Japan Securities Finance Co., Ltd. · TSE:8511
Japan Securities Finance — 1H FY2010 Earnings Presentation
35 slides from Japan Securities Finance's earnings presentation, March 2010
Slide 1: Financial Presentation for 1st Half, FY2010
Financial Presentation for 1st Half, FY2010 Japan Securities Finance Co.,Ltd This document is the English translation for non-Japanese investors convenience. Although Japan Securities Finance intend to faithfully translate the Japanese documents into English, the accuracy and correctness of translat
Slide 2: Financial Summary
a Financial Summary
Slide 3: Financial Summary for 1st Half, FY2010
Financial Summary for 1st Half, FY2010 ¥ mil Parent Consolidated FY2009 FY2010 FY2009 FY2010 Change Change 1H 1H 1H 1H Operating ▲2,677 ▲3,845 11,904 9,227 (▲22.5%) 15,749 11,904 (▲24.4%) Revenues EX Premium ▲972 ▲2,140 Charges 8,482 7,509 12,327 10,186 (▲11.5%) (▲17.4%) Operating Expenses 6,003 4,0
Slide 4: Operating Revenues by Each Business
Operating Revenues by Each Business \ mil Sep-09 Sep-10 11,837 9,183 【Margin Loan】 Securities Finance Bussiness 【Margin Loan】 Margin Loan Business 7,426 4,517 (47.1%) (37.9%) ・Although ・Although Interest Interest on on loans loans increased, increased, Fees Fees on on Lending Lending Interest on Loa
Slide 5: Financial Highlights for 1st Half, FY2010
Financial Highlights for 1st Half, FY2010 1 Margin Margin Loan Loan Balance Balance for for 1 st Half, 1st Half, FY2010 FY2010 \ mil Avg. Margin Avg. Stock Loan Rate Policy Rate Sep-09 Sep-10 Change Loan Loan （as of sep） （as of sep） Margin Loan Business 7,426 4,517 -39.2% \ bn \ bn Interest on Loans
Slide 6: Financial Highlights for 1st Half, FY2010
Financial Highlights for 1st Half, FY2010 2 Booked Booked Profit Profit in in Equity-Method Equity-Method Booked Profit in Equity-Method of ¥20mil due to earning recovery in JBIS Holdings. \ mil FY2009 FY2010 change 1H 1H Non-Operating Revenues 153 149 -3 Gain in Equity-Method － 20 20 Non-Operating
Slide 7: Financial Results of Group Companies
Financial Results of Group Companies \ mil FY2010, 1H Results Shareholding Ratio Operating Recurring Net Revenues* Income Income Consolidated 11,904 2,868 2,655 JSF - 9,227 2,179 1,395 JSF Trust Bank 100% 2,227 574 1,256 Nihon Building 100% 665 272 165 Equity-method - Gain in Equity-Method 20 * Figu
Slide 8: Financial Results for JSF Trust Bank
Financial Results for JSF Trust Bank ¥mil FY2009 FY2010 change 1H 1H Recurring Revenues 3,384 2,227 ▲1,156 Trust charges 114 150 35 Recurring Income 801 574 ▲227 Extraordinary Profit ― 682 682 Net Income 801 1,256 454 Equity Ratio 17.77％ 23.01％ Financial Financial Highlights Highlights for for 11sts
Slide 9: Main Assets of JSF Trust Bank
Main Assets of JSF Trust Bank ● Securities Holdings ● Ratio of Securities(as of Sep-10) \mil 2% JGB less Sep-09 Mar-10 Sep-10 Notes than 1Y JGB 802,388 897,766 527,945 less than 1Y 706,880 847,870 457,934 JGB over 1Y over 1Y 95,507 49,895 70,010 31% Short-term Bond 0 0 0 Municipal Bond 70,479 105,02
Slide 10: Estimated Figures for FY2010
Estimated Figures for FY2010 Parent Consolidated 1st Half FY2010 FY2010 1st Half FY2010 FY2010 estimated 1st Half estimated estimated estimated 1st Half estimated estimated difference difference difference difference (announced Result (announced on (announced on (announced Result (announced on (anno
Slide 11: Precondition Balance of Margin Loans
Precondition Balance of Margin Loans 1H, FY2010 Results FY2010 Precondition Excess of Excess of Margin Loan Excess Margin Loan Excess of ¥202bn of Stock Loan ¥160bn Stock Loan ¥81bn ¥80bn Matching Matching ¥130bn ¥130bn Margin Loan Stock Loan Margin Loan Stock Loan ¥332bn ¥211bn ¥290bn ¥210bn Oct-10
Slide 12: Consolidated Estimated Figures
