, to be settled on February 27, 2026, results in a total sale amount of ¥14,329 million and a gain on sale of ¥12,048 million, eliminating the bank’s equity stake in Hisamitsu.

As a result of this divestment, the Bank of Saga plans to record a significant gain on sale of equity securities on a consolidated basis in the fiscal year ending March 31, 2026. The bank is currently reviewing its consolidated earnings forecasts for that fiscal year in light of the tender offer proceeds and other factors, indicating potential revisions that may affect shareholder expectations and financial performance indicators once finalized.

The most recent analyst rating on (JP:8395) stock is a Buy with a Yen5286.00 price target. To see the full list of analyst forecasts on Bank of Saga Ltd. stock, see the JP:8395 Stock Forecast page.

Bank of Saga Lifts Nine-Month Profit and Hikes Dividend Forecast

The Bank of Saga reported consolidated ordinary income of ¥44.2 billion for the nine months ended December 31, 2025, up 3.9% year on year, with ordinary profit rising 13.6% to ¥10.0 billion. Profit attributable to owners of parent climbed 16.4% to ¥7.2 billion, lifting basic earnings per share to ¥424.70 and supporting a modest improvement in the equity-to-asset ratio to 3.9% as total assets stood at ¥3.14 trillion.

The bank plans to pay a total annual dividend of ¥100 per share for the fiscal year ending March 31, 2026, an increase from ¥90 in the previous year, signaling confidence in earnings sustainability. Management left its full-year forecast unchanged, projecting ¥56.0 billion in ordinary income and ¥8.0 billion in profit attributable to owners, suggesting stable but moderate growth expectations for shareholders and other stakeholders.

The most recent analyst rating on (JP:8395) stock is a Buy with a Yen5286.00 price target. To see the full list of analyst forecasts on Bank of Saga Ltd. stock, see the JP:8395 Stock Forecast page.