Bank Of The Ryukyus,limited · TSE:8399
Bank Of The Ryukyus,limited — FY2013 Earnings Presentation
39 slides from Bank Of The Ryukyus,limited's earnings presentation, 2014
Slide 1: Bank of the Ryukyus Management Briefing for FY2013
Bank of the Ryukyus Management Briefing for FY2013 Thoughts of a Mother Turtle By Chie Tengan Winner of the 22nd (fiscal 2013) Bingata Design Contest presented by the Bank of the Ryukyus
Slide 2: The Financial and Economic Environment of Okinawa Prefecture
The Financial and Economic Environment of Okinawa Prefecture 1
Slide 3: Overview of Okinawa Prefecture
■Overview of Okinawa Prefecture Natural Environment Industry Approximately 2,276 km2 (around 0.6% of Japan’s Number of 6,410,000 (2013) total land area, the smallest proportion after tourists each year Area Kagawa, Osaka, and Tokyo; 18.4% of Okinawa’s main island is used as a U.S. military base) Gro
Slide 4: Economic Trends (Bank of Japan Tankan)
■Economic Trends (Bank of Japan Tankan) Business confidence at a high level for the first time in 22 years （ Business condition diffusion index: Strong-Week） Bank of Japan Tankan 40 Japan Okinawa ＋28 30 ＋22 20 ＋12 10 0 -10 -20 -30 -40 -50 -60 Feb-1992 Feb-1993 Feb-1994 Feb-1995 Feb-1996 Mar-1997 Mar
Slide 5: Trends in Land Prices
■Trends in Land Prices Upward trend in prices within the Prefecture for both commercial- and residential-use land Commercial-use land (YoY) Residential-use land (YoY) Japan Okinawa Japan Okinawa 14.00% 14.00% 12.00% 12.00% 10.00% 10.00% 8.00% 8.00% 6.00% 6.00% 4.00% 4.00% 2.00% ＋0.5％ ＋0.1％ 2.00% 0.0
Slide 6: Employment Conditions
■Employment Conditions Improvement in employment conditions with a year-on-year decline in the unemployment rate of 1.1 percentage points Trends in the overall unemployment rate (Annual average) Japan Okinawa 9.00% 8.00% 7.00% 5.7％ 6.00% 5.00% 4.0％ 4.00% 3.00% 2.00% 1.00% 0.00% 1991 1992 1993 1994 1
Slide 7: Projected Population
■Projected Population Okinawa Prefecture’s population is projected to increase for the foreseeable future Projected Population （ 1995＝ 100） Japan Okinawa Peak 11 5 111.3 110.7 111.0 110.3 109.4 109.2 106.9 107.5 103.5 10 5 100.0 101.7 101.9 100.8 98.8 101.0 96.0 100.0 95 92.8 89.2 85.4 85 75 10 Year
Slide 8: Estimates of the Number of Households
■Estimates of the Number of Households Continued increase in the number of households Estimates of the Number of Households （ 1995＝ 100） Japan Okinawa 145.5 143.0 145 139.6 135.1 135 128.9 125 120.8 Peak 114.5 115.2 114.8 113.5 115 110.3 111.7 111.1 105 100.0 106.5 95 100.0 85 75 65 1995 2000 2005 2
Slide 9: Tourism
■Tourism Record number of inbound tourists resulting from a variety of factors including the impact of LCCs and new Ishigaki Airport ◆LCCs commence services across 15 routes Trends in the Number of Inbound Tourists and * Number in parentheses represent the number or return flights in one day Revenue
Slide 10: Monthly Trends in Inbound Tourism
■Monthly Trends in Inbound Tourism Continuous year-on-year increase for 19 consecutive months Breakdown of inbound tourists by region and nationality (fiscal 2013) Monthly Trends in Inbound Tourism Breakdown of domestic travelers by region (YoY ) Positive correction Others Nagoya 25% Tokyo 15% Fukuo
Slide 11: Measures for Promoting Okinawa
■Measures for Promoting Okinawa Budget trends for the department responsible for Okinawa Development and Promotion Lump Sum Subsidy（¥175.9 Billion） Okinawa within Japan’s Cabinet Office Okinawa Development and Okinawa Development and Promotion Promotion Special Promotion Public Investment Subsidy (h
Slide 12: Construction
■Construction Substantial increase in both housing starts and public works Trends in new housing starts in the Prefecture Trends in orders received for public works projects Owned houses Leased houses Condominiums, etc. Central government Okinawa Prefecture Municipalities Others （ Thousands ） (Billi
Slide 13: Second Runway at Naha Airport
■Second Runway at Naha Airport Additional construction of a 2,700m runway to address the increase in air travel demand Total project expenses Commencement of construction Completion of construction About ¥198 Billion January-2014 December-2019 ■Naha Airport runway construction Second highest number
Slide 14: Okinawa Institute of Science and Technology Graduate University (OIST)
