Resona Holdings, Inc. · TSE:8308
Resona — Q3 FY2008 Earnings Presentation
79 slides from Resona's earnings presentation, February 2009
Slide 1: Aiming at Establishing True Retail Bank
Aiming at Establishing True Retail Bank - Financial Results for 3Q of FY2008 and Outline of the New Business Revitalization Plan - RESONA February 2009 @ Resona Holdings, Inc. RESONA
Slide 2: Contents
Note: In some pages of this material, names of Resona Group companies are shown in the CONTENTS following abbreviated form: RHD: Resona Holdings, RB: Resona Bank, SR: Saitama Resona Bank, KO: Kinki Osaka Bank, and RT: Resona Trust & Banking Resona Group at a Glance Update on Recent Business Results
Slide 3: Resona Group at a Glance
Resona Group at a Glance Update on Recent Business Results Pathway to Early Repayment of Public Funds Outline of the New Business Revitalization Plan <Reference Material> 2
Slide 4: Resona Group at a Glance: Franchise value
Resona Group at a Glance Corporate structure Franchise value Solid presence in the Tokyo Metropolitan Area and the Kansai region where economic activities, industries, and Resona Holdings population are highly concentrated 3 100% 100% 100% 100% Total: 595 (End of March 2008) 3 Resona Saitama Kin
Slide 5: Resona Group's Strengths
Resona Group’s Strengths Loan Portfolio Composition Loan-to-Deposit Spread Cost to Income Ratio Lending to SMEs and individuals accounts Favorable loan-to-deposit spread Operational efficiency comparable to for more than 80% of the entire loan portfolio (Domestic operations, Mar. 31, 2008)
Slide 6: The Bank Immune to the Current Turmoil in Financial Markets
The Bank Immune to the Current Turmoil in Financial Markets Sound assets backed by very stable deposit funding RHD’s consolidated balance sheet (As of Sep. 30, 2008) [Stable funding structure] [Sound loan portfolio] Strong retail deposit base Loans and bills Well-diversified loan portfolio disco
Slide 7: Update on Recent Business Results
Resona Group at a Glance Update on Recent Business Results Pathway to Early Repayment of Public Funds Outline of the New Business Revitalization Plan <Reference Material> 6
Slide 8: Operating Results for the 3Q (9 Months from April to December)
Operating Results for the 3Q (9 Months from April to December) (Total of Group Banks, Non-consolidated Basis) 1-3Q 1-3Q Rate of Financial Results FY2008 FY2007 Change Progress*4 Comments Gross Operating Profit 508.0 Bn 514.4 Bn (1.2) % Gross operating profit almost in line with the plan 74.3% Ne
Slide 9: Comparison of Quarterly Business Results (1-3Q FY2008)
Comparison of Quarterly Business Results (1-3Q FY2008) Comparison of quarterly consolidated net income 150 132.9 (Billions of Yen) 100 81.6 58.0 51.1 40.8 50 25.1 28.2 4.7 0.1 0 (50) (38.4) Resona HD (100) Mizuho FG SMFG (150) (134.0) MUFG (145.1) (200) Apr.-Jun. (1Q) Jul. - Sep. (2Q) Oct.-Dec. (3Q)
Slide 10: Measures to Enhance Financial Soundness: Loan Asset
Measures to Enhance Financial Soundness: Loan Asset NPL balance and NPL ratio (Total of Group Banks) High reserve ratio against uncovered NPLs (Sep. 30, 2008) Collateral and guarantees(A) Loan loss reserve(B) ( Y bn) Unrecoverable or valueless 0.7% 11.19% 12% 100% 97.7% 100% claims 12.5% 11.0% Ris
Slide 11: Measures to Enhance Financial Soundness: Credit Cost
Measures to Enhance Financial Soundness: Credit Cost New addition to specific reserve is mostly Credit costs (Total of Group banks) necessitated by “3 specified industries” and certain large borrowers （Billions of Yen） New addition to specific reserve by credit amounts at the beginning of the fisc
Slide 12: Measures to Enhance Financial Soundness: Securities Portfolio
Measures to Enhance Financial Soundness: Securities Portfolio Securities portfolio with minimized downside risks Non-trading marketable securities available for sale Unwinding of net investment Relationship-purpose equity holdings position in response to poor Significant reduction during Intensi
Slide 13: Trend of Loan Business (Total of Group Banks)
