Nishi-nippon Financial Holdings, Inc. · TSE:7189
Nishi-nippon Financial — Q2 FY2023 Earnings Presentation
51 slides from Nishi-nippon Financial's earnings presentation, Dec 1, 2023
Slide 1: Financial Results for the Second Quarter of the Fiscal Year Ending March 31st, 2024
Financial Results for the Second Quarter of the Fiscal Year Ending March 31st, 2024 December 1, 2023 Nishi-Nippon Financial Holdings, Inc.
Slide 2: Today's Agenda / Reference Materials
Today's Agenda Reference Materials Page Page I. Financial Results 2 The Economic Environment in Kyushu/Fukuoka 34 – 37 1. Overview of Financial Results 3 2. Net Interest Income 4 Supplementary Materials on Performance 38 (1) Interest on Loans and Discounts (NCB) 5 1. Statement of Income 39 – 41 (2)
Slide 3: I. Financial Results
I. Financial Results I. Financial Results Financial Results for the Second Quarter of the Fiscal Year Ending March 31st, 2024 P.2
Slide 4: 1. Overview of Financial Results
1. Overview of Financial Results Profit attributable to owners of parent increased by 1.9 billion yen year-on-year (YoY) to 15.4 billion yen, as a decrease in net interest income due mainly to an increase in interest on foreign currency funding was outweighed by increases in fees and commissions a
Slide 5: 2. Net Interest Income
2. Net Interest Income Net interest income for the six months ended September 30, 2023 decreased by 4.8 billion yen YoY to 44.3 billion yen, due mainly to an increase in interest on foreign currency funding despite increases in interest on loans and discounts and interest and dividends on securiti
Slide 6: 2. Net Interest Income: (1) Interest on Loans and Discounts (NCB)
2. Net Interest Income: (1) Interest on Loans and Discounts (NCB) Interest on loans and discounts for the interim accounting period increased by 1.0 billion yen YoY to 39.4 billion yen on the back of solid growth of business loans and personal loans. This represents the first YoY growth of interes
Slide 7: 2. Net Interest Income: (2) Interest and Dividends on Securities (NCB)
2. Net Interest Income: (2) Interest and Dividends on Securities (NCB) Interest and dividends on securities for the interim accounting period increased by 3.6 billion yen YoY to 13.5 billion yen, due mainly to a rise in yield. Interest and dividends on securities for the year ending March 31, 20
Slide 8: Impact of rising domestic Interest Rates on Earnings
<Appendix> Impact of rising domestic Interest Rates on Earnings Floating interest rate loans, which are closely linked with market interest rates, account for approximately 60% of the Nishi-Nippon City Bank’s loans and discounts. Compared to deposits, loans and discounts have a higher sensitivit
Slide 9: 3. Fees and Commissions
3. Fees and Commissions Fees and commissions for the interim accounting period increased by 1.5 billion yen YoY to 12.6 billion yen, due mainly to increases in corporate customer-related fee income and client assets-related fee income including that of a securities subsidiary company. Fees and c
Slide 10: 4. Expenses
4. Expenses Expenses for the interim accounting period increased by 1.4 billion yen YoY to 40.2 billion yen, due mainly to an increase in system-related expenses and an addition of City Ascom’s expenses, which joined the NNFH Group in October 2023. Expenses for the year ending March 31, 2024 are
Slide 11: 5. Credit Cost
5. Credit Cost Credit Cost for the interim accounting period increased by 0.8 billion yen YoY to 2.2 billion yen. Credit Cost for the year ending March 31, 2024 is expected to be in line with the initial plan (up by 3.1 billion yen YoY to 7.0 billion yen), given the outlook remains opaque. ■ Cre
Slide 12: 6. Financial Results Forecast
6. Financial Results Forecast Profit attributable to owners of parent for the year ending March 31, 2024 is expected to decrease by 2.1 billion yen YoY to 24.0 billion yen, mainly due to a decline in net interest income as a result of an increase in interest on foreign currency funding and an abse
Slide 13: II. Management Strategies
II. Management Strategies - Initiatives to Enhance Corporate Value - II. Management Strategies Financial Results for the Second Quarter of the Fiscal Year Ending March 31st, 2024 P.12
Slide 14: 1. Local Market Environment in Kyushu / Fukuoka
