Resona Holdings, Inc. · TSE:8308
Resona — FY2013 Earnings Presentation
87 slides from Resona's earnings presentation, Jul 7, 2014
Slide 1: Business Results for FY2013 and Future Management Direction
Business Results for FY2013 and Future Management Direction July 2014
Slide 2: Contents
Contents Resona Group at a Glance Outline of Business Results for FY2013 and Updates on Major Businesses Efforts to Build Solid Foundation for Sustainable Growth Progress in Public Funds Full Repayment Plan and Direction of Future Capital Policies Reference Material 1. In some pages of this material
Slide 3: Table of Contents
Table of Contents Progress in "Public Funds Full Repayment Plan“ Resona Group at a Glance and Direction of Future Capital Policies P4 Resona Group at a Glance P36 Repayment Efforts Entering the “Final Stage” to Complete Full Repayment P5 Population and Economic Scale of Resona’s Primary Operating Ba
Slide 4: Resona Group at a Glance
Resona Group at a Glance Outline of Business Results for FY2013 and Updates on Major Businesses Efforts to Build Solid Foundation for Sustainable Growth Progress in Public Funds Full Repayment Plan and Direction of Future Capital Policies Reference Material 3
Slide 5: Resona Group at a Glance
Resona Group at a Glance Resona focuses management resources on Tokyo and Kansai metropolitan areas and retail banking business Resona Group is the largest retail-focused bank with full-line trust capabilities in Japan with a well-established customer base comprising approx. 13 million retail ac
Slide 6: Population and Economic Scale of Resona's Primary Operating Base
Population and Economic Scale of Resona’s Primary Operating Base Prefectures where Resona’s franchise is concentrated account for more than 30% of Japan’s population and GDP Such prefectures are comparable to some countries in terms of GDP Prefectural GDP in USD Compared Prefecture Population*1
Slide 7: Loan Portfolio, Interest Margin and Cost to Income Ratio
Loan Portfolio, Interest Margin and Cost to Income Ratio Loans provided to SMEs and individuals account for over 80% of total loans. Interest margins are higher relative to peers Through operational reforms and efficient management, Resona mitigated the high-cost structure inherent in retail ban
Slide 8: Sound Balance Sheet
Sound Balance Sheet Sound assets backed by very stable deposit funding Resona’s consolidated balance sheet (as of March 31, 2014) Total assets Y44.7 tn Sound loan portfolio Stable funding structure Loans and bills Consists mostly of discounted Strong deposit base housing loans and small-lot JP
Slide 9: Stable Earnings Trend and High Profitability
Stable Earnings Trend and High Profitability Resona has consistently generated stable profits supported by our sound balance sheet Resona’s 5-year average RORA and ROA are higher than the average for the 3 megabank groups and 10 largest regional bank groups Historical Consolidated ROA*1 RORA (5-
Slide 10: Outline of Business Results for FY2013 and Updates on Major Businesses
Resona Group at a Glance Outline of Business Results for FY2013 and Updates on Major Businesses Efforts to Build Solid Foundation for Sustainable Growth Progress in Public Funds Full Repayment Plan and Direction of Future Capital Policies Reference Material 9
Slide 11: Financial Highlights for FY2013
Financial Highlights for FY2013 1. Posted JPY220.6bn of consolidated net income 4. Public Funds Full Repayment Plan progressed Consolidated net income decreased by Y54.4bn Repaid in total Y515.6bn of public funds and the (19.8%) YoY amount still outstanding is reduced to Y356.0bn on an injected
Slide 12: Factors Accounting for the Change in Consolidated Net Income
Factors Accounting for the Change in Consolidated Net Income Consolidated net income declined by Y54.4bn YoY (Y35.6bn increase YoY with an adjustment of one-time tax-related gain (Y90.1bn) posted in the previous year) Consolidated net income exceeded Y200bn for three consecutive fiscal years Inc
Slide 13: Outline of Financial Results for FY2013
Outline of Financial Results for FY2013 (Billions of Yen) Resona Holdings Total of 3 group Factors accounting for the difference (Consolidated) (A)-(B) (Approx. figures) Difference banks Resona Saitama Kinki RC: Resona Card, （A） YoY change （A）－（B） （B） YoY change Resona Osaka GS: Guarantee subsidiari