Trend of Loan Business (Total of Group Banks) Trend of loan and deposit rates and spread Loan rate caught up with regional banks average (Domestic banking account) 2.2% 2.5% Resona Group (3 banks) Loan rate (left scale) 2.1% City Banks 2.4% 1.0% Loan-to-deposit spread (left scale) Regional Banks 2
Slide 14: Trend of Major Fee Businesses
Trend of Major Fee Businesses Investment trusts Personal annuity （Y bn） （Y bn） 50 Sale commission （Y bn） （Y bn） 1,297.2 Trust fees Amount sold (right scale) 1,200 16 Related income 300 Amount sold (right scale) 40 14 979.1 228.4 858.0 900 12 30 204.2 197.0 200 737.2 10 18.1 25.8 600 8 147.1 20 15.4
Slide 15: Capital Adequacy Ratio (RHD Consolidated Basis)
Capital Adequacy Ratio (RHD Consolidated Basis) RHD’s consolidated CAR [Mar. 31, 2008] 14.28% ⇒ [Sep. 30, 2008] 14.84% (+0.56%) 億円20/3末3FIRB増減自己資本比率TierⅠ比率自己資本額+31,965 Capital adequacy ratio Primary factors for the change Change in capital adequacy ratio (Basel II, F-IRB basis) [Total qualifying c
Slide 16: Earnings Forecasts for Fiscal Year Ending March 31, 2009
Earnings Forecasts for Fiscal Year Ending March 31, 2009 (Revised in November 2008) Resona Holdings (Consolidated) Resona Holdings (Non-consolidated) Change Change from Change Change from 1H FY Full year 1H FY Full year (Billions of Yen) from initial the previous from initial the previous 2008 forec
Slide 17: Pathway to Early Repayment of Public Funds
Resona Group at a Glance Update on Recent Business Results Pathway to Early Repayment of Public Funds Outline of the New Business Revitalization Plan <Reference Material> 16
Slide 18: Approach towards Repayment of Public Funds
Approach towards Repayment of Public Funds Aims at early repayments of public funds through the following approaches “Basic Policy toward Repayment of Public Funds” (Announced in May 2008) Secure a source of funds for repayment as soon as possible Maintain an appropriate capital adequacy ratio
Slide 19: Progress in FY 2008
Progress in FY 2008 Accumulation of Funds for repayments As of the end of September 2008, procured 1,668.9 bn of funds available for repayments Public fund preferred shares Remaining amount: ¥1,998.8bn (infusion amount basis) Profit & Other capital surplus (New PS) Retained earnings (End of Septem
Slide 20: Countermeasure for Possibility of Dilution
Countermeasure for Possibility of Dilution Relating to the Early Strengthening Law Preferred Shares Intend to prevent dilution from taking place by the following countermeasures Basic policy of repurchase and cancellation remain unchanged Announced the following approaches as a countermeasure fo
Slide 21: Outline of the New Business Revitalization Plan
Resona Group at a Glance Update on Recent Business Results Pathway to Early Repayment of Public Funds Outline of the New Business Revitalization Plan <Reference Material> 20
Slide 22: Concept of the New Business Revitalization Plan
Concept of the New Business Revitalization Plan Viewpoints Areas Priority businesses to be strengthened further for re- of Focus to become the unrivaled leader in retail financial services classification Products and Loans to individuals Appropriate product proposal Transactions Strengthening of Sol
Slide 23: Redefined Missions for Personal and Corporate Banking Businesses
Redefined Missions for Personal and Corporate Banking Businesses and Pursuit of Trust Synergies Personal Banking Corporate Banking Clearly redefined as division Division for sustained and stable that will lead growth earnings contribution Business offering solutions Life designing support business t
Slide 24: Outlook for Major Management Indices in the New Plan Period
Outlook for Major Management Indices in the New Plan Period FY2007 FY2008 FY2011 (Total of Group Banks) (Actual) (Plan) (Plan) Actual Actual Net Net 337.8 bn. 315.0 383.0 bn. Actual Actual net net operating operating profit profit will will Operating Operating Profit Profit increase increase by
Slide 25: Outlook for the Priority Businesses in the New Plan Period
