Tochigi Bank, Ltd. · TSE:8550
Tochigi Bank — The Tochigi Bank — FY2024 Earnings Presentation
51 slides from Tochigi Bank's earnings presentation, May 26, 2025
Slide 1: Financial Results Presentation for the Fiscal Year Ended March 31, 2025
Financial Results Presentation for the Fiscal Year Ended March 31, 2025 (May 26, 2025) Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevai
Slide 2: Contents
Contents Overview of Financial Results Efforts to Enhance Corporate Value Appendix (Basic Strategy from the 11th Medium- term Management Plan to March 2030) Overview of Financial Results P.3 Efforts to Increase PBR P.17 Markets in Our Operating Areas P.28 Recording of Losses on Sale of Securities P.
Slide 3: Overview of Financial Results
Overview of Financial Results 2
Slide 4: Overview of Financial Results
Overview of Financial Results Overview of Financial Results (Billion yen) Non-consolidated 2024/3 2025/3 Change % Change Main Points on Non-consolidated Financial Results Gross operating profit 28.4 (1.3) (29.7) – We sold securities with valuation losses and ended the fiscal year with a net Net inte
Slide 5: Recording of Losses on Sale of Securities
Overview of Financial Results Recording of Losses on Sale of Securities Purpose In Japan, we returned to a world with interest rates as policy interest rates rose. Judging that the environment for reinvestment in securities had improved, we accelerated the planned improvement of our portfolio and so
Slide 6: Net Interest Income, Fees and Commissions Income, and Core Net Business Profit
Overview of Financial Results Net Interest Income, Fees and Commissions Income, and Core Net Business Profit (Excluding Gains (Losses) from Cancellation of Investment Trusts) Reasons for Increase(Decrease) in Net Interest Income Fees and Commissions Income Interests Interest and (Billion yen) on dep
Slide 7: Trends in Yields
Overview of Financial Results Trends in Yields Trends in Yields on Loans/Discounts, Deposits, and Securities Trends in Interest Rates on Newly Originated Loans Loand/Discounts Securities Deposits Loans/Discounts (excluding gains (losses) （%） from cancellation of (%) investment trusts) 1.09 中小企業向け 有担
Slide 8: Deposits and Loans and Bills Discounted
Overview of Financial Results Deposits and Loans and Bills Discounted Trends in Balance of Deposits Trends in Balance of Loans and Bills Discounted 40,000 4,000 * ( ) indicates the percentage of total deposits 25,000 2,500 * ( ) indicates the percentage of total balance of loans and （億円） (Billion ye
Slide 9: Expenses and Equity Capital
Overview of Financial Results Expenses and Equity Capital Trends in Expenses and Overhead Ratio (OHR) Trends in Equity Capital and Capital Adequacy Ratio (Billion yen) 3,500 350.0 Consolidated equity Consolidated capital 15.00% 連結自己資本額 連結自己資本比率 人件費 税金 Personnel expenses 物件費 物件費 Non-personnel expense
Slide 10: Loans Based on the Banking Act and Financial Reconstruction Act
Overview of Financial Results Loans Based on the Banking Act and Financial Reconstruction Act Loans Based on the Banking Act and Financial Reconstruction Act: Cost of Credit Balance at the Fiscal Year-end (Billion yen) （%） 破産更生債権等 危険債権 要管理債権 Bankrupt and quasi- Special 要管理債権 危険債権 破産更生債権等 不良債権比率 Doub
Slide 11: Financial Results Forecast
Overview of Financial Results Financial Results Forecast (Billion yen) Main Points on Non-consolidated Financial Results Non-consolidated 2025/3 2026/3 Change % Change The securities portfolio has improved due to significant losses on sales Gross operating profit (1.3) 30.0 31.3 – of securities in t
Slide 12: Dividends and Total Return Ratio
Overview of Financial Results Dividends and Total Return Ratio Although we recorded a loss for the year ended March 31, 2025 due to losses on sales of securities, we will maintain the year-end dividend at 3.50 yen per share and an annual dividend of 7.00 yen per share. We plan to pay an annual divid
Slide 13: The 11th Medium-term Management Plan —Progress status—
The 11th Medium-term Management Plan —Progress status— 12
Slide 14: The 11th Medium-term Management Plan (Overview)
The 11th Medium-term Management Plan The 11th Medium-term Management Plan (Overview) Realize the Provision of New Value Theme Term of the plan: from April 2023 to March 2026 Basic strategy 1: Strengthening profitability Basic strategy 2: Strengthening the system —Evolution (deepening) of regional fi
Slide 15: The 11th Medium-term Management Plan (Result)