Slide 14: Factors Accounting for the Change in Gross Operating Profit
Factors Accounting for the Change in Gross Operating Profit (Total of Group Banks) Gross operating profit decreased by Y26.3bn YoY Increase in fee income almost made up for the decline in net interest income (Billions of Yen) Pension and FY2012 Financial securities trust +2.6 Loans Other Other Net
Slide 15: Outline of Results by Business Segments (1)
Outline of Results by Business Segments (1) Actual net operating profit decreased by Y18.3bn YoY due to slowdown in Market division Actual net operating profit of “Customer Divisions” increased by Y0.6bn YoY Actual net operating profit of “Markets and Other (Net)” decreased by Y19.0bn YoY due to
Slide 16: Outline of Results by Business Segments (2)
Outline of Results by Business Segments (2) Personal Banking Segment Corporate Banking Segment Actual net operating profit increased by Y1.4bn Actual net operating profit decreased by Y0.7bn Increase in fee income fully made up for the decrease Increase in fee income and reduction in operati
Slide 17: Trend of Loan and Deposit
Trend of Loan and Deposit (Total of Group Banks) Loan and deposit rates and spread Average loan balance and spread (Domestic Acct.) FY2013 FY2014 Loan yield (left scale) (Trillion Yen) Y oY Y oY (Act) (Plan) Loan-to-deposit spread (left scale) change change 2.5% 1.2% Deposit cost (right scale) Aver
Slide 18: Trend of Housing Loans
Trend of Housing Loans (Total of Group Banks) Composition of newly originated housing loans Housing loan origination by interest rate type Apartment loan Over 80% of the newly originated loans are variable rate type （Y tn） Flat 35 Residential housing loan 1.63 1.55 1.47 1.5 1.34 1.30 0.32 0.33 0.3
Slide 19: Trend of Fee Businesses
Trend of Fee Businesses Fees and commission income plus trust fees earned in FY2013 : Y115.9bn (1) Investment Products (2) Pension and Securities Trusts 115.9 (Total of Group Banks) (Total of Group Banks) Insurance products Investment trust Amount of investment trust and insurance products sold (ri
Slide 20: Credit Costs and NPL
Credit Costs and NPL Trend of credit costs NPL balance and NPL ratio (Total of Group Banks) (Note) Positive figures represent reversal gains (Ybn) FY2010 FY2011 FY2012 FY2013 Net credit cost (1) (36.8) (4.4) 21.4 27.1 (Total of group banks (A) General reserve (2) 5.7 49.4 29.4 28.4 Specific reserve
Slide 21: Securities Portfolio
Securities Portfolio Securities portfolio with reduced downside risks Trend of Securities Portfolio (HD consolidated) Stocks Mar.2003 Mar.2007 Mar.2013 Mar..2014 (Ybn) Unrealized Breakeven Nikkei average: Approx. 6,500 yen gains Available-for-sale securities*1 (1) 6,005.1 6,396.5 7,697.0 6,201
Slide 22: Status of Accumulated Other Comprehensive Income (A-OCI)
Status of Accumulated Other Comprehensive Income (A-OCI) RHD Consolidated Balance Sheet (Ybn) Mar. 2013 Mar. 2014 (A) Net unrealized gain on available-for-sale securities Net assets (1) 2,189.3 1,956.4 Net unrealized gains on available-for-sale securities are Capital stock (2) 340.4 50.4 Y333.2 bn
Slide 23: Capital Adequacy Ratio (Consolidated, Domestic Standard)
Capital Adequacy Ratio (Consolidated, Domestic Standard) Capital adequacy ratio Factors for the YoY change Adopted the Basel 3 from Mar. 31, 2014 Comparison of total qualifying capital as of Mar.31, 2014 and 2013 （Ybn） For the methodology to calculate the credit risk weighted assets, RHD/RB/SR
Slide 24: Capital Adequacy Ratio (Consolidated, International Standard)
Capital Adequacy Ratio (Consolidated, International Standard) Capital adequacy ratio Risk weighted assets Banks adopting the IRB approach to calculate credit For the methodology to calculate the credit risk- risk weighted assets are required to satisfy: weighted assets, RHD/RB/SR started adoptin
Slide 25: Earnings Forecasts for FY2014
Earnings Forecasts for FY2014 (Billions of Yen) Resona Holdings (Consolidated) Resona Holdings (Non-consolidated) Forecast for term-end Interim Full y ear Change f rom per share dividend* Interim Full y ear Change f rom f orecasts f orecasts prev ious y ear f orecasts f orecasts prev ious y ear Comm
Slide 26: Forecasted Consolidated Net Income for FY2014 Compared with FY2013
