Bank Of The Ryukyus,limited · TSE:8399
Bank Of The Ryukyus,limited — FY2018 Earnings Presentation
43 slides from Bank Of The Ryukyus,limited's earnings presentation, June 2019
Slide 1: Management Briefing: Financial Results for FY2018
Management Briefing Financial Results for FY2018 Received an honorable mention in the 27th (fiscal 2018) Bingata Design Contest “Kariyushi (Harmony) with a Prayer for Phoenix” by Atsuko Miura
Slide 2: Table of Contents
Table of Contents Strong Okinawa Economy Business Strategy Tankan Survey ........ 4 Target Figures (Customer Centric 2017 Tourism ........ 5 Mid-Term Management Plan) Summary of Business Strategy ........ 25 Population, Number of Households, and Housing Starts ........ 6 Business Potential Evaluatio
Slide 3: Strong Okinawa Economy
1 Strong Okinawa Economy * Annual statistical indicators are based on the calendar year.
Slide 4: Tankan Survey
Tankan Survey Although the business sentiment index indicates that business confidence has peaked, the trend still remains significantly above the national average. Business Sentiment DI (Good/Bad) Cash Flow Sentiment DI (Good/Bad) Nationwide Okinawa Nationwide Okinawa 30 60 End Mar. ‘19 End Mar. ‘1
Slide 5: Tourism
Tourism In 2018, Okinawa had 9.84 million visitors, a record number for 6 consecutive years, reaching the same level as Hawaii. In 2019, cruise ships are also expected to call 697 times, a significant increase. Number of Tourists and Tourism Revenues Number of Cruise Ship Calls in Okinawa Prefecture
Slide 6: Population, Number of Households, and Housing Starts
Population, Number of Households, and Housing Starts Okinawa’s population is expected to grow until 2025, while the number of households is expected to keep growing onward. As the number of households increases, the number of new residential construction (housing starts) will also increase steadily.
Slide 7: Real Estate
Real Estate Growth rate of land prices and unit construction costs have surpassed the national average. Price Growth Rate of Residential Areas Unit construction cost (%) Nationwide Okinawa 10.0 (10,000 yen/m2) +8.5% Nationwide Okinawa 5.0 +0.6% 0.0 22.2 22.3 22.5 5.0 21.1 10.0 1994 1999 2004 2009 20
Slide 8: Employment
Employment Employment has improved with an increase in the job-openings-to-applicants ratio and a decline in the unemployment ratio. Meanwhile, the labor shortage is currently getting worse. Job-openings-to-applicants Ratio and Employment Sentiment DI (Good/Bad) (%) Unemployment Ratio (Times) 2.00 J
Slide 9: Financial Results for Fiscal Year Ended March 31, 2019
2 Financial Results for Fiscal Year Ended March 31, 2019
Slide 10: Summary of Profit/Loss Trends (Non-consolidated: Mar. 2015–Mar. 2019)
Summary of Profit/Loss Trends (Non-consolidated: Mar. 2015–Mar. 2019) (Million yen) End Mar. ‘15 End Mar. ‘16 End Mar. ‘17 End Mar. ‘18 End Mar. ‘19 Year on Year Profit from customer services *1 5,425 5,179 2,994 2,981 2,885 96 Deposit and loan balance *2 22,752 22,768 21,795 21,476 21,691 +215 Prof
Slide 11: Profit/Loss during Fiscal Year Ended March 31, 2019
Profit/Loss during Fiscal Year Ended March 31, 2019 Reactionary rise in net credit costs; net income fell due to a decrease in the profit/loss balance in the Trading Division. Net income was the 4th highest in the bank’s history. Net income Factors Increasing and Decreasing (100 million yen) (Millio
Slide 12: Profit from Customer Services
Profit from Customer Services The deposit and loan balance turned to positive, but total profit from services turned negative due to increased expenses. Profit from customer services Factors Increasing and Decreasing Profit from service charges (excl. loan-related fees) from FY 2017 Expenses (100 mi
Slide 13: Loans
Loans Although the yield declined, the balance steadily increased, turning into an increase in income from interest. Loan Balance Factors Increasing and Decreasing Syndicated loans (100 million (100 million Local government and other (excl. syndicated loans) yen) Loan Interest Income yen) Balance fa
Slide 14: Loans
Loans Increased mortgage loans, especially lending to real estate agents. The interest rate charged to borrowers declined at a slower rate. (100 million yen) Syndicated loan (%) Real estate-related loans BREAKDOWN OF LOAN 1,000 Balance 0.6 Mortgage loans balance Balance of rental and real estate bus
Slide 15: Deposits, etc.
