77 Bank, Ltd. · TSE:8341
77 Bank — The 77 Bank — FY2021 Earnings Presentation
59 slides from 77 Bank's earnings presentation, Jun 1, 2021
Slide 1: Results for the Fiscal Year Ended March 31, 2021 IR Presentation
Results for the Fiscal Year Ended March 31, 2021 IR Presentation Materials were prepared for the Bank’s presentation of its results for the fiscal year ended March 31, 2021 held on June 1, 2021. June 1, 2021
Slide 2: Contents
Contents 1. Financial Summary ... 2 2. Vision 2030 ... 12 3. Projected Performance ... 35 4. Business Strategy ... 39 5. ESG and SDGs ... 50 The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 1
Slide 3: Financial Summary
01 Financial Summary The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 2
Slide 4: Financial Summary (Summary of profits and losses)
1. Financial Summary (Summary of profits and losses) YoY change Summary of profits and losses FY2020 FY2021 Increase/decrease Rate of change % (Non-consolidated) (JPY bn, %) < Core operating income > Gross operating income 72.1 67.8 (4.3) (6.0) [ Core gross operating income ] [ 74.6 ] [ 80.6 ] [ 6.0
Slide 5: Financial Summary (Interest income)
1. Financial Summary (Interest income) (JPY bn) FY2020 FY2021 YoY change Interest income increased JPY 2.0 billion year-on-year, Interest income 68.5 70.5 2.0 partly as a result of an increase in interest and dividends on Investment income 70.8 71.8 1.0 securities and a decline in interest on deposi
Slide 6: Financial Summary (Loans and bills discounted/Deposits)
1. Financial Summary (Loans and bills discounted/Deposits) ・ Loans and bills discounted increased 4.5% year-on-year owing to increased corporate loans, partly as a result of lending to business operators affected by the spread of COVID-19, as well as an increase in retail loans centered on housing l
Slide 7: Financial Summary (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: 7,510 cases / JPY 368.8 billion Consultations concerning matters (including changes in loan conditions) (as of March 31, 2021) other than loans related to COVID- 19, by the COVID-19 Emergency
Slide 8: Financial Summary (Securities)
1. Financial Summary (Securities) Balance of marketable securities (on an amortized cost base) The balance of marketable securities increased by JPY National gov. bonds Local gov. bonds 138.1 billion from the end of March 2020, thanks to (JPY bn) Corporate bonds Others 4,000 Stocks Balance of public
Slide 9: Financial Summary (Securities)
1. Financial Summary (Securities) Gains (losses) from evaluation of securities Gains (losses) from evaluation of securities increased (JPY bn) National gov. bonds Local gov. bonds JPY 64.5 billion from the end of March 2020, thanks to 200 Corporate bonds Others 183.6 increases related to investment
Slide 10: Financial Summary (Fees and commissions)
1. Financial Summary (Fees and commissions) Fees and commissions increased JPY 0.1 billion year-on-year as a result of a steady increase in fees and commissions from corporate clients as a result of syndicated loans, commitment lines, M&A, and other transactions, despite a decline in fees and commis
Slide 11: Financial Summary (Expenses)
1. Financial Summary (Expenses) Expenses decreased JPY 3.0 billion year-on-year, mainly because of a decrease in the number of employees as a result of retirement, etc., a fallback from increased system-related expenses in the previous year, and decreased operating activity-related expenses in line
Slide 12: Financial Summary (Credit-related expenses/reserve for possible loan losses)
(Credit-related expenses/reserve for possible loan losses/ 1. Financial Summary credits disclosed under the Financial Reconstruction Law) Credit-related expenses increased JPY 0.3 billion year-on-year, owing to increased lending to business operators affected by COVID- 19, together with an increase
Slide 13: Vision 2030
02 Vision 2030 The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 12
Slide 14: Vision 2030 Positioning
2. Vision 2030 Positioning The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 13
Slide 15: Objectives and Background to Formulation
2. Vision 2030 Objectives and Background to Formulation The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 14
Slide 16: Our Target Form
2. Vision 2030 Our Target Form The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 15
Slide 17: 77 Bank Group Direction
2. Vision 2030 77 Bank Group Direction The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 16
Slide 18: Key Factors to Achieve “Our Target Form”
2. Vision 2030 Key Factors to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 17
Slide 19: Key Factors to Achieve “Our Target Form”
2. Vision 2030 Key Factors to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 18
Slide 20: Key Factors to Achieve “Our Target Form”
2. Vision 2030 Key Factors to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 19