Forecasted Consolidated Net Income for FY2014 Compared with FY2013 (Act) Forecasting Y150 bn of consolidated net income for FY2014 (Y70.6 bn decrease YoY) (Billions of yen) +1.8 (2.4) FY2013 22.3 (52.6) FY2014 10.0 YoY 220.6 (70.6) Actual (12.3) (5.4) +9.1 (8.8) Net credit cost (credit cost ra
Slide 27: Efforts to Build Solid Foundation for Sustainable Growth
Resona Group at a Glance Outline of Business Results for FY2013 and Updates on Major Businesses Efforts to Build Solid Foundation for Sustainable Growth Progress in Public Funds Full Repayment Plan and Direction of Future Capital Policies Reference Material 26
Slide 28: Increase Business Loans (1) Business Environment
Increase Business Loans (1) Business Environment Pickup in loan demand from SMEs Pickup in loan demand from improving business confidence and more active corporate activities Improvement in Inflation business confidence <Average balance of corporate and apartment loans> (Y tn) 15.2 Growth strategy/p
Slide 29: Increase Business Loans (2) Promotion Measure
Increase Business Loans (2) Promotion Measure Stimulating latent demand for fund Stimulating latent demand for fund with asset and business succession solutions by extending supports for growth and business turnaround Example of solutions Example of solutions Effectively Supporting Management consul
Slide 30: Increase Loans to Individuals (1) Housing Loans
Increase Loans to Individuals (1) Housing Loans Housing loan demand likely to be strong in FY2014 Promotion measures to be taken in FY2014 Inflationary environment Growing number of LPs open on holidays Number of LPs Collaboration between LPs and Expanded tax incentives given to home buyers Of whi
Slide 31: Increase Loans to Individuals (2) Consumer Loans
Increase Loans to Individuals (2) Consumer Loans Start actively promoting consumer loans as one of strategically important businesses Vast untapped client base to promote consumer loans Actively promote the following strategic products with high profitability <Consumer loan balance (Total of Group B
Slide 32: Upgrade Segments / Cross-selling Culture
Cross-selling Culture Visible progress has been made through the increase in the number of “Resona Loyal Customers” Number of Customers Top-line Avg. # of Customer segments based on (thousands) Income Products Increase life-time profits by upgrading Per customer segments and by increasing the depth
Slide 33: Promotion of Cross-selling (1) Premier Customer Segments
Promotion of Cross-selling (1) “Premier” Customer Segments Resona Group’s customers in need of PB solutions are rapidly increasing Change in business Vast PB business “Retail x Trust” business model environment customer base Retail customer base Full-line trust Over 0.8 million potentially Advent of
Slide 34: Promotion of Cross-selling (2) Potential Customer Segments
Promotion of Cross-selling (2) “Potential” Customer Segments To raise per head profitability of “potential” segment customers being a primary objective Promoting cross-selling to existing customers is more cost-efficient than trying to capture new customers Top-line Potential I x 10 income • Sum o
Slide 35: Sustain Low-cost Operation to Further Enhance Competitiveness
Sustain Low-cost Operation to Further Enhance Competitiveness Trend of effective personnel and Mid to long-term measures to curtail effective non-personnel expenses operating expenses Effective personnel expenses remained flat, absorbing an Continue ceaseless efforts to reduce costs in the incre
Slide 36: Progress in Public Funds Full Repayment Plan and Direction of Future Capital Policies
Resona Group at a Glance Outline of Business Results for FY2013 and Updates on Major Businesses Efforts to Build Solid Foundation for Sustainable Growth Progress in Public Funds Full Repayment Plan and Direction of Future Capital Policies Reference Material 35
Slide 37: Repayment Efforts Entering the Final Stage to Complete Full Repayment
Repayment Efforts Entering the “Final Stage” to Complete Full Repayment The balance of public funds has reduced to almost one tenth of the peak amount Chronological repayment of public funds (based on injected amount) 3,500 (JPY bn) Sub Debt RCC Preferred DIC Preferred DIC Common Amount repaid 3,1
Slide 38: Outline of Public Funds Full Repayment Plan and Progress to Date