1. Local Market Environment in Kyushu / Fukuoka Fukuoka and other areas in the Kyushu Region, the NNFH Group’s main market, offer a number of favorable business opportunities, on the back of a strong economy, a series of large-scale urban redevelopment projects, and accumulation of industries cent
Slide 15: Urban Development Projects in the Center of Fukuoka City
<Appendix> Urban Development Projects in the Center of Fukuoka City In the central part of Fukuoka City, a variety of large-scale urban development projects, including Tenjin Big Ban and Hakata Connected, are underway. ■Sites of the projects in the central part of Fukuoka City and its vicinity < C
Slide 16: Development of Housing and Logistics Facilities in Fukuoka City and Its Vicinity
<Appendix> Development of Housing and Logistics Facilities in Fukuoka City and Its Vicinity Development of housing and logistics facilities are underway on the back of population growth and economic boom. ■ Population in Fukuoka City and its Vicinity ■ Housing starts in Fukuoka City ■ YoY fluctuat
Slide 17: Updates on Semiconductor-related Investments in Kyushu
<Appendix> Updates on Semiconductor-related Investments in Kyushu Companies around the world are proactively making capex for semiconductor-related facilities in many prefectures in Kyushu, most notably Taiwan Semiconductor Manufacturing Company Limited (TSMC) in Kumamoto. - Total amount (for publ
Slide 18: 2. Initiatives to Enhance Corporate Value
2. Initiatives to Enhance Corporate Value While improving ROE through steady implementation of the measures under the new Medium-Term Business Plan, which started this fiscal year, we aim to increase PER through continuous disclosure of the status of each initiative, among other metrics, and dialo
Slide 19: PBR, ROE, and Stock Prices
<Appendix> PBR, ROE, and Stock Prices ■ PBR ■ Consolidated ROE 6.0% 0.50 - After remaining very muted, - ROE rising for the 2nd consecutive year 0.45 5.5% PBR is showing an upward trend ⇒ Aiming at a level above capital cost (estimated at around 7%) over the mid-/long-term 0.40 0.36 0.36 5.0% 4.95%
Slide 20: 3. One to One Solutions: (1) Corporate Customers
3. Providing Customer-Oriented “One to One Solutions”: (1) Corporate Customers In the current MTBP, we aim to provide financial and non-financial solutions tailored to each corporate customer’s need, which are becoming increasingly diverse and sophisticated. Increasingly diverse and sophisticated
Slide 21: 3. One to One Solutions: (1) Corporate Customers
3. Providing Customer-Oriented “One to One Solutions”: (1) Corporate Customers Provide diverse fundraising methods that meet customers’ individual needs through the use of structured finance, funds, and other instruments. Providing diverse fundraising methods Initiatives for structured finance
Slide 22: 3. One to One Solutions: (1) Corporate Customers
3. Providing Customer-Oriented “One to One Solutions”: (1) Corporate Customers Through collaboration among Group companies, provide a diverse range of solutions that address immediate managerial issues for many corporate customers, including “digitalization/DX” and “recruitment.” Support for digit
Slide 23: Case study (Solutions Offered to Corporate Customers)
<Appendix> Case study (Solutions Offered to Corporate Customers) - Solution to various managerial issues, such as low - Solution to various managerial issues, such as Support for digitalization operational efficiency - Support for cashless payment low operational efficiency - Company A Company C (Fu
Slide 24: 3. One to One Solutions: (2) Retail Customers
3. Providing Customer-Oriented “One to One Solutions”: (2) Retail Customers During the current MTBP period, provide optimal solutions for each customer by enforcing customer-oriented business operation and consulting on all assets and liabilities for a broad range of customers. Consulting on full
Slide 25: 3. One to One Solutions: (2) Retail Customers
3. Providing Customer-Oriented “One to One Solutions”: (2) Retail Customers Provide optimal solutions for each customer by proposing asset building starting with NISA and loan products that correspond to the life stage of the customer. Consulting on asset building, starting with NISA, etc. Provisi
Slide 26: 4. Sales Reform: (1) Strengthening the Sales System