Slide 21: Basic Strategies to Achieve “Our Target Form”
2. Vision 2030 Basic Strategies to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 20
Slide 22: Basic Strategies to Achieve “Our Target Form”
2. Vision 2030 Basic Strategies to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 21
Slide 23: Basic Strategies to Achieve “Our Target Form”
2. Vision 2030 Basic Strategies to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 22
Slide 24: Basic Strategies to Achieve “Our Target Form”
2. Vision 2030 Basic Strategies to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 23
Slide 25: Basic Strategies to Achieve “Our Target Form”
2. Vision 2030 Basic Strategies to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 24
Slide 26: Basic Strategies to Achieve “Our Target Form”
2. Vision 2030 Basic Strategies to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 25
Slide 27: Long-term Strategies Related to Management of Investment Securities
Long-term Strategies Related to Management of 2. Vision 2030 Investment Securities The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 26
Slide 28: Profit Increase Concept
2. Vision 2030 Profit Increase Concept The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 27
Slide 29: PDCA Cycle
2. Vision 2030 PDCA Cycle The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 28
Slide 30: Midterm Targets to Achieve “Our Target Form”
2. Vision 2030 Midterm Targets to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 29
Slide 31: Midterm Targets to Achieve “Our Target Form”
2. Vision 2030 Midterm Targets to Achieve “Our Target Form” The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 30
Slide 32: (Reference 1) Results and Issues of Previous Medium-term Management Plan
2. Vision 2030 (Reference 1) Results and Issues of Previous Medium-term Management Plan The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 31
Slide 33: (Reference 1) Results and Issues of Previous Medium-term Management Plan
2. Vision 2030 (Reference 1) Results and Issues of Previous Medium-term Management Plan The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 32
Slide 34: (Reference 2) Management Environment
2. Vision 2030 (Reference 2) Management Environment The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 33
Slide 35: Activities to spread knowledge and educate people in the 77 Bank
2. Vision 2030 Activities to spread knowledge and educate people in the 77 Bank 1. Holding of briefings to achieve “Vision 2030” In order to promote understanding of the details of “Vision 2030,” the President and officers with executive responsibilities (Senior Managing Directors and Managing Direc
Slide 36: Projected Performance
03 Projected Performance The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 35
Slide 37: Projected Performance (Summary of profits and losses)
3. Projected Performance (Summary of profits and losses) Summary of profits and losses FY2021 FY2022 YoY change FY2023 (Results) (Forecast) Increase/decrease (Simulation) (Non-consolidated) (JPY bn) Gross operating income 67.8 71.5 3.7 74.2 [ Core gross operating income ] [ 80.6 ] [ 77.4 ] [ (3.2) ]
Slide 38: Projected Performance (Yields, interest margin, interest rates, etc.)
3. Projected Performance (Yields, interest margin, interest rates, etc.) Level of yields, interest margins, interest rates, etc. used as the basis for projected performance and simulations (%) FY2021 FY2022 FY2023 Interest rates/interest margin (Results) (Forecast) YoY change (Simulation) Loans and
Slide 39: Projected Performance (Shareholder returns)
3. Projected Performance (Shareholder returns) In addition to maintaining a stable dividend, we will also endeavor to enhance internal reserves and maintain and improve the soundness of our management. FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 ROE (consolidated) (%) 3.54 3.56 3.82 3.60 3.89 3.42 End
Slide 40: Business Strategy
04 Business Strategy The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 39
Slide 41: Business Strategy (Loans and bills discounted)
4. Business Strategy (Loans and bills discounted) Loans and bills discounted (average balances) < Policies for promoting corporate loans > (JPY bn) Loans for local governments Retail loans Corporate loans ・ Strengthen loan management and support 6,000 from headquarters based on business 5,162.0 5,26
Slide 42: Business Strategy (Loans and bills discounted)
4. Business Strategy (Loans and bills discounted) (JPY bn) Retail loans (average balances) (JPY bn) < Policies for promoting housing loans > 1,800 150 ・ Utilize branches on non-business days Housing loans Unsecured loans, etc. ・ Enhance coordination with housing business operators 1,135.5 1,171.0 1,
Slide 43: Business Strategy (Fees and commissions from corporate clients)