Outlook for the Priority Businesses in the New Plan Period FY2007 FY2008 FY2011 (Actual) (Plan) (Plan) (Total of Group Banks) Number Number of of Will Will Trusts Trusts 10,331 10,830 12,980 Cross-selling Cross-selling opportunities opportunities under under Custody Custody captured captured byb
Slide 26: Merger between Resona Bank and Resona Trust & Banking
Merger between Resona Bank (RB) and Resona Trust & Banking (RT) On Dec. 19, 2008, RB and RT concluded a merger contract (Merger date: April 1, 2009) Resona Bank is supposed to be a surviving company Set up “Merger Steering Committee” to realize merger effects at an early date Expected merger e
Slide 27: Reference Material
Resona Group at a Glance Update on Recent Business Results Outline of the New Business Revitalization Plan Pathway to Early Repayment of Public Funds <Reference Material> 26
Slide 28: Financial and Other Detailed Data on Resona
Financial and Other Detailed Data on Resona Reference Materials 27
Slide 29: Financial Results for the 1st Half of FY2008: General Overview
Financial Results for the 1st Half of FY2008: General Overview Posted consolidated net income of Y86.3 bn. Net income decreased by Y33.8 bn. (-28.1%) YoY and by Y63.7 bn. (-42.4%) compared with forecast Y104.4 bn. gain from the sale of Tokyo Head Officer building Net credit cost increased by Y
Slide 30: Outline of Financial Results for 1H of FY2008
Outline of Financial Results for 1H of FY2008 Resona Holdings Total of four banks Factors accounting (Consolidated) (Non-consolidated) Resona for the difference (A) - (B) (Approx. figures) Saitama Kinki (Amount in billions of yen) Difference Resona Trust & Resona Osaka Banking RC: Resona Card, RG: R
Slide 31: Analysis on YoY Change in Top-line Income
Analysis on YoY Change in Top-line Income (Total of Group Banks) Top-line income for 1H of FY2008 remained almost flat ( a decline of 0.8 bn. YoY) Fee income items such as investment trust sale and real estate brokerage fees slowed down Net gains on bonds recovered due to the absence of a loss p
Slide 32: Analysis on YoY Change in Consolidated Net Interim Income
Analysis on YoY Change in Consolidated Net Interim Income Consolidated net interim income declined by Y33.8 bn (28.1%) YoY Increase of net credit cost (+112.6 bn) is mostly attributable to 3 specified industries and certain large borrowers Sale of Tokyo HO bldg. contributed Y62.0 bn to consolida
Slide 33: Management Accounting by Business Lines
Management Accounting by Business Lines Management Accounting by Group Business Lines (1H FY2008) “RAROC” and “RVA” as management indicators to measure profitability to allocated capital (Y bn., %) Net Operating Profit after Deduction of Credit Cost *1 Management Indices Gross Operating Credit Ope
Slide 34: Capital Adequacy Ratio (RHD and Subsidiary Banks)
Capital Adequacy Ratio (RHD and Subsidiary Banks) Sep. 30, 2008 [Preliminary] RHD (Consolidated) RB (Consolidated) 億円20/3末3FIRB増減自己資本比率TierⅠ比率自己資本額+31,965 Japanese Domestic Standard Mar. 31,2008 Sep. 30, 2008 Mar. 31,2008 Sep. 30, 2008 (Billioons of Yen) F-IRB F-IRB F-IRB F-IRB Act Act Change Act Ac
Slide 35: Comparison of Balance Sheet Structure
Comparison of Balance Sheet Structure (Sep. 30, 2008) 47% 44% 49% 57% 62% 65% 66% 79% 21% 20% 20% 47% 19% 34% 29% 33% 35% 15% 23% 16% 6% 5% 3% 5% Debtor Creditor Debtor Creditor Debtor Creditor Debtor Creditor Total Resona MUFG Mizuho SMFG Assets ¥39.3 tr ¥194.0 tr ¥153.2 tr ¥111.0 tr Loan . Securit
Slide 36: Stocks, Securitized Products, Leveraged Loan, NPL and DTA
Stocks, Securitized Products, Leveraged Loan, NPL and DTA (Y bn) (As of Sep. 30, 2008) 12,000 11,004 10,738 841 10,000 1,134 Tier I 901 886 8,380 590 1,600 8,000 3,118 6,000 6,000 Tier I Tier I 3,799 1,003 4,747 4,491 1,144 4,000 812 Tier I 251 2,347 5,011 2,000 1,675 3,863 343 2,790 488 285 559 0 R
Slide 37: Risk Volume Relative to Capital
Risk Volume Relative to Capital (Sep. 30, 2008) Primary risks such as credit, market and operational risks are controlled within Tier 1 limit Risk buffers comprising of excess Tier 1 and Tier 2 are provided against the risk volume (Ybn) assumed under a stress scenario or the risks difficult to m
