Fukuoka Financial Group, Inc. · TSE:8354
Fukuoka Financial — Investor Presentation (November 2024)
34 slides from Fukuoka Financial's investor presentation, Nov 27, 2024
Slide 1: Investor Meeting
Investor Meeting November 27, 2024
Slide 2: Contents
Contents Part I: Management Strategy Part II: FY2024 Earnings Projections Overview of FY2024 Interim Financial Results P4 Summary of Profit & Loss P22 FY2024 Earnings Projections P5-6 Top Line (Consolidated Core Business Profit) P23 Progress of the 7th Medium-Term Management Plan P7 Bott
Slide 3: Part I: Management Strategy
Part I: Management Strategy
Slide 4: Overview of FY2024 Interim Financial Results
Investor Meeting Overview of FY2024 Interim Financial Results [Summary of FY2024 interim financial results] Financial highlights (FFG consolidated) FFG consolidated 2024/1H 2023/1H YoY chg. (excluding FCB) Core gross business profit 1,371 +131 (+92) 1,240 Consolidated core business profit increase
Slide 5: FY2024 Earnings Projections
Investor Meeting FY2024 Earnings Projections [Summary of earnings projections for FY2024] Increase/decrease factors in earnings projections (FFG consolidated) [Compared to the projection of May 2024] [Underlying interest rate scenario] FFG consolidated FY2024 revised FY2023 projection YoY chg. (excl
Slide 6: FY2024 Earnings Projections (increase/decrease factors in consolidated core business profit)
Investor Meeting FY2024 Earnings Projections (increase/decrease factors in consolidated core business profit) Core business will grow significantly due to buildup in the sales divisions, including balance of loans and service revenue Although the yen interest rate is a leading factor in the cost
Slide 7: Progress of the 7th Medium-Term Management Plan
Investor Meeting Progress of the 7th Medium-Term Management Plan Expect to achieve all of the target management indicators in the 7th Medium-Term Management Plan (ROE, net income, balance of loans to SMEs, etc.) [7th MTMP key measures] [7th MTMP target management indicators] (%) Key measure Main i
Slide 8: Capital Policy and Shareholder Returns
Investor Meeting Capital Policy and Shareholder Returns Our basic policy is to manage capital in a way that balances growth investments with shareholder returns based on the premise of maintaining soundness The projected full-year dividend for FY2024 has been revised to ¥135 (+¥5) based on the u
Slide 9: Toward the Next Medium-Term Management Plan_Business Environment Surrounding FFG
Investor Meeting Toward the Next Medium-Term Management Plan_Business Environment Surrounding FFG Consider growth strategies for the next medium-term management plan, taking account of the changes in society, customers, and competition surrounding FFG Technological innovation, changes in Into a wo
Slide 10: Toward the Next Medium-Term Management Plan_Key Points for Growth
Investor Meeting Toward the Next Medium-Term Management Plan_Key Points for Growth Key points for growth during the next medium-term management plan III – Achieve concrete results for the New areas Making Minna Bank profitable initiatives in the 7th Medium- I. Transformation of the existing Term Man
Slide 11: I. Transformation of the Existing Business Model
Investor Meeting I. Transformation of the Existing Business Model Maintain and expand the customer base by differentiating FFG from competitors, leveraging the effects of the “transformation of the existing business model” undertaken since the 7th Medium-Term Management Plan Maintenance/expansion
Slide 12: I. Transformation of the Existing Business Model_Benefitting from Interest Rates
Investor Meeting I. Transformation of the Existing Business Model_Benefitting from Interest Rates The impact of yen interest rates at the current interest rate level will remain flat in FY2024, but will subsequently increase to about ¥17 billion due to loan portfolio restructuring Currently resp