4. Business Strategy (Fees and commissions from corporate clients) < Offer solutions to issues based on business evaluations > External support Clients organizations The 77 Bank Group Cultivate and capture Issues for enhancement of Development Bank of Japan 77 Card 77 Bank diverse customer corporate
Slide 44: Business Strategy (Sales commissions of assets in custody)
4. Business Strategy (Sales commissions of assets in custody) Sales commissions of assets in custody < Policies for promoting assets in custody > 77 Securities (excluding brokerage commissions, etc. from the Bank) ・ Strengthen sales systems targeting wealthy and elderly (JPY mn) Investment trusts 4,
Slide 45: Business Strategy (Strengthen consulting capabilities)
4. Business Strategy (Strengthen consulting capabilities) < Departments receiving awards > Initiatives to strengthen consulting capabilities Classification Department receiving award With the aim of strengthening our consulting capabilities, since FY2020, Business Analysis and Issue Sharing Departme
Slide 46: Business Strategy (Marketable securities trading)
4. Business Strategy (Marketable securities trading) < Strengthening marketable securities trading structure > < Reinvestment in yen-denominated bonds taking market trends into consideration > ・ Improve ability to structure deals by enhancing research and ・ Rebalance funds from redemption of nationa
Slide 47: Business Strategy (Productivity enhancement)
4. Business Strategy (Productivity enhancement) Number of users of e-banking services and retail online The usage of contact points declined significantly as a result of increased 400 banking services (thousand customers) convenience thanks to the advancement of digitalization, as well as the 300 sp
Slide 48: Business Strategy (Productivity enhancement)
4. Business Strategy (Productivity enhancement) Expenses and core OHR Personnel expenses Non-personnel expenses Tax Core OHR (JPY bn) As part of measures to improve our OHR and increase 73.28% 71.35% labor productivity, we will utilize the promotion of 62.27% 64.45% 62.43% paperwork-free and digital
Slide 49: Business Strategy (Utilization of digital technologies)
4. Business Strategy (Utilization of digital technologies) While focusing on “digital reforms in the banking business,” our existing business domain, we will also promote further reform by focusing on “creating new businesses” based on “combining finance with digital technologies.” Digital reforms i
Slide 50: Business Strategy (HR development)
4. Business Strategy (HR development) In order to develop “human resources that serve a purpose for customers and local communities” and “human resources that contribute to corporate reform,” we will hold various types of training seminar that will contribute to strengthening our consulting capabili
Slide 51: ESG and SDGs
05 ESG and SDGs The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 50
Slide 52: ESG and SDGs: Environmental Issues
5. ESG and SDGs The 77 Bank Group, in keeping with the philosophy of the Bank Creed passed down from our founders—“The Bank’s progress goes hand in hand with prosperity in the local community”—aims to contribute to the future of the region and the realization of a sustainable society by working towa
Slide 53: Key ESG and SDG-related results and initiatives
5. ESG and SDGs Key ESG and SDG-related results and initiatives ■ Renewable energy-related funding 354 cases / JPY 162.7 billion ■ Green bonds 23 cases / JPY 30.2 billion ■ 77 ESG Privately Placed Corporate Bonds 47 cases / JPY 6.2 billion ■ Sustainability bonds 7 cases / JPY 3.7 billion ■ 77 Privat
Slide 54: “77 Regional Revitalization Business Matching Event”
5. ESG and SDGs ■ “77 Regional Revitalization Business Matching Event” The 77 Bank Group engages in various initiatives aimed at resolving the issues of both local governments with whom it has entered into Comprehensive Cooperation Agreements for Regional Revitalization and private business operator
Slide 55: Initiatives to support women’s return to work
5. ESG and SDGs We have established four key areas and are committed to creating a highly productive organization where each and every employee can perform to their full potential in a healthy state of mind and body, and with a greater sense of fulfillment and job accomplishment. By allowing our emp
Slide 56: Creation of Operating Officers Committee
5. 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 57: ESG and SDGs
5. 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 58: ESG and SDGs: Eiichi Shibusawa
5. ESG and SDGs Businessman Eiichi Shibusawa, who is often called the “father of Japanese capitalism,” contributed significantly 「日本の資本主義の父」と呼ばれた実業家の渋沢栄一は、当行の設立に大きく貢献した人物であり、渋沢翁の to the establishment of the Bank, and the spirit of “harmony of morality and the economy” that he advocated 「道徳経済合一」の精神は当
Slide 59: The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021
The 77 Bank, Ltd. | Fiscal Year Ended March 31, 2021 58