77 Bank, Ltd. · TSE:8341
77 Bank — The 77 Bank — H1 FY2022 Earnings Presentation
45 slides from 77 Bank's earnings presentation, Dec 7, 2021
Slide 1: Results for the First Half of Fiscal Year Ending March 31, 2022 - IR Presentation
Results for the First Half of Fiscal Year Ending March 31, 2022 IR Presentation Materials were prepared for the Bank’s presentation of its results for the first half of fiscal year ending March 31, 2022 held on December 7, 2021. December 7, 2021
Slide 2: Contents
Contents 1. Financial Summary ... 2 2. Projected Performance ... 12 3. Business Strategy ... 16 4. ESG and SDGs ... 36 The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 1
Slide 3: Financial Summary
01 Financial Summary The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 2
Slide 4: Financial Summary (Summary of profits and losses)
1. Financial Summary (Summary of profits and losses) (JPY bn, %) Summary of profits and losses 1H 1H YoY change (Non-consolidated) FY2021 FY2022 Increase/decrease Rate of change % < Core operating income > Gross operating income 37.5 38.5 1.0 2.7 [ Core gross operating income ] [ 38.0 ] [ 44.4 ] [ 6
Slide 5: Financial Summary (Interest income)
1. Financial Summary (Interest income) (JPY bn) 1H 1H FY2021 FY2022 YoY change Interest income increased JPY 3.6 billion year-on-year, Interest income 34.1 37.7 3.6 partly as a result of increases in interest on loans and bills discounted and interest and dividends on Investment income 34.9 38.0 3.1
Slide 6: Financial Summary (Loans and bills discounted/Deposits)
1. Financial Summary (Loans and bills discounted/Deposits) ・ Loans and bills discounted increased 2.8% year-on-year owing to active efforts to respond to the demand for funds of SMEs, etc., affected by COVID-19, as well as an increase in retail loans centered on housing loans. Interest on yen-denomi
Slide 7: Response to clients in light of impact of COVID-19
1. Financial Summary (Response to clients in light of impact of COVID-19) COVID-19-related loan performance (including changes in loan conditions) JPY bn Cases ♦Consultations by the COVID-19 Emergency Amount of loans executed Number of loans executed 500 10,000 Support Team 7,385 cases (as of Septem
Slide 8: Financial Summary (Securities)
1. Financial Summary (Securities) Balance of marketable securities (on an amortized cost base) The balance of marketable securities increased National gov. bonds Local gov. bonds by JPY 8.6 billion from the end of March 2021, (JPY bn) Corporate bonds Others 4,000 Stocks Balance of public, etc. (at t
Slide 9: Financial Summary (Securities)
1. Financial Summary (Securities) Gains (losses) from evaluation of securities Gain (losses) from evaluation of securities National gov. bonds Local gov. bonds Corporate bonds Others increased JPY 7.0 billion from the end of Stocks Gains (losses) from evaluation of securities March 2021, thanks to i
Slide 10: Financial Summary (Fees and commissions)
1. Financial Summary (Fees and commissions) (JPY mn) 1H 1H FY2021 FY2022 YoY change Fees and commissions increased JPY Fees and commissions A 7,854 9,330 1,476 2.2 billion year-on-year, thanks partly to Fees and commissions from payments 4,628 4,536 (92) an increase in fees and commissions from corp
Slide 11: Financial Summary (Expenses)
1. Financial Summary (Expenses) Despite an increase in non-personnel expenses as a result of higher system-related expenses, etc., expenses decreased JPY 0.5 billion year-on-year, mainly because of a decrease in personnel expenses, partly as a result of a decrease in the number of employees. (JPY bn
Slide 12: Credit-related expenses/reserve for loan losses/credits
(Credit-related expenses/reserve for loan losses/ 1. Financial Summary credits disclosed under the Financial Reconstruction Law) Despite factors such as credit downgrades caused by the prolonging of the COVID -19 pandemic, etc., credit-related expenses decreased as the impact on business performance
Slide 13: Projected Performance
02 Projected Performance The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 12
Slide 14: Projected Performance (Summary of profits and losses)
2. Projected Performance (Summary of profits and losses) (JPY bn) Summary of profits and losses FY2021 FY2022 YoY change FY2023 (Non-consolidated) (Results) (Forecast) Increase/decrease (Simulation) Gross operating income 67.8 74.8 7.0 77.1 [ Core gross operating income ] [ 80.6 ] [ 82.4 ] [ 1.8 ] [
Slide 15: Projected Performance (Yields, interest margin, interest rates, etc.)
