Resona Holdings, Inc. · TSE:8308
Resona — H1 FY2009 Earnings Presentation
54 slides from Resona's earnings presentation, Nov 20, 2009
Slide 1: First Half of FY2009 Business Results and Future Management Direction
First Half of FY2009 Business Results and Future Management Direction Aiming at Establishing True Retail Bank RESONA November 20, 2009 @ Resona Holdings, Inc. RESONA
Slide 2: Contents
Note: In some pages of this material, names of Resona Group companies are shown in the CONTENTS following abbreviated form: RHD: Resona Holdings, RB: Resona Bank, SR: Saitama Resona Bank, KO: Kinki Osaka Bank and RT: former Resona Trust & Banking Outline of 1H FY2009 Business Results Updates on Majo
Slide 3: Outline of 1H FY2009 Business Results
Outline of 1H FY2009 Business Results Updates on Major Businesses: Results of 1H FY2009 and Outlook for the Full Year Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 2
Slide 4: Financial Results for 1H of FY2009: General Overview
Financial Results for 1H of FY2009: General Overview Posted consolidated net interim income of Y85.5bn , almost the same level as 1H FY2008 Net interim income decreased by Y0.7bn. (-0.9%) YoY, topping the May ’09 forecast by Y55.5bn (+185%). Y61.2bn YoY increase in net interim income, excluding
Slide 5: Factors Accounting for the Change in Consolidated Net Interim Income
Factors Accounting for the Change in Consolidated Net Interim Income Y61.2bn increase in consolidated net interim income if one-time gain on sale of Tokyo Head Office building is adjusted 110 863 (Billions of Yen) 4.8 (1) Absence of gain on sale of Toky o Head Of f ice buiding: (104.4) (2) Absence o
Slide 6: Outline of P&L for 1H of FY2009
Outline of P&L for 1H of FY2009 (Billions of Yen) Resona Holdings Total of group banks Factors accounting for the difference (A) - (B) (Consolidated) Saitama Difference (Non-consolidated) Resona Kinki Osaka (Approx. figures) Resona （A） YoY change (A)-(B) （B） YoY change Non-consolidated Non-consolida
Slide 7: Analysis on YoY Change in Top Line Income (Total of Group Banks)
Analysis on YoY Change in Top Line Income (Total of Group Banks) Top-line income fall by Y26.7bn primarily due to preceding policy rate cuts [1H FY2008] (Amount in billions of yen) [1H FY2009] “+” mark indicates contribution to profit Y341.8bn Y315.1bn Net gains on bonds Loan/Deposit (Y26.7) Financi
Slide 8: High Quality of Balance Sheet
High Quality of Balance Sheet Sound assets backed by very stable deposit funding RHD’s consolidated balance sheet [Stable funding structure] (As of Sep. 30, 2009) Strong retail deposit base [Sound loan portfolio] Loans and bills 13 million retail deposit accounts Well-diversified loan portfoli
Slide 9: Measures to Enhance Financial Soundness: Loan Asset
Measures to Enhance Financial Soundness: Loan Asset (Total of Group Banks) NPL balance and NPL ratio High reserve ratio against uncovered NPLs (Sep. 30, 2009) Collateral and guarantees(A) Loan loss reserve(B) Uncovered portion（C） （B） ／ {（B）＋（C）} (Y bn) 11.19% Unrecoverable or valueless claims 12%
Slide 10: Measures to Enhance Financial Soundness: Credit Cost
Measures to Enhance Financial Soundness: Credit Cost (Total of Group Banks) Trend of credit cost Credit costs arising from 3 industries and large obligors declined noticeably （Billions of Yen） New addition to specific reserve by credit amounts at the 2H 1H 2H 1H 1H FY'07 FY'07 FY'08 FY'08 FY'09 be
Slide 11: Measures to Enhance Financial Soundness: Securities Portfolio (1)
Measures to Enhance Financial Soundness: Securities Portfolio (1) (RHD Consolidated) Securities portfolio with minimized downside risks Non-trading marketable securities available for sale Relationship-purpose equity holdings (at cost) Stocks Reduced relationship-purpose stock holdings by ap
