Hokuhoku Financial Group, Inc. · TSE:8377

Hokuhoku Financial — FY2013 Earnings Presentation

41 slides from Hokuhoku Financial's earnings presentation, Mar 31, 2014

Slide 1: Investor Meeting – Financial Results for FY 2013
Investor Meeting ～Financial Results for FY 2013～ (ended March 31, 2014) Hokuhoku Financial Group，Inc．
Slide 2: Table of Contents
Ｈｏｋｕｈｏｋｕ Table of Contents ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．【Financial Results for FY 2013】【Management Strategy】・Summary of Financial Results ・・・ 1 ・Our Domestic Network ・・・ 16 ・Net Interest Income ・・・ 3 ・Our Overseas Network ・・・ 17 ・Loan Portfolio ・・・ 4 ・Consumer Loans ・・・ 18 ・Securities Portfolio ・・・ 6 ・Inv
Slide 3: Summary of Financial Results
Ｈｏｋｕｈｏｋｕ Summary of Financial Results ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．（JPY Bn）（JPY Bn）【Total of two banks】 FY13 change FY12 【Consolidated】 FY13 change FY12 Gross business profits 143.7 (10.7) 154.5 Ordinary income 190.9 (8.1) 199.1 Net interest income 121.7 (2.6) 124.3 Ordinary profits 49.4 20.1 29.3 Net fee
Slide 4: Summary of Financial Results
Ｈｏｋｕｈｏｋｕ Summary of Financial Results ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． Hokuriku bank Hokkaido bank （JPY Bn） FY13 change FY12 FY13 change FY12 Gross business profits 78.4 (9.3) 87.8 65.3 (1.4) 66.7 Net interest income 66.3 (3.6) 69.9 55.4 1.0 54.3 Net fees & commissions 9.1 (1.5) 10.6 8.6 0.9 7.7 Net trading inc
Slide 5: Net Interest Income (Total of two banks)
Ｈｏｋｕｈｏｋｕ Net Interest Income (Total of two banks) ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Net interest income -¥2.5Bn compared to FY12  Avg. yield of loans decreased as the result of decline in market interest rate and the increasing competition 【Breakdown of net interest income (domestic)】（JPY Bn） Increase/decrea
Slide 6: Loan Portfolio
Ｈｏｋｕｈｏｋｕ Loan Portfolio ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Loans -¥65.7Bn (-0.88%) compared to Mar-13  Loans to SMEs and consumers -¥52.9Bn (-1.12%) compared to Mar-13 【Balance of loans】 (JPY Bn) (JPY Bn) Hokuriku bank Total of two banks 4,252.3 4,233.9 4,332.7 4,227.6 7,241.1 7,287.0 7,402.0 7,336.3 2,871.3 2
Slide 7: Loan Portfolio
Ｈｏｋｕｈｏｋｕ Loan Portfolio ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Consumer loans +¥37.5Bn (+1.81%) compared to Mar-13  Housing loans made +¥3.9Bn compared to FY12 【Balance of consumer loans】 (JPY Bn) Total of two banks (JPY Bn) Hokuriku bank 2,072.2 2,109.8 1,993.3 2,020.5 1,114.7 1,143.5 1,042.5 1,062.5 282.3 285.6
Slide 8: Securities Portfolio (Total of two banks)
Ｈｏｋｕｈｏｋｕ Securities Portfolio (Total of two banks) ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Balance of stocks increased while balance of yen-denominated bonds decreased  Unrealized gains on available-for-sale securities increased 【Balance of securities】【Valuation difference】 (JPY Bn) 2,497.8 2,481.4 (JPY Bn) 2,471.
Slide 9: Deposits & NCDs
Ｈｏｋｕｈｏｋｕ Deposits & NCDs ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Deposits and NCDs +¥163.8Bn (+1.64%) compared to Mar-13  Individuals +¥92.8Bn (+1.34%) compared to Mar-13 【Balance of deposits & NCDs】 (JPY Bn) (JPY Bn) Hokuriku bank Total of two banks 5,726.2 5,909.0 5,439.9 5,545.1 10,008.1 10,172.0 9,523.8 9,700.8
Slide 10: Interest Margins (Total of two banks)
Ｈｏｋｕｈｏｋｕ Interest Margins (Total of two banks) ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  FY13 Loans interest rate 1.45% (-0.09% compared to FY12)  FY13 Deposits interest rate 0.05% (-0.02% compared to FY12) 【Interest rate of yen dominated loans and deposits】 (%) (%) 1.74 1.64 1.58 1.54 Spread 1.55 1.52 1.50 1.48 1.45
Slide 11: Net Fees and Commissions Income (Total of two banks)
