0718 GMT - Orix's $2.32 billion sale of Orix Bank to Daiwa Securities appears to be an important step toward its ROE target of 15% through improved capital efficiency, CreditSights analysts say. The bank, which focuses on real estate investment loans, accounted for 18% of Orix's assets as of fiscal 3Q, with profit contribution of just 3% over the nine months of the FY. Its unconventional business model--devoid of branch network, ATMs, or account settlement functions--has prevented it from benefiting from Japan's rising interest rates, CreditSights' Karen Wu says. Instead, rising funding costs have outpaced asset yield growth, squeezing its NIM. Orix expects a gain of Y124 billion on the sale, equivalent to around a third of annual earnings in the FY ending March 2024 and 2025. Orix shares last up 9.8%. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

April 28, 2026 03:18 ET (07:18 GMT)

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