Chugin Financial Group,inc. · TSE:5832
Chugin Financial Group,inc — H1 FY2024 Earnings Presentation
56 slides from Chugin Financial Group,inc's earnings presentation, Dec 2, 2024
Slide 1: 1H FY2024 Earnings Results Briefing
1H FY2024 Earnings Results Briefing December 2, 2024 Our challenges build our future. Chugin Financial Group, Inc.
Slide 2: Table of Contents
Our challenges build our future. Table of Contents Chugin Financial Group, Inc. I. Earnings Results for 1H FY2024 and Forecasts for II. Toward Enhancement of Corporate Value FY2024 • Summary • Overview of the Medium-term Management Plan and Progress 13 Consolidated for the FG 4 • Awareness of the Cu
Slide 3: Section I Earnings Results for 1H FY2024 and Forecasts for FY2024
Section I Earnings Results for 1H FY2024 and Forecasts for FY2024 3
Slide 4: Earnings Results —Summary (Consolidated for the FG)—
Earnings Results —Summary (Consolidated for the FG)— Our challenges build our future. Chugin Financial Group, Inc. Net sales expanded significantly, mainly in net interest income and net fee income. *Forecast published on May 10, 2024 ちゅうぎんフィナンシャルグループ連結業績推移 Consolidated financial results for the Chu
Slide 5: Summary —Status of the Group Companies (Non-consolidated for the Bank)—
Summary —Status of the Group Companies (Non-consolidated for the Bank)— Our challenges build our future. Chugin Financial Group, Inc. Net interest income increased significantly mainly due to strategic asset expansion and rising domestic interest rates. 中国銀行 単体 for The Chugoku Bank Non-consolidated
Slide 6: Breakdown of Net Interest Income and Net Fee Income (Non-consolidated for the Bank)
Summary Our challenges build our future. —Breakdown of Net Interest Income and Net Fee Income (Non-consolidated for the Bank)— Chugin Financial Group, Inc. [Breakdown of net interest income (non-consolidated for the Bank)] [Breakdown of net fee income (non-consolidated for the Bank)] 2023年度 2024年度 2
Slide 7: <Reference> Fee Business-related Revenues (Group total)
Our challenges build our future. <Reference> Fee Business-related Revenues (Group total) Chugin Financial Group, Inc. [Breakdown of fee business-related revenues (Group total)] 2021年度 2022年度 2023年度 2024年度 1H FY2021 1H FY2022 1H FY2023 1H FY2024 （億円） (billion yen) 中間 中間 中間 中間 前年比 YoY フィービジネス関連収益 Fee
Slide 8: Summary —Status of the Group Companies (Excluding the Bank)—
Summary —Status of the Group Companies (Excluding the Bank)— Our challenges build our future. Chugin Financial Group, Inc. Showed a stable increase mainly in Lease and Securities (expansion of group sales due to transition to a holding company) Ordinary Group companies (billion yen) YoY Net income Y
Slide 9: Earnings Forecasts
Our challenges build our future. Earnings Forecasts Chugin Financial Group, Inc. Earnings forecasts were revised upward based on strong performance up to 1H. Initial plan ちゅうぎんフィナンシャルグループ連結 Consolidated for the Chugin Financial Group 2023年度 FY2023 2024年度 FY2024 *May 10, 2024 Plan Consolidated net in
Slide 10: Shareholder Return Policy
Our challenges build our future. Shareholder Return Policy Chugin Financial Group, Inc. [FY2024] • Aiming for a dividend payout ratio of around 40%, increase dividends through profit growth • Flexibly carry out share buybacks through capital control Shareholder Not yet 38.2% 36.9% 38.9% 41.6% 63.４%
Slide 11: Cross-shareholdings
Our challenges build our future. Cross-shareholdings Chugin Financial Group, Inc. We will limit cross-holdings to cases where it is determined necessary for the sustainable growth and Basic Policy enhancement of the corporate value of the Group and the issuers, and we will reduce them through dialog
Slide 12: Section II Toward Enhancement of Corporate Value
Section II Toward Enhancement of Corporate Value 12
Slide 13: Overview of the Medium-term Management Plan: Three Growth Strategies
Overview of the Medium-term Management Plan: Three Growth Strategies 1 “Deepening” of regional revitalization SDGs We will contribute to the “sustainable development of communities” by Corresponding materiality (priority issues) drawing out their appeal and potential. Revitalization of local economy
Slide 14: Progress of the Medium-term Management Plan (KPIs)
Progress of the Medium-term Management Plan (KPIs) (On a consolidated bases for the FG, unless indicated otherwise) 財務KPI Financial KPI '22年度実績 FY2022 result '23年度実績 FY2023 result '24中間実績 FY2024 1H result ’26年度目標 FY2026 target 親会社株主に帰属する当期純利益 Profit attributable to owners of parent 204億円 20.4 billio
Slide 15: Awareness of the Current Situation
Awareness of the Current Situation Trends and targets for ROE/PBR The need to aim for a level higher than the KPIs in the current Medium-term Management Plan is recognized. Introduction of The Long-term Lifting of negative interest Management Plan ROE(%) ROE(%) PBR (times) PBR (times) negative inter
Slide 16: Initiatives toward Improvement of ROE
