77 Bank, Ltd. · TSE:8341
77 Bank — FY2019 Earnings Presentation
35 slides from 77 Bank's earnings presentation, Jun 4, 2019
Slide 1: IR Presentation: Results for Fiscal Year Ended March 31, 2019
IR Presentation Results for Fiscal Year Ended March 31, 2019 June 4, 2019 Materials were prepared for the Bank’s presentation of its results for the fiscal year ended March 31, 2019 held on June 4, 2019.
Slide 2: Contents
Contents Fiscal Year Ended March 31, 2019 I. Financial Summary II. Measures under the Medium-term Management Plan Summary of profits and losses 3 Current state of Miyagi Prefecture 12 Interest income 4 Overview of the Medium-term Management Plan 13 Loans and bills discounted 5 Key Strategies 14 Depo
Slide 3: I. Financial Summary
I. Financial Summary CCRT 2 TI BANK
Slide 4: Summary of profits and losses
Fiscal Year Ended I. Financial Summary Summary of profits and losses March 31, 2019 (JPY bn, %) YoY change <Core operating income> Summary of profits and losses FY2018 FY2019 Increase/ Rate of Core operating income decreased (Non-consolidated) Decrease change % because of a decrease in interest Gros
Slide 5: Interest income
Fiscal Year Ended I. Financial Summary Interest income March 31, 2019 (JPY bn) FY2018 FY2019 FY2020 <FY2019 summary> YoY change (Plan) YoY change Interest income decreased JPY 3.7 billion Interest income 69.6 65.9 (3.7 ) 65.3 (0.6) year-on-year due to decreased dividends Investment income 72.7 69.4
Slide 6: Loans and bills discounted
Fiscal Year Ended I. Financial Summary Loans and bills discounted March 31, 2019 (JPY bn, %) Loans and bills discounted FY2020 <FY2019 summary> FY2018 FY2019 (average balances) YoY change (Plan) YoY change Average balances increased 3.7% Loans and bills discounted 4,494.0 4,662.3 3.7 4,779.0 2.5 yea
Slide 7: Deposits and certificates of deposits
Fiscal Year Ended I. Financial Summary Deposits and certificates of deposits March 31, 2019 (JPY bn, %) Deposits and <FY2019 summary> FY2020 certificates of deposits FY2018 FY2019 YoY change (Plan) YoY change Average balance remained (average balances) Deposits and approximately the same year-on- ce
Slide 8: Securities
Fiscal Year Ended I. Financial Summary Securities March 31, 2019 ● Balance of securities (based on market value) (JPY bn) ● Composition ratio by type (on an amortized cost base) Gains (losses) Change End-Mar. End-Mar. End-Mar. Change from evaluation End-Mar. End-Mar. End-Mar. End-Mar. 2020 from end-
Slide 9: Securities
Fiscal Year Ended I. Financial Summary Securities March 31, 2019 ● Balance of marketable securities (on an amortized cost base) ● Gains (losses) from evaluation of securities National gov. bonds Local gov. bonds Corporate bonds National gov. bonds Local gov. bonds Corporate bonds (JPY bn) Total gain
Slide 10: Assets in custody
Fiscal Year Ended I. Financial Summary Assets in custody March 31, 2019 (JPY bn, %) Sales of assets in FY2020 <FY2019 summary> FY2018 FY2019 custody YoY change (Plan) YoY change ･ Investment trust sales and balance decreased as the net asset values Sales in 77 Bank 91.4 85.1 (6.8) 128.0 50.4 remaine
Slide 11: Credit-related expenses/credits disclosed under the Financial Reconstruction Law/capital adequacy ratio
Credit-related expenses/credits disclosed under Fiscal Year Ended I. Financial Summary the Financial Reconstruction Law/capital adequacy ratio March 31, 2019 Credit-related expenses Credits disclosed under the Financial Reconstruction Law ● Trends of Credits disclosed under the Financial Reconstruct
Slide 12: II. Measures under the Medium-term Management Plan
II. Measures under the Medium-term Management Plan 11
Slide 13: Current state of Miyagi Prefecture
Current state of Miyagi Prefecture Fiscal Year Ended II. Measures under the MTMP March 31, 2019 Industrial transformation Increase in visitors ● Expansion of manufacturing industry has created new ● Building tourism platform jobs and grown peripheral industries (e.g. Toyota ・ Creation of DMO in Send
Slide 14: Overview of the Medium-term Management Plan
Fiscal Year Ended II. Measures under the MTMP Overview of the Medium-term Management Plan March 31, 2019 Business Model Further enhance the degree of customer satisfaction and confidence in the Bank through “consulting” offering the optimum solutions by identifying customers’ needs and issues. Moreo
Slide 15: Key Strategies
Fiscal Year Ended II. Measures under the MTMP Key Strategies March 31, 2019 Growth strategy Regional economy vitalization strategy Key Strategy 1 Key Strategy 2 —Strengthening of profitability— —Enhancement of value of the region— Based on the recognition that the “high-cost, low-profit model” is th
Slide 16: Key Strategy 1: Growth - Corporate sales through business evaluation
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 (Status of initiative to evaluate business feasibility) Strengthening of Corporate Sales through Business Evaluation Initiatives End-Mar. End-Mar. End-Mar. 2017 2018 2019 Number of clients 1,776 3,255 4,978
Slide 17: Key Strategy 1: Rebalance loan assets - corporate loans
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 Continue efforts to rebalance loan assets ○ Trends in yen loan yields ● Outstanding balance of corporate loans (yen-denominated, at term-end) （％） 1.2 (JPY bn) Corporate loans In Miyagi Pref. In Sendai City I
Slide 18: Key Strategy 1: Rebalance loan assets - consumer loans
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 Continue efforts to rebalance loan assets ○ Housing loans ● Outstanding balance of consumer loans (at term-end) ・ Increase deals by strengthening good relations Consumer loans Housing loans Unsecured loans w