Slide 38: Securities Portfolio
Securities Portfolio Net unrealized gains on available-for-sale securities (RHD consolidated basis) as of the end of September 2008 amounted to ¥100.4bn. Stocks Bonds (Available-for-sale securities, RHD Consolidated) [Balance of Securities Held (Non-consolidated Basis) ] (Ybn) No Within 1 1 to 5 5
Slide 39: Shareholdings by Industry
38 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Services Real estate Other financial services Insurance Securities, commodities T OPIX Banking Retail Wholesale Information, telecommunication Resona Bank Warehouse, transportation Air transport Marine transport Land transport Utilities Shareholdings by
Slide 40: Maturity Ladder of Deposits and Loans
Maturity Ladder of Deposits and Loans (RB, Domestic Operations) Loans and Bills Discounted Deposits [End of March 2008] [End of March 2008] Within 6M 6 to 12M 1 to 3Y Over 3Y Total Within 6M 6 to 12M 1 to 3Y Over 3Y Total Fixed rate 4.1% 4.0% 7.2% 8.0% 23.3% Liquid deposits 43.8% 2.1% 8.2% 7.9% 61
Slide 41: Swap Positions by Remaining Periods (RB)
Swap Positions by Remaining Periods (RB) Notional amounts of interest rate swaps by remaining period (Billions of Yen) End of September, 2008 End of March, 2008 Within 1 year 1 to 5 years Over 5 years Total Within 1 year 1 to 5 years Over 5 years Total Receive fixed rate/Pay floating rate 90.0 474
Slide 42: Composition of Loan Portfolio by Corporate/Individual Customers
Composition of Loan Portfolio by Corporate/Individual Customers (RB) Loans to corporations *Market rate-linked loans (corporate) include the fixed-rate (spread) loans maturing in less than one year. [End September 2007] [End March 2008] [End September 2008] Fixed Rate Fixed Fixed 14% Rate Rate Prim
Slide 43: Composition of Deposits by Corporate/Individual Customers
Composition of Deposits by Corporate/Individual Customers (RB) Corporate Deposits [End September 2007] [End March 2008] [End September 2008] Time Time Time Deposits Deposits Deposits 28% 28% 27% Liquidity Liquidity Liquidity Deposits Deposits Deposits 68% 68% 67% Individual Deposits [End March 200
Slide 44: Migrations of Borrowers (RB, 1H of FY2008)
Migrations of Borrowers (RB, 1H of FY2008) Exposure amount basis （Migration during the 1H of FY2008） End of September 2008 Upward Downward Special Quasi- Migration Migration Normal Other Watch Doubtful Bankrupt Other Attention Bankrupt Collection, Assignments, Repayments Sale Normal 95.2% 3.0% 0.4%
Slide 45: Trend of Long-term Senior Debt Rating (RB)
Trend of Long-term Senior Debt Rating (RB) 2003 2004 2005 2006 2007 2008 2009 JCR 2/28 5/19 9/22 1/20 12/17 1/31 6/8 4/10 6/9 3/30 5/5 9/18 MDY S&P 2/3 1/24 R&I 2/4 A1 A+ A2 A A3 A- Baa1BBB+ Baa2 BBB R&I S&P Baa3 BBB- Moody's JCR Ba1 BB+ 44
Slide 46: List of Preferred Shares Issued by RHD (1)
List of Preferred Shares Issued by RHD (1) [As of the End of January 2009] Class B Preferred Shares Class C Preferred Shares Class E Preferred Shares Class F Preferred Shares Distinction between public and private funds Public Fund Public Fund Public Fund Public Fund Original issuer and name of secu
Slide 47: List of Preferred Shares Issued by RHD (2)
List of Preferred Shares Issued by RHD (2) [As of the End of January 2009] Class 1 Preferred Shares Class 2 Preferred Shares Class 3 Preferred Shares Class 4 Preferred Shares Class 5 Preferred Shares Class 9 Preferred Shares Distinction between public and private fund Public Fund Public Fund Public
Slide 48: Class 9 Preferred Shares: Structure Embodying Basic Policies toward Repayments
Class 9 Preferred Shares: Structure that Embodies “Basic Policies toward Repayments” Designed in such a way to ensure high capital eligibility and to avoid dilution All shares will be allotted and subscribed to by Merrill Lynch Limitation on exercise of Acquisition Rights Japan Finance Acquisitio
Slide 49: Class 9 Preferred Shares: Acquisition Right and Acquisition Clause