Consolidated Estimated Figures \ mil FY2010, 1H Results FY2010 Estimated Figures Shareholding Ratio Operating Recurring Net Operating Recurring Net Income Income Income Income Income Income Consolidated 2,724 2,868 2,655 3,100 3,500 3,300 JSF － 1,889 2,179 1,395 1,900 2,400 1,500 JSF Trust Bank 100%
Slide 13: Management Matters
Management Matters
Slide 14: Outstanding Balance of Standardized Margin Transactions
Outstanding Balance of Standardized Margin Transactions (TSE+JDQ) \ tri \ 1.8 15,000 Standardized Margin Buying Transactions (left) 1.6 Standardized Margin Selling Transactions (left) Mar-09 Nikkei225(right) 12,500 1.4 \684bn 1.2 10,000 1.0 7,500 0.8 Aug-10 0.6 \297bn 5,000 0.4 2,500 0.2 0.0 - Jan-0
Slide 15: 2nd Mid-term Management Plan
2nd Mid-term Management Plan ～Strategies of 2nd MMP～ FY2009 FY2010 FY2011 【Business Strategies】 Margin Transaction Support Division Strengthen Competiveness of ◆Increase the number of Loanable Issues ETFs for Loans for Margin Transactions Margin Loan Business ◆ Loans for Negotiable Margin Transactio
Slide 16: Increase the number of Loanable Issues
Increase the number of Loanable Issues Increase the number of Loanable Issues to improve convenience and to strengthen competiveness of Margin Loan Business. ☆ If Increases the number of Loanable Issues, Improve convenience ・・・Issues eligible for short sale increase, then expect increase of margin t
Slide 17: Reinforcing Management Foundation
Reinforcing Management Foundation Group Risk Management system ・Improvement of the efficiency of risk management at JSF Trust Bank ・Strengthening governance by JSF The business continuity system in a time of disaster ・Launch of the Backup system and office to ensure continuity in a time of disaste
Slide 18: Business Continuity Plan at JSF
Business Continuity Plan at JSF JSF develops and continually improves business continuity plan to maintain the functions such as Margin Loan Business, which constitutes part of securities market infrastructure. The establishment of the basic policy in business continuity (Disclosed in September 20
Slide 19: Present Measures of JSF Group Company
Present Measures of JSF Group Company JSF Trust Bank 1.Expansion of Trust Business ・Business promotion to foreign exchange brokers for Foreign Exchange Margin Trust ・Boost Securities Trust 2.Securities Investment Policy in Banking Business ・Investment in riskless assets such as JGBs or government gu
Slide 20: End of Margin Loan Business for JASDAQ market
End of Margin Loan Business for JASDAQ market Apr 2004 Start margin loan business for JASDAQ market Apr 2010 Management integration of OSE and JASDAQ Oct 12 2010 Market integration of Hercules market and JASDAQ market End of Margin Loan Business for JASDAQ market as of Oct.8 2010 Share of Standardiz
Slide 21: Dividend Policy
Dividend Policy Dividend Policy Basically, Basically, Dividend Dividend Payout Payout Ratio Ratio of of about about 40% 40% on on Parent Parent Financial Financial Results, Results, and and considering considering Consolidated Consolidated DPR DPR or or Dividend Dividend on on Equity Equity (DOE
Slide 22: Appendix
a Appendix
Slide 23: Maintenance of Cash Funding Sources
Maintenance of Cash Funding Sources Strengthen cash funding ability by maintaining cash funding sources, to supply low rate money stably to securities market and to enhance company’s financial soundness. To fund fluctuating money with low rate, it’s important for the company to maintain solid amou
Slide 24: Operating Revenues by Each Business
Operating Revenues by Each Business \ mil Mar-06 Mar-07 Mar-08 Mar-09 Sep-9 ※ Mar-10 ※ Sep-10 Securities Finance Bussiness 29,075 34,917 38,619 34,427 11,837 20,817 9,183 Margin Loan Business 22,993 23,186 23,156 19,638 7,426 12,954 4,517 (61.8%) (53.3%) (45.8%) (44.3%) (47.1%) (46.5%) (37.9%) Inter
