Nishi-nippon Financial Holdings, Inc. · TSE:7189
Nishi-nippon Financial — FY2023 Earnings Presentation
52 slides from Nishi-nippon Financial's earnings presentation, May 24, 2024
Slide 1: Financial Results for the Fiscal Year Ended March 31st, 2024
Financial Results for the Fiscal Year Ended March 31st, 2024 May 24th, 2024 Nishi-Nippon Financial Holdings, Inc.
Slide 2: Contents
Today’s Agenda Reference Materials Page Page I. Financial Results 2 Economic Environment in Kyushu/Fukuoka 35 – 38 1. Overview of Financial Results 3 2. Net Interest Income 4 Supplementary Materials on Performance 40 (Appendix) Impact of Rising Domestic Interest Rates on Earnings 5 1. Statement of I
Slide 3: I. Financial Results
I. Financial Results I. Financial Results Financial Results for the Fiscal Year Ended March 31st, 2024 P.2
Slide 4: 1. Overview of Financial Results
1. Overview of Financial Results Profit attributable to owners of parent fell 2.5 billion yen year-on-year (YoY) to 23.6 billion yen, as an increase in income from the main business including loans and fees and commissions was outweighed by the absence of the gain on negative goodwill posted in th
Slide 5: 2. Net Interest Income
2. Net Interest Income Net interest income for the fiscal year ended March 31st, 2024 shrank by 2.7 billion yen YoY to 91.0 billion yen mainly due to an increase in interest on foreign currency funding, despite increases in interest on loans and discounts and interest and dividends on securities.
Slide 6: Appendix: Impact of Rising Domestic Interest Rates on Earnings
<Appendix> Impact of Rising Domestic Interest Rates on Earnings The rise in market interest rates against the background of the change in the Bank of Japan’s monetary policy and other factors is expected to have a positive impact on our performance, mainly through the expansion of the loan-to-depo
Slide 7: 2. Net Interest Income (1) Interest on Loans and Discounts (NCB)
2. Net Interest Income (1) Interest on Loans and Discounts (NCB) Interest on loans and discounts for the fiscal year ended March 31st, 2024 increased by 2.6 billion yen YoY to 79.9 billion yen on the back of solid growth of business loans and personal loans. Interest on loans and discounts for t
Slide 8: 2. Net Interest Income (2) Interest and Dividends on Securities (NCB)
2. Net Interest Income (2) Interest and Dividends on Securities (NCB) Interest and dividends on securities for the fiscal year ended March 31st, 2024 increased by 7.5 billion yen YoY to 28.0 billion yen, mainly due to increases in interest on foreign securities and gains on investment trust cancel
Slide 9: 3. Fees and Commissions
3. Fees and Commissions Fees and commissions for the fiscal year ended March 31st, 2024 increased by 2.9 billion yen YoY to 24.0 billion yen, mainly due to increases in corporate customer-related fee income and client assets-related fee income at the bank and a securities subsidiary. Fees and co
Slide 10: 4. Expenses
4. Expenses Expenses for the fiscal year ended March 31st, 2024 rose by 2.2 billion yen YoY to 80.2 billion yen, mainly due to an increase in system-related expenses and the addition of City Ascom’s expenses after it joined the NNFH Group in the previous fiscal year. Expenses for the year ending
Slide 11: 5. Credit Cost
5. Credit Cost Credit cost for the fiscal year ended March 31st, 2024 rose by 2.7 billion yen YoY to 6.6 billion yen, close to its pre-COVID-19 pandemic levels. While outstanding loans and bills discounted grew, the ratio of credit cost and the ratio of non-performing loans remained at low levels.
