Chugin Financial Group,inc. · TSE:5832
Chugin Financial Group,inc — FY2023 Earnings Presentation
58 slides from Chugin Financial Group,inc's earnings presentation, Jun 3, 2024
Slide 1: FY2023 Earnings Results Briefing
FY2023 Earnings Results Briefing June 3, 2024 Our challenges build our future. Chugin Financial Group, Inc.
Slide 2: Table of Contents
Our challenges build our future. Table of Contents Chugin Financial Group, Inc. I. Earnings Results for FY2023 and Forecasts II. Management Plan (toward enhancement for FY2024 of corporate value) • Summary • Awareness of the Current Situation and 11 Consolidated for the FG 4 Enhancement of Corporate
Slide 3: Section I Earnings Results for FY2023 and Forecasts for FY2024
Section I Earnings Results for FY2023 and Forecasts for FY2024 3
Slide 4: Earnings Results - Summary (Consolidated for the FG)
Our challenges build our future. Earnings Results - Summary (Consolidated for the FC) Chugin Financial Group, Inc. Consolidatedfinancial Consolidated financialresults results * Forecast published on May 12, 2023 for forthe theChugin ChuginFinancial FinancialGroup Group FY2020 FY2020 FY2021 FY2021 FY
Slide 5: Summary - Status of the Group Companies (Non-consolidated for the Bank)
Summary －Status of the Group Companies Our challenges build our future. Chugin Financial Group, Inc. (Non-consolidated for the Bank)－ Non-consolidated Non-consolidated for for the Chugoku The Chugoku Bank Bank FY2023 FY2023 YoY (billion yen) yen) YoY vs. Initial (billion YoY vs. Initial plan* plan*
Slide 6: Summary - Status of the Group Companies (Excluding the Bank)
Summary －Status of the Group Companies Our challenges build our future. Chugin Financial Group, Inc. (Excluding the Bank)－ Group companies (billion yen) Ordinary profit YoY Net income YoY * Lease 0.82 0.35 0.53 0.19 * Card 0.28 -0.16 0.18 -0.13 Human Innovations (Employment placement) 0.04 0.02 0.03
Slide 7: Summary - Shareholder Returns
Our challenges build our future. Summary －Shareholder Returns－ Chugin Financial Group, Inc. [FY2024] Revise shareholder return policy and significantly increase dividends • Aiming for a dividend payout ratio of around 40%, increase dividends through profit growth (FY2023: +17 yen, FY2024: +6 yen pla
Slide 8: Summary - Cross-shareholdings
Our challenges build our future. Summary －Cross-shareholdings－ Chugin Financial Group, Inc. We will limit cross-holdings to cases where it is determined necessary for the sustainable growth and Basic Policy enhancement of the corporate value of the Group and the issuers, and reduce them through dial
Slide 9: Earnings Forecasts
Our challenges build our future. Earnings Forecasts Chugin Financial Group, Inc. Consolidated Consolidated forfor thethe Chugin Chugin FY2023 FY2024 Earnings Forecasts Financial Group FY2023 FY2024 Financial Group Consolidated net income (billionyen) (billion yen) Results Results Forecasts Forecasts
Slide 10: Section II Management Plan (toward enhancement of corporate value)
Section II Management Plan (toward enhancement of corporate value) 10
Slide 11: Awareness of the Current Situation and Enhancement of Corporate Value through the Medium-term Management Plan
Awareness of the Current Situation and Enhancement of Corporate Value through the Medium-term Management Plan Trends and targets for ROE/PBR ROE (%) ROE (%) PBR (times) PBR (times) Introduction of Lifting of negative negative interest interest rate rate Mar. 2024 Jan. 2016 6.4 Current Medium-term Th
Slide 12: Overview of the Medium-term Management Plan: Three Growth Strategies
Overview of the Medium-term Management Plan: Three Growth Strategies 1 “Deepening” of regional revitalization SDGs Corresponding materiality We will contribute to the “sustainable development of communities” (priority issues) by drawing out its appeal and potential. Revitalization of local economy a
Slide 13: Overview of the Medium-term Management Plan: KPIs
Overview of the Medium-term Management Plan: KPIs (On a consolidated bases for the FG, unless indicated otherwise) FinancialKPI Financial KPI FY2022 result FY2022 result FY2023 result FY2023 result FY2026 target FY2026 target Profit attributable to owners of parent 20.4 20.4billion yen billion yen 2
Slide 14: Evolution of the Medium-term Management Plan
Evolution of the Medium-term Management Plan In the first year of the Medium-term Management Plan (FY2023), steady progress was made in terms of both business performance and measures. From FY2024, we will formulate the Chugin DX Strategy, change the Capital Management policy, and implement the
Slide 15: Section III Initiatives toward Improvement of ROE
Section III Initiatives toward Improvement of ROE 15
Slide 16: Initiatives toward Improvement of ROE (logic tree)
Initiatives toward Improvement of ROE (logic tree) Measures to Improve ROE (Net Income/Capital Adequacy) An increase in net interest income through the accumulation of high-quality assets = An increase in interest on loans and discounts DX Strategy Boosting net sales on account of interest rate
Slide 17: Chugin DX Strategy - Vision and Scenario