Slide 19: Key Strategy 1: Initiatives for apartment loans
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 Initiatives for apartment loans ● Executed amount and outstanding balance of apartment loans ○ Overview of Miyagi Prefecture real estate market (at term-end) ・Rental housing starts based on actual demand bac
Slide 20: Key Strategy 1: Efforts to increase income other than interest income
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 ○ Strengthen sales promotion structure Efforts to increase income other than interest income ・The Bank plans to increase the headcount of Consulting Promotion ● Fees 経営者保険 and commissions from corporate clie
Slide 21: Key Strategy 1: Strengthen sales of assets in custody
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 Strengthen sales of assets in custody ● Balance of assets in custody of the Group ● Sales commissions of assets in custody, etc. Investment Public Structured bonds, etc. Operating revenue of 77 Investment In
Slide 22: Key Strategy 1: Strengthen overseas business support
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 Strengthen overseas business support Asia Business Support Dept. (established March 2011) China/Hong Kong ASEAN region Shanghai Provision of local Support for Marketing channel Singapore Representative Offic
Slide 23: Key Strategy 1: Strengthen the Group's comprehensive capabilities
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 Strengthen the Group’s comprehensive capabilities <Initiatives to expand business area> ・77 Securities Provision of integrated Clients (retail customers, Works together with the entire Group to respond to di
Slide 24: Key Strategy 1: Leverage Digital Technology
Fiscal Year Ended II. Measures under the MTMP Key Strategy 1: Growth strategy March 31, 2019 Leverage Digital Technology ○ Reorganization Offer new products Enhance business ・Merged the IT Strategy Office of the General and services efficiency and automation Planning & Coordination Division and the
Slide 25: Key Strategy 2: Regional economy vitalization strategy
Fiscal Year Ended II. Measures under the MTMP Key Strategy 2: Regional economy vitalization strategy March 31, 2019 Contribute to regional revitalization Support for starting a new company or business Support and develop regional core companies ・Utilization of the fund in cooperation with 77 Capital
Slide 26: Key Strategy 3: Productivity enhancement
Fiscal Year Ended II. Measures under the MTMP Key Strategy 3: Productivity enhancement strategy March 31, 2019 Effective and efficient allocation of management resources ○ Initiatives to streamline operations <Reduction of annual hours through operational streamlining in FY2019> ○ Initiatives to est
Slide 27: Key Strategy 4: Vigorously address ESG-related issues
Fiscal Year Ended II. Measures under the MTMP Key Strategy 4: Governance strategy March 31, 2019 Vigorously address ESG-related issues E Environment ○ Implementation of ESG Investments ○ Began offering ESG-related investment trusts Actively implemented ESG investments, such as green (Jul. 2018) bond
Slide 28: Key Strategy 4: Governance - Social initiatives
Fiscal Year Ended II. Measures under the MTMP Key Strategy 4: Governance strategy March 31, 2019 Ｓ Social (140th anniversary project) 77 Kids Challenge Joint sports workshops held by three of the Bank’s sports One branch, one social contribution campaign clubs (baseball, track and field, and badmint
Slide 29: Key Strategy 4: Governance and dividends
Fiscal Year Ended II. Measures under the MTMP Key Strategy 4: Governance strategy March 31, 2019 G Governance Enhance shareholder value Increase Increase dividend ● Dividends dividend by JPY 2.5 ○ Milestones for enhancement/strengthening of governance (JPY) by JPY 2.5 (forecast) (plan) Term-end divi
Slide 30: Progress of targets / KPIs
Fiscal Year Ended II. Measures under the MTMP Progress of targets / KPIs March 31, 2019 ○ Targets Item FY2018 results FY2019 results FY2021 targets ・ Net income (consolidated) JPY 18.3 bn JPY 17.6 bn JPY 19.0 bn or more Enhancement of ・ Interest on loans and bills discounted JPY 41.4 bn JPY 42.0 bn
Slide 31: III. Projected Performance
III. Projected Performance 30
Slide 32: Projected performance for FY2020
Projected performance for FY2020 Fiscal Year Ended III. Projected Performance March 31, 2019 (JPY bn) (%) Summary of profits and losses FY2019 FY2020 Interest rates/ FY2019 FY2020 (Non-consolidated) (Results) (Plan) YoY change Interest margin (Results) (Plan) YoY change Gross operating income 69.2 6
Slide 33: Quantitative Plan (1)
Quantitative Plan (1) Fiscal Year Ended III. Projected Performance (Quantitative plan to be formulated and reviewed annually) March 31, 2019 1. Major accounts (average balance) (JPY bn, %) FY2019 FY2018 FY2020 FY2021 Increase/decrease vs (Results) (Plan) (Forecast) FY2018 Plan Results vs Plan change
Slide 34: Quantitative Plan (2)
Quantitative Plan (2) Fiscal Year Ended III. Projected Performance (Quantitative plan to be formulated and reviewed annually) March 31, 2019 3. Profits and losses (JPY bn, %) FY2018 FY2019 FY2020 FY2021 (Results) (Plan) (Forecast) Increase/decrease Plan Results vs Plan vs FY2018 Core gross operating
Slide 35: Translation note and projections disclaimer
This is a Japanese-English translation of the presentation material for your convenience. In the case that there is any discrepancy between the Japanese and English versions, the Japanese version is assumed to be correct. Please note that the projections described in this document do not guarantee f