Slide 13: Asset Management Business/Semiconductor-Related Business
Investor Meeting I. Transformation of the Existing Business Model_Asset Management Business/ Semiconductor-Related Business Aiming for sustainable earnings improvement by seizing business opportunities such as “from savings to investment” and Silicon Island Kyushu Asset management business Semicon
Slide 14: II. Strengthening the Investment Banking Business
Investor Meeting II. Strengthening the Investment Banking Business Improve ROE by strengthening structured finance and equity investment Return acquired business resources to Kyushu, starting with FFG’s relationships with second-tier companies and SMEs (contribute to promotion of GX/transition,
Slide 15: III. Minna Bank (1)
Investor Meeting III. Minna Bank (1) First-half key figures and business profit were generally in line with projected figures, and the full-year outlook is expected to be -¥9.5 billion, in line with the initial projection Currently working on the key issues that were set at the beginning of the
Slide 16: III. Minna Bank (2)
Investor Meeting III. Minna Bank (2) As alliance partnerships steadily increase in number and the financial business needs of business owners grow, discussions are underway for alliances beyond just BaaS API collaborations All FFG companies will continue to work toward making Minna Bank profitab
Slide 17: Toward Sustainable Profit Growth/ROE Improvement
Investor Meeting Toward Sustainable Profit Growth/ROE Improvement [Initiatives aimed at ROE of 8% in FY2027] FY2024 FY27 Future Company-wide RORA* Current: Approx. 0.7% ➡ 0.8%+ (Impact on bottom line) *Consolidated net income (after tax)/Risk assets * 100 Consolidated bottom line III Making Minna Ba
Slide 18: FFG's Raison d'Être and Long-Term Strategic Direction
Investor Meeting FFG’s Raison d’Être and Long-Term Strategic Direction – Currently formulating a series of growth stories that connect FFG’s philosophy, long- FFG’s raison d’être Bringing true wealth to the community term strategy, and next medium-term management plan (starting in April 2025) by thi
Slide 19: [Reference] Utilization of Digital Technologies
Investor Meeting [Reference] Transformation of the Existing Business Model_Utilization of Digital Technologies Released banking app for retail customers, portal site for corporate customers, and sales force automation (SFA) system with the aim of improving customer convenience and FFG’s sales prod
Slide 20: [Reference] Sales Reforms/Business Reforms
Investor Meeting [Reference] Transformation of the Existing Business Model_Sales Reforms/Business Reforms Strengthen ability to provide solutions through the synergistic effects of various sales and business reform measures, starting with the use of the digital tools described on the previous slid
Slide 21: Part II: FY2024 Earnings Projections
Part II: FY2024 Earnings Projections (Reference) For detailed financial results for the first half of FY2024, refer to the Financial Highlights First Half of FY2024 disclosed on the FFG website. https://www.fukuoka-fg.com/en/investorimg/pdf/20241120_ir.pdf
Slide 22: FY2024 Earnings Projections_Summary of Profit & Loss
Investor Meeting FY2024 Earnings Projections_Summary of Profit & Loss Profit & loss (FFG consolidated) FY2024 revised Banks total Bank of Fukuoka Kumamoto Bank (non- Juhachi-Shinwa Bank Fukuoka Chuo Bank projection (non-consolidated) consolidated) (non-consolidated) (non-consolidated) FY2024 revised
Slide 23: Top Line (Consolidated Core Business Profit)
Investor Meeting Top Line (Consolidated Core Business Profit) Core business profit (FFG consolidated) (Unit: ¥ bil.) Breakdown of year-on-year changes (FFG consolidated) (Unit: ¥ bil.) YoY chg. +¥9.1 billion [Non-interest income] excluding gains (losses) on bonds, [Expenses] excluding non-recurring