4. Sales Reform: (1) Strengthening the Sales System Strengthen the framework for Group collaboration while enhancing the HQ support system in both corporate and retail businesses, so that we can properly connect customers’ issues and needs with the Group’s diverse solution functions. Strengthen th
Slide 27: 4. Sales Reform: (2) Digital Strategy
4. Sales Reform: (2) Digital Strategy Continue expanding functions of NCB App (for retail customers) and NCB Business Station (for corporate customers). With the user base expanding steadily, these two digital channels assume greater importance as a point of contact with customers. The Nishi-Nippo
Slide 28: 4. Sales Reform: (3) Work Reform
4. Sales Reform: (3) Work Reform Continue with initiatives for increasing operational efficiency to enhance productivity of the entire Group. In particular, efforts will be made to reform branch offices into “business locations focused on consulting,” considering the fundamental reduction of bra
Slide 29: 5. Human Resources Reform: (1) HR Development
5. Human Resources Reform: (1) HR Development Strongly support the growth of each employee by developing strategic human resources to lead the Group’s future in consulting, DX, planning, etc., and expanding job class/business operation-based training and re- skilling training. Developing strateg
Slide 30: 5. Human Resources Reform: (2) Greater Job Satisfaction
5. Human Resources Reform: (2) Greater Job Satisfaction Build a corporate culture that promotes advancement of diverse human resources by establishing an environment that improves job satisfaction through review of treatment of employees, HQ building reconstruction / branch office renovations, pro
Slide 31: 6. Sustainability Initiatives
6. Sustainability Initiatives Contribute to the realization of a sustainable society by bolstering SDGs/ESG initiatives via means only available to a regional financial group Our initiatives for the environment and climate change Supporting customers’ efforts for the environment and climate change
Slide 32: 7. Capital Policy: (1) Basic Approaches
7. Capital Policy: (1) Basic Approaches Actively make forward-looking growth investments while securing sufficient levels of capital for sustainable growth and improving the corporate value of the NNFH Group, and also increase returns of profits to shareholders and investors Drive growth investmen
Slide 33: 7. Capital Policy: (2) Shareholders Returns
7. Capital Policy: (2) Shareholders Returns Increased the forecast for the year-end dividend per share from 25 to 30 yen, raising the annual dividend per share from 50 to 55 yen (increase for a third consecutive year). Also set a 2.0 billion yen quota for share buybacks. Dividends Share buybacks T
Slide 34: 7. Capital Policy: (3) Reduction of Strategic Shares
7. Capital Policy: (3) Reduction of Strategic Shares Consider reducing strategic shares after validating continued shareholding for each stock Aim to reduce the balance (acquisition cost) by 10% or more during the current MTBP ■ Balance of strategic shares (acquisition cost) and the number of st
Slide 35: The Economic Environment in Kyushu/Fukuoka
The Economic Environment in Kyushu/Fukuoka Ref. The Economic Environment in Kyushu/Fukuoka Financial Results for the Second Quarter of the Fiscal Year Ending March 31st, 2024 P.34
Slide 36: 1. Key Economic Indicators
1. Key Economic Indicators (Million yen) <Import/export of the Kyushu economic zone> <Mining/manufacturing production, shipment, and inventory in Kyushu> 1,400,000 120 Export Import Production Shipment Stock 1,200,000 110 1,000,000 100 800,000 600,000 90 400,000 80 200,000 (Seasonally adjusted, Annu
Slide 37: 2. Trends in Local Economies
2. Trends in Local Economies (1) Business sentiment among local enterprises <Business Survey Index> (Difference of “up”-”down” compared to previous quarter) • The business survey index for Northern Kyushu between Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar. July and September 2023 saw the difference betw
Slide 38: 2. Trends in Local Economies
2. Trends in Local Economies (3) Trends in key industries <Auto production volume in Kyushu (Automobiles) and its share in the country> (%) (10K units) The automobile industry in Kyushu has grown steadily as one assembly plant after 18 20.0 Production volume Share in the country another opened and
Slide 39: Supplementary Materials on Performance