The 11th Medium-term Management Plan The 11th Medium-term Management Plan (Result) Progress on Management Targets (March 2025) 11th Medium-term 11th Medium-term 2024/3 Result 2025/3 Result Management Plan Management Plan Target Landing Forecast Core net business profit ¥7.4 billion ¥8.4 billion ¥8.5
Slide 16: Growth Investment and Strategic Personnel Assignment
The 11th Medium-term Management Plan Growth Investment and Strategic Personnel Assignment Growth Investment Strategic Personnel Assignment Invest ¥8.0 billion or more in total (for 3 years) Reassign 150 personnel in total (for 3 years) Investment results (2024/3 to 2025/3) (Million yen) Reassignment
Slide 17: Efforts to Enhance Corporate Value
Efforts to Enhance Corporate Value 16
Slide 18: Efforts to Increase PBR
Efforts to Enhance Corporate Value Efforts to Increase PBR In order to increase our price book-value ratio (PBR), we are implementing initiatives for enhancing management effectiveness (as measured by ROE: return on equity) and corporate growth expectations for the Bank (as measured by PER: price ea
Slide 19: Increase of PBR
Efforts to Enhance Corporate Value Increase of PBR ROE is currently below the capital cost, and PBR remains below 1x. We aim to achieve ROE that exceeds the shareholders’ equity cost to increase PBR (*) The Bank’s cost of shareholders’ equity is Trends in ROE by year recognized to be around 7 to 9%
Slide 20: Medium- to Long-term ROE Targets
Efforts to Enhance Corporate Value Medium- to Long-term ROE Targets We aim to achieve an ROE that exceeds the cost of [Vision] ROE shareholders’ equity. Our initial target is to achieve 3% or higher by the final ROE of 8% year of the Medium-term Management Plan, 6% or higher by 2030/3, and ultimatel
Slide 21: Targets for Management Indicators etc., toward ROE of 6%
Efforts to Enhance Corporate Value Targets for Management Indicators etc., toward ROE of 6% Equation for Decomposition of ROE ROE Profit ＝ RORA Profit × Financial leverage Risk assets Equity capital Risk assets Equity capital RORA ≒ [Gross operating profit RORA] Expenses Gross operating profit (excl
Slide 22: Improvement of RORA (Strengthening profitability)
Efforts to Enhance Corporate Value Improvement of RORA (Strengthening profitability) As part of our efforts to resolve issues faced by regional customers, we will steadily increase loans to the regional community (SME and home loans). To achieve this, we will first seek to improve the loan-to-deposi
Slide 23: Loan Plan (Average Balance and Yield)
Efforts to Enhance Corporate Value Loan Plan (Average Balance and Yield) We will increase the balance of loans to SMEs by about 140.0 billion yen with the risk-taking capacity created by the reduction of valuation losses on securities and also increase the overall balance of loans to large enterpris
Slide 24: Securities (Restructure of Portfolio)
Efforts to Enhance Corporate Value Securities (Restructure of Portfolio) Assuming a gradual rise in domestic interest rates, we plan to reinvest mainly in medium- and short-term government bonds (2- to 5-year bonds) and asset swaps for the time being. 2025/3 (Results） 2030/3 Portfolio Forecast Equit
Slide 25: Financial Leverage Control (Appropriate capital management)
Efforts to Enhance Corporate Value Financial Leverage Control (Appropriate capital management) Capital Allocation (for illustration purpose) [Changes in capital adequacy ratio] Accumulated 利益蓄積 profits ﾘｽｸｱｾｯﾄ増加 Increase in risk assets Shareholder 株主還元 returns Growth 成長投資等 investment etc. 10.10% 9%
Slide 26: Accumulation of Core Net Business Profit and Improvement of OHR
Efforts to Enhance Corporate Value Accumulation of Core Net Business Profit and Improvement of OHR Accumulation of Core Net Business Profit (excluding gains (losses) from cancellation of investment trusts) Trends in Core Net Business Profit Accumulation of Core Net Business Profit to achieve ROE of
Slide 27: Reduction of Strategic Shareholdings
Efforts to Enhance Corporate Value Reduction of Strategic Shareholdings With regard to strategic shareholdings, we verify the rationale for holding them annually at Board of Directors meetings. Most recently, at the Board of Directors meeting held in December 2024, we reviewed the appropriateness of
Slide 28: Appendix
Appendix (Basic Strategy from the 11th Medium-term Management Plan to March 2030) 27
Slide 29: Markets in Our Operating Areas