Slide 12: 6. Financial Results Forecast
6. Financial Results Forecast Profit attributable to owners of parent for the year ending March 31st, 2025 is expected to grow 3.4 billion yen YoY to 27.0 billion yen, mainly due to an increase in net interest income resulting from an increase in interest on loans and discounts and a fall in inter
Slide 13: II. Management Strategies
II. Management Strategies - Initiatives to Enhance Corporate Value - II. Management Strategies Financial Results for the Fiscal Year Ended March 31st, 2024 P.12
Slide 14: 1. Local Market Environment in Kyushu/Fukuoka
1. Local Market Environment in Kyushu/Fukuoka Strong economies of Fukuoka and other areas in the Kyushu Region, the NNFH Group’s main market, where a series of large-scale urban redevelopment projects and the accumulation of industries centering on semiconductors are ongoing, lead to a number of b
Slide 15: (1) Economic Outlook in Kyushu
1. Local Market Environment in Kyushu/Fukuoka (1) Economic Outlook in Kyushu Kyushu’s economy is expected to grow at a level exceeding the national average growth for three consecutive years, driven by an increase in capital investments centered on semiconductor-related industries. ■ Kyushu’s econ
Slide 16: (2) Demographics in Fukuoka Pref./Fukuoka City
1. Local Market Environment in Kyushu/Fukuoka (2) Demographics in Fukuoka Pref./Fukuoka City Population decline in Fukuoka Prefecture, where our Head Office is located, is moderate compared to the national average on the back of the growing population in Fukuoka City. ■ Population projection for F
Slide 17: (3) Development Trend in Fukuoka City and Its Vicinity
1. Local Market Environment in Kyushu/Fukuoka (3) Development Trend in Fukuoka City and Its Vicinity In addition to large-scale redevelopment projects in the central part of Fukuoka City, development projects for housing and logistics facilities are progressing in the vicinity of Fukuoka City on t
Slide 18: (4) Update on Semiconductor-related Investments
1. Local Market Environment in Kyushu/Fukuoka (4) Update on Semiconductor-related Investments Companies around the world are proactively making capex for semiconductor-related facilities in many prefectures in Kyushu, most notably Taiwan Semiconductor Manufacturing Company Limited (TSMC) in Kumamo
Slide 19: 2. Initiatives to Enhance Corporate Value
2. Initiatives to Enhance Corporate Value While improving ROE through steady implementation of the measures under the Medium-Term Business Plan, we aim to increase PER through continuous disclosures of the status of each initiative, among other metrics, and dialogues with investors, thus enhancing
Slide 20: Appendix: PBR, ROE, and Stock Prices
《Appendix》 PBR, ROE, and Stock Prices ■ PBR ■ Consolidated ROE Shareholders’ equity basis Aiming at a level above capital cost over the 0.60 Net asset basis medium- to long-term After remaining very muted, PBR is showing an upward trend 0.49 0.50 We recognize our capital cost is currently around 6*1
Slide 21: 3. One to One Solutions (1) Corporate Customers
3. Providing Customer-Oriented “One to One Solutions” (1) Corporate Customers Provide financial and non-financial solutions tailored to each corporate customer’s needs, which are becoming increasingly diverse and sophisticated. Increasingly diverse and sophisticated issues Credit Banking cards Lea
Slide 22: (1) Corporate Customers: Fundraising Methods
3. Providing Customer-Oriented “One to One Solutions” (1) Corporate Customers Provide diverse fundraising methods that meet customers’ individual needs using structured finance, funds, and other instruments. Initiatives for structured finance Utilization of funds Offering a diverse menu of struc
Slide 23: (1) Corporate Customers: DX and HR Support
3. Providing Customer-Oriented “One to One Solutions” (1) Corporate Customers Provide a diverse range of solutions that address immediate managerial issues of many corporate customers, including “digitalization/DX” and “recruitment.” Support for digitalization/DX Human resources-related support
Slide 24: 3. One to One Solutions (2) Retail Customers
3. Providing Customer-Oriented “One to One Solutions” (2) Retail Customers Provide optimal solutions for each customer by practicing customer-oriented business operation and consulting on all assets and liabilities for a broad range of customers. Consulting on full range of assets and liabilities