2. Projected Performance (Yields, interest margin, interest rates, etc.) (JPY bn) FY2021 FY2022 FY2022 (Reference) Level of yields, interest rates, etc. used as the basis for projected (Results) (Forecast) YoY change (Simulation) performance and simulations (%) Interest income 70.5 71.4 0.9 71.7 FY2
Slide 16: Projected Performance (Shareholder returns)
2. Projected Performance (Shareholder returns) We will continue to maintain a stable dividend, while also endeavoring to enhance internal reserves and maintain and improve the soundness of our management. FY2017 FY2018 FY2019 FY2020 FY2021 1H FY2022 ROE (consolidated) (%) 3.56 3.82 3.60 3.89 3.42 4.
Slide 17: Business Strategy
03 Business Strategy The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 16
Slide 18: Business Strategy (Vision 2030)
3. Business Strategy (Vision 2030) The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 17
Slide 19: Business Strategy (Vision 2030)
3. Business Strategy (Vision 2030) The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 18
Slide 20: Consulting-based sales based on customer needs (Corporate sales)
3. Business Strategy (Corporate sales) Ⅰ Top customer satisfaction strategy Inspire through consulting and digital technologies! ♦Consulting-based sales based on customer needs Corporate loans (average balances) Fees and commissions from corporate clients Foreign currency-denominated Miyagi Pref. Sy
Slide 21: Continuation of business evaluations
3. Business Strategy (Corporate sales) Ⅰ Top customer satisfaction strategy Inspire through consulting and digital technologies! ■Continuation of business evaluations Implementation of business evaluations • Capture and stimulate customer needs with “quality enhancements” (Clients, JPY 100mn) Number
Slide 22: Provision of solutions from headquarters and group
3. Business Strategy (Corporate sales) Ⅰ Top customer satisfaction strategy Inspire through consulting and digital technologies! External support The 77 Bank Group Clients organizations Issues for enhancement of corporate value Development Bank of Japan Cultivate and capture Financial 77 Bank 77 Lea
Slide 23: Strengthening promotion of apartment loans and structured finance
3. Business Strategy (Corporate sales) Ⅰ Top customer satisfaction strategy Inspire through consulting and digital technologies! (JPY bn) Balance of apartment loans and amount executed (JPY bn) Balance Amount executed 611.7 614.3 40 ■Strengthening promotion of 601.8 600 apartment loans 31.6 28.1 • R
Slide 24: Proposals that match customers' lifestyles (Retail sales)
3. Business Strategy (Retail sales) Ⅰ Top customer satisfaction strategy Inspire through consulting and digital technologies! ♦ Proposals that match customers’ lifestyles Retail loans (average balances) Balance of assets in custody 77 Securities (excluding brokerage from the Bank) Investment trusts
Slide 25: Capturing accommodation purchasing needs and unsecured loans
3. Business Strategy (Retail sales) Ⅰ Top customer satisfaction strategy Inspire through consulting and digital technologies! Number of new housing starts in Miyagi Pref. and ■Steadily capturing accommodation amount of housing loans executed (Number of houses) (JPY bn) purchasing needs Inc. detached
Slide 26: Product proposals tailored to different life events
3. Business Strategy (Retail sales) Ⅰ Top customer satisfaction strategy Inspire through consulting and digital technologies! Sales commissions of assets in custody 77 Securities (excluding brokerage commissions, etc. from the Bank) Investment trusts ■Product proposals tailored to different life eve
Slide 27: Improve productivity through paperwork-free reform and digital initiatives
3. Business Strategy (Productivity enhancement) Reform channels and release from the burden of Ⅱ Double productivity strategy administrative work! ♦Improve productivity through paperwork-free reform, digital initiatives, and the rebalancing of management resources Expenses and core OHR (JPY bn) Pers
Slide 28: Measures to promote paperwork-free reform
3. Business Strategy (Productivity enhancement) Reform channels and release from the burden of Ⅱ Double productivity strategy administrative work! ■ Measures to promote paperwork-free Total number of personnel and number of bases (People, branches) Part-timers etc. reform, etc. Employees Number of b
Slide 29: Enhancement of non-face-to-face channels
3. Business Strategy (Utilization of digitalization) Reform channels and release from the burden of Ⅱ Double productivity strategy administrative work! Number of users of e-banking services and app ■Enhancement of non-face-to-face channels downloads and initiatives targeting digital reform (Thousand
Slide 30: Create an attractive region and support growth of companies
3. Business Strategy (Support growth) Ⅲ Regional growth strategy Achieve sustainable growth in the local community! ♦Create an attractive region and support the growth of inspirational companies Establishment of <77> Startup Support Desk (Details of support measures, etc., shown below) Main types of