Appendix Markets in Our Operating Areas [Working-age Population (Ages 15-64)] Current status Future projections Prefectural capital (population and business establishments are distributed and concentrated) 2024 2030 Plan major developments, such as LRT extension and arena 317,461 300,505 Utsunom
Slide 30: Thorough credit creation for regional SMEs
Appendix Corporate Customer Strategy —Thorough credit creation for regional SMEs— We strengthen consulting services aimed at increasing corporate value for customers through business feasibility assessments and support for key industries based on the characteristics of each area. Through resolving c
Slide 31: Creating funding demand for SMEs by resolving issues
Appendix Corporate Customer Strategy —Creating funding demand for SMEs by resolving issues— Create funding demand through in-depth consulting based on “area strategies” and “industry-specific strategies” that take into account the regional characteristics and industrial distribution of the business
Slide 32: Measures to promote loans by area and industry
Appendix Corporate Customer Strategy —Measures to promote loans by area and industry— Promotion measures by area and target of balance increase Promotion measures by industry and target of balance in 2030/3 increase in 2030/3 [Utsunomiya Area] 50.0–60.0 billion yen [Manufacturing] Around 40.0–50.0 b
Slide 33: Lending to SMEs — Portfolio breakdown by industry
Appendix Corporate Customer Strategy —Lending to SMEs— Portfolio breakdown by industry (SMEs/total loans and bills discounted) ■Change in portfolio breakdown by industry in lending to SMEs in association with the expansion of SME loans 2025/3 SMEs 2030/3 SMEs Expand loans to SMEs Balance increase of
Slide 34: Boosting earnings from solutions
Appendix Corporate Customer Strategy —Boosting earnings from solutions— Provide appropriate solutions for each life stage of companies to support their sustainable growth. One-Stop Support for Support for Founding Period Founding & New Businesses Maturing Period Business Succession Business Plan Con
Slide 35: Personal loans
Appendix Individual Customer Strategy —Personal loans— We have established a consultation system for customers via a variety of channels, including direct face-to-face at our six Loan Plazas, indirect face-to-face at our Direct Centers (call operations), and non-face-to-face on the web. Trends in Ba
Slide 36: Deposit assets
Appendix Individual Customer Strategy —Deposit assets— The Bank will utilize sales channels and digital tools to provide consulting functions that closely align with each customer’s life plan, based on the goals-based approach. Tochigin Investment Trust Support Center (opened in October 2024) Trends
Slide 37: Deposit Strategy
Appendix Deposit Strategy Returning to a so-called “world with interest rates,” the significance of deposit acquisition is increasing even further. The Bank aims to stably build up deposit balance through promoting the transition of individual/corporate customers’ bank accounts to their main account
Slide 38: DX Strategy — Start to construct data utilization base
Appendix DX Strategy —Start to construct data utilization base (data lake)— We aim to create new values in the fields such as sales, planning, credit management, and risk management by constructing the data utilization base, organizing and integrating data held by our systems including the core syst
Slide 39: DX Strategy — Service for corporate customers
Appendix DX Strategy —Service for corporate customers— The Bank will build up contacts with customers digitally to provide new value-added services. Tochigin BIZ Portal (corporate portal site) Number of Corporate IB (scheduled to start the service in August 2025) Contracts The online service desk fo
Slide 40: DX Strategy — Service for individual customers
Appendix DX Strategy —Service for individual customers— The Bank will build up contacts with customers digitally to provide new value-added services. Tochigin App Number of Tochigin App Users [Examples of currently available functions] (Users) 240,000 • Check of balance and deposit/withdrawal transa
Slide 41: Channel & Branch Office Strategy
Appendix Channel & Branch Office Strategy The Bank will strengthen the sales system by pursuing the diversification of channels and branch office functions. Direct Face-to-Face Channel (i) Direct face-to-face ⇔ Non-face-to-face Non-face-to-face Channel Identify and resolve essential issues by people
Slide 42: Clean Energy Solutions Co., Ltd.