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy －Vision and Scenario ー DX Strategy Capital Management Enhancement of FG Functions Our DX vision is to “co-create” a prosperous future with our customers. As a scenario for realizing this vision, we will first become a D
Slide 18: Chugin DX Strategy - Feature (1)
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy - Feature (1) - DX Strategy Capital Management Enhancement of FG Functions Starting from the digitalization that we have been laying the foundation for under the Future Co-creation Plan I/II, we will realize our big vis
Slide 19: Chugin DX Strategy - Feature (2): Strong partnerships
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy - Feature (2): Strong partnerships - DX Strategy Capital Management Enhancement of FG Functions By building partnerships with leading companies in other industries that possess cutting- edge technologies and know-how, w
Slide 20: Chugin DX Strategy - Operational Process Reforms (Phase 1)
Chugin DX Strategy Evolution of Medium-term Management Plan (Improvement of ROE) Enhancement Capital - Operational Process Reforms (Phase 1) - DX Strategy of FG Management Functions As we have started operational process reforms on an End-to-End (across the Group) basis since FY2023, we will concent
Slide 21: Chugin DX Strategy - Bold operational shift
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy - Bold operational shift - DX Strategy Capital Management Enhancement of FG Functions Through thorough streamlining of operations, we will shift our operation focus from administration to sales and growth and strategic
Slide 22: Supporting customers' DX (Phase 2)
Chugin DX Strategy Evolution of Medium-term Management Plan (Improvement of ROE) - Supporting customers’ DX (Phase 2) - Enhancement Capital DX Strategy of FG Management Functions We support DX in local communities by developing businesses that are close to our customers’ daily lives through open inn
Slide 23: "Co-creation" of a future with our customers (Phase 3)
Chugin DX Strategy Evolution of Medium-term Management Plan (Improvement of ROE) - “Co-creation” of a future with our customers (Phase 3) - Enhancement Capital DX Strategy of FG Management Functions By expanding into non-financial businesses and building a co-creation platform through cross-industry
Slide 24: Development of new businesses: Regional BPO services (Phase 3)
Evolution of Medium-term Management Chugin DX Strategy Plan (Improvement of ROE) Capital Enhancement DX Strategy - Development of new businesses: Regional BPO services (Phase 3) - of FG Management Functions We will take on back-office operations such as accounting of our local customers to help crea
Slide 25: Chugin DX Strategy - DX revenue impact
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy - DX revenue impact - DX Strategy Capital Management Enhancement of FG Functions Setting high revenue targets (moonshot targets), we foster an organizational culture of continuously taking on challenges. Revenue impact
Slide 26: Capital Management - Management policy
Evolution of Medium-term Management Plan (Improvement of ROE) Capital Management - Management policy - DX Strategy Capital Management Enhancement of FG Functions Change in the capital control indicator <Previously> <After change> Consolidated for the FG Consolidated for the FG Total capital adequacy
Slide 27: Capital Management - Capital allocation
Evolution of Medium-term Management Plan (Improvement of ROE) Capital Management - Capital allocation - DX Strategy Capital Management Enhancement of FG Functions Capital allocation [Consolidated for the FG] Ratio of common equity Tier 1 (excluding the valuation difference on available-for-sale secu
Slide 28: Enhancement of FG Functions
Evolution of Medium-term Management Plan (Improvement of ROE) Enhancement of FG Functions DX Strategy Capital Management Enhancement of FG Functions For flexible and steady implementation of strategies and measures, enhancement of FG functions is planned. Previously – Before becoming FG– BK (until O
Slide 29: Conclusion
Conclusion Chugin DX Strategy Capital Management • Shifting operations to sales and growth • Consistent risk-taking, not affected by Evolution of the and strategic areas through operational process reform (Operation volume reduction: 40%≒600 × market fluctuations ＝ Medium-term Management people) Pla
Slide 30: Introduction of attending Outside Director
<Reference> Introduction of attending Outside Director Skills matrix Kenichi Fukuhara 企業経営/サス Corporate management/ Management 経営戦略 コンプライアンス/ Compliance/ 人財戦略 HR strategy 営業戦略 Sales strategy システム/DX System/DX Finance and 財務会計 法務 Legal affairs テナビリティ Sustainability strategy リスク管理 Risk management acco
Slide 31: Section IV Appendix
Section IV Appendix 31
Slide 32: Appendix 1 Initiatives toward Improvement of ROE
Appendix 1 Initiatives toward Improvement of ROE 32
Slide 33: Boosting Net Sales - An Increase in Net Interest Income
Boosting Net Sales －An Increase in Net Interest Income Improvement of ROE Manageme through Accumulation of High-Quality Assets－ Net sales nt Capital Return resources Opening of the Singapore Branch and Strengthening of Accumulation of Loans Ship Finance Purpose Capturing local demand for funds (Medi
Slide 34: Boosting Net Sales - Sustainable Finance and RORA