Class 9 Preferred Shares: “Acquisition Right” and “Acquisition Clause” 1Y 5Y 8Y Acquisition Right Not Conditionally exercisable* (Preferred Shareholders) Exercisable* (If MV of ordinary shares exceeds the Acquisition Exercisable Rights Threshold Price for a certain period) Acquisition Clause Conditi
Slide 50: Business Revitalization Plan
Business Revitalization Plan Reference Materials 49
Slide 51: Resona Group's Management Direction
Resona Group’s Management Direction Community bank group most supported by regional communities and customers Repayment of public funds through JUMP sustained growth ・Clear differentiation strategy Issued Class Five Preferred August 2007 ・Quality-oriented growth strategy Shares (¥100bn) Issued Class
Slide 52: What We Have Achieved (1): Sustainable Profitability
What We Have Achieved (1): Sustainable Profitability （Total of Group Banks） FY2002 FY2007 Actual Actual net net Profitability Improved Improved core core business Profitability 307.3bn 337.8bn business operating operating profit profit profitability profitability driven by driven by growth growt
Slide 53: What We Have Achieved (2): Growth of Five Core Businesses
What We Have Achieved (2): Growth of Five Core Businesses Sustained Growth of Five Core Businesses （Total of Group Banks） FY2002 FY2007 Emphasis Emphasis on on accumulating accumulating Transaction Transaction Loans Loans to to with *1 11.3tn 10.3tn high high quality quality loan loan assets ass
Slide 54: Becoming True Retail Bank through Establishment of Resona Style
Becoming True Retail Bank through Establishment of Resona Style Community Community Bank Bank Group Group Most Most Supported Supported by by True True Retail Retail Bank Bank Local Communities and Customers Local Communities and Customers “Resona” “Resona” as as aa firm firm brand brand of of retai
Slide 55: Securing Stable Bottom-line Profits Underpinned by Financial Soundness
Securing Stable Bottom-line Profits Underpinned by Financial Soundness Securing stable bottom-line profits underpinned by financial soundness Income structure less dependent on asset growth Increase fee income by strengthening personal banking business (Fee income ratio: FY2008 19％ → FY2011 22％）
Slide 56: Outline of the Earnings Plan (Total of Group Banks)
Outline of the Earnings Plan (Total of Group Banks) Return to a stable growth trend again Underlying Underlying Scenario Scenario FY2007 FY2008 FY2009 FY2010 FY2011 Increase [Macro economy] (Amount in Billions of Yen) Plan Plan (Decrease) Actual Plan Plan Stagnation continues for a while. However,
Slide 57: How We Manage Loans and Deposits during the New Plan Period
How We Manage Loans and Deposits during the New Plan Period Aiming at securing stable interest income from employed assets Loan portfolio management in reference to RORA Strengthen housing and SME loans to which relatively [Total Assets 39.4] [Total Assets 40.6] law capital charge is applicable
Slide 58: Analysis on Top-line Income Growth during the New Plan Period
Analysis on Top-line Income Growth during the New Plan Period Planned top-line income growth during the New Plan period: ＋76.0 bn. Driver for top-line income growth is an increase in fee income of + 36.0 bn. Fee income ratio* will rise from 19.1% (FY2008) to 22.0% (FY2011) (0.5) +17.0 Other, net
Slide 59: Personal Banking Business (1): Estate Planning
Personal Banking Business (1): Estate Planning Strengthen personal banking business as a core growth area Acceptance of testamentary trusts as an opportunity Wills entrusted as of Mar. 2012 (Plan): Approx. 14,000 to initiate multiple related transactions 14,000 Wills entrusted to RB Strength
Slide 60: Personal Banking Business (2): Financial Product Sale
Personal Banking Business (2): Financial Product Sale Investment trusts Personal annuity Income for FY2011: 42.0bn (+14.1bn from FY2008) Income for FY2011: 22.0bn ( +6.1bn from FY2008) Recover Y1 trillion yen annual sale Close to Y400 billion annual sale is expected (Expect outstanding bal.
