Resona Holdings, Inc. · TSE:8308
Resona — FY2008 Earnings Presentation
49 slides from Resona's earnings presentation, May 25, 2009
Slide 1: Business Results of FY2008 and Future Management Direction
Business Results of FY2008 and Future Management Direction Aiming at Establishing True Retail Bank RESONA May 25, 2009 @ Resona Holdings, Inc.
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: Resona Trust & Banking Outline of Business Results for FY2008 Updates on Major Bus
Slide 3: Outline of Business Results for FY2008
Outline of Business Results for FY2008 Updates on Major Businesses: Results of FY2008 and Outlook for FY2009 Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 2
Slide 4: Financial Results for FY2008: General Overview
Financial Results for FY2008: General Overview Secured consolidated net income of Y123.9 bn. Net income decreased by Y178.9bn. (-59.1%) YoY and by Y36.1 bn. (-22.5%) compared with Nov. ’08 forecast Y104.4 bn. gain from the sale of Tokyo Head Officer building => Net contribution to net income aft
Slide 5: Outline of P&L for FY2008
Outline of P&L for FY2008 (Billions of yen) Resona Holdings Total of four banks Factors accounting (Consolidated) (Non-consolidated) Resona for the difference (A) - (B) (Approx. figures) Saitama Difference Resona Kinki Osaka Trust & Resona RC: Resona Card, RG: Resona Guarantee, Banking RCP: Resona C
Slide 6: The Bank Most Distant from the Current Turmoil in Financial Markets
The Bank Most Distant from the Current Turmoil in Financial Markets Sound assets backed by very stable deposit funding RHD’s consolidated balance sheet [Stable funding structure] (As of March 31, 2009) Strong retail deposit base [Sound loan portfolio] Loans and bills 13 million retail deposit ac
Slide 7: Analysis on YoY Change in Top Line Income
Analysis on YoY Change in Top Line Income (Total of Group banks) Top line income declined by Y24.7bn primarily due to decrease in fee income [FY2007] Financial (Amount in billions of yen) [FY2008] product sale “+” mark indicates contribution to profit Y700.0bn （17.9) Y675.3bn Net gains on Pension/se
Slide 8: Analysis on YoY Change in Consolidated Net Income
Analysis on YoY Change in Consolidated Net Income Net income declined by Y178.9bn, (59.1)% YoY (Amount in billions of yen) “+” mark indicates contribution to profit Top-line Income (24.7) Net gains on stocks (Including stock futures) Operating expenses +3.4 (0.7) (178.9) Net credit cost (125.2) Othe
Slide 9: Measures to Enhance Financial Soundness: Loan Asset
Measures to Enhance Financial Soundness: Loan Asset High reserve ratio against uncovered NPLs NPL balance and NPL ratio (Total of Group Banks) (Mar. 31, 2009) Collateral and guarantees(A) Loan loss reserve(B) Uncovered portion（C） （B） ／ {（B）＋（C）} (Y bn) 100% 5.5% 100% 9.7% 11.19% 12% 14.4% Unrecove
Slide 10: Measures to Enhance Financial Soundness: Credit Cost
Measures to Enhance Financial Soundness: Credit Cost New addition to specific reserve is mostly Credit costs (Total of Group banks) necessitated by “3 specified industries” and certain large borrowers （Billions of Yen） New addition to specific reserve by credit amounts at the beginning of the fisc
Slide 11: Measures to Enhance Financial Soundness: Securities Portfolio
Measures to Enhance Financial Soundness: Securities Portfolio Securities portfolio with minimized downside risks Non-trading marketable securities available for sale Unwinding of net investment (at cost) Relationship-purpose equity holdings Significant reduction position in response to during In
Slide 12: Capital Adequacy Ratio (RHD Consolidated Basis)
Capital Adequacy Ratio (RHD Consolidated Basis) RHD’s consolidated CAR [Mar. 31, 2008] 14.28% ⇒ [Mar. 31, 2009] 13.45% (- 0.83% YoY) 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 Primary factors for the change Change in capital adequacy ratio (Basel II, F-IRB basis) [Total qualify
Slide 13: Earnings and Dividend Forecasts for Fiscal Year 2009
Earnings and Dividend Forecasts for Fiscal Year 2009 (Billions of yen) Resona Holdings (Non- Resona Holdings (Consolidated) consolidated) Change from Change from Interim Full year Interim Full year the previous the previous forecast forecasts year forecast forecasts year Consolidated ordinary income
Slide 14: Analysis on Consolidated Net Income Forecast for FY2009
Analysis on Consolidated Net Income Forecast for FY2009 Consolidated net income forecast for FY2009 : Y100.0 bn. [Interest rate] FY2008 FY2009 (Amount in billions of yen) （Actual） （Plan） B-A “+” mark indicates contribution to profit Loan rate A 2.17% B 1.91% -0.26% +37.6 Deposit rate 0.26% 0.15% -0.