Deposits, etc. Deposits for both retail and corporate customers are steadily increasing. Interest on deposits dropped due to a decline in yields. Annual percentage yield (%) Balance of deposits, etc. Annual percentage yield (nationwide banks) Annual percentage yield 0.15 Retail Commercial (100 milli
Slide 16: Profit from Service Charges
Profit from Service Charges As the different types of revenue sources emerge, income from fees and charges is steadily increasing. Trend of Profit from Service Charges (excl. group credit life Number of visits for consulting activities insurance premiums and loan guarantee fees) (Million yen) (Numbe
Slide 17: Assets in Custody
Assets in Custody Balance steadily increased thanks to sales of single-premium life insurance and investment trusts. Assets in custody balance Assets on custody sales revenue Single-premium life insurance (100 million Single-premium life insurance (100 million yen) Investment trusts yen) 460 489 Inv
Slide 18: Securities
Securities The balance decreased due to the redemption of government and corporate bonds and the sale of foreign bonds. The market value is greater than the book value. Securities balance Difference between market value and book Stocks, ETF, investment trusts value of securities Government bonds Cro
Slide 19: Securities
Securities Profit from forex trading increased, but the profit/loss balance in Trading Division decreased due to the decreased balance of 3 share accounts, etc. Profit/loss in Trading Division Securities investment yield Gains/losses from trading in forex and trading account securities Balance of 3
Slide 20: Net Credit Costs/Disclosed Bad Debt
Net Credit Costs/Disclosed Bad Debt Net credit costs saw a significant increase mainly due to revised general allowance for doubtful accounts. Net credit costs Disclosed bad debt Recoveries of written-off claims Substandard claims (100 million yen) Other processing costs Doubtful claims Loan amount
Slide 21: Expenses
Expenses Expenses increased due to investment to improve various revenue sources, convenience, and productivity. (100 million yen) Expenses Personnel Expenses Breakdown of non-personnel expenses (100 million yen) Others Non-personnel expenses Deposit insurance premiums 250 241 General and administra
Slide 22: Capital Adequacy Ratio (CAR)
Capital Adequacy Ratio (CAR) The capital adequacy ratio declined due to an increase in lending. Regulatory capital and capital adequacy rate Risk assets Total regulatory capital Subordinated debt portion (100 million yen) Loan Department Others Consolidated capital adequacy ratio (right axis) (100 m
Slide 23: Forecast for FY 2019 (ending March 31, 2020)
Forecast for FY 2019 (ending March 31, 2020) Profit growth is expected for both non-consolidated and consolidated financial results driven by the improved balance of deposits and loans. Non-consolidated (100 million yen) FY 2019 (ending Mar. ‘20) FY 2018 (ended Mar. ‘19) Forecast Year on Year Result
Slide 24: Business Strategy
Strategy 7) %) co) = 7) =) co
Slide 25: Target Figures (Customer Centric 2017 Mid-Term Management Plan)
Target Figures (Customer Centric 2017 Mid-Term Management Plan) Current mid-term management plan has been on track to achieve target numbers. * Target numbers are estimates for FY 2019 Achieved Achieved Consolidated net income Consolidated capital during the period adequacy rate More than 5 billion
Slide 26: Summary of Business Strategy
Summary of Business Strategy Type of Business Trend Notable Initiatives Review the readiness of business potential evaluation and sales Business Potential Evaluation Make use of our original Business Potential Evaluation Sheet and Sales Review the interest rate guidelines Establish the Corporate Bus
Slide 27: Business Potential Evaluation and Sales
Business Potential Evaluation and Sales * Understanding customer needs and reviewing employee training to provide the best solutions to customers. Reviewing the preparedness of business potential Make use of our original Business Potential Evaluation evaluation and sales (Started in Oct. 2018) Sheet
Slide 28: Corporate Business
Corporate Business Establishing a system with various consulting services for corporate customers to increase income revenue from fees. Established the Corporate Business Division (Apr. 2017) Results of business succession consulting fees Integrated consulting services for corporate customers. (Mi
Slide 29: Bank Card Services (Ryugin Visa Debit Card)
Bank Card Services (Ryugin Visa Debit Card) Starting card service directly from our bank by issuing international card brands of Visa and Mastercard Issuance of Ryugin Visa Debit Card (Oct. 2015) Issuance of Business Debit Card for corporations (Sep. 2018) Mar. 2018 Support of 3-D Secure began Str
