Chugin Financial Group,inc. · TSE:5832
Chugin Financial Group,inc — H1 FY2022 Earnings Presentation
61 slides from Chugin Financial Group,inc's earnings presentation, Dec 5, 2022
Slide 1: 1H FY2022 Earnings Results Briefing
1H FY2022 Earnings Results Briefing December 5, 2022 Our challenges build our future. Chugin Financial Group, Inc.
Slide 2: Today's Key Message
Today’s Key Message 1. 1H FY2022 Earnings Results and FY2022 Plan 1H FY2022 earnings results: Consolidated profit was 13.9 billion yen (An increase of 3.6 billion yen from the announced forecast (progress of the plan: 74%)) Corporate-related revenue centering on the net fee income remained robust.
Slide 3: Contents
I. Earnings Results for 1H FY2022 and Forecasts for III. Management Strategy FY2022 Long-term Management Plan “Vision 2027: Plan for Creating the Summary 5 Future Together” 22 Net Interest Income 6 Medium-term Management Plan “Plan for Creating the Future 23 Together: Stage II” Net Fee Income 7 Five
Slide 4: Section I Earnings Results for 1H FY2022 and Forecasts for FY2022
Section I Earnings Results for 1H FY2022 (The Chugoku Bank) and Forecasts for FY2022 (Holding Company)
Slide 5: 1H FY2022 Earnings Results –Summary–
1H FY2022 Earnings Results –Summary– (billion yen) 1H 1H 1H 1H [Consolidated] FY2019 FY2020 FY2021 FY2022 YoY vs. Plan* Consolidated ordinary income 12.9 11.9 15.2 19.9 4.7 4.9 Profit attributable to owners of parent 8.6 8.2 10.1 13.9 3.8 3.6 [Non-consolidated] Core business gross profit 37.7 38.9 4
Slide 6: Net Interest Income
Net Interest Income [Factors behind change in net interest income] [Loan yield] (%) Loan yield ■Yen based: ¥29.4 billion ■Foreign currency-based: ¥5.0 billion (+¥2.8 billion YoY) (+¥0.4 billion YoY) Loan yield (yen) • Interest on loans and discounts: Flat YoY • Interest on loans and discounts: 1.06
Slide 7: Net Fee Income
Net Fee Income [Net fee income] +564 (million yen) 20,000 +402 (million yen) 17,723 17,159 10,000 9,243 8,841 +136 7,588 -104 15,000 4,903 8,000 2,338 4,767 2,442 Assets in custody* 1,812 +242 +580 6,000 3,903 2,199 3,661 Investment 1,619 10,000 banking 1,464 business -242 4,000 -177 Remittance/ 2,1
Slide 8: Corporate-solution-related Revenues
Corporate-solution-related Revenues [Revenues from solutions for corporate customers] [Breakdown of loans to the headquarters] 12,872 (million yen) (Net interest income, net fee income, net (Balance at end of Sep. 2022) other operating profits, etc.) Corporate 1,125 loans 7,253 224 Marketable 8% loa
Slide 9: Revenues Related to Assets in Custody
Revenues Related to Assets in Custody [Breakdown of revenues related to [Inheritance-related business] 7,556 assets in custody] (million yen) (4,903) *Testamentary trusts, inheritance No. of contracts support business, etc. signed -249 116 (-104) 3,798 84 (2,442) 3,549 76 (2,338) 2,653 Group total (
Slide 10: Expenses
Expenses *Effect of conversion into a financial group system Of personnel expenses, a decrease of 800 million [Expenses] yen represents the concurrent portion of the financial group, and has been transferred to the -0.8 “Management control fee” under “Other property expenses.” (billion yen) (billion
Slide 11: Credit Costs and Non-performing Loans
1H of FY2022 Earnings Results ｰCredit Costs and Non-performing Loansｰ [Status of non-performing loans] [Credit costs] (Loans disclosed under the Financial Revitalization Law) (billion yen) (billion yen) Other credit costs (*) *The Chugoku Bank does not carry out partial direct write-offs. Provision
Slide 12: (Reference) Major Accounts (1) –Deposits & Assets in Custody–
(Reference) Major Accounts (1) –Deposits & Assets in Custody– [Average balance of deposits +3.5% +3.1% and assets in custody] 9,083.4 9,078.3 (8,086.3) 8,803.4 (8,075.8) (billion yen) 8,772.3 Total assets in (7,801.5) (7,776.5) 174.9 173.9 custody 8,250.7 226.4 152.1 217.7 (Deposits + NCD) 143.5 8,5