■Okinawa Institute of Science and Technology Graduate University (OIST) Positioned as a future silicon valley and research hub of Asia ＯＩＳＴ Technology Innovation Economic Zone In addition to 50 senior research officials, approximately 300 research associates conduct research across a variety of spe
Slide 15: Okinawa Bridging Asia (Okinawa International Logistics Hub)
■Okinawa Bridging Asia (Okinawa International Logistics Hub) Geographic competitive advantage due to its position at the heart of Asia Okinawa relay model Center of a massive market with a population of two billion Order from New Chitose Airport Haneda China 1.3 billion Airport arrival Haneda Airpor
Slide 16: Substantial Expansion of Okinawa's Regional and Economic Zone Systems
■Substantial Expansion of Okinawa’s Regional and Economic Zone Systems Okinawa boasts a variety of incentive programs including an extremely favorable tax deduction and allowance system that is not available in other prefectures. In fiscal 2014, the Prefecture also took steps to substantially improv
Slide 17: Major Projects within the Prefecture
■Major Projects within the Prefecture ：Private-sector businesses ：Public works （ ）：Total project costs Construction of a resort hotel adjacent to the Okinawa ◆Hotel Orion Motobu Resort & Spa Churaumi Aquarium; operations scheduled to commence (approx. ¥9 billion) in July 2014 Plan to utilize a vac
Slide 18: Financial Results for FY2013
Financial Results for FY2013 17
Slide 19: Financial Summary (Non-Consolidated)
■Financial Summary (Non-Consolidated) Increase in revenue and earnings for the first time in nine years （Billions of Yen） FY2013 FY2012 Change Ordinary revenue 37.9 37.5 ＋0.4 Business gross profit 30.2 29.3 ＋0.9 Expenses 21.7 21.4 ＋0.3 Real net business profit 8.5 7.8 ＋0.7 Net credit costs 2.5 2.8 -
Slide 20: Financial Summary (Consolidated)
■Financial Summary (Consolidated) Increase in revenue; substantial increase in earnings due mainly to an increase in the ratio of voting rights in subsidiary company Ryugin Hosho Co., Ltd. （Billions of Yen） FY2013 FY2012 Change Consolidated ordinary revenue 39.9 39.3 ＋0.6 Consolidated ordinary profi
Slide 21: Factors Behind the Change in Net Income (Non-Consolidated)
■Factors Behind the Change in Net Income (Non-Consolidated) Increase in net income largely attributable to the increase in real net business profit Net Income （ Billions of Yen ） Factors Behind the Change in Net Income (Non-Consolidated) 6 ( Mi l l i ons of Yen) 500 893 5 294 4.4 349 4.2 Improvement
Slide 22: Factors Behind the Change in Real Net Business Profit (Non-Consolidated)
■Factors Behind the Change in Real Net Business Profit (Non-Consolidated) Increase in real net business profit largely attributable to the increase in service profit and decrease in interest on deposits Real Net Business Profit Factors behind the year-on-year change （ Billions of Yen ） in real net b
Slide 23: Loans (Non-Consolidated)
■Loans (Non-Consolidated) Increase in loans to individuals, corporations, and local public authorities; the balance of loans tops ¥1,300 billion （ Billions of Yen ） Loans (Non-Consolidated) Individuals Corporations Local public authorities and other Rate of increase (Compared with the end of the pre
Slide 24: Trends in Economic Conditions and the Bank's Lending Activities
■Trends in Economic Conditions and the Bank’s Lending Activities The Bank’s lending activities closely linked to economic conditions within the prefecture 40 Bank of Japan Diffusion Index (Okinawa) 12.00% Rates of loan increase and decrease (year on year; right axis) 10.00% 30 8.00% ＋7.1％ 20 6.00% 4
Slide 25: Business Loans (Non-Consolidated)
■Business Loans (Non-Consolidated) Increase mainly in loans to the real estate sector including apartment loans as well as the medical and welfare sector Business Loans (Non-Consolidated) Real estate, rental and leasing Wholesale and retail Construction Medical and welfare Manufacturing Others Rate
Slide 26: Consumer Loans (Non-Consolidated)
■Consumer Loans (Non-Consolidated) Robust trends in mortgage, card, automobile, and educational loans Consumer Loans (Non-Consolidated) （ Billions of Yen ） Mortgage loans Other loans Rate of mortgage loan increase Rate of other loan increase (Compared with the end of the previous period: Right scale