Outline of “Public Funds Full Repayment Plan” and Progress to Date Amount in “Final Stage” to Complete Full Repayment billions of yen Mar. 2013 (Injected 1st Year 2nd Year 3rd Year 4th Year 5th Year amount basis) Total 871.6 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Completed Repayment 32.0*
Slide 39: Mitigating and Eliminating Two Concerns relating to RHD's Common Shares
Mitigating and Eliminating “Two Concerns” relating to RHD’s Common Shares Mitigating “Dilution Concern” Repayment of convertible preferred stock will relating to RCC/DIC Preferred Stock decrease the number of dilutive shares RCC To be repaid in installments through special preferred dividends Year
Slide 40: Direction of Resona's Capital Management
Direction of Resona’s Capital Management Capital Adequacy Ratio Management Remain subject to the Japanese Domestic Standard However, in order to secure reliable capital strength, Resona Group operates its business with a high CAR, taking reference to the International Standard. Started calcula
Slide 41: Reference Material
Resona Group at a Glance Outline of Business Results for FY2013 and Updates on Major Businesses Efforts to Build Solid Foundation for Sustainable Growth Progress in Public Funds Full Repayment Plan and Direction of Future Capital Policies Reference Material 40
Slide 42: Long Term Trend of Major Indications
Long Term Trend of Major Indications (Ybn) FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 Gross operating profit 901.8 775.0 763.1 768.6 805.2 769.3 739.5 678.3 667.0 655.2 637.1 608.5 Net interest income 599.1 561.2 542.3 549.8 563.7 555.3 547.0 499.4 484.0 463.
Slide 43: Business Results by Major Group Business Segments
Business Results by Major Group Business Segments “RAROC” and “RVA”*1 as management indicators to measure profitability to allocated capital Management Accounting by Major Group Business Lines (FY2013) (Billions of Yen, %) Profitability Soundness Net operating profit after a deduction of credit co
Slide 44: Consolidated Subsidiaries and Affiliated Companies
Consolidated Subsidiaries and Affiliated Companies Consolidated domestic subsidiaries (excluding subsidiary banks) (Billions of Yen) Capital contribution Net income Name Line of business ratio FY2013 YoY change FY2012 Credit guarantee Resona Ｇroup Resona Guarantee Co., Ltd. (1) (Mainly housing loan)
Slide 45: Capital Adequacy Ratio (Subsidiary Banks)
Capital Adequacy Ratio (Subsidiary Banks) Resona Bank Saitama Resona Bank Kinki Osaka Bank (Consolidated) (Non-consolidated) (Consolidated) Japanese Domestic Standard (Billions of Yen) Mar.31,2013 Mar.31,2014 Mar.31,2013 Mar.31,2014 Mar.31,2013 Mar.31,2014 Basel 2 Basel 3 Basel 2 Basel 3 Basel 2 Bas
Slide 46: KPIs for Cross-selling
KPIs for Cross-selling (Total of Group Banks, End of March 2014) Primary Index RLCs = Clients to whom the group have achieved cross-selling to some extent (Number of customers in thousands) Mar 31, 2013 Mar 31, 2014 Change AUM or condominium loan (1) Premier 51.1 52.7 ＋1.5 exceeding JPY50
Slide 47: Well-established Competitive Edge as Pioneer of Reforms in Customer Service
Well-established Competitive Edge as Pioneer of Reforms in Customer Service Resona has achieved higher customer satisfaction through service reforms, which have resulted in enhancing the service level in branches Enhancing Customer Satisfaction <Resona’s “Service Reform”> <Results of “Service Refo
Slide 48: Operational Reforms Aimed at Simultaneously Enhancing Revenue and Reducing Costs
Operational Reforms Aimed at Simultaneously Enhancing Revenue and Reducing Costs Profitability Maximization of Branch Offices Productivity Reinforcement Sales Force Reinforcement Significant reduction of administrative Freeing resources through work operational reforms and shifting Expansion o
Slide 49: Loan Volume Growth
Loan Volume Growth Resona has successfully built up the optimal lending portfolio generating superior returns relative to the risk taken by promoting small-lot loans to diversified borrowers Resona’s housing loan balance has grown at a rate higher than that of the Japanese megabanks Trend of Loa
Slide 50: Cross-selling Strategy: Housing Loans as Gateway to Cross-selling
Cross-selling Strategy : Housing Loans as Gateway to Cross-selling Efficient cross-selling to existing and new housing loan (“HL”) clients whose credit profiles are already recognized or will be recognized upon the loan application Approx. 520 thousand existing HL clients. Resona creates long-te