Slide 12: Measures to Enhance Financial Soundness: Securities Portfolio (2)
Measures to Enhance Financial Soundness: Securities Portfolio (2) (RHD Consolidated) Unrealized gain (loss) on non-trading marketable securities available for sale Ratio of stockholdings to Tier 1 Unrealized gain (loss) ： Y 119.4 bn Break-even Nikkei Average : Approx. 7,000 Yen Floating-rate
Slide 13: Capital Adequacy Ratio (RHD Consolidated)
Capital Adequacy Ratio (RHD Consolidated) RHD’s consolidated CAR [Mar. 31, 2009] 13.45% ⇒ [Sep. 30, 2009] 13.10% (- 0.35%) 億円20/3末3FIRB増減自己資本比率TierⅠ比率自己資本額+31,965 Capital adequacy ratio Factors for the change in 1H FY2009 [Total qualifying capital] Y (142.1)bn (-0.70%) Change in capital adequacy r
Slide 14: Earnings and Dividend Forecasts for Fiscal Year 2009
Earnings and Dividend Forecasts for Fiscal Year 2009 Resona Holdings (Consolidated) Resona Holdings (Non-consolidated) Change from Change from 1H FY'09 Full year Change from (Billions of Yen) 1H FY'09 Full year Change from (Billions of Yen) original previous year original previous year (Actual) fore
Slide 15: Analysis on Consolidated Net Income Forecast for FY2009
Analysis on Consolidated Net Income Forecast for FY2009 Consolidated net income forecast for FY2009 : Y120bn ( Revised upward on 30, October) (Amount in billions of yen) “+” mark indicates contribution to profit +40.6 Other Net gains gain/loss, on stocks net (3.9) (102.7) Gross Credit operating cost
Slide 16: Updates on Major Businesses: Results of 1H FY2009 and Outlook
Outline of 1H FY2009 Business Results Updates on Major Businesses: Results of 1H FY2009 and Outlook for the Full Year Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 15
Slide 17: Trend of Loan Business (Total of Group Banks)
Trend of Loan Business (Total of Group Banks) Trend of loan and deposit rates and spread 2.5% Loan rate (left scale) Loan-to-deposit spread (left scale) 1.1% Deposit rate (right scale) 2.4% 1.0% Change from previous year ： (0.16)% 2.23% 2.3% 2.18% 2.18% 2.19% 0.9% ・ Decline due to policy rate facto
Slide 18: Loans and Bills Discounted: Plan for FY2009
Loans and Bills Discounted : Plan for FY2009 (Total of Group Banks) Loans to Corporations Housing Loan Trend of average loan balance Balance as of Sep. 30, ‘09: Y11.86tn. (HL ratio: 45.1%) 15 Origination including Flat 35 in 1H FY’09: Y0.69tn (+Y0.13tn YoY) 13.19 13.37 Origination planned in
Slide 19: Trend of Major Fee Businesses
Trend of Major Fee Businesses Investment Trusts (Total of Group Banks) Personal Annuity (Total of Group Banks) 50 1,500 （Y bn） （ Y bn） Full Year Half Year Full Year Half Year 16 300 1,297.2 Sale commission 14 Related income 40 Trust fees 1,200 Amount sold (right scale) Amount sold (right scale) 12
Slide 20: Efforts to Build Solid Foundation for Sustainable Growth
Outline of 1H FY2009 Business Results Updates on Major Businesses: Results of 1H FY2009 and Outlook for the Full Year Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 19
Slide 21: Operational Reform: Achievements and Outlook for the Future (RB)
Operational Reform: Achievements and Outlook for the Future（RB) Trend of clerical work volume by channels Operational reform initiatives (FY2009) Remove clerical work burden from branches and “6 Smart Initiatives” = Establishing Resona Style redefine them as a place for sales activities Halve
Slide 22: Introduction of Smart Branch Office for Individual Customers