Boosting Net Sales －An Increase in Net Interest Income Improvement of ROE Manageme through Accumulation of High-Quality Assets－ Net sales nt Capital Return resources Sustainable Finance Improvement of RORA Consulting service menu RORA on loans * Based on SP Support for realization of carbon neutrali
Slide 35: Boosting Net Sales - Expansion of Consulting Revenues of the Entire Group
Boosting Net Sales Improvement of ROE Manageme －Expansion of Consulting Revenues of the Entire Group－ Net sales nt Capital Return resources An Increase in Consulting Revenues through Collaboration within the Chugin Group People Group collaboration system Chugin Human Innovations More diverse and Cus
Slide 36: Boosting Net Sales - Expansion of Business Pillars
Improvement of ROE Boosting Net Sales －Expansion of Business Pillars－ Net sales Management resources Capital Return C Cube Consulting Chugin Energy A consulting company centered on DX and SX A local energy company that promotes decarbonization with a small group of elite professionals Local <Members
Slide 37: Boosting Net Sales - Alliance Strategy
Improvement of ROE Boosting Net Sales －Expansion of Business Pillars－ Net sales Management resources Capital Return Alliance Strategy We aim to co-create new value through active collaboration with various stakeholders, including different industry players. Basic stance Co-creation and promotion o
Slide 38: Appendix 2 Initiatives toward Improvement of PER
Appendix 2 Initiatives toward Improvement of PER 38
Slide 39: Initiatives toward Improvement of PER
Initiatives toward Improvement of PER Measures to Improve PER (Aggregate Market Value (Stock Price)/Net Income) = Implementation of corporate philosophy Initiatives that capture the community from a wide perspective (collaboration with municipal governments) Co-creation of a Startup ecosystem
Slide 40: Co-creation of a Prosperous Future - Communities and Customers
Co-creation of a Prosperous Future Improvement of PER －Communities and Customers－ Communities Customers Employees Characteri- Initiatives that capture the community from a wide perspective stics and Co-creation DX and SX issues of (collaboration with municipal governments) the of appealing communiti
Slide 41: Startup ecosystem
Co-creation of a Prosperous Future Improvement of PER －Communities and Customers－ Communities Customers Employees Startup ecosystem Okayama Innovation Okayama Tech • Support for startups aimed at creating companies Project Planter/Tech Grand Prix that represent the communities A “school” for entrepr
Slide 42: Transformation into next-generation channels through DX
Co-creation of a Prosperous Future Improvement of PER －Communities and Customers－ Communities Customers Employees Transformation into next-generation channels through DX ・Chugin App ・Chugin Business Portal 500,000 Introduction to Enhancement of functions users Enhancement of infrastructure 20,000 (l
Slide 43: Co-creation of a Prosperous Future - Employees: Human capital investments
Improvement of PER Co-creation of a Prosperous Future －Employees－ Communities Customers Employees Human capital investments • Expand human capital investments in line with our business strategy, such as secondment to external organizations for training In addition to the items on the left, <From FY2
Slide 44: Co-creation of a Prosperous Future - Employees: Diversity and Inclusion
Improvement of PER Co-creation of a Prosperous Future －Employees－ Communities Customers Employees Nijiiro (rainbow) Heart Project Diversity and Inclusion (D&I) • Establishment of the D&I NEXT 10 Promotion • Launched as a working group to utilize women’s perspectives and sensitivities Department in m
Slide 45: Co-creation of a Prosperous Future - Employees: Organizational culture
Improvement of PER Co-creation of a Prosperous Future －Employees－ Communities Customers Employees Organizational culture 2014 2015 2017 2018 2020 2021 2022 2023 D&I NEXT 10 Promotion Department Headquarters open application system Becoming a holding company, Corporate Principles and Chugin Values Me
Slide 46: Appendix 3 Major Numerical Figures
Appendix 3 Major Numerical Figures 46
Slide 47: Net Interest Income - Non-consolidated for the Bank
Our challenges build our future. Net Interest Income –Non-consolidated for the Bank– Chugin Financial Group, Inc. [Factors behind change in net interest income] [Loan yield] (%) Loan Loan yieldyield Loan yield Loan yield (yen) (yen) 1.46 ■ Yen-based: ¥54.4 billion ■ Foreign currency-based: ¥7.8 bill
Slide 48: Net Interest Income - Supplementary Information
Our challenges build our future. Net interest income <Supplementary Information> Chugin Financial Group, Inc. Impact on interest on loans and discounts Status of yen deposits and loans caused by interest rate hikes Stable BS structure supported by a wealth of very low-liquid Loan interest is expecte
Slide 49: Net Fee Income - Non-consolidated for the Bank
Our challenges build our future. Net Fee Income –Non-consolidated for the Bank – Chugin Financial Group, Inc. [Net fee income] (billion yen) +1.9 20.1 200 18.2 17.1 +0.5 Assets in 5.2 custody* 4.7 150 4.7 Investment +0.6 banking 4.9 business 4.3 3.6 100 Remittance/co 4.4 llection fees 4.4 4.8 50 +0.