Slide 15: Updates on Major Businesses
Outline of Business Results for FY2008 Updates on Major Businesses: Results of FY2008 and Outlook for FY2009 Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 14
Slide 16: Trend of Loan Business (Total of Group Banks)
Trend of Loan Business (Total of Group Banks) Trend of loan and deposit rates and spread Loan rate caught up with regional banks average 2.5% 2.2% Loan rate (left scale) Resona Group (3 banks) 2.4% Loan-to-deposit spread (left scale) 1.0% City Banks 2.1% Deposit rate (right scale) Regional Banks 2
Slide 17: Loan and Bills Discounted: Plan for FY2009
Loan and Bills Discounted : Plan for FY2009 Average balance of loans to corporations Housing Loan (Group banks total) (Group banks total) 15 Balance at the end of March 2009: Y11.7 tn. 13.19 13.37 (Housing loan ratio: 43.9%) 12.86 12.43 12.37 Proper housing loans Flat 35 Housing loan ratio 13 44.1
Slide 18: Sale of Financial Products
Sale of Financial Products Investment Trusts Personal annuity Income for FY2008 : Y20.3bn ( -Y17.0bn YoY） Income for FY2008: Y8.7bn ( - Y0.9bn YoY) Amount sold: Y314.9bn, Term-end Bal.: Y1,696.2bn Amount sold: Y194.1bn Trust fees Sale commission Amount sold (right scale) 16 50 320.0 1,297.2
Slide 19: Real Estate, Pension and Securities Trust Businesses
Real Estate, Pension and Securities Trust Businesses Real estate business (RB) Pension and securities trust business (RT) Income for FY2008: Y7.7bn (-Y8.0bn YoY) Gross operating profits for FY2008: Y27.4bn (-Y3.6bn) Commission income: Y7.2bn (- Y7.3bn YoY) Pension trust business: Y20.0bn (-
Slide 20: Results of FY2008 and Outlook for FY2009
Outline of Business Results for FY2008 Updates on Major Businesses: Results of FY2008 and Outlook for FY2009 Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 19
Slide 21: 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 22: Establishing a firm brand of "Retail x Trust" (2)
Establishing a firm brand of “Retail x Trust” (2) 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:
Slide 23: Efficacy of New Branch Office Management Structure (RB)
Efficacy of New Branch Office Management Structure (RB) Redefined roles for “business promotion” and “admin. & internal control” divisions (Apr. 2008) Old management structure New management structure Division of labor with a view to enhancing expertise Branch BranchOffice OfficeGM Business Busine
Slide 24: Efforts to Build Solid Foundation for Sustainable Growth
Outline of Business Results for FY2008 Updates on Major Businesses: Results of FY2008 and Outlook for FY2009 Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 23
Slide 25: 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 26: Repayment of Public Funds: Progress in FY 2008
Repayment of Public Funds: Progress in FY 2008 Despite difficult environment, repaid Y252.3bn and cumulative repaid amount exceeded Y1tn [Jun 19, 2008] DIC transferred a part of the common shares of RHD to the Dai-ichi Mutual Life Repayment of Y14.4bn on an infusion amount basis (Y50.0bn in term
Slide 27: Consideration on Strength of Core Tier 1 Capital
Consideration on Strength of Core Tier 1 Capital Core Tier 1 (1) : Net of DTA, Preferred Securities, Non-convertible Preferred Shares (Billions of Yen) 8% Among preferred shares, non- 2,000 308.9 convertible preferred shares are deduced as non-core Tier 1 capital 112.9 6% 1,500 Ratio to Tier 1 163
Slide 28: Call Ladder for Debt Capital Instruments (FY2009, FY2010)
Call Ladder for Debt Capital Instruments (FY2009, FY2010) Call schedule: Resona Holdings level Arrival Arrivalofofcall calldate dateduring duringFY2009 FY2009 LT2 Approx. Y20 bn. LT2 Approx. Y20 bn. FY2009 FY2010 Estimated Estimatedimpact impacton onCAR CAR ⇒⇒Approx. （Based Approx. 0.1% （Base
Slide 29: Distributable Profits and Dividend Policy
Distributable Profits and Dividend Policy Plan to distribute 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) Common Y0.3bn Common & Preferred Preferred Y17.8bn Y0.4bn Re
Slide 30: Pathway to Early Repayment of Public Funds
Outline of Business Results for FY2008 Updates on Major Businesses: Results of FY2008 and Outlook for FY2009 Efforts to Build Solid Foundation for Sustainable Growth Pathway to Early Repayment of Public Funds <Reference Material> 29
Slide 31: Management Accounting by Business Lines
Management Accounting by Business Lines Management Accounting by Group Business Lines (FY2008) “RAROC” and “RVA”*1 as management indicators to measure profitability to allocated capital （Ybn.、％） Management Indices Net Operating Profit after Deduction of Credit Cost*2 Net Credit Cost RAROC RVA*1 OH
Slide 32: Capital Adequacy Ratio (RHD and Subsidiary Banks)