Slide 51: Measures to Keep and Restore Profitability of HL Business
Measures to Keep and Restore Profitability of HL Business 1 Promotion of cross-selling HL business as a gateway for cross-selling Three Profitability 2 Low-cost operation Challenge to HL back office processing reform Enhancers 3 Upside from rise in interest rate Floating-rate loans account for ap
Slide 52: Impact of Rising Interest Rates on Net Interest Income
Impact of Rising Interest Rates on Net Interest Income Steepening of Yield Curve Breakeven inflation rate*1 Composition of newly originated loans by interest rate type*2 (%) Demand for switching to fixed-rate loans 4 2 Expected Inflation↑ ↑ 0 Long-term ↑ Interest rate↑ (2) (4) 2009/1/1 2010/1/1
Slide 53: Examples: How We Try to Originate Loans to Premier Customers
Examples: How We Try to Originate Loans to Premier Customers Solutions for SME owners to prepare cash Solutions for Effective Utilization of Real Estate for estate division in the future Establish a property management company and sell it Reconstruction needs stemming from aging the shares of hi
Slide 54: Trend of Investment Product Sale Business
Trend of Investment Product Sale Business (Total of Group Banks) Investment Trust*1 Insurance*1 （Y bn） （Y bn） 100 96.1 392.3 400 369.3 89.7 83.3 82.6 78.9 73.7 297.3 71.2 70.5 300 293.5 68.8 245.6 58.8 61.2 233.9 243.5 201.0 188.4 50 200 189.1 44.5 146.4 118.5 100 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 55: Financial Product Sales to Individuals
Financial Product Sales to Individuals Resona’s high potential in selling financial products to individuals We expect “Abenomics” to accelerate a recent shift from savings to investment in the Japanese financial market Potential in Selling Financial Products to Individuals Open alliance strate
Slide 56: Supports for SMEs Doing Business in Asia
Supports for SMEs Doing Business in Asia Footholds and Alliance Partners in Asia Local Services Offered through Alliances Large number of branches and local expertise Overseas Ability to provide local service without being regulated representative offices as a foreign bank 4 offices Shanghai M
Slide 57: Efficient Cost Structure: Personnel and Non-Personnel Expense
Efficient Cost Structure: Personnel and Non-Personnel Expense (Total of Group Banks) Unavoidable increase in operating expenses including social insurance premium will be offset by continued efforts to reduce non-personnel expenses Strictly controlled personnel expenses including the cost associ
Slide 58: Sophistication in ALM Interest Rate Risk Management
Sophistication in ALM Interest Rate Risk Management: (Introduction of Internal Model to Measure Core Liquidity Deposits) Reassess the value of liquidity deposits Methods to measure core liquidity deposits Internal model to measure core liquidity deposits Before implementation of internal model ⇒ Gra
Slide 59: Securities Portfolio (Total of Group Banks)
Securities Portfolio (Total of Group Banks) Maturity ladder for securities held (securities with contractual maturities, nominal amount basis) (Y bn) End of Mar. 2014 End of Mar. 2013 Five to Five to One year One to Three to Seven to Over One year One to Three to Seven to Over seven Total seven Tota
Slide 60: Stocks Held by Industry
10% 15% 20% 0% 5% Fishery, agriculture and forestry Mining Construction Food product Textile product Pulp and paper Chemical product Pharmaceutical product Oil and petrochemical product Rubber products Glass and pottery Iron and steel Non-metal products Metal products Machinery Electronics Transport
Slide 61: Maturity Ladder of Deposit and Loans
Maturity Ladder of Deposit and Loans (Total of Group Banks, Domestic Operation) Loans and Bills Discounted Deposits [End of March 2013] [End of March 2013] Within 6M 6 to 12M 1 to 3Y Over 3Y Total Within 6M 6 to 12M 1 to 3Y Over 3Y Total Fixed rate (1) 2.3% 1.5% 4.4% 7.6% 15.9% Liquid deposits (1) 3
Slide 62: Swap Positions by Remaining Periods
Swap Positions by Remaining Periods (RHD Consolidated) Notional amounts of interest rate swaps by remaining period (Billions of Yen) Mar. 31, 2013 Mar. 31, 2014 Within 1 to 5 Over Within 1 to 5 Over Total Total 1 year years 5 years 1 year years 5 years Receive fixed rate/ Pay floating rate (1) 55.