Slide 13: (Reference) Major Accounts (2) –Loans–
(Reference) Major Accounts (2) –Loans– [Average loan balance] ＋3.8％ +3.3％ 6,000 60,000 60,000 6,000 5,375.2 5,175.7 5,329.4 (billion yen) 5,155.8 4,994.2 25.1 31.2 30.0 Hong Kong Branch 23.7 5,000 50,000 24.7 +3.2％ 50,000 5,000 1,249.9 +3.8% 1,243.3 1,210.0 Personal loans 1,197.3 1,164.1 4,000 40,00
Slide 14: (Reference) Major Accounts (3) –Securities–
(Reference) Major Accounts (3) –Securities– [Average balance of securities] -100.1 [Unrealized gains/losses] (billion yen) 2,438.8 End of Sep. End of Mar. End of Sep. Change from end (billion yen) 2021 2022 2022 of Mar. 2022 2,342.7 2,380.7 16.4 2,338.7 Total 148.4 94.5 41.3 - 53.2 Investment partne
Slide 15: (Reference) Major Accounts (4) –Impact of Rising Interest Rate–
(Reference) Major Accounts (4) –Impact of Rising Interest Rate– • Investment in yen assets: With a large amount of deposits, we will seek the expansion of a stable profit margin when interest rates are rising. • Investment in foreign currency assets: We will continue the ongoing improvement of forei
Slide 16: Earnings Forecasts
Earnings Forecasts [Earnings forecasts] FY2021 FY2022 Consolidated profit Result Change from (billion yen) Forecast YoY announcement* 18.3 18.6 Consoli- Consolidated ordinary profit 25.8 27.1 1.3 0.0 14.4 dated 11.9 Consolidated profit 18.3 18.6 0.3 0.0 Core business gross profit 80.2 83.4 3.2 3.9 N
Slide 17: Section II Capital Policy
Section II Capital Policy
Slide 18: Capital Policy
Capital Policy [Capital balance] The three points, consisting of soundness, profitability and enhanced shareholder returns, will be well-balanced. • Stable management base Sound- • Response to local customers’ financing needs, implementation ness of growth investments • Improvement of profitability,
Slide 19: Shareholder Return Policy
Shareholder Return Policy [Shareholder return policy for FY2022] Shareholder return ratio of at least 35% through dividends and share buybacks (consolidated basis) – Enhancement of shareholder returns by stable and continuous increase in dividends and flexible share buybacks – Shareholder 35% or ret
Slide 20: Cross-held Shares
Cross-held Shares We pursue improvement of capital efficiency by constantly reducing cross-held shares. The Board of Directors will examine Initiatives toward reducing cross-held shares the status on a regular basis. [Judging whether or not [Shares not satisfying the The relevant shares are held o
Slide 21: Section III Management Strategy
Section III Management Strategy ーLong-term Management Plan and Medium-term Management Planー
Slide 22: Long-term Management Plan Vision 2027
Long-term Management Plan “Vision 2027: Plan for Creating the Future Together” In March 2017, we formulated our 10-year Long-term Management Plan “Vision 2027: Plan for Creating the Future Together” based on our long-term vision to “Create with Our Community, Customers and Employees a Rich Future Th
Slide 23: Medium-term Management Plan: Stage II
Medium-term Management Plan “Plan for Creating the Future Together: Stage II” Based on the achievements of the structural reforms (strategic investments and streamlining operations and enhancing sales capabilities through BPR measures) under the previous Medium-term Management Plan, we will establis
Slide 24: Five Pillars of the Medium-term Management Plan
Five Pillars of the Medium-term Management Plan “Plan for Creating the Future Together: Stage II” Enhancement of initiatives for regional revitalization and the SDGs Confront the various issues surrounding the local areas, and aim to solve the issues, create new businesses, and work 1 toward the S