Slide 25: (2) Retail Customers: NISA and Loan Products
3. Providing Customer-Oriented “One to One Solutions” (2) Retail Customers Provide optimal solutions for each customer by proposing asset building starting with NISA and loan products that correspond to the life stage of the customer. Consulting on asset building, starting with NISA, etc. Provisio
Slide 26: 4. Sales Reform (1) Strengthening the Sales System
4. Sales Reform (1) Strengthening the Sales System Strengthen the framework for Group collaboration while enhancing the HQ support system in both corporate and retail businesses, so that we can properly connect customers’ issues and needs with the Group’s diverse solution functions. Strengthen the
Slide 27: 4. Sales Reform (2) Digital Strategy
4. Sales Reform (2) Digital Strategy Continue expanding the functions of NCB App (for retail customers) and NCB Business Station (for corporate customers). With the expansion of the user base accelerating, these two digital channels are assuming greater importance as our customer contact points. T
Slide 28: 4. Sales Reform (3) Work Reform
4. Sales Reform (3) Work Reform Continue initiatives for increasing operational efficiency to enhance productivity of the entire Group. The branch system upgrade to be implemented in this fiscal year is especially designed to fundamentally reduce branch administration, transforming branch office
Slide 29: 5. Human Resources Reform (1) HR Development
5. Human Resources Reform (1) HR Development Strongly support the growth of each employee by developing strategic human resources to lead the Group’s future in consulting, DX, planning, etc., and expanding job class/business operation-based training and re- skilling training Developing strategic
Slide 30: 5. Human Resources Reform (2) Greater Job Satisfaction
5. Human Resources Reform (2) Greater Job Satisfaction Build a corporate culture that promotes advancement of diverse human resources by establishing an environment that improves job satisfaction through a review of treatment of employees, HQ building reconstruction / branch office renovations, pr
Slide 31: 6. Sustainability Initiatives
6. Sustainability Initiatives Contribute to the realization of a sustainable society by bolstering SDGs/ESG initiatives via means only available to a regional financial group. Supporting customers’ efforts Our initiatives *2: As measured according to the standards applied to periodical reports sti
Slide 32: 7. Capital Policy (1) Basic Approaches
7. Capital Policy (1) Basic Approaches Actively make forward-looking growth investments while securing sufficient levels of capital for sustainable growth and improvement of the corporate value of the NNFH Group; at the same time, increase returns of profits to shareholders and investors. Drive gro
Slide 33: 7. Capital Policy (2) Shareholder Returns
7. Capital Policy (2) Shareholder Returns Shareholder returns for the fiscal year ended March 31st, 2024 totaled 9.8 billion yen with a total return ratio of 41.4%. Plan to increase annual dividends from 55 yen to 60 yen in line with the target total return ratio of around 40% in the fiscal year
Slide 34: 7. Capital Policy (3) Reduction of Strategic Shares
7. Capital Policy (3) Reduction of Strategic Shares Accelerated the reduction of strategic shares centered on those of financial institutions and non-local companies. As a result, achieved the reduction target (10% or more of the balance) announced in the previous year. Continue reviewing whet
Slide 35: MEMO
MEMO
Slide 36: The Economic Environment in Kyushu/Fukuoka
The Economic Environment in Kyushu/Fukuoka Ref. The Economic Environment in Kyushu/Fukuoka Financial Results for the Fiscal Year Ended March 31st, 2024 P.35
Slide 37: 1. Key Economic Indicators
1. Key Economic Indicators <Import/export of the Kyushu economic zone> <Mining/manufacturing production, shipment, and inventory in Kyushu> (Million yen) Export Import Production Shipment Inventory (Seasonally adjusted, annual average in 2015 = 100) Jan ’21 Apr ‘21 Jul ‘21 Oct ‘21 Jan ’22 Apr ‘22 Ju
Slide 38: 2. Trends in Local Economies
2. Trends in Local Economies <Business Survey Index> (Difference of “up”-”down” compared to previous quarter) (1) Business sentiment among local enterprises • The business survey index for Northern Kyushu in the Oct-Dec 2023 Jan-Mar 2024 Apr-Jun 2024 Jul-Sep 2024 January-March 2024 quarter saw the i