Supplementary Materials on Performance Ref. Supplementary Materials on Performance Financial Results for the Second Quarter of the Fiscal Year Ending March 31st, 2024 P.38
Slide 40: 1. Statement of Income: (1) Six Months Ended September 2023 – YoY Comparisons
1. Statement of Income: (1) Six Months Ended September 2023 – YoY Comparisons Six months ended September 30, 2023 Six months ended September 30, 2022 Results YoY change Results (100 million yen) NNFH (A) NCB (B) (A)-(B) NNFH (A) NCB (B) (A)-(B) NNFH (A) NCB (B) (A)-(B) Ordina ry i ncome 913 776 137
Slide 41: 1. Statement of Income: (2) Forecast for the Fiscal Year Ending March 31st, 2024
1. Statement of Income: (2) Forecast for the Fiscal Year Ending March 31st, 2024 – YoY Comparisons Fiscal year ending March 31, 2024 Fiscal year ended March 31, 2023 Full-year forecast YoY change Results (100 million yen) NNFH (A) NCB (B) (A)-(B) NNFH (A) NCB (B) (A)-(B) NNFH (A) NCB (B) (A)-(B) Ord
Slide 42: 1. Statement of Income: (3) Forecast Comparisons with the Initial Forecast
1. Statement of Income: (3) Forecast for the Fiscal Year Ending March 31st, 2024 – Comparisons with the Initial Forecast Fiscal year ending March 31, 2024 Fiscal year ending March 31, 2024 Full-year forecast Comparison with initial forecast Full-year initial forecast (Briefings on May 26) (100 milli
Slide 43: 2. Balance Sheet: (1) Assets
2. Balance Sheet: (1) Assets NNFH NCB (100 million yen) March 31st, 2020 March 31st, 2021 March 31st, 2022 March 31st, 2023 September 30th, 2023 March 31st, 2020 March 31st, 2021 March 31st, 2022 March 31st, 2023 September 30th, 2023 Assets Cash and due from banks 17,147 17,388 26,147 19,466 25,637
Slide 44: 2. Balance Sheet: (2) Liabilities and Net Assets
2. Balance Sheet: (2) Liabilities and Net Assets NNFH NCB (100 million yen) March 31st, 2020 March 31st, 2021 March 31st, 2022 March 31st, 2023September 30th, 2023 March 31st, 2020 March 31st, 2021 March 31st, 2022 March 31st, 2023September 30th, 2023 Liabilities Deposits 84,816 92,955 95,703 97,918
Slide 45: 3. Average Amount Outstanding, Yield, and Interest of Main Accounts (Interim) (NCB)
3. Average Amount Outstanding, Yield, and Interest of Main Accounts (Interim) (NCB) (Six months ended) (100 million yen) September 30th, 2019 September 30th, 2020 September 30th, 2021 September 30th, 2022 September 30th, 2023 Avg. amount outstanding Yields Interest Avg. amount outstanding Yields Int
Slide 46: 3. Average Amount Outstanding, Yield, and Interest of Main Accounts (NCB)
3. Average Amount Outstanding, Yield, and Interest of Main Accounts (NCB) Forecast (100 million yen) Fiscal year ended March 31st, 2020 Fiscal year ended March 31st, 2021 Fiscal year ended March 31st, 2022 Fiscal year ended March 31st, 2023 Fiscal year ending March 31st, 2024 Avg. amount outstanding
Slide 47: 4. Balance and Valuation Gains or Losses of Securities (NCB)
4. Balance and Valuation Gains or Losses of Securities (NCB) (100 million yen) The end of March 2019 The end of March 2020 The end of March 2021 The end of March 2022 The end of March 2023 The end of September 2023 ■ Bala nce sheet amount Government bonds 3,815 2,125 3,655 5,006 4,959 4,501 Local go
Slide 48: 5. Breakdown of Credit Cost by Occurrence Factor (NCB)
5. Breakdown of Credit Cost by Occurrence Factor (NCB) (Six months ended) (Fiscal year ended) (100 million yen) Sep. 30, 2019 Sep. 30, 2020 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2023 Mar. 31, 2019 Mar. 31, 2020 Mar. 31, 2021 Mar. 31, 2022 Mar. 31, 2023 Provision for general reserve for possible loan
Slide 49: 6. Capital Adequacy Ratio (Consolidated)
6. Capital Adequacy Ratio (Consolidated) ■ Capital Adequacy Ratio (Consolidated) Sep. 30, ‘23 vs. Mar. 31, ‘23 Mar. 31, '23 (100 million yen) Core capital: instruments and reserves A 4,889 129 4,760 Directly issued qualifying common share capital 4,964 118 4,846 Accumulated other comprehensive incom
Slide 50: MEMO
MEMO Financial Results for the Second Quarter of the Fiscal Year Ending March 31st, 2024 P.49
Slide 51: Nishi-Nippon Financial Holdings, Inc.
These materials have been prepared for the sole purpose of information provision, and do not constitute an invitation or solicitation to purchase or sell any specific securities. Any and all information described herein is subject to change or amendment without notice. These materials contain
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