Slide 25: Key Performance Indicators (KPIs) of the Medium-term Plan
Key Performance Indicators (KPIs) of the Medium-term Management Plan “Plan for Creating the Future Together: Stage II” • We have set the value we can provide stakeholders as the KPIs of the Medium-term Management Plan: “Plan for Creating the Future Together: Stage II.” • We will endeavor to increase
Slide 26: Five Pillars: Progress and Achievements
Five Pillars of the Medium-term Management Plan “Plan for Creating the Future Together: Stage II” *For details of the “Five pillars” initiatives, [Summary: Progress and achievements of the five pillars] please see the attached Reference Materials. Major initiatives to date Achievements to date Enhan
Slide 27: Section III Management Strategy –Our intended form–
Section III Management Strategy ーOur intended formー
Slide 28: Abundant Business Foundation of the Chugin Group
Abundant Business Foundation of the Chugin Group The population is based on “Population Estimates” as of October 2021 published by the Ministry of Internal Affairs and Communications. Abundant forest resource Temperate climate with few • In northern Okayama Prefecture, forest resource produces abund
Slide 29: Missions to Be Fulfilled
Missions to Be Fulfilled Create with Our community, Customers and Employees a Rich Future That We Can All Share. Previous Medium-term Plan: “Plan for Creating the Future Together: Stage I” Enhancement of tangible aspects (thorough BPR) Medium-term Plan: “Plan for Creating the Future Together: Stage
Slide 30: Foundation for Fulfilling Missions: Vitalization of the Organization
Foundation for Fulfilling Missions: Vitalization of the Organization • Various initiatives that contribute to vitalization of the organization have been implemented to respond to changes in the internal and external environment. • “Chugin Open Lab,” autonomous goal setting by sales offices, and othe
Slide 31: Toward the Future of Affluent Communities (1)
Toward the Future of Affluent Communities (1) Maniwa City (Decarbonization Leading Area and SDGs Nishiawakura Village Future City) (Decarbonization-leading Area and SDGs Future City) Decarbonization Leading Area Chugin’s Forest (since 2008) “Business to create decarbonization-leading areas to allow
Slide 32: Toward the Future of Affluent Communities (2)
Toward the Future of Affluent Communities (2) Horizontal development of regional communities is pursued by the Chugin Group as a main partner Improvement of financial literacy of Accelerate regional DX and SX regional communities Provided office tours and visiting lectures for students as The Ch
Slide 33: Reasons and Objectives for the Transition to a Holding Company
Reasons and Objectives for the Transition to a Holding Company The Chugin Group’s Objectives comprehensive financial Establish sustainable business models services provision system that will mutually develop among regional society and customers The Chugoku Bank Chugin Credit Guarantee Chugin Operati
Slide 34: Chugin Capital Partners, Limited
Initiatives of the Newly Established Subsidiaries －Chugin Capital Partners, Limitedー A community-based, Chugin Capital Partners, Limited investment-specific subsidiary Established: April 1, 2022 PE fund*2 Local company Venture capital*1 (*1) An investment company that invests in companies expected C
Slide 35: Chugin Capital Partners, Limited: Funds and Menu
Initiatives of the Newly Established Subsidiaries －Chugin Capital Partners, Limitedー Fund ・ Business succession and growth ・・ “Chugin Fund for Creating the Future Together” ・ Infrastructure ・・ “Chugin Hare-no-kuni Infrastructure Fund*” ・ Venture capital・・ “Chugin Infinity Fund” ・Other ・・ “Chugin Bri
Slide 36: Chugin Human Innovations Co., Ltd.