Slide 25: Avg. & Outstanding Loan Balance
Avg. & Outstanding Loan Balance \ mil FY2009 FY2010 FY2005 FY2006 FY2007 FY2008 FY2009 Interim Interim avg. 1,637,698 1,444,347 917,219 336,324 317,156 324,205 332,944 Margin Loans term-end 2,328,082 1,634,700 508,587 244,306 384,728 328,755 277,758 Bond Financing & General avg. 46,436 79,425 76,941
Slide 26: Features of Balance Sheet
Features of Balance Sheet Features of Assets Features of Liabilities (1) Fluctuation of Loan Balance (1) Fluctuation of money funding amount Loan balance moves everyday because margin loan is Need to response flexibly to fluctuating cash demands, over-night loan because of the fluctuation of margin
Slide 27: Margin Buying Transactions & JSF Margin Loans
Margin Buying Transactions & JSF Margin Loans \ tri 10 60% Margin Buying Balance 9 Margin Loan Balance Ratio 50% 8 7 40% 6 5 30% 4 20% 3 2 10% 1 0 0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Japan Securities Finance Co.,Ltd 27
Slide 28: Margin Selling Transactions & JSF Stock Loans
Margin Selling Transactions & JSF Stock Loans ￥tri 2.0 100% 1.8 Margin Selling Balance 90% Stock Loan Balance Ratio 1.6 80% 1.4 70% 1.2 60% 1.0 50% 0.8 40% 0.6 30% 0.4 20% 0.2 10% 0.0 0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Japan Securities Finance Co.,Ltd 28
Slide 29: Securities Account
Securities Account Sep-10 notes Sep-10 Assets Liabilities \mil \mil Collateral Money of Securities Loans 699,626 947,377 Lent Margin Loans 277,758 margin loan Margin Loans 224,453 Collateral Money of Securities 1,344,908 Borrowed Excess of Stock Loan 113,493 stock loan Securities Account Securities
Slide 30: JGB Balance
JGB Balance \ bn JSF \ mil 2,000 1.5 444 629 JSF Sep-09 Mar-10 Sep-10 1,500 JGB Balance 1,490,320 2,085,612 2,156,566 272 1,528 1.0 less than 1Y 1,218,803 1,641,497 1,527,707 1,000 1,641 (.90) over 1Y 271,517 444,115 628,859 1,219 (.77) 0.5 (15Y floating JGB) 192,516 193,314 194,014 500 (.66) Net un
Slide 31: Margin Loan Rates
Margin Loan Rates Margin Loan Stock Loan BOJ Policy Interest Rate Jul 2006 Uncollateralized O/N Call Rate:0.25％ Securities Company Securities Company Feb 2007 Uncollateralized O/N Call Rate:0.50％ JSF Loan Rate Lending Oct 2008 Uncollateralized O/N Call Rate:0.30％（▲0.20%） 0.97% Fee 0.40% Dec
Slide 32: Loan Rate of Loans for Margin Transactions
Loan Rate of Loans for Margin Transactions 10.0% 8 .7 5 % L o a n R a te 9.0% In te re s t R a te o n C o lla te ra l M o n e y o f S to c k L o a n 8.0% L e n d in g F e e P ro fit M a rg in 7.0% 6.0% 5 .0 0 % 5.0% Sep 93 4.0% 3.75% 3.0% J an 0 9 2.0% May 0 2 1.37% 1.0% 0.0% 88 89 90 91 92 93 94 95
Slide 33: Share Buyback Program
Share Buyback Program total shares start end purchased amount cancellation shares issued shs \ mil shs shs FY2008 2008/4/1 2008/4/18 4,312,800 2,999 99,704,000 2008/5/15 2008/6/11 978,900 999 99,704,000 2008/6/27 2008/7/25 1,000,000 881 99,704,000 2008/9/24 6,004,000 93,700,000 6,291,700 4,881 Numbe
Slide 34: Securities-related Business by JSF Group Companies
Securities-related Business by JSF Group Companies TSE TSE Securities Finance Business Sapporo JapanSecurities SecuritiesFinance Finance Sapporo Japan Loansfor Loans forMargin Margin Transactions Fukuoka Transactions Fukuoka Loansfor Loans fornegotiable negotiablemargin margin Designated as transact
Slide 35: Notice
Notice This document includes statements for business forecast. These statements don’t guarantee company’s future achievement and that involve risk or uncertain factors. Company’s future achievement may be changed drastically up to stock market or financial conditions. Japan Securities Finance Co.,L
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