Slide 24: Bottom Line (Consolidated Net Income)
Investor Meeting Bottom Line (Consolidated Net Income) Consolidated net income (Unit: ¥ bil.) Breakdown of year-on-year changes (Unit: ¥ bil.) YoY chg. +¥10.8 billion +¥10.8 billion +4.2 72.0 -16.4 72.0 +17.7 Consolidated net income61.2 61.2 54.1 21.5 +17.7 Gain on -21.5 negative goodwill +9.1 31.2
Slide 25: Net Interest Income (banks total)
Investor Meeting Net Interest Income (banks total) Net interest income (banks total) (Unit: ¥ bil.) Domestic interest on deposits and loans (banks total) (Unit: ¥ bil.) Domestic deposits and loans: Excluding loans to Government and Bank of Fukuoka loans to FFG Domestic deposits and loans: Excluding
Slide 26: Non-Interest Income (banks total)
Investor Meeting Non-Interest Income (banks total) Non-interest income (banks total) *Excluding gains (losses) on bonds (Unit: ¥ bil.) Asset management product sales (Group total) (Unit: ¥ bil.) Corporate-related fees: Loan fees (syndicated loans, structured finance, etc.), M&A fees, etc. * FFG Secu
Slide 27: Consolidated Expenses
Investor Meeting Consolidated Expenses Overhead expenses (FFG consolidated) (Unit: ¥ bil.) Breakdown of year-on-year changes (Unit: ¥ bil.) [Excluding non-recurring expenses] FY2023 YoY chg. +¥9.7 billion FY2024 +¥9.7 billion Subsidiaries, etc. Banks total +8.3 +1.4 159.9 159.9 16 +1.6 +5.0 -0.2 150
Slide 28: Consolidated Credit Cost / NPLs Disclosed under the FRL, Reserve
Investor Meeting Consolidated Credit Cost / NPLs Disclosed under the FRL, Reserve Balance and ratio of NPLs disclosed under the FRL (FFG Credit cost (-) (FFG consolidated) (Unit: ¥ bil.) (Unit: ¥ bil.) consolidated) Disclosed NPL ratio (Excluding loans to 2.15% 2.02% 1.97% 1.93% Government, etc.) Di
Slide 29: Average Balance of Loans
Investor Meeting Average Balance of Loans Average balance by segment (Unit: ¥ bil.) [Reference] Average balance by bank (Unit: ¥ bil.) Excluding loans to Government (public) and Bank of Fukuoka loans to FFG (large-sized enterprises) Figures in parentheses are annual rates Excluding loans to Governme
Slide 30: Deposits, etc. (including CDs)
Investor Meeting Deposits, etc. (including CDs) Average balance by segment (Unit: ¥ bil.) [Reference] Average balance by bank (Unit: ¥ bil.) Figures in parentheses are annual rates +6.4% +3.6% +3.1% Annual +1.4% rate 21,364 21,668 21,363.5 21,668.0 20,725 211.6 20,724.6 307.6 Total 19,999 283.3 621.
Slide 31: Breakdown of Loans and Deposits & CDs by Type
Investor Meeting Breakdown of Loans and Deposits & CDs by Type [Domestic] Balance of loans (portfolio by short-term/long-term/base rate) [Domestic] Balance of deposits, etc. (portfolio by floating/fixed) Breakdown (total = 100%) Breakdown (total = 100%) Sep. 2022 Mar. 2023 Sep. 2023 Mar. 2024 Sep. 2
Slide 32: Securities
Investor Meeting Securities Balance at end of period, unrealized gains (losses) (FFG onsolidated) (Unit: ¥ bil.) Bond duration (banks total) (Unit: Years) After considering hedges; including marketable securities held to maturity Unrealized ●Domestic bonds 95.4 52.3 gains (losses) 6.94 7.8 -3.1 (aft
Slide 33: Minna Bank
Investor Meeting Minna Bank Minna Bank Summary of profit & loss (Minna Bank*) (Unit: ¥ bil.) Number of downloads and accounts (Unit: Thousands) Balance of deposits (excluding special deposits) (Unit: ¥ bil.) 2024/1H results +¥17.3 billion (Unit: ¥ bil.) 2024/1H 2023/1H YoY chg. 3,310 Number of 2,800
Slide 34: Fukuoka Financial Group
Fukuoka Financial Group This document has been prepared solely for the purpose of providing information and does not constitute a solicitation for the purchase or sale of any specific securities. All or part of the matters contained in this document may be amended or changed without notice. Re
Fukuoka Financial Group — Investor Presentation (November 2024) on 6ix