Slide 31: Creation of Miyagi wide-area PPP platform (MAPP)
3. Business Strategy (Regional economy vitalization) Ⅲ Regional growth strategy Achieve sustainable growth in the local community! Creation of “Miyagi wide-area PPP platform (MAPP)” (established January 2020) ~Promoting Public Private Partnerships~ Core members Miyagi wide-area PPP platform Support
Slide 32: Promote diversity and foster an ambitious spirit
3. Business Strategy (Human resource development) Ⅳ Corporate culture reform strategy Virtuous circle of ambition, confidence, and cheerfulness! ♦Promote diversity and foster an ambitious spirit Persons dispatched externally to develop specialist human resources (as of Sep.30, 2021) ■ Development of
Slide 33: Vision 2030 briefings by managers
3. Business Strategy (Ambitious spirit) Ⅳ Corporate culture reform strategy Virtuous circle of ambition, confidence, and cheerfulness! “Vision 2030” briefings by managers Number of times held: 164 times (President and officers with executive responsibilities) (as of end-October 2021) In order to enh
Slide 34: Strengthening marketable securities trading
3. Business Strategy (Marketable securities trading) Composition ratio by type (on an amortized cost base) 100% Stocks End-Mar. End-Mar. End-Mar. End-Mar. End-Sep. 2022 2023 2020 2021 2021 80% (Forecast) (Simulation) Foreign bonds National gov. 15.9% 9.2% 8.6% 8.9% 9.0% bonds Investment 60% Local go
Slide 35: Establishment of new company (77 Partners)
3. Business Strategy (Group strategy) Establishment of new company In December 2021, the Bank established “77 Partners Co., Ltd.” as a subsidiary specializing in investments. In addition to utilizing the “strengths” that we have developed to date, we will also focus on initiatives to diversify our s
Slide 36: Vision 2030 status of progress
3. Business Strategy (Vision 2030 status of progress) 1. Strengthening of financial foundation (key factors) FY2021 Sep. 2021 FY2022 FY2026 FY2031 Results Results Estimate Midterm Targets Our Target Form Net income (consolidated) JPY 16.5 bn JPY 12.2 bn JPY 20.0 bn JPY 21.0 bn JPY 28.0 bn Capital ad
Slide 37: ESG and SDGs
04 ESG and SDGs The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 36
Slide 38: ESG and SDGs: SDG Declaration and TCFD support
4. ESG and SDGs The 77 Bank Group, in keeping with the philosophy of the Bank Creed passed down from our founders- “desiring communal prosperity and serving local communities.”-aims to contribute to the future of the region and the realization of a sustainable society by working toward the achieveme
Slide 39: ESG and SDGs: SDGs Action Plan
4. ESG and SDGs As we look to achieve “Our Target Form” set forth in “Vision 2030,” we have formulated an “SDGs Action Plan,” as well as KPIs for related items, based on the “77 Bank Group SDG Declaration,” in order to strengthen our initiatives targeting the “Sustainable Development Goals (SDGs)” (
Slide 40: ESG and SDGs-related project and major results
4. ESG and SDGs Example of ESG and SDGs-related project and major results ■ Lending to large solar power ■The Bank’s SDGs-related products project ・ Launch of “77 SDGs-related services” In October 2021, the Bank began offering the “77 SDGs Support Service” and “77 SDGs Support Loans,” with the aim o
Slide 41: Initiatives to promote diversity & inclusion
4. ESG and SDGs Initiatives to promote diversity & inclusion <Diversity Promotion Policy> (Established April 2018) The 77 Bank will promote diversity that leads to improvements in corporate value, by respecting the diversity of each and every employee and generating new value and ideas. 1. Fostering
Slide 42: Creation of Operating Officers Committee
4. ESG and SDGs The 77 Bank Group is taking steps to increase corporate value by further enhancing corporate governance, including strengthening systems for the execution of business operation. Strengthening systems for the execution of business operations ■ Creation of Operating Officers Committee
Slide 43: Contributions to the region and society
4. ESG and SDGs We aim to achieve co-prosperity with the region and dedicate ourselves to serving the region by deepening interaction with regional society as a member of the local community and through our ongoing social contribution activities, including support for cultural and educational promot
Slide 44: Eiichi Shibusawa and the Bank Creed
4. ESG and SDGs Businessman Eiichi Shibusawa, who is often called the “father of Japanese capitalism,” contributed significantly to the establishment of the Bank, and the spirit of “harmony of morality and the economy” that he advocated forms the basis for the Bank Creed of the 77 Bank today. ■ Lett
Slide 45: The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022
The 77 Bank, Ltd. | First Half of Fiscal Year Ending March 31, 2022 44