Slide 61: Personal Banking Business (3): Loans to Individuals
Personal Banking Business (3): Loans to Individuals Housing loans Other consumer loans ( strategic products) Balance at the end of March 2012: 12.3 tn. Strengthen core focus products* further HL balance 1.6 118.0 1.5 120 15.0 HL origination （right scale ） 1.5 102.0 1.3 1.3 1.2 87.0 90 12.3 11.8
Slide 62: Corporate Banking Businesses (1): Loans to SMEs
Corporate Banking Businesses (1): Loans to SMEs Transformation to business providing customers with Loans to SMEs solutions to management challenges Increase loans to SMEs by Y450 bn Fees from corporate solutions* : + 4.4bn Mar. 31, 2008: Y10.0 tn ⇒ Mar. 31, 2012: Y10.5 tn FY 2008: 7.2bn ⇒ FY 20
Slide 63: Corporate Banking Business (2): Real Estate, Pension and Securities Trust
Corporate Banking Business (2) : Real Estate, Pension and Securities Trust Real estate business (RB) Pension and Securities trust business （RT） Income from real estate business to exceed Y20.0 bn Entrusted pension assets to increase by Y1 tn Securities trusts to exceed Y40 tn 25 Income from e
Slide 64: Business Revitalization Plan: Earnings Plan
Business Revitalization Plan: Earnings Plan (Total of Four Banks) FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 (Billions of Yen) (Actual) (Plan) (Plan) (Plan) (Plan) (Billions of Yen) (Actual) (Plan) (Plan) (Plan) (Plan) Gross operating profit 700.0 684.0 690.0 721
Slide 65: Japanese Macro Economy
Japanese Macro Economy Reference Materials 64
Slide 66: Policy Measures by Japanese Government and Financial Regulators
Policy Measures by Japanese Government and Financial Regulators Measures to stabilize financial markets and support SMEs (2nd supplementary budget for FY2008) 1. Measures to support financing of SMEs (Implemented from October 2008) Emergency guarantee frame by the Credit Guarantee Corporations To
Slide 67: Overall Economy in Japan (1)
Overall Economy in Japan (1) GDP growth*1 GDP Components 3.5 （％） 3.4 Private Consumption Private Real GDP Non-Resi. Investment Domestic Demand (Y trillion) Government Consumption Net Exports 2.6 2.5 2.0 2.3 2.5 2.0 2.5 27.2 29.0 31.5 31.0 30.3 2.0 2.0 500 19.3 21.2 21.9 23.9 24.8 2.0 13.4 15.3 15.6
Slide 68: Overall Economy in Japan (2)
0% 20% 40% 60% 2000 Apr. - Jun. 2000 Oct. - Dec. 2001 Apr. - Jun. 2001 Oct. - Dec. 2002 Apr. - Jun. 2002 Oct. - Dec. 2003 Apr. - Jun. 2003 Oct. - Dec. 2004 Apr. - Jun. 2004 Oct. - Dec. / Total assets 2005 Apr. - Jun. 2005 Oct. - Dec. (4 quarter moving average) Equity to total assets 2006 Apr. - Jun.