Slide 63: Composition of Loan Portfolio by Base Rates
Composition of Loan Portfolio by Base Rates (Total of Group Banks) Loans to corporations*1 Fixed Fixed Fixed Prime Prime Prime Rate Rate Rate Rate Rate, Rate, 24% 23% 24% 30% 29% 28% [March 31, [September 30, [March 31, 2013] 2013] 2014] Market Rate*2 Market Rate*2 Market Rate*2 46% 47% 48% Loans to
Slide 64: Composition of Deposits by Types
Composition of Deposits by Types (Total of Group Banks) Corporate Deposits Time Time Time deposits deposits deposits 28% 25% 25% [March 31, [September 30, [March 31, 2013] 2013] 2014] Liquidity deposits Liquidity deposits Liquidity deposits 69% 70% 71% Individual Deposits Time Time Time deposits dep
Slide 65: Migrations of Borrowers (RB, 1H FY2013)
Migrations of Borrowers (RB, 1H FY2013) Exposure amount basis (Migration during 1H of FY2013)*1 End of September 2013 Upward Downward Other Special Effectively Migration Migration Normal Doubtful Bankrupt Other Collection, Assignments, Watch Attention Bankrupt Repayments Sale Normal 98.5% 0.8% 0.0
Slide 66: Migrations of Borrowers (RB, 2H FY2013)
Migrations of Borrowers (RB, 2H FY2013) Exposure amount basis (Migration during 2H of FY2013)*1 End of March 2014 Upward Downward Other Special Effectively Migration Migration Normal Doubtful Bankrupt Other Collection, Assignments, Watch Attention Bankrupt Repayments Sale Normal 98.5% 0.9% 0.0% 0.
Slide 67: Corporate Governance
Corporate Governance The First Japanese Bank Employing a Committees-based Governance Modell Majority of Board Members Consist of Outside Directors The first Japanese bank with a committees- Companies with committees governance based governance model model in Japan Separation of management over
Slide 68: List of Preferred Share Issued by RHD
List of Preferred Share Issued by RHD [As of June 30, 2014] Public Funds Private Funds Class C Class F Class 3 Class 4 Class 5 Class 6 Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Preferred Shares Distinction between public and private funds (1) Public Fund Pu
Slide 69: Change in Composition of Resona HD's Total Equity
Change in Composition of Resona HD’s Total Equity (From Mar. 31, 2010 to Mar. 31, 2014) BPS (ND) is rapidly expanding => BPS(ND) 552 yen （Y bn） Resona Capital Public Funds Full Restructuring Plan Repayment Plan 3,000 Net Income 160.0 P.O. 2,500 547.7 2,271.8 Repayment Other 48.9 (1,307.6) Repayment
Slide 70: Distributable Profits and Dividend Policy
Distributable Profits and Dividend Policy Distribute in total Y78.9 bn*1 as term-end dividends for FY2013 （Common dividends: Y32.8 bn Preferred dividends: Y46.0 bn*1) Resona Holdings (Distributable Profits as of End Mar. 2014: Y1,078.4 bn) Term-end Common Y1.1 bn Common Y18.6 bn Common Y2.4 bn divid
Slide 71: Outline of the New Domestic Capital Regulation
Outline of the New Domestic Capital Regulation Subordinated debts, preferred securities and non-convertible preferred shares Existing subordinated debts and preferred securities can be fully included in Core Capital as of the end of March 2014. These grandfathering items will be subject to a 10-
Slide 72: Trend of Long-term Senior Debt Rating of Resona Bank