Ｈｏｋｕｈｏｋｕ Net Fees and Commissions Income (Total of two banks) ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． Sales of investment trusts increased while sales of insurance decreased 【Fee revenue】【Net fees and commissions】 (JPY Bn) (JPY Bn) FY13 FY12 9.1 9.1 8.7 8.9 change 1.1 0.9 1.1 1.0 ① Net fees and commissions 17.7 (0.5)
Slide 12: G&A Expenses (Total of two banks)
Ｈｏｋｕｈｏｋｕ G&A Expenses (Total of two banks) ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． G&A expenses decreased due to the decrease in investment in IT system 【G&A expenses and OHR】【Increase/decrease factors in G&A expenses】 (JPY Bn) OHR (JPY Bn) 65.37% 66.08% FY13 change FY12 64.37% 63.47% 12/9 Personnel 44.3 (0.3) 44.6 N
Slide 13: Net Credit Costs (Total of two banks)
Ｈｏｋｕｈｏｋｕ Net Credit Costs (Total of two banks) ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． Net credit costs decreased due to the decrease in “Net transfer to specific allowance of loan losses” 【Increase/decrease factors in net credit costs 】 (JPY Bn) Increase/decrease factors of credit FY13 change FY12 related costs (JPY
Slide 14: Non-Performing Loan
Ｈｏｋｕｈｏｋｕ Non-Performing Loan ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． NPL ratio 2.67% (-0.44% from Mar-13) 【Balance of non-performing loan】 (JPY Bn) Hokuriku bank (JPY Bn) Total of two banks 3.53% 3.28% 3.34% 3.17% 3.11% 2.78% 144.3 153.5 148.4 2.96% NPL ratio 18.4 26.7 18.8 120.3 2.67% 16.3 236.8 236.7 220.5 89.6 96.4
Slide 15: Capital
Ｈｏｋｕｈｏｋｕ Capital ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． Capital adequacy ratio 12.31% 【Capital adequacy ratio 】【Capital adequacy ratio】【Basel Ⅲ, Domestic Standard】 (JPY Bn) Consolidated (JPY Bn) Full Capital adequacy ratio [Consolidated] 14/3 implementation 11.88% 12.04% 12.31% 11.72% Capital 605.5 369.5 605.5 Inst
Slide 16: Forecasts
Ｈｏｋｕｈｏｋｕ Forecasts ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．【Earnings forecasts for FY14】【Dividend forecasts for FY14】 (JPY Bn) Interim FY14 Change from [Consolidated] Interim Year-end Anuual Forecasts Forecasts FY13 Ordinary income 89.5 179.0 (11.9) Dividend per common share ― ¥4.00 ¥4.00 Ordinary profits 13.5 28.0 (
Slide 17: Management Strategy
ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． Management Strategy 15
Slide 18: Our Domestic Network
Ｈｏｋｕｈｏｋｕ Our Domestic Network ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  329 branches extended in Hokkaido, Hokuriku and three major metropolitan areas  Lower system related costs by joint use of “MEJAR” ( Most Efficient Joint Advanced Regional banking system ) Hokuhoku FG 【About Hokkaido & Hokuriku area】【Hokkaido ar
Slide 19: Our Overseas Network
Ｈｏｋｕｈｏｋｕ Our Overseas Network ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Support clients’ overseas business development by our representative offices and alliance with other financial institutions  Develop various services such as information offering and fundraising Yuzhno-Sakhalinsk Shenyang Vladivostok Business Par
Slide 20: Consumer Loans
Ｈｏｋｕｈｏｋｕ Consumer Loans ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Promotion of consumer loans by extending various products and taking aggressive sales and marketing measures in line with customer demands  Improve interest margin by comparably high-yielding card loans and ensure solid earnings base 【Avg. balance and
Slide 21: Investment Products (Individuals)
Ｈｏｋｕｈｏｋｕ Investment Products (Individuals) ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Make the best of marketing database and foster capable salesforces to offer quality solutions in line with customer needs for asset building and asset management  Extend customer base by proposals of NISA account and sales of investm
Slide 22: Business Support