Introduction of Smart Branch Office for Individual Customers Overview of Smart Branch Office for Individual Customers “3 NOs & 3 LESSes” As a full-banking branch office developed for individual customers, Realize processing style based on Resona’s “3 NOs & 3 LESSes” concept, No Waiting Time Ba
Slide 23: Smart Branch Office: Full-view Layout Image
Smart Branch Office: Full-view Layout Image Transaction Area Sales Area 22
Slide 24: Smart Branch Office: View from the Entrance
Smart Branch Office: View from the Entrance [Store front image seen from a customer] ・No space for clerical work other than ATM corner ・Entire store space dedicated to consulting-based sales activities General Reception Counter ATM Support (Existing Quick-Navi Terminal） 23
Slide 25: Smart Branch Office: Image of Consulting Corner
Smart Branch Office: Image of Consulting Corner [Image of consulting corner seen from a customer] Creating friendly atmosphere by removing obstacles between customer and sales staff [Use of Consulting Corner] ■Introduce products and services ・Explain them using pamphlets ■Consultation for loans/asse
Slide 26: Establishing a firm brand of Retail x Trust (1)
Establishing a firm brand of “Retail x Trust” (1) Fusion of “client base” and “trust function” through the merger between RB and RT Concentrated full-line trust functions from retail to wholesale into Resona Bank Resona Holdings Key factors for differentiation Vis-à-vis mega banks Commercial b
Slide 27: Establishing a firm brand of Retail x Trust (2)
Establishing a firm brand of “Retail x Trust” (2) Will trust, estate division, asset succession Pension Trust Will trust as a gateway for multifaceted transactions Existence of vast unexplored market Number of wills in custody ： Apx. 11 thousands Target: 2,000 new and higher share entrustm
Slide 28: Relocation of Tokyo Head Office
Relocation of Tokyo Head Office Assignment of Tokyo HO bldg. and Relocation Outline of Head Office Business Reform Sold a current HQ building at Y162.6bn in April 2008 Pursue further low-cost operation Secured approx. Y130 bn of retained earnings Higher business quality and swift decision ma
Slide 29: Human Resources Management
Human Resources Management Cultivate human resources who will lead Resona’s future growth System enabling employees to perform well <Number of Female Managers> 20% Female Actively promote female staff managers * 18.1% → Female leaders training program 14.7% Diversity Diversity Assist female staffs
Slide 30: Pathway to Early Repayment of Public Funds
Outline of 1H FY2009 Business Results Updates on Major Businesses: Results of 1H FY2009 and Outlook for the Full Year Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 29
Slide 31: Approach towards Repayment of Public Funds
Approach towards Repayment of Public Funds Aims at early repayments of public funds through the following approaches “Basic Policy toward Repayment of Public Funds” (Announced in May 2006) Preferred Shares Secure a source of funds for repayment as soon as possible Repurchase Repurchase and a
Slide 32: Progress in Repayment and Accumulation of Funds for Repayments
Progress in Repayment and Accumulation of Funds for Repayments Cumulative repaid amount exceeded Y1tn 3,300 (Billions of Yen) 300.0 Subordinated Loans 2,800 Common Shares 296.4 Preferred Shares (ESL) Repaid approx. Preferred Shares (DIL) JPY 1 trillion 2,300 45.0 (Infusion amount basis) 868.0 293.7
Slide 33: Outline of Capital Management (FY2009)
Outline of Capital Management (FY2009) Capital management to secure funds for repaying public funds, raise quality of capital and enhance regulatory capital refinancing capability Exchange offer and financing with non- Exchange Offer (Details on page 33） convertible preferred shares Exchange Off
Slide 34: Outline of Exchange Offer
