Japan’s Banks Enter a New Era of Opportunity

Japan's banks are entering a multi-decade capex-driven growth cycle that could push megabank ROEs from ~10-11% toward ~15%.

• Loan market expansion: Japan's domestic loan market is forecast to grow from ~588 trillion yen (~$3.7T) in FY ending March 2026 to ~712 trillion yen (~$4.5T) by March 2031, with early growth near 5% annually settling to 3-4%.
• Capital markets growth too: Debt capital markets are seen growing from ~52 trillion yen (~$331B) to ~63 trillion yen (~$401B) by March 2031; M&A market from ~23 trillion yen (~$146B) to ~32 trillion yen (~$204B).

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