Slide 27: Deposits (Non-Consolidated)
■Deposits (Non-Consolidated) Continued robust trends in deposits from individuals and corporations; increase attributable to the shift in designated financial institution regarding public funds Deposits (Non-Consolidated) （ Billions of Yen ） Individuals Corporations Public funds (year-end balance) R
Slide 28: Assets in Custody (Non-Consolidated)
■Assets in Custody_(Non-Consolidated) Robust trends in insurance sales; increase in the balance of assets in custody Assets in Custody(Non-Consolidated) （ Billions of Yen ） JGBs Investment trusts Single-premium insurance Rate of assets in custody (Compared with the end of the previous period: Right
Slide 29: Earnings Forecasts for FY2014 (Non-Consolidated)
■Earnings Forecasts for FY2014 (Non-Consolidated) While yields on loans are projected to decline, net income is expected to remain in line with FY2013 due mainly to an increase in service profit （Billions of Yen） FY2014 FY2013 Year-on-year change Business gross profit 29.5 30.2 -0.7 Expenses 22.2 21
Slide 30: Earnings Forecasts for FY2014 (Consolidated)
■Earnings Forecasts for FY2014 (Consolidated) Substantial increase in revenue due mainly to the inclusion of Ryukyu Leasing Co., Ltd. in the scope of the Bank’s consolidation as a consolidated subsidiary; narrowing of the decline in net income due mainly to a decrease in extraordinary gain/loss （Bil
Slide 31: Bank of the Ryukyus Strategy
Bank of the Ryukyus Strategy 30
Slide 32: Positioning of the FY2014 Short-Term Management Plan
■Positioning of the FY2014 Short-Term Management Plan Toward the next Break Through 2012 medium-term —Aiming to become the bank of preference for the citizens of Okinawa— management plan FY2011 FY2012 FY2013 FY2014 Sowing seeds Sprouting Blossoming Three arrows of IT innovation Core Strategies Ⅰ.
Slide 33: Basic Approach Toward the FY2014 Short-Term Management Plan
■Basic Approach Toward the FY2014 Short-Term Management Plan FY2014 management target: Become the bank of preference Increase earning capacity Buildup the balance of loans Expand service revenue Undertake more effective securities investment Strengthen activities in growth fields Strengthen asset
Slide 34: Core Strategy I (Reform our marketing system)
■Core Strategy I (Reform our marketing system) Three arrows of IT innovation; reform branch and head office processes Increase the efficiency of service operations Review rules and communication Improve the convenience of online Reform over-the- Communication tool communication counter procedu
Slide 35: Core Strategy II (Hire and train highly specialized staff)
■Core Strategy II (Hire and train highly specialized staff) Develop specialized staff Increased the balance of loans backed by collateral (ABLs) A record high 25 individuals accredited as property including trade accounts receivable and property assessment advisors across all financial instituti
Slide 36: Growth Strategy I (Support development of the regional economy)
■Growth Strategy I (Support development of the regional economy) Help expand marketing channels Held a business forum to promote the appeal of Okinawa Agricultural and marine products; foods Buyers (top ranked 47 business partners restaurants and Support renowned chefs hotels in Japan and prepare r
Slide 37: Growth Strategy II (Strengthen marketing capabilities in retail banking and fee businesses)
■Growth Strategy II (Strengthen marketing capabilities in the retail banking and fee businesses) Strategies to forge a principal bank position and build a stronger corporate image Launched the Shiawase Free Loan Introduced a T-Point service Up to a maximum Targeting such customers The rate of T-Po
Slide 38: Hold Sixth Industrialization Seminars (Proposal)
■Hold Sixth Industrialization Seminars (Proposal) Overview (Proposal) Dates (planned) Locations (planned) Participants July 11, 2014 (Friday): 14:00 – 18:00 Hotel to other location within Kumejima ・Farmers July 14, 2014 (Monday): 14:00 – 18:00 Hotel Yugafu Inn Okinawa ・The general public interested
Slide 39: Thank you for your kind attention
Bank of the Ryukyus is committed to fostering a close affinity with customers and to become the bank of preference. Thank you for your kind attention. 38