Initiatives toward Improvement of ROE Evolution of the Medium-term Management Plan ROE for FY2026 (Target level) Target ROE level for FY2026: 7% or more NEW 7% or more (Above the Medium-term Management Plan Enhancement of KPI level of “5% or more”) FG Functions <Today’s topics> Chugin DX Strategy: O
Slide 17: Initiatives toward Improvement of ROE —Logic tree—
Initiatives toward Improvement of ROE —Logic tree— Measures to Improve ROE (Net Income/Capital Adequacy) = Boosting net sales DX Strategy Profitability RORA Enhancement of FG Appropriate allocation of management resources Functions (Net income/RWA) × Capital Management Control and strategic use of c
Slide 18: Chugin DX Strategy
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy DX Strategy Capital Enhancement of FG Management Functions Since 2017, based on the Long-term Management Plan Vision 2027 “Future Co-creation Plan,” we have been implementing reforms for co-creation with communities and
Slide 19: Chugin DX Strategy —Operational process reforms (Phase 1)—
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy —Operational process reforms (Phase 1)— DX Strategy Capital Enhancement of FG Management Functions Promote various measures to streamline operational man-hours of Reduction of operational man hours approximately 600 peo
Slide 20: Chugin DX Strategy —Business partnership with Recruit (Phases 2 and 3)—
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy —Business partnership with Recruit (Phases 2 and 3)— DX Strategy Capital Enhancement of FG Management Functions Collaborative partners November 26, 2024 Signed a basic agreement with Recruit Co., Ltd. for services to in
Slide 21: Chugin DX Strategy — Trial launch of regional BPO services
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy — Trial launch of regional BPO services (Phases 2 and 3) — DX Strategy Capital Enhancement of FG Management Functions Established a trial base for full-scale operation of the regional BPO service from October 2024. Goin
Slide 22: Chugin DX Strategy — Initiatives to ensure the steady advancement of DX measures
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy — Initiatives to ensure the steady advancement of DX measures — DX Strategy Capital Enhancement of FG Management Functions In the Chugin DX Strategy, we first aim to become a DX company ourselves and then apply the expe
Slide 23: Chugin DX Strategy —Deployment of the Okayama Model—
Evolution of Medium-term Management Plan (Improvement of ROE) Chugin DX Strategy —Deployment of the Okayama Model— DX Strategy Capital Enhancement of FG Management Functions In the Chugin DX Strategy, we aim to solve problems facing local communities by collaborating with “industry, government, and
Slide 24: Capital Management
Evolution of Medium-term Management Plan (Improvement of ROE) Capital Management DX Strategy Capital Management Enhancement of FG Functions Change in the capital control indicator [Capital management approach] Consolidated for the FG Ratio of common equity Tier 1 (excluding valuation difference on a
Slide 25: Capital Management
Evolution of Medium-term Management Plan (Improvement of ROE) Capital Management DX Strategy Capital Management Enhancement of FG Functions Capital allocation [Consolidated for the FG] Ratio of common equity Tier 1 (excluding the valuation difference on available-for-sale securities, etc.) ＋0.34pt -
Slide 26: Strategic Use of Capital: Sustainable finance
Evolution of Medium-term Management Plan (Improvement of ROE) Strategic Use of Capital DX Strategy Capital Management Enhancement of FG Functions Sustainable finance The amount executed has exceeded the initial assumption, and the target amount has been revised upward. By proposing solutions that le
Slide 27: Strategic Use of Capital: Oceangoing shipping
Evolution of Medium-term Management Plan (Improvement of ROE) Strategic Use of Capital DX Strategy Capital Management Enhancement of FG Functions Oceangoing shipping The oceangoing shipping industry is one of the local key industries in the eastern Setouchi economic zone, and the significance of thi
Slide 28: Impact of rising domestic interest rates (simulation)
Evolution of Medium-term Management Plan (Improvement of ROE) <Reference> Impact of rising domestic interest rates (simulation) DX Strategy Capital Management Enhancement of FG Functions Interest rate simulation (1) –Policy interest rate 0.50%– Yen BS (approx. 9 trillion yen) Impact on net interest
Slide 29: Enhancement of FG Functions
Evolution of Medium-term Management Plan (Improvement of ROE) Enhancement of FG Functions DX Strategy Capital Management Enhancement of FG Functions We have a unit system in place from June 2024. (Business strategy unit, investment strategy unit) By transferring authority to make prompt decisions an
Slide 30: Initiatives toward Improvement of PER —Logic tree—
Evolution of Medium-term Management Plan (Improvement of ROE) Initiatives toward Improvement of PER —Logic tree— DX Strategy Capital Management Enhancement of FG Functions Measures to improve PER (Aggregate Market Value (Stock Price) / Net Income) = Implementation of corporate philosophy Co-creation
Slide 31: Co-creation of a Prosperous Future —Communities and Customers—
