Japan Securities Finance Co., Ltd. · TSE:8511

Japan Securities Finance — 3Q FY2013 Earnings Presentation

26 slides from Japan Securities Finance's earnings presentation, February 2013

  1. Slide 1: Financial Presentation for 3Q, FY2013

    Financial Presentation for 3Q, FY2013 Japan Securities Finance Co.,Ltd This document is an English translation for non-Japanese investors convenience. Although Japan Securities Finance intend to faithfully translate the Japanese documents into English, the accuracy and correctness of translation are

  2. Slide 2: Financial Summary

    a Financial Summary

  3. Slide 3: Financial Summary for 3Q, FY2013

    Financial Summary for 3Q, FY2013 ¥ mil Parent Consolidated FY2012 FY2013 FY2012 FY2013 Change Change 1Q-3Q 1Q-3Q 1Q-3Q 1Q-3Q Operating 917 926 10,808 11,725 (8.5%) 13,216 14,142 (7.0%) Revenues EX Premium 950 959 Charges 8,537 9,488 10,945 11,905 (11.1%) (8.8%) Operating Expenses 5,432 5,419 ▲12 6,1

  4. Slide 4: Operating Revenues by Each Business

    Operating Revenues by Each Business \ mil Real Estate Dec-12 Dec-13 Management, Dec-12 Securities Finance Bussiness 10,762 11,703 4.7% Margin Loan Business 4,656 6,396 Trust Banking, 13.9% Margin Loan, (35.2%) (45.2%) 35.2% Interest on Loans 1,174 2,863 Interest on collateral money of securities bor

  5. Slide 5: Financial Highlights FY2013, 3Q ①

    Financial Highlights FY2013, 3Q ① 1 Margin Margin Loan Loan Balance Balance for for 3Q, 3Q, FY2013 FY2013 【1Q～3Q】 Avg. Margin Avg. Stock Loan Rate \ mil Loan Loan （as of Dec） Dec-12 Dec-13 Change \ bn \ bn Margin Loan Business 4,656 6,396 37.4% FY2013, 3Q 462 177 0.77% Interest on Loans 1,174 2,863

  6. Slide 6: Financial Highlights FY2013, 3Q ②

    Financial Highlights FY2013, 3Q ② 2 Profit Profit on on bond bond investment investment decreased decreased 【1Q～3Q】 \mil  In JSF, profit on bond investment (both interest FY2012 FY2013 change income and trading income) decreased. 3Q 3Q JSF 4,056 2,185 ▲1,870 JSF Trust Bank 1,121 1,145 24 3 Allowanc

  7. Slide 7: Financial Highlights FY2013, 3Q ③

    Financial Highlights FY2013, 3Q ③ 4 Recorded Recorded gain gain on on negative negative goodwill goodwill by by the the result result of of the the merge merge with with OSF OSF 【2Q】  As net asset value of OSF exceeded an acquisition cost, \mil we recorded gain on negative goodwill FY2012 FY2013 ch

  8. Slide 8: Financial Results of Group Companies

    Financial Results of Group Companies Subsidiary Japan Securities Finance Affiliate （ ) Shareholding Ratio （100%） （100%） （20.0%） （20.8%） JSF Nihon Japan Information JSFIT Trust Bank Building Processing \ mil FY2013, 3Q Results (Reference) Shareholding FY2012 3Q Ratio Operating Recurring Net Net Incom

  9. Slide 9: Financial Results of JSF Trust Bank

    Financial Results of JSF Trust Bank \mil FY2012 FY2013 3Q 3Q change Financial Financial Highlights Highlights for for 3Q, 3Q, FY2013 FY2013 Recurring Revenues 1,936 1,780 ▲156  Trust charges increased Trust charges 243 360 117 compared with the year-earlier period. Ordinary Expenses 1,931 1,618 ▲31

  10. Slide 10: Estimated Figures for FY2013

    Estimated Figures for FY2013 Precondition Balance of Margin Loans FY2013 Precondition ¥mil FY2012 Estimated Figures (Reference) Excess of FY2012 Margin Loan Excess of Operating Recurring Net Income Income Income Net Income ¥370bn Stock Loan ¥60bn 2,600 3,200 6,200 Consolidated 1,777 （+700） （+800） （+

  11. Slide 11: Appendix

    a Appendix

  12. Slide 12: Dividend Policy

    Dividend Policy   Dividend Policy Basically, Dividend Payout Ratio of about 40% on Consolidated Financial Results, Results considering Dividend on Equity (DOE) Ratio. FY2013 Forecast：Annual ¥14（Interim ¥7, year-end ¥7） FY FY FY FY FY FY FY 2007 2008 2009 2010 2011 2012 2013 Annual Dividend per sha

  13. Slide 13: Operating Revenues by Each Business

    Operating Revenues by Each Business \ mil Mar-09 Mar-10 Mar-11 Mar-12 Dec-12 Mar-13 Dec-13 Securities Finance Bussiness 34,427 20,817 17,558 15,186 10,762 14,093 11,703 Margin Loan Business 19,638 12,954 8,922 6,756 4,656 6,625 6,396 (44.3%) (46.5%) (39.0%) (33.4%) (35.2%) (37.5%) (45.2%) Interest o

