Norinchukin Bank, Japan's central financial institution for agricultural, forestry, and fisheries cooperatives, is implementing a significant strategic overhaul following a record consolidated net loss of 1.8 trillion yen (approximately $12.6 billion) for the fiscal year ending March 2025. This substantial financial setback is largely attributed to the sharp devaluation of its extensive holdings in U.S. and European government bonds, a direct consequence of rising global interest rates.
In response to these financial challenges, President Kazuto Oku will resign effective March 31, 2025, and will be succeeded by Taro Kitabayashi, currently a Managing Executive Officer, who is set to assume the presidency on April 1, 2025. This leadership transition is occurring as the bank recalibrates its investment strategy, planning to diversify its portfolio by reducing exposure to foreign government bonds and increasing its allocation to Japanese government bonds (JGBs). To bolster its financial standing, Norinchukin is also undertaking capital enhancement measures, including issuing lower-dividend rate stocks to member cooperatives and redeeming perpetual subordinated loans, which have already contributed to an improved Common Equity Tier 1 (CET1) ratio of 19.2%. The bank forecasts a return to profitability in the fiscal year ending March 2026, projecting a net profit between 30 billion and 70 billion yen, supported by its revised investment strategy and anticipated stabilization of global interest rates.