Improvement of PER Co-creation of a Prosperous Future —Communities and Customers— Communities Customers Employees Initiatives that capture the community from a wide perspective (collaboration with municipal governments) Characteristics Co-creation of The Chugin Group works as one to further develop
Slide 32: Co-creation of a Prosperous Future —Communities and Customers—
Improvement of PER Co-creation of a Prosperous Future —Communities and Customers— Communities Customers Employees Startup ecosystem Asset formation Expand efforts through the deployment of the startup ecosystem. Number of NISA accounts Startups and Number of companies newly secondary startups establ
Slide 33: Co-creation of a Prosperous Future —Employees—
Improvement of PER Co-creation of a Prosperous Future —Employees— Communities Customers Employees Human capital investments We will enhance and maintain the quality and quantity of human resources necessary for the realization of our management strategy over the medium to long term. Implement specif
Slide 34: Co-creation of a Prosperous Future —Employees—
Improvement of PER Co-creation of a Prosperous Future —Employees— Communities Customers Employees Diversity and inclusion We will take consistent steps to improve the wellbeing and engagement of our Group employees. Major diversity & inclusion initiatives (classified into four categories) ❶ Career s
Slide 35: Conclusion
Conclusion ROE (Evolution of Medium-term Management Plan) ✓ Shifting operations to “sales” through advancement of operational process reform, and reinforcing net Toward the sales by starting collaboration with external partners improvement of PBR ✓ Strategic investment of capital in priority and gro
Slide 36: Section III Appendix
Section III Appendix 36
Slide 37: Appendix 1 Initiatives toward Improvement of ROE
Appendix 1 Initiatives toward Improvement of ROE 37
Slide 38: An Increase in Net Interest Income through Accumulation of High-Quality Assets
Boosting Net Sales Improvement of ROE —An Increase in Net Interest Income through Accumulation of High-Quality Assets— Net sales Management resources Capital Return Accumulation of Loans Improvement of RORA Capturing local demand for funds (Medium-term Management Plan) RORA on loans Local developmen
Slide 39: Boosting Net Sales —Expansion of Consulting Revenues of the Entire Group—
Improvement of ROE Boosting Net Sales —Expansion of Consulting Revenues of the Entire Group— Net sales Management Capital Return resources An increase in consulting revenues through collaboration within the Chugin Group People Group collaboration system Chugin Human Innovations More diverse and soph
Slide 40: Boosting Net Sales —Expansion of Business Pillars—
Improvement of ROE Boosting Net Sales —Expansion of Business Pillars— Net sales Management Capital Return resources C Cube Consulting Chugin Energy A consulting company centered on DX and SX with A local energy company that promotes decarbonization a small group of elite professionals <Members> Loca
Slide 41: Boosting Net Sales —Expansion of Business Pillars— Alliance Strategy
Improvement of ROE Boosting Net Sales —Expansion of Business Pillars— Net sales Management Capital Return resources Alliance Strategy We aim to co-create new value through active collaboration with various stakeholders, including different industry players. Boosting net Business domain • Co-creation
Slide 42: Appendix 2 Initiatives toward Improvement of PER
Appendix ２ Initiatives toward Improvement of PER 42
Slide 43: Co-creation of a Prosperous Future —Communities and Customers—
Improvement of PER Co-creation of a Prosperous Future —Communities and Customers— Communities Customers Employees Transformation into next-generation channels through DX Introduction to Chugin App Chugin Business Portal 500,000 20,000 Enhancement of users Enhancement of infrastructure 13,000 custome
Slide 44: Co-creation of a Prosperous Future —Employees—
Improvement of PER Co-creation of a Prosperous Future —Employees— Communities Customers Employees Organizational culture 2014 2015 2017 2018 2020 2021 2022 2023 2024 Zakkubaran-kai (frank discussion meeting), Headquarters open application Revision to the our second corporate brand movie system perfo
Slide 45: Appendix 3 Major Numerical Figures
Appendix ３ Major Numerical Figures 45
Slide 46: Net Interest Income —Non-consolidated for the Bank—
Net Interest Income —Non-consolidated for the Bank— [Factors behind change in net interest income] [Loan yield] (%) Foreign currency-based: ¥5.0 billion Loan yield Loan yield Loan yield Loan yield (yen) (yen) 1.53 Yen-based: ¥31.8 billion (+¥1.4 billion YoY) 1.41 (+¥4.5 billion YoY) • Interest o
Slide 47: Net Fee Income —Non-consolidated for the Bank—
Net Fee Income —Non-consolidated for the Bank— [Net fee income] ＋1.6 11.5 120 12 (billion yen) *: Assets in custody (investment trusts, insurance, municipal bonds, 9.9 and financial instrument brokerage) + inheritance-related business 100 10 9.2 ＋0.9 8.8 3.4 2.5 7.5 808 2.3 ＋0.7 2.4 2.8 Assets in 1.