Capital Adequacy Ratio (RHD and Subsidiary Banks) Mar. 31, 2009 [Preliminary] 億円20/3末3FIRB増減自己資本比率TierⅠ比率自己資本額+31,965 RHD (Consolidated) RB (Consolidated) SR (Non-consolidated) Japanese Domestic Standard (F-IRB) Mar. 31,2008 Mar. 31,2009 Mar. 31,2008 Mar. 31,2009 Mar. 31,2008 Mar. 31,2009 (Billions
Slide 33: Risk Buffer
Risk Volume Relative to Capital (End of March 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 mea
Slide 34: Securities Portfolio
Securities Portfolio Net unrealized losses on available-for-sale securities (RHD consolidated basis) as of the end of March 2009 amounted to Y32.5bn. Stock Portfolio Bond Portfolio (Available-for-sale securities, RHD Consolidated) [Balance of Securities Held (Non-consolidated Basis) ] (Ybn) No (Yb
Slide 35: Shareholdings by Industry (End of March 2009, RB)
34 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Services Real estate Other financial services Insurance Securities, commodities TOPIX Banking Retail Wholesale Shareholdings by Industry (End of March 2009, RB) Information, telecommunication Resona Bank Warehouse, transportation Air transport Marine tra
Slide 36: 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 2008] [End of March 2008] Within 6M 6 to 12M 1 to 3Y Over 3Y Total Within 6M 6 to 12M 1 to 3Y Over 3Y Total Fixed rate 4.1% 4.0% 7.2% 8.0% 23.3% Liquid deposits 43.8% 2.1% 8.2% 7.9% 61.9%
Slide 37: 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 March 2009 End of March 2008 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 110.0 454.0
Slide 38: 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 March 2008] [End September 2008] [End March 2009] Fixed Fixed Rate Fixed Rate 15% Rate Prime 15
Slide 39: Composition of Deposits by Corporate/Individual Customers (RB)
Composition of Deposits by Corporate/Individual Customers (RB) Corporate Deposits [End March 2008] [End September 2008] [End March 2009] Time Time Time Deposits Deposits deposits 27% 28% 26% Liquidity Liquidity Liquidity Deposits deposits Deposits 67% 70% 68% Individual Deposits [End March 2008] [
Slide 40: Migrations of Borrowers (RB, 1H of FY2008)
Migrations of Borrowers (RB, 1H of FY2008) Exposure amount basis （Migration during the 1H of FY2008） End of September 2008 Upward Downward Special Quasi- Migration Migration Normal Other Watch Doubtful Bankrupt Other Attention Bankrupt Collection, Assignments, Repayments Sale Normal 95.2% 3.0% 0.4%
Slide 41: Migrations of Borrowers (RB, 2H of FY2008)
Migrations of Borrowers (RB, 2H of FY2008) Exposure amount basis （Migration during the 2H of FY2008） End of March 2009 Upward Downward Special Quasi- Migration Migration Normal Other Watch Doubtful Bankrupt Other Attention Bankrupt Collection, Assignments, Repayments Sale Normal 96.2% 2.7% 0.1% 0.3%
Slide 42: Trend of Long-term Senior Debt Rating of Resona Bank
Trend of Long-term Senior Debt Rating of Resona Bank 2003年 2003 2004年 2004 2005年 2005 2006年 2006 2007年 2007 2008年 2008 2009年 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
Slide 43: List of RHD's Preferred Shares (1)
List of RHD’s Preferred Shares (1) [As of April 30, 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 4/26/2001
Slide 44: List of RHD's Preferred Shares (2)
List of RHD’s Preferred Shares (2) [As of April 30, 2009] Class 1 Preferred Shares Class 2 Preferred Shares Class 3 Preferred Shares Class 4 Preferred Shares Class 5 Preferred Shares Class 9 Preferred Shares Distinction between public and private fund Public Fund Public Fund Public Fund Private Fund
Slide 45: Class 9 Preferred Shares: Structure Embodying Basic Policies toward Repayments
Class 9 Preferred Shares: Structure that Embodies “Basic Policies toward Repayments” Designed in such a way to ensure high capital eligibility and to avoid dilution All shares will be allotted and subscribed by Merrill Lynch Limitation on exercise of Acquisition Rights Japan Finance Acquisition R
Slide 46: Class 9 Preferred Shares: Acquisition Right and Acquisition Clause
Class 9 Preferred Shares: “Acquisition Right” and “Acquisition Clause” 1Y 5Y 8Y Acquisition Right Not Conditionally exercisable* (Preferred Shareholders) Exercisable* (If MV of ordinary shares exceeds the Acquisition Exercisable Rights Threshold Price for a certain period) Acquisition Clause Conditi
Slide 47: Class 9 Preferred Shares: Comparison with Public Fund Preferred Stocks
Class 9 Preferred Shares: Comparison with Public Fund Preferred Stocks Financial Function Early Deposit Insurance Class 9 Preferred Shares Strengthening Law Law Preferred Dividend Rate Fixed rate (1.36%, 1.48%) 1yYLibor +50bps Fixed rate (0.93%) Initial Exchange Premium N.A. N.A. 15％ Start of the Pe
Slide 48: Business Revitalization Plan: Earnings Plan
Business Revitalization Plan: Earnings Plan (Total of Four 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 700.0 675.3 690.0
Slide 49: 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