Slide 50: Corporate Solution-related Revenues - Consolidated for the FG
Our challenges build our future. Corporate Solution-related Revenues –Consolidated for the FG– Chugin Financial Group, Inc. [Corporate solutions-related revenues] (unit: million yen) *1: A total of gross margin for Lease, and operating revenues from Breakdown of Group Card, Human Innovations, and C
Slide 51: Revenues Related to Assets in Custody - Consolidated for the FG
Our challenges build our future. Revenues Related to Assets in Custody –Consolidated for the FG– Chugin Financial Group, Inc. [Breakdown of revenues related to assets in custody] +1,216 8,239 (unit: million yen) (+517) (5,258) 7,330 Breakdown of Group 7,023 (4,767) companies (million yen) (4,741) Gr
Slide 52: Expenses - Non-consolidated for the Bank
Our challenges build our future. Expenses –Non-consolidated for the Bank– Chugin Financial Group, Inc. [Expenses] (billion yen) 60 +1.5 52.8 51.9 51.3 Taxes +0.9 3.3 50 2.8 3.1 Business management 0.8 1.7 fee +0.3 11.4 Other property 11.6 11.9 40 expenses * Impact of the 2.1 transformation to the FG
Slide 53: Credit Costs and Non-performing Loans - Non-consolidated for the Bank
Our challenges build our future. Credit Costs and Non-performing Loans –Non-consolidated for the Bank– Chugin Financial Group, Inc. [Credit costs] [Non-performing loans (NPL) (Loans disclosed (billion yen) under the Financial Revitalization Act)] (billion yen) Other Other credit credit costs* costs*
Slide 54: Status of Capital Adequacy - Consolidated for the FG
Our challenges build our future. Status of Capital Adequacy －Consolidated for the FG－ Chugin Financial Group, Inc. [Capital adequacy ratio (consolidated for the FG)] [Status of capital adequacy (consolidated for the FG)] (%) FY FYended Mar. FY ended Mar. FYended Mar. ended Mar. (billion yen) (billio
Slide 55: Deposits & Assets in Custody - Non-consolidated for the Bank
Our challenges build our future. Deposits & Assets in Custody –Non-consolidated for the Bank– Chugin Financial Group, Inc. [Average balance of deposits and assets in custody] +1.6% (billion yen) 9,224.9 9,074.2 (8,171.9) Total assets in (8,067.0) 8,803.4 custody (Deposits + NCD) (7,801.5) 187.1 9,00
Slide 56: Loans - Non-consolidated for the Bank
Our challenges build our future. Loans –Non-consolidated for the Bank– Chugin Financial Group, Inc. [Average loan balance] +6.5% 5,753.6 6,000 (billion (billionyen) yen) 5,400.9 5,175.7 47.1 30.7 Overseas branches 25.1 930.3 +19.7% 5,000 776.9 Loans to the 633.7 headquarters*3 415.7 451.3 429.0 Loca
Slide 57: Securities - Non-consolidated for the Bank
Our challenges build our future. Securities –Non-consolidated for the Bank– Chugin Financial Group, Inc. [Average balance of securities] [Unrealized gains/losses] End End of of Mar. Mar. End End of of Mar. Mar. (billion yen) 2023 2024 Term-end (billion yen) 2023 2024 Term-end comparison comparison (
Slide 58: Chugin Financial Group, Inc.
Our challenges build our future. Chugin Financial Group, Inc. This material contains forward-looking statements. These statements do not guarantee our future business performance and include risks and uncertainties. It should be noted that future performance may differ from the targets mentioned her
Chugin Financial Group — FY2023 Earnings Presentation on 6ix