Slide 48: Corporate Solution-related Revenues —Consolidated for the FG—
Corporate Solution-related Revenues —Consolidated for the FG— [Corporate solutions-related revenues] Breakdown of Group companies (million yen) *1： A total of gross margin for Lease, and operating revenues from Card, Human Innovations, and C Cube 6,141 Consulting (after deducting internal transactio
Slide 49: Revenues Related to Assets in Custody —Consolidated for the FG—
Revenues Related to Assets in Custody —Consolidated for the FG— [Breakdown of revenues related to assets in custody] Breakdown of Group companies (million yen) *1: Total of operating revenues for Securities and Asset Management (after deducting internal transactions) 5,146 Chugin Securities +1,137 (
Slide 50: Expenses —Non-consolidated for the Bank—
Expenses —Non-consolidated for the Bank— [Expenses] (billion yen) 67.7% 64.0% OHR 61.9% 55.0% 53.7% 300 30 ＋7 26.7 26.4 26.0 25.9 25.3 Taxes 1.5 1.7 1.5 1.6 Impact of the 1.5 0.9 1.0 transformation to the FG Business management fee* Approx. 0.6 billion yen in 5.7 5.7 expenses for personnel who Other
Slide 51: Credit Costs and Non-performing Loans —Non-consolidated for the Bank—
Credit Costs and Non-performing Loans —Non-consolidated for the Bank— [Credit costs] [Non-performing loans (NPL) (Loans disclosed (billion yen) (billion yen) under the Financial Revitalization Act)] Other credit costs* **The The Chugoku Chugoku Bank Bank does does not not carry carry out out partial
Slide 52: Deposits & Assets in Custody —Non-consolidated for the Bank—
Deposits & Assets in Custody —Non-consolidated for the Bank— [Average balance of deposits and assets in custody] ＋２.2% 9,406.9 (billion yen) (8,289.5) 9,200.8 9,083.4 (8,158.4) Total assets in (8,086.3) 193.5 custody 8,772.3 (7,776.5) 187.8 168.4 90,000 9,000 (Deposits + NCD) 174.9 186.9 ＋7.1% 226.4
Slide 53: Average Loan Balance —Non-consolidated for the Bank—
Expenses —Non-consolidated for the Bank— [Average loan balance] ＋11.1% 6,272 (billion yen) 5,642.2 70.8 60,000 6,000 5,329.4 5,155.8 42.0 4,994.2 ＋48.5% 1,273.4 30.0 Overseas 23.7 857.3 50,000 5,000 branches 24.7 753.9 612.9 Loans to the 529.9 407.2 headquarters*3 421.7 458.5 437.1 474.1 40,000 4,00
Slide 54: Securities —Non-consolidated for the Bank—
Securities —Non-consolidated for the Bank— [Average balance of securities] [Unrealized gains/losses] 2023/9末 Sep. 30, 2023 2024/3末 Mar. 31, 2024 2024/9末 Sep. 30, 2024 Term-end （億円） (billion yen) 前期末比 comparison (billion yen) 2,573.5 合計 Total 448 44.8 848 84.8 644 64.4 ▲ -204 20.4 有価証券 Securities 231
Slide 55: Status of Capital Adequacy —Consolidated for the FG—
Status of Capital Adequacy —Consolidated for the FG— [Capital adequacy ratio (consolidated for the FG)] [Status of capital adequacy (consolidated for the FG)] FY ended 1H ended (%) 2024/3期 2024/9期 （億円） (billion yen) Mar. 2024 Sep. 2024 対比 Change Total capital adequacy ratio 総自己資本 Total capital adequ
Slide 56: Chugin Financial Group, Inc.
Our challenges build our future. Chugin Financial Group, Inc. 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 her
Chugin Financial Group — H1 FY2024 Earnings Presentation on 6ix