Ｈｏｋｕｈｏｋｕ Business Support ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． Support business expansion in growing industries and offer solutions of business problems of corporate clients to create business opportunities and turn around declining financing needs 【Avg. balance and yield of corporate loans】 Work together for solut
Slide 23: Net Interest Income
Ｈｏｋｕｈｏｋｕ Net Interest Income ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Deposit interest payment continues decreasing, but the effect is milder because deposit interest rate come close to the lower limit  Increase balance of investment trusts and other high-yielding securities to absorb effect of decreased interest re
Slide 24: G&A Expenses
Ｈｏｋｕｈｏｋｕ G&A Expenses ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Gross business profits was lower than that of previous fiscal year, mainly due to the decrease in net interest income.  Pursue cost reduction to absorb the effect of revision in consumption tax. 【Core gross business profits】  Expenses are expected to be
Slide 25: Capital Policy
Ｈｏｋｕｈｏｋｕ Capital Policy ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．  Maintain 10% or above of capital adequacy ratio in the end of FY 2015  Accumulate internal reserve and control risk in asset to offset decrease of subordinated capital  Year-end dividends are increased by ¥0.25 to ¥4.00 per common share 【Capital adequ
Slide 26: Medium-Term Management Plan “GO for IT !”
Ｈｏｋｕｈｏｋｕ Medium-Term Management Plan “GO for IT !” ＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ．【The progress from April-2013 to March-2014 】 FY12 FY13 FY14 plan FY15 plan Avg. balance of Deposits ¥ 9,790.3 Bn ¥ 10,129.2 Bn ¥ 10,204.1 Bn ¥ 10,110.0 Bn Avg. balance of Loans ¥ 7,277.8 Bn ¥ 7,344.0 Bn ¥ 7,384.0 Bn ¥ 7,480.0 B
Slide 27: Appendix
ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌＧｒｏｕｐ，Ｉｎｃ． Appendix 25
Slide 28: About Hokuhoku FG ① Outline of Hokuhoku FG and Two Banks
About Hokuhoku FG ① ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Outline of Hokuhoku FG and Two Banks Ｇｒｏｕｐ，Ｉｎｃ． (As of March 31, 2014） Hokuhoku FG Hokuriku Bank Hokkaido Bank Date of establishment September 26, 2003 July 31, 1943 March 5, 1951 （Started business in 1877） Location of head office 1-2-26 T sutsumicho-dori, T oy
Slide 29: About Hokuhoku FG ② History of Hokuhoku FG
About Hokuhoku FG ② ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ History of Hokuhoku FG Ｇｒｏｕｐ，Ｉｎｃ． Hokuriku area Hokkaido area 1877 Established in Ishikawa Prefecture Ishikawa 1878 Fukui Trade between Hokkaido and Hokuriku area Established in Fukui Prefecture flourished in the 19th century, and a lot of people immigrated fro
Slide 30: About Hokuhoku FG ③ Historical Data (Hokuhoku FG)
About Hokuhoku FG ③ ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Historical Data (Hokuhoku FG ) Ｇｒｏｕｐ，Ｉｎｃ．（JPY Bn） FY2009 FY2010 FY2010 FY2011 FY2011 FY2012 FY2012 FY2013 FY2013 <Consolidated> Full year Interim Full year Interim Full year Interim Full year Interim Full year Ordinary income 226.7 109.2 214.6 105.7 207.9 105.
Slide 31: About Hokuhoku FG ④ Historical Data (Hokuriku Bank)
About Hokuhoku FG ④ ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Historical Data (Hokuriku Bank ) Ｇｒｏｕｐ，Ｉｎｃ．（JPY Bn） FY2009 FY2010 FY2010 FY2011 FY2011 FY2012 FY2012 FY2013 FY2013 Full year Interim Full year Interim Full year Interim Full year Interim Full year Ordinary income 113.7 55.0 108.8 54.0 105.4 56.2 103.0 48.5 97.
Slide 32: About Hokuhoku FG ⑤ Historical Data (Hokkaido Bank)
About Hokuhoku FG ⑤ ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Historical Data (Hokkaido Bank ) Ｇｒｏｕｐ，Ｉｎｃ．（JPY Bn） FY2009 FY2010 FY2010 FY2011 FY2011 FY2012 FY2012 FY2013 FY2013 Full year Interim Full year Interim Full year Interim Full year Interim Full year Ordinary income 93.7 44.8 87.0 43.2 87.5 42.3 81.6 40.2 80.2 Co