Outline of Exchange Offer Realizing improvement in the quality of capital and significant reduction in the number of potential shares simultaneously (1) Repurchase and cancellation of Improvement in the quality of capital Class 9 Preferred Shares Repurchase all of Class 9 Preferred Shares Streng
Slide 35: Consideration on Strength of Core Tier 1 Capital
Consideration on Strength of Core Tier 1 Capital (Sep. 30, 2009) Core Tier 1 (1) : Net of DTA, Preferred Securities, Non-convertible Preferred Shares (Billions of Yen) 8% Among preferred shares, non- 2,000 convertible preferred shares are 282.0 6% deduced as non-core Tier 1 capital 103.7 Ratio to
Slide 36: Reference Material
Outline of 1H Fy2009 Business Results Updates on Major Businesses: Results of 1H FY2009 and Outlook for the Full Year Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 35
Slide 37: Gap Analysis: 1H FY2009 (Act) vs. 2H FY2009 (Forecast)
Gap Analysis: 1H FY2009 (Act) vs. 2H FY2009 (Forecast) (Amount in billions of yen) “+” mark indicates contribution to profit Gross operating profit Operating (16.2) Expenses Net gains (4.6) on stocks (1.2) Net Credit (51.0) First Half of Cost Other gains/ FY2009 Gross operating profit +2.6 Income
Slide 38: Management Accounting by Business Lines
Management Accounting by Business Lines Management Accounting by Group Business Lines (1H of FY2009) “RAROC” and “RVA”*1 as management indicators to measure profitability to allocated capital (Billions of Yen, %) Profitability Soundness Net operating profit after a deduction of credit cost Net pro
Slide 39: Capital Adequacy Ratio (RHD and Subsidiary Banks)
Capital Adequacy Ratio (RHD and Subsidiary Banks) RB(Consolidated) SR(Non-consolidated) KO(Consolidated) 億円20/3末3FIRB増減自己資本比率TierⅠ比率自己資本額+31,965 【F-IRB】 【F-IRB】 【SA】 Japanese Domestic Standard (Billions of Yen) Mar.31,2009 Sep.30,2009 Mar.31,2009 Sep.30,2009 Mar.31,2009 Sep.30,2009 Change Change Cha
Slide 40: Risk Buffer
Risk Volume Relative to Capital (End of September 2009) Primary risks such as credit, market and operational risks are controlled within Tier 1 limit Risk buffers comprising of excess Tier 1 and Tier 2 are provided against the risk volume assumed under a stress scenario or the risks difficult to
Slide 41: Securities Portfolio
Securities Portfolio Net unrealized gains on available-for-sale securities (RHD consolidated basis) as of the end of September 2009 amounted to Y119.4bn Stock Portfolio Bond Portfolio (Available-for-sale securities, RHD Consolidated) [Balance of Securities Held (Non-consolidated Basis) ] (Ybn) No
Slide 42: Shareholdings by Industry (End of September 2009, RB)
41 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Services Real estate Other financial services Insurance Securities, commodities T OPIX Banking Shareholdings by Industry (End of September 2009, RB) Retail Wholesale Information, telecommunication Resona Bank Warehouse, transportation Air transport Marin
Slide 43: Maturity Ladder of Deposit and Loans (RB, Domestic Operations)
Maturity Ladder of Deposit and Loans (RB, Domestic Operations) Loans and Bills Discounted Deposits [End of March 2009] Within 6M 6 to 12M 1 to 3Y Over 3Y Total [End of March 2009] Fixed rate 3.2% 2.5% 5.3% 8.4% 19.3% Within 6M 6 to 12M 1 to 3Y Over 3Y Total Prime rate-based 44.0% 0.5% 0.0% 0.0% 44.5
Slide 44: Swap Positions by Remaining Periods (RB)
Swap Positions by Remaining Periods (RB) Notional amounts of interest rate swaps by remaining period (Billions of Yen) End of September 2009 End of March 2009 Within 1 year 1 to 5 years Over 5 years Total Within 1 year 1 to 5 years Over 5 years Total Receive fixed rate/Pay floating rate 103.0 471.