Initiatives of the Newly Established Subsidiaries －Chugin Human Innovations Co., Ltd.ー A company that provides Chugin Human Innovations Co., Ltd. one-stop solutions Established: May 30, 2022 concerning “people” Personnel Utilization of management resources and consulting creditworthiness of the Ch
Slide 37: Chugin Human Innovations: Personnel Placement Business
Initiatives of the Newly Established Subsidiaries －Chugin Human Innovations Co., Ltd.ー Provide a menu of diversified solutions concerning “people” as the key management issue of a corporation based on the “personnel placement business.” Business program of Future development “Personnel placement bus
Slide 38: C Cube Consulting Co., Ltd.
Initiatives of the Newly Established Subsidiaries －C Cube Consulting Co., Ltd.ー Contribution to the solution of customers’ and C Cube Consulting Co., Ltd. regional issues and sustainable growth Representative: Ryu Nishihara Diversifying and sophisticating regional issues (Former Director at PwC Cons
Slide 39: C Cube Consulting: Business Domain
Initiatives of the Newly Established Subsidiaries －C Cube Consulting Co., Ltd.ー Business Domain To solve social issues of • Support for the formulation of DX/IT the region strategies • Support for the upgrading of internal • Support for the formulation systems • Support for the introduction of cloud
Slide 40: Initiatives of Alliance/Partnership: Regional Coordination
Initiatives of Alliance/Partnership Regional coordination strategy － Accelerate coordination in a wide range over the borders of industries toward regional development 2019/10 2021/2 2022/2 2022/3 Okayama Co-creation Partnership Okayama Consortium for • Coordination with local financial institutions
Slide 41: TSUBASA Alliance
Initiatives of Alliance/Partnership TSUBASA Alliance: － We pursue scale advantage and synergies through this broad, large-scale alliance. The alliance’s total assets of 96 trillion yen are the largest following those of TSUBASA Alliance Co., Ltd. Japanese mega banks (as of Mar. 2022). Responds t
Slide 42: Next Medium-term Management Plan –Positioning–
Next Medium-term Management Plan －Positioning－ • The next Medium-term Management Plan represents the period in which we must work to achieve the KPIs of the Long-term Management Plan (10-year strategy) by demonstrating the results of the reforms implemented in Stages I and II. It is also the period
Slide 43: Next Medium-term Management Plan –Concept–
Next Medium-term Management Plan －Concept－ • Build sustainable business models while addressing new challenges. Group Corporate Principle Create with our community, customers and employees a rich future that we can all share. Evolution to a comprehensive services Key initiatives in the business focu
Slide 44: Our Future (Statement)
Our Future (Statement) We are in times of change. Turn to an offensive, not a defensive, position. Let your dreams come true without getting into a rut. Chugin will evolve to a comprehensive financial group to co-create a rich future together with its customers. Optimum solutions will be created for
Slide 45: Our challenges build our future.
Our challenges build our future. We are in times of change. Turn to an offensive, not a defensive, position. Let your dreams come true without getting into a rut. Chugin will evolve into a comprehensive financial group to co-create a rich future together with its customers. Optimum solutions will be
Slide 46: Reference Materials: Initiatives for the Principal Measures (Sustainability)
[Reference Materials] Initiatives for the Principal Measures (Sustainability) 1. Enhancement of Initiatives for Regional 47-52 Revitalization and the SDGs 2. Deepening of Customer-oriented Sales Activities: 53-55 3. Vitalization of the Organization 56 4. Enhancement of the Digitalization Strategy 57
Slide 47: Enhancement of Initiatives for Regional Revitalization
1. Enhancement of Initiatives for Regional Revitalization and the SDGs －Initiatives for Regional Revitalization Initiatives for Regional Positioning the regional revitalization and the SDGs as the “First Pillar” of the Revitalization current Medium-term Management Plan, we will strengthen the initia
Slide 48: Addressing Climate Change
1. Enhancement of Initiatives for Regional Revitalization and the SDGs －Addressing Climate Change Addressing Climate Through thorough discussions in Board Meetings, we are determined Change to improve support for and disclosure of the shift to decarbonization Source: “FY2018 Annual Report on Prefect
Slide 49: Sustainable Finance
1. Enhancement of Initiatives for Regional Revitalization and the SDGs －Sustainable Finance Environmental and social finance Goal for FY2030 Enlightenment activity for the Group companies Invested amount: 1,500 billion yen SDGs-related training has been implemented periodically (Balance: approx.