Slide 33: About Hokuhoku FG ⑥ Market Share in Our Home Market (Loans)
About Hokuhoku FG ⑥ ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Market Share in Our Home Market (Loans, Sep-13) Ｇｒｏｕｐ，Ｉｎｃ． Hokuriku Area Hokkaido Area Shinkin Banks HFG Shinkin Banks HFG 18.6% 24.1% 27.3% 25.3% Other Banks Other Banks 9.7% 31.4% Main Competitor Main Competitor 22.7% 40.9% S.B HFG HFG S.B 17.4% S.B 15.1% HFG
Slide 34: About Hokuhoku FG ⑦ Market Share in Our Home Market (Deposits)
About Hokuhoku FG ⑦ ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Market Share in Our Home Market (Deposits, Sep-13) Ｇｒｏｕｐ，Ｉｎｃ． Hokuriku Area Hokkaido Area Shinkin Banks HFG HFG 22.9% Shinkin Banks 22.6% 27.9% 32.3% Other Banks Main Competitor Main Competitor 30.8% 18.4% Other Banks 32.6% 12.5% HFG HFG S.B S.B 14.1% 16.4% S.B
Slide 35: About Hokuhoku FG ⑧ Lending in the Region by Industry
About Hokuhoku FG ⑧ ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Lending in the Region by Industry (Mar-14) Ｇｒｏｕｐ，Ｉｎｃ． Hokuriku Bank Hokkaido Bank Manufacturing Others Others 7.1% 0.8% Manufacturing 0.6% Construction 12.4% 3.7% Construction Communication・ 4.7% Transportation Individual 3.8% 34.9% Communication・ Individual Tr
Slide 36: About Japanese Regional Banks ① Financial Institutions in Japan
About Japanese Regional Banks ① ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Financial Institutions in Japan Ｇｒｏｕｐ，Ｉｎｃ． Source: Home page of Japanese Bankers Association of Japan 1 Central Bank - Bank of Japan Hokuhoku Financial Group 2 Private Financial Institutions (Hokuriku Bank, Hokkaido Bank) City banks Banks Regional b
Slide 37: About Japanese Regional Banks ② Outline of Regional Banks
About Japanese Regional Banks ② ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Outline of Regional Banks Ｇｒｏｕｐ，Ｉｎｃ． Outline of Regional Banks Leading Banks in the Regions The 64 regional banks in Japan consistently The regional banks have formed a dense enjoy wide patronage as banks that develop branch network in the regions,
Slide 38: The Present Condition of the Regional Economy ① Characteristics of Our Main Business Area
The Present Condition of the Regional Economy ① ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Characteristics of Our Main Business Area Ｇｒｏｕｐ，Ｉｎｃ． Data from Ministry of Internal Affairs and Communications Population and Square Measure Scale matching for Toyama Ishikawa Fukui Total Hokkaido Osaka! Total Prefecture a Prefecture
Slide 39: The Present Condition of the Regional Economy ② Economic Conditions
The Present Condition of the Regional Economy ② ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Economic Conditions Ｇｒｏｕｐ，Ｉｎｃ． Monthly Economic Report Regional Economic Report April-14 (By the Cabinet Office) (By Bank of Japan) All Japan Hokuriku Area Hokkaido Area Economic Moderate recovery trend Recovering moderately Recoveri
Slide 40: The Present Condition of the Regional Economy ③ Big Projects in Hokuriku and Hokkaido
The Present Condition of the Regional Economy ③ ＨｏｋｕｈｏｋｕＦｉｎａｎｃｉａｌ Big Projects in Hokuriku and Hokkaido Area Ｇｒｏｕｐ，Ｉｎｃ． Hokkaido ◎Construction of the Hokkaido Shinkansen Constructing a 360 KM line from Shin-Aomori Station to Sapporo Station. Expected to be completed in FY 2015 （Shin-Aomori Station
Slide 41: Hokuhoku Financial Group, Inc. Planning Group Contact
Inquiries related to this presentation should be addressed to Hokuhoku Financial Group, Inc. Planning Group TEL(81)76-423-7331 FAX(81)76-423-9545 E-MAIL:honsha2@hokuhoku-fg.co.jp http://www.hokuhoku-fg.co.jp/ This document may not be reproduced or distributed to any third party without prior approva