Appendix New Business Initiatives —Clean Energy Solutions Co., Ltd.— Clean Energy Solutions Co., Ltd., established in March 2023, is a company in the energy field that was launched into business based on an idea of our employee. Two years having passed since its establishment, the company’s operatio
Slide 43: Organizational Culture/Climate Improvement of Internal Environment
Appendix Initiatives for Investment in Human Capital The Bank will strive to enhance engagement through the improvement of the internal environment, the cultivation of the Tochigin mindset, and the cultivation of a new organizational culture/climate. Wholeheartedly desire to contribute to Take on ne
Slide 44: Initiatives for Investment in Human Capital
Appendix Initiatives for Investment in Human Capital The Bank deems human resources, a driver to realize the provision of new value, as its capital. The Bank has been boosting investment in human capital. Raise in Starting Wage and Wage Increase Ratio Development of Specialized Human Resources Raise
Slide 45: Human resources development
Appendix Initiatives for Investment in Human Capital —Human resources development— In the 11th Medium-term Management Plan, we have set the theme of “Realize the provision of new value” and aim to become a corporate group that co-creates a sustainable regional future. As an effort to realize this go
Slide 46: Initiatives for Diversity, Equity & Inclusion
Appendix Initiatives for Diversity, Equity & Inclusion [1] Promotion of diversity After the establishment of the Women Advancement Promotion Council in January 2015, we launched the Diversity & Inclusion (D&I) Project Team in February 2025. Targets and Results related to diversity and development
Slide 47: Initiatives to Improve Engagement
Appendix Initiatives to Improve Engagement We will improve our productivity and performance and transform our organizational culture/climate. To such ends, we have conducted the engagement survey among all bank employees, identified current issues related to their work and work environment, and have
Slide 48: TCFD
Appendix Initiative for Climate Change —TCFD— To tackle environmental issues such as climate change, which the Group recognizes as its significant challenges, the Group announced its endorsement of the Task Force on Climate-related Disclosures (TCFD) recommendations in December 2021 and are now work
Slide 49: TCFD
Appendix Initiative for Climate Change —TCFD— «Scope 3 Emissions by Category» The Bank’s Scope 3 emissions consist mostly of emissions under [Breakdown of emissions under Category 15 (Investments)] Category 15 (greenhouse gas emissions by investees and loan recipients, also known as financed emissio
Slide 50: Initiatives for Sustainable Finance
Appendix Initiatives for Sustainable Finance To support our customers in their efforts to address social and environmental issues, the Bank has positioned the following financing activities as ESG/SDGs financing, and are working to strengthen this initiative. (Billion yen) 3,000 300.0 Social secto
Slide 51: Transcribing, copying, or distributing this material to third parties without prior written permission from
Transcribing, copying, or distributing this material to third parties without prior written permission from THE TOCHIGI BANK, LTD. is prohibited. This material is prepared for informational purposes only and is not intended as a solicitation to buy or sell any particular securities. All or part of t