Slide 50: Promotion Structure
1. Enhancement of Initiatives for Regional Revitalization and the SDGs －Promotion Structure The special dedicated section “SDGs Promotion Department (FG)” plays the leading role, operating the basic policy and the committee. From the perspective of the improvement of corporate value over the med
Slide 51: Local Trading Company SETONOWA
1. Enhancement of Initiatives for Regional Revitalization and the SDGs －Local Trading Company We will establish a business model that enables the Group and local communities to grow together by using the know- how, information, and networks of the Group. We will contribute to the development of
Slide 52: SDGs and ESG through Our Core Business
1. Enhancement of Initiatives for Regional Revitalization and the SDGs －SDGs and ESG through Our Core Business We provide strong support for our customers’ achievements in decarbonization and SDGs, etc. by accelerating the SDGs and ESG through our core business. We endeavor to improve our corpor
Slide 53: Corporate Solutions
2. Deepening of Customer-oriented Sales Activities ー Corporate Solutions Corporate solutions: Sales offices and the HQ unite to propose the optimal solutions for the customer. Customers for relationship management Local support activities (corporate solutions) Both sales offices and the headquarte
Slide 54: Retail Solutions and Group Synergies
2. Deepening of Customer-oriented Sales Activities ー Retail Solutions and Group Synergies Retail solutions:We support customers’ life plans from both financial and non-financial aspects, according to the customer segment and the sales channel. Group synergies: Higher synergies are pursued by sec
Slide 55: Regional Headquarters Structure and Autonomous Goal Setting
2. Deepening of Customer-oriented Sales Activities ー Regional Headquarters Structure and Autonomous Goal Setting Regional Headquarters Structure: Cooperation with the region (city, town, village) will be further strengthened by establishing seven regional headquarters according to the administrati
Slide 56: Vitalization of the Organization
3. Vitalization of the Organization We pursue the improvement of corporate value on a medium- to long-term basis Promotion of diversity through employees’ workstyle reforms and active roles played by diverse human resources. Monthly overtime Health and Productivity Management hours worked Initiative
Slide 57: Enhancement of the Digitalization Strategy
4. Enhancement of the Digitalization Strategy Digital strategy vision of The Chugoku Bank: “Pursue comprehensive services business to serve every aspect of customers’ lives and businesses” We will powerfully promote digitalization by using people (sales), products (sales offices), and informatio
Slide 58: Digitalization Strategy –Channel–
4. Enhancement of the Digitalization Strategy －Channel Launched the “Chugin app” for retail customers in July 2021, and the “Chugin Business Portal” in September 2022. A new sales style will be realized by combining face-to-face and non-face-to-face channels. NEW Chugin app Chugin Business Porta
Slide 59: Expenses, Employees and Sales Offices
5. Establishment of a Sustainable Growth Model －Expenses, Employees and Sales Offices We have succeeded in thoroughly streamlining operations due to the digitalization and BPR that we promoted under the previous Medium-term Plan. We will carry out fundamental cost reductions toward a sustainable
Slide 60: Corporate Governance
5. Establishment of a Sustainable Growth Model －Corporate Governance Enhance governance to achieve “sound and sustainable growth” and “improvement of corporate value on a medium- to long-term basis." We selected the Prime Market where more sophisticated governance system is required. The Sustain
Slide 61: Forward-looking statements
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 herein due to changes in the management environment and other fac
Chugin Financial Group — H1 FY2022 Earnings Presentation on 6ix