Norinchukin posts quarterly profit, flags cautious outlook after bond losses (updated)

MITSUI & CO.

21/05/2026 08:20

Recasts top, adds quotes from CFO in paragraphs 1-5

By Anton Bridge

TOKYO, May 21 (Reuters) - Japan's Norinchukin Bank reported a small fourth-quarter profit on Thursday, as it continues to rebuild its finances after heavy losses on U.S. and European sovereign bonds in 2024 and 2025.

The bank maintained a cautious outlook for the current financial year, forecasting profit of 50 billion to 100 billion yen, and sought to reassure investors that its exposure to private credit - an area of concern due to potential hidden risks - remains limited.

"Last year there was a lot of uncertainty around tariffs, but ultimately markets, especially equity markets, performed very well. Whether the momentum will remain this year, we have to regularly assess the environment," Chief Financial Officer Masaki Nagano told journalists.

Norinchukin recorded a net profit of 22 billion yen ($138.32 million) in the fourth quarter of its financial year ended March 31, compared with a net loss of 393 billion yen over the same period a year earlier.

"Given uncertainty about the future, we recognise that we have no choice but to err on the side of caution in our estimates," Nagano said.

Unlike most banks, Norinchukin generates returns from securities investments rather than lending. It is the primary financial institution for Japan's farm, forestry and fishery cooperatives.

REBUILDING AFTER BOND ROUT

Norinchukin was hit hard when rising interest rates from 2022 slashed the value of its enormous holdings of government bonds.

The bank booked a net loss of 1.81 trillion yen in the year to March 2025 as it sold these off. Thereafter, it has gradually raised investments in other assets, such as equities, real estate, private equity and infrastructure.

Norinchukin's investment portfolio grew to 45.6 trillion yen at the end of March from 40.3 trillion yen a year earlier.

At the end of March 2026, the bank still had 1.24 trillion yen of unrealised losses on its bond holdings, but these were partially offset by unrealised gains of 1.02 trillion yen in stocks, credit and other holdings.

Amid concerns over the viability of private credit funds in the United States, which have faced a wave of redemption requests from investors, Norinchukin has invested around 300 billion yen in private credit, CFO Nagano said.

This equates to roughly 1.3% of its total credit holdings of 22.2 trillion yen.

($1 = 159.0500 yen)

 (Reporting by Anton Bridge; Editing by Himani Sarkar, Mrigank Dhaniwala and Louise Heavens)

 ((Anton.Bridge@thomsonreuters.com))