Slide 30: Bank Card Services (Card Affiliates)
Bank Card Services (Card Affiliates) Speeding up the process of gaining card affiliates by adding organizations as agencies. (Number of Affiliates) Number of card affiliates Efficiency acquiring card affiliates by partnering with various 5,000 organizations 4,076 Jun. 2018 Formed an affiliate partne
Slide 31: Retail Business
Retail Business Expanding private banking business by providing specialized employee training for retail customers and using unique tools. Restructuring the employee training system (Apr. 2019) Starting property inheritance consulting services for Eliminated the hiring categories of “future manage
Slide 32: Retail Business
Retail Business Efficient outbound sales at the Direct Banking Center (DBC). Outbound sales for personal consumption History of DBC loans and insurance products Jun. 1999 New Telephone Banking Center was established Efficient outbound sales driven by customer data analysis Oct. 2002 Automated appl
Slide 33: Branch Office Strategy
Branch Office Strategy Reduce the number of branch offices and costs with “branch-in-branch” (“B in B”: multiple branches in one location). Reduce branch offices with “branch-in-branch (B in B)” Introduce communications-driven design for branch offices Implement a new revenue management system to
Slide 34: IT Systems
IT Systems Making effective use of cloud services to aim to reduce system costs and expedite development. Making use of cloud services Results from cloud services While maintaining the same robustness in accounting and Adopted cloud services for our website (Apr. 2018) information systems, we acti
Slide 35: IT Systems
IT Systems In order to control system investment and expenses, strictly applying rules related to system development investment. Outlook Adjusting system expenses to the right level System-related expenses will increase for the time being due to large-scale investment for renewing the systems, exp
Slide 36: Personnel Expenses
Personnel Expenses Reducing the labor force to bring down labor costs by trimming down tellers. Working toward reducing staff FTB (Flexible & Traditional Bank) project In addition to trimming down tellers, the following plan will (Expected to carry out the pilot in Oct. 2019) also be implemented to
Slide 37: Productivity Improvement (Streamlining Sales of Assets in Custody)
Productivity Improvement (Streamlining Sales of Assets in Custody) Used systems to significantly reduce the workload of sales agents of assets in custody. Deployed a conversation recording system (checked by Introduced “Azukari” archives (May 2015) a third person before signing a contract) (Oct. 201
Slide 38: Productivity Improvement (Use of Diverse Human Resources)
Productivity Improvement (Use of Diverse Human Resources) Initiatives to improve employee motivation and secure diverse human resources. Abolishing the policy limiting the age of management Expanding hiring of experienced workers positions (Apr. 2018) Purposes Changed to policy that does not lower
Slide 39: Productivity Improvement (Promoting the Success of Temps and Female Employees)
Productivity Improvement (Promoting the Success of Temps and Female Employees) Initiatives to make use of the power of temps and female employees, who account for a half of bank clerks, as useful resources of the organization. Promoting the hiring of temporary workers (Jul. 2017) EMPLOYEES Female ma
Slide 40: Adapting to Changing Economic Conditions
Adapting to Changing Economic Conditions Anticipating economic stagnation 2–3 years down the road and preparing to deal with it in the early stage. Adopting a more elaborate method of calculating Tightening the standard of the application review process general allowance for doubtful accounts (Jun.
Slide 41: Next Mid-Term Management Plan Concept
Next Mid-Term Management Plan Concept Assuming the negative interest rate policy would continue, we are aiming for the steady growth of the profit from services to customers (Deposit and Loan Balance + Profit from Service Charges – Expenses). The starting point is to maintain the capital adequacy ra
Slide 42: ESG Initiatives
ESG Initiatives Aiming to materialize a sustainable society and improve corporate value in the medium to long term. Projects Major Efforts Saving energy • Became the first certified Nearly ZEB in Okinawa Prefecture (in headquarters) (76% energy saving based on the BEI: Building energy-efficiency ind
Slide 43: About This Presentation
About This Presentation Contact information for questions about this document: General Planning Department, Bank of the Ryukyus, Limited Tel 098-860-3787 Fax 098-862-3672 E-mail ryugin@ryugin.co.jp The information in this presentation is on a non-consolidated basis unless otherwise specified. Inform