Hokuhoku Financial Group — FY2013 Earnings Presentation on 6ix

Hokuhoku Financial — FY2013 Earnings Presentation

Slide 1: Investor Meeting – Financial Results for FY 2013

Slide 2: Table of Contents

Slide 3: Summary of Financial Results

Slide 4: Summary of Financial Results

Slide 5: Net Interest Income (Total of two banks)

Slide 6: Loan Portfolio

Slide 7: Loan Portfolio

Slide 8: Securities Portfolio (Total of two banks)

Slide 9: Deposits & NCDs

Slide 10: Interest Margins (Total of two banks)

Slide 11: Net Fees and Commissions Income (Total of two banks)

Slide 12: G&A Expenses (Total of two banks)

Slide 13: Net Credit Costs (Total of two banks)

Slide 14: Non-Performing Loan

Slide 15: Capital

Slide 16: Forecasts

Slide 17: Management Strategy

Slide 18: Our Domestic Network

Slide 19: Our Overseas Network

Slide 20: Consumer Loans

Slide 21: Investment Products (Individuals)

Slide 22: Business Support

Slide 23: Net Interest Income

Slide 24: G&A Expenses

Slide 25: Capital Policy

Slide 26: Medium-Term Management Plan “GO for IT !”

Slide 27: Appendix

Slide 28: About Hokuhoku FG ① Outline of Hokuhoku FG and Two Banks

Slide 29: About Hokuhoku FG ② History of Hokuhoku FG

Slide 30: About Hokuhoku FG ③ Historical Data (Hokuhoku FG)

Slide 31: About Hokuhoku FG ④ Historical Data (Hokuriku Bank)

Slide 32: About Hokuhoku FG ⑤ Historical Data (Hokkaido Bank)

Slide 33: About Hokuhoku FG ⑥ Market Share in Our Home Market (Loans)

Slide 34: About Hokuhoku FG ⑦ Market Share in Our Home Market (Deposits)

Slide 35: About Hokuhoku FG ⑧ Lending in the Region by Industry

Slide 36: About Japanese Regional Banks ① Financial Institutions in Japan

Slide 37: About Japanese Regional Banks ② Outline of Regional Banks

Slide 38: The Present Condition of the Regional Economy ① Characteristics of Our Main Business Area

Slide 39: The Present Condition of the Regional Economy ② Economic Conditions

Slide 40: The Present Condition of the Regional Economy ③ Big Projects in Hokuriku and Hokkaido

Slide 41: Hokuhoku Financial Group, Inc. Planning Group Contact