Slide 45: Composition of Loan Portfolio by Corporate/Individual Customers (RB)
Composition of Loan Portfolio by Corporate/Individual Customers (RB) Loans to corporations *Market rate-linked loans (corporate) include the fixed-rate (spread) loans maturing in less than one year. [End September 2008] [End March 2009] [End September 2009] Fixed Fixed Fixed Rate Rate Rate 15% Prim
Slide 46: Composition of Deposits by Corporate/Individual Customers (RB)
Composition of Deposits by Corporate/Individual Customers (RB) Corporate Deposits [End September 2008] [End March 2009] [End September 2009] Time Time Time Deposits Deposits deposits 28% 26% 27% Liquidity Liquidity Liquidity deposits Deposits Deposits 68% 67% 70% Individual Deposits [End September
Slide 47: Migrations of Borrowers (RB, 1H of FY2009)
Migrations of Borrowers (RB, 1H of FY2009) Exposure amount basis （Migration during the 1H of FY2009） End of September 2009 Upward Downward Special Quasi- Migration Migration Normal Other Watch Doubtful Bankrupt Other Attention Bankrupt Collection, Assignments, Repayments Sale Normal 96.7% 2.1% 0.2%
Slide 48: Trend of Long-term Senior Debt Rating of Resona Bank
Trend of Long-term Senior Debt Rating of Resona Bank 2003 2003 2004 2004 2005 2005 20062006 20072007 2008 2008 2009 2009 JCR Moody'S S&P 2/28 5/19 9/22 1/20 12/17 1/31 6/8 4/10 6/9 3/30 5/5 9/18 R&I 2/3 1/24 2/4 A1 A+ Moody's A2 A R&I JCR S&P A3 A- Baa1 BBB+ Baa2 BBB R&I S&P Baa3 BBB- Moody's JCR Ba
Slide 49: List of RHD's Preferred Shares (1)
List of RHD’s Preferred Shares (1) [As of November 1, 2009] Class C Preferred Shares Class F Preferred Shares Distinction between public and private funds Public Fund Public Fund Original issuer and name of securities Kinki Osaka Bank Series 1 Asahi Bank Series 2 Class 2 Original issue date 4/26/200
Slide 50: List of RHD's Preferred Shares (2)
List of RHD’s Preferred Shares (2) [As of November 1, 2009] Class 1 Preferred Shares Class 2 Preferred Shares Class 3 Preferred Shares Class 4 Preferred Shares Class 5 Preferred Shares Class 6 Preferred Shares Distinction between public and private fund Public Fund Public Fund Public Fund Private Fu
Slide 51: Distributable Profits and Dividend Policy
Distributable Profits and Dividend Policy Distributed in total Y49.0bn as term-end dividends for FY2008 （Common dividends: Y10.7bn Preferred dividends: Y38.2bn) Resona Holdings (Distributable Profits as of End Mar. 2009: Y1,150.1bn) Term-end dividends Common Y0.3bn Common & Preferred for FY2008 Pref
Slide 52: Establishing a firm brand of Retail x Trust
Establishing a firm brand of “Retail x Trust” Pursue merger synergies arising from the following sources Targets Targets (FY2009 (FY2009 to to FY2011) FY2011) Measures Measures New New evaluation evaluation framework framework Testamentary Testamentary trusts trusts New New entrustments: ent
Slide 53: Business Revitalization Plan: Earnings Plan
Business Revitalization Plan: Earnings Plan (Total of Group Banks) FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 (Billions of Yen) (Actual) (Actual) (Plan) (Plan) (Plan) (Billions of Yen) (Actual) (Actual) (Plan) (Plan) (Plan) Gross operating profit 700.0 675.3 690.
Slide 54: Forward-looking statements
The forward-looking statements contained in this presentation may be subject to material change due to the following factors. These factors may include changes in the level of stock price in Japan, any development and change related to the government’s policies, laws, business practices and their in