Slide 39: 2. Trends in Local Economies: Key Industries
2. Trends in Local Economies <Auto production volume in Kyushu and its share in the (3) Trends in key industries country> (Automobiles) (10,000 units) The automobile industry in Kyushu has grown steadily as one assembly plant after Production volume Share in the country another opened and a cluste
Slide 40: MEMO
MEMO Financial Results for the Fiscal Year Ended March 31st, 2024 P.39
Slide 41: Supplementary Materials on Performance
Supplementary Materials on Performance Ref. Supplementary Materials on Performance Financial Results for the Fiscal Year Ended March 31st, 2024 P.40
Slide 42: 1. Statement of Income (1) YoY Comparisons
1. Statement of Income (1) Fiscal Year Ended March 31st, 2024 - YoY Comparisons Fiscal year ended March 31st, 2024 Fiscal year ended March 31st, 2023 Results YoY change Results (100 million yen) NNFH (A) NCB (B) (A) – (B) NNFH (A) NCB (B) (A) – (B) NNFH (A) NCB (B) (A) – (B) (consolidated) (consolid
Slide 43: 1. Statement of Income (2) Comparison with Previous Forecast
1. Statement of Income (2) Fiscal Year Ended March 31st, 2024 – Comparison with Previous Forecast Fiscal year ended March 31st, 2024 Previous forecast for fiscal year ended Results Comparison with previous forecast March 31st, 2024〔Note〕 (100 million yen) NNFH (A) NCB (B) (A) – (B) NNFH (A) NCB (B)
Slide 44: 1. Statement of Income (3) Forecast for FY Ended March 2025
1. Statement of Income (3) Forecast for the Fiscal Year Ended March 31st, 2025 – YoY Comparisons Fiscal year ended March 31st, 2025 Fiscal year ended March 31st, 2024 Forecast YoY change Results (100 million yen) NNFH (A) NCB (B) (A) – (B) NNFH (A) NCB (B) (A) – (B) NNFH (A) NCB (B) (A) – (B) (conso
Slide 45: 2. Balance Sheet (1) Assets
2. Balance Sheet (1) Assets NNFH(Consolidated) NCB (100 million yen) Mar. 31, 2020 Mar. 31, 2021 Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024 Mar. 31, 2020 Mar. 31, 2021 Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024 Assets Cash and due from banks 17,147 17,388 26,147 19,466 22,006 17,007 17,103 25,597 19,1
Slide 46: 2. Balance Sheet (2) Liabilities and Net Assets
2. Balance Sheet (2) Liabilities and Net Assets NNFH(Consolidated) NCB (100 million yen) Mar. 31, 2020 Mar. 31, 2021 Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024 Mar. 31, 2020 Mar. 31, 2021 Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2024 Liabilities and Net Assets Deposits 84,816 92,955 95,703 97,918 101,772
Slide 47: 3. Average Amount Outstanding, Yield, and Interest of Main Accounts
3. Average Amount Outstanding, Yield, and Interest of Main Accounts (Interim) (NCB) (Fiscal year ended) Forecast (100 million yen) March 31st, 2020 March 31st, 2021 March 31st, 2022 March 31st, 2023 March 31st, 2024 March 31st, 2025 Avg. amount outstanding Yield Interest Avg. amount outstanding Yiel
Slide 48: 4. Balance and Valuation Gains or Losses of Securities (NCB)
4. Balance and Valuation Gains or Losses of Securities (NCB) (100 million yen) March 31st, 2020 March 31st, 2021 March 31st, 2022 March 31st, 2023 March 31st, 2024 ■Balance sheet amount Government bonds 2,125 3,655 5,006 4,959 4,440 Local government bonds 2,611 3,321 4,007 4,219 4,798 Corporate bond
Slide 49: 5. Breakdown of Credit Cost by Cause (NCB)
5. Breakdown of Credit Cost by Cause (NCB) (Fiscal year ended) (100 million yen) March 31st, 2020 March 31st, 2021 March 31st, 2022 March 31st, 2023 March 31st, 2024 Provision for general reserve for possible loan losses (Reversal of allowance for loan losses) A 14 26 (18) (6) 3 Changes in loan-loss
Slide 50: 6. Capital Adequacy Ratio (Consolidated)
6. Capital Adequacy Ratio (Consolidated) ■Capital Adequacy Ratio (Consolidated) Mar. 31, 2024 Mar. 31, 2023 Mar. 31, 2023 (100 million yen) Core capital: instruments and reserves A 5,003 243 4,760 Directly issued qualifying common share capital 4,981 135 4,846 Accumulated other comprehensive income
Slide 51: MEMO
MEMO Financial Results for the Fiscal Year Ended March 31st, 2024 P.50
Slide 52: Nishi-Nippon Financial Holdings, Inc.
These materials have been prepared for the sole purpose of information provision, and do not constitute an invitation or solicitation to purchase or sell any specific securities. Any and all information described herein is subject to change or amendment without notice. These materials contain
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