  14. Slide 14: Avg. & Outstanding Loan Balance

    Avg. & Outstanding Loan Balance \ mil FY2012 FY2013 FY2008 FY2009 FY2010 FY2011 FY2012 3Q 3Q avg. 336,324 324,205 293,429 218,059 190,659 214,164 462,923 Margin Loans term-end 244,306 328,755 305,083 241,035 185,293 502,322 525,223 Bond Financing & General avg. 51,887 46,863 45,850 50,893 57,952 55,

  15. Slide 15: Margin Transactions & Margin Loans

    Margin Transactions & Margin Loans \ tri 6 60% Margin Buying Balance 5 Margin Loan Balance 50% Ratio 4 40% 3 30% 2 20% 1 10% 0 0% 03 04 05 06 07 08 09 10 11 12 13 tri 1.8 ￥ 100% 1.6 Margin Selling Balance 90% Stock Loan Balance 80% 1.4 Ratio 70% 1.2 60% 1.0 50% 0.8 40% 0.6 30% 0.4 20% 0.2 10% 0.0 0%

  16. Slide 16: Changes in accounting policies (Securities Accounts)

    Changes in accounting policies (Securities Accounts)  Changed our accounting policy regarding balance sheets  We changed not to record “securities accounts”, such as “securities lent”, “securities in custody”, “securities in deposit”, “collateral securities deposited”, “securities borrowed” and “s

  17. Slide 17: Features of Balance Sheet (Non-Consolidated)

    Features of Balance Sheet （NonｰConsolidated) Features of Assets Features of Liabilities (1) Fluctuation of Loan Balance (1) Fluctuation of money funding amount Loan balance moves everyday because margin loan is Need to response flexibly to fluctuating cash demands, over-night loan because of the flu

  18. Slide 18: JGB Balance

    JGB Balance \ bn JSF \ mil 2,000 3.0 JSF Dec-12 Mar-13 Dec-13 2.5 1,500 (2.68) JGB Balance 1,371,132 1,050,772 1,026,797 2.0 1 year or less 877,116 650,205 301,031 1,000 494 401 1.5 over 1Y 494,015 400,567 725,766 726 1.0 (15Y floating JGB) 153,196 151,912 150,476 500 (1.16) (1.28) 877 650 0.5 Net u

  19. Slide 19: Revenue Structure of Margin Loans

    Revenue Structure of Margin Loans BLUE：Operating Revenues RED：Operating Expenses Interest on Loans （B）×0.77% Excess of Fees on Lending Securities Interest on Borrowing Margin Loan Exess of （Lending Fees） （B）×Funding rate （B） Stock Loan （D）×0.40% Interest on collateral money of （D） securities procure

  20. Slide 20: Margin Loan Rates

    Margin Loan Rates Margin Loan Stock Loan BOJ Policy Interest Rate  Jul 2006 Uncollateralized O/N Call Rate:0.25％ Securities Company Securities Company  Feb 2007 Uncollateralized O/N Call Rate:0.50％ JSF Loan Rate Lending  Oct 2008 Uncollateralized O/N Call Rate:0.30％（▲0.20%） 0.77% Fee 0.40%  Dec

  21. Slide 21: Loan Rate of Loans for Margin Transactions

    Loan Rate of Loans for Margin Transactions 10.0% 9.0% 8.75% Loan Rate Interest Rate on Collateral Money of Stock Loan 8.0% Lending Fee 7.0% Profit Margin 6.0% 5.00% 5.0% Sep-93 4.0% 3.75% Nov-10 3.0% Jan-09 2.0% May-02 1.17% 1.0% 0.0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

  22. Slide 22: Share Buyback Program

    Share Buyback Program total shares start end purchased amount cancellation shares issued shs \ mil shs shs FY2008 2008/4/1 2008/4/18 4,312,800 2,999 99,704,000 2008/5/15 2008/6/11 978,900 999 99,704,000 2008/6/27 2008/7/25 1,000,000 881 99,704,000 2008/9/24 6,004,000 93,700,000 6,291,700 4,881 Numbe

  23. Slide 23: The 3rd Mid-term Management Plan (FY2012–FY2014)

    The 3rd Mid-term Management Plan（FY2012～FY2014） Management Policy Establish solid credibility Retain solid equity capital, stable and long-term return of profits to shareholders Further solidify the profit base Further improve the efficiency of organizational and business management Business Str

  24. Slide 24: JSF Trust Bank (Loan & Securities)

    JSF Trust Bank (Loan & Securities) ● Loan Balance by Industry ● Securities Holdings \mil \mil Mar-13 Sep-13 Dec-13 Mar-13 Sep-13 Dec-13 Notes Loan Loan Loan ratio ratio ratio JGB 172,968 375,273 407,410 Balance Balance Balance Manufacturing 23,386 29.4% 20,828 31.7% 17,011 26.2% less than 99,285 20,

  25. Slide 25: Securities-related Business by JSF Group Companies

    Securities-related Business by JSF Group Companies TSE TSE Securities Finance Business Sapporo Sapporo JapanSecurities SecuritiesFinance Finance Fukuoka Japan Loansfor Loans forMargin Margin Fukuoka Transactions Transactions Designated Securities Finance Loansfor Loans fornegotiable negotiablemargin

  26. Slide 26: Notice

    Notice This document includes statements for business forecast. These statements don’t guarantee company’s future achievement and they involve risk or uncertain factors. Company’s future achievement may be changed drastically up to stock market or financial conditions. Japan Securities Finance Co.,L

Japan Securities Finance — 3Q FY2013 Earnings Presentation on 6ix