Slide 69: Overall Economy in Japan (3)
Overall Economy in Japan (3) Capital investment / Cash flow (%) Capital investment / Cash flow 150 140 Medium-scale 130 enterprises 120 110 100 Large-scale 90 enterprises 80 small-scale enterprises 70 60 50 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 68
Slide 70: Overall Economy in Japan (4)
75 80 85 90 95 100 105 Jan-00 Jun-00 Nov-00 （CY2000=100） Apr-01 Sep-01 Feb-02 Jul-02 Dec-02 May-03 Oct-03 Mar-04 Aug-04 source: BOJ Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Output price ratio index / Input price ratio index （Manufacturing Industry） Dec-07 Input-Output Price Index May-08 Oct-
Slide 71: Comparison of Debts Held by Private Non-financial Sectors
Comparison of Debts Held by Private Non-financial Sectors 240 (Relative to GDP, %) 220 U.K. 200 180 U.S. 160 140 Japan 120 100 80 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 (Source) BOJ, FRB, ONS 70
Slide 72: Overall Economy in Japan (5)
Overall Economy in Japan (5) Trend of Unemployment Rate % Japan U.S. EU (15 countries) 9 8 7 6 5 4 3 2005/06 2005/09 2005/12 2006/03 2006/06 2006/09 2006/12 2007/03 2007/06 2007/09 2007/12 2008/03 2008/06 2008/09 (Source) Datastream 71
Slide 73: Overall Economy in Japan (6)
Overall Economy in Japan (6) Enterprise Bankruptcy (All Industries) (Number of cases) 1,600 12,000 Total Debt (¥ billion) 1,400 10,000 1,200 8,000 1,000 800 6,000 600 4,000 400 2,000 200 0 0 8/06 9/06 10/06 11/06 12/06 1/07 2/07 3/07 4/07 5/07 6/07 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/0
Slide 74: Japan-US Comparison of Housing Trends (1)
Japan-US Comparison of Housing Trends (1) Housing Starts Japan US (1,000s) Housing Bubble (1,000s) Collapse 200 2,500 180 160 2,000 140 120 1,500 100 80 1,000 News on condos built with false quake-resistance data 60 40 500 Source: Ministry of Land, Infrastructure and Transport Source: The US Departm
Slide 75: Japan-US Comparison of Housing Trend (2)
Japan-US Comparison of Housing Trend (2) Housing Demand （¥ trillion） Japan US Newly Contracted Housing Loan for Individuals 550 Weekly Mortgage Applications Index 5.5 (4 quarter moving average) (4 week moving average, March 1990=100) 500 5.0 450 4.5 400 4.0 350 3.5 300 3.0 2.5 250 00 01 02 03 04 05
Slide 76: Japan-US Comparison of Housing Trend (3)
Japan-US Comparison of Housing Trend (3) Major Difference in Housing Loan Features (Japan and the U.S.) Japan U.S. Primary objective Primarily for In many cases, for of purchasing home permanent dwelling replacements Most important criteria DTI LTV for loan application screening (Debt-to-Income Rati
Slide 77: Macro trends for Real Estate Business
Macro trends for Real Estate Business Number of households Population and housing ownership rate Population*1 Owning site of present dwelling and/or 35 80% 50 present dwelling 30 48 60% 25 46 20 40% 15 44 10 20% 42 5 40 0 0% - 1995 2000 2005 2010 2015 24 29 34 39 44 49 54 59 64 69 70 0- 25 - 30 - 35
Slide 78: Potential for Sales of Financial Products
Potential for Sales of Financial Products Total net assets of investment trusts*1 Individual’s financial assets (Sep. 2008) 50 45% Securities 45 Banks 40% C ash & In ve st m e n t In su r an c e & Direct De po si t s, 5 3 .1 % t r u st s, 4 . 0 % Pe n si o n , 2 7 . 4 % 40 Share of Banks 35% Japan S
Slide 79: Forward-looking statements
The forward-looking statements contained in this presentation may be subject to material change due to the following factors. These factors may include changes in the level of stock price in Japan, any development and change related to the government’s policies, laws, business practices and their in