Trend of Long-term Senior Debt Rating of Resona Bank S&P 2003 2004 2005 2006 2007 2011 2012 2013 2014 Moody's R&I 2/28 9/22 1/20 1/20 12/17 6/8 4/10 3/30 9/18 8/24 JCR 5/19 2/3 1/24 6/9 5/5 2/18 9/9 1/31 9/29 A1 A+ 2/4 R&I JCR S&P A2 A Moody's A3 A- Baa1 BBB+ Baa2 BBB S&P Baa3 BBB- Moody's R&I Ba1 B
Slide 73: Business Revitalization Plan
Business Revitalization Plan (Billions of Yen) FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 [Total of Group Banks] (Actual) (Actual) (Actual) (Plan) (Plan) (Actual) (Actual) (Actual) (Plan) (Plan) Gross operating profit 1 598.6 581.6 555.2 568.0 588.0 Total assets
Slide 74: Macro Economic Trend
Reference Material Macro Economic Trend 73
Slide 75: Actual and Forecast of Real GDP Growth Rate
Actual and Forecast of Real GDP Growth Rate GDP Components*1 *2 (Y tn) Private Consumpton Private Investment *2 Public Demand Net Exports 5.4 500 125.9 400 84.7 300 200 322.3 100 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2008 2009 2010 2011 2012 2013 2014 [Real GDP
Slide 76: Overall Economy in Japan (1)
Overall Economy in Japan (1) Trends in Stability Ratios of Japanese Companies*1 《Companies capitalized 《Companies capitalized 《Companies capitalized at 10M-100M(Y)》 at 100M-1,000M(Y)》 over 1,000M(Y)》 80% 160% 80% 160% 80% 160% 60% 120% 60% 120% 60% 120% 40% 80% 40% 80% 40% 80% 20% 40% 20% 40% 20% 40
Slide 77: Overall Economy in Japan (2)
Overall Economy in Japan (2) Capital investment / Cash flow (%) 140 Large-scale enterprises Medium-scale enterprises 120 Small-scale enterprises 100 80 60 40 1983 1988 1993 1998 2003 2008 2013 *1. Source: Ministry of finance, Cabinet Office, Resona Bank 76
Slide 78: Overall Economy in Japan (3)
Overall Economy in Japan (3) Comparison of Debts Held by Private Non-financial Sectors*1 (% of GDP) 240 JAPAN US UK 220 200 180 160 140 120 100 80 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 *1. Source: BOJ, FRB, ONS, Resona Bank 77
Slide 79: Overall Economy in Japan (4)
Overall Economy in Japan (4) Enterprise Bankruptcy*1 (Number of cases) (Ybn) Total Debt (Construction/Real Estate Industries) Total Debt (other) 1,500 2,500 Number of Bankrupt Case (right scale) 1,300 2,000 1,100 1,500 1,000 900 500 700 0 500 2008/3 2008/9* 2009/3 2009/9 2010/3 2010/9 2011/3 2011/9
Slide 80: Employment
Employment The active job openings-to-applicants ratio has exceeded 1.0 for the first time since 2007 The wage / salary level has been rising since 2009 Active job openings-to-applicants ratio*1 Wage / Salary*2 (JPY thousand) (times) 310 1.2 305 1.0 300 0.8 295 290 0.6 285 0.4 280 0.2 275 0.0 27
Slide 81: Exchange Rate / Corporate Earnings
Exchange Rate / Corporate Earnings Yen has depreciated and Japanese corporate profits have recovered to the pre-financial crisis level Exchange Rate(USD / JPY)*1 Ordinary Profit for Japanese Corporations*2 (JPY) (JPY tn) 125 60 120 50 115 110 40 105 100 30 95 20 90 85 10 80 75 0 2003/1/1 2005/1/1
Slide 82: JGB Holdings by Foreign Investors
JGB Holdings by Foreign Investors More than 90% of the JGBs outstanding are held by Japanese investors Domestic Holdings of Government Bonds*1 (%) 100 91.7 80 70.1 60.7 60 52.7 39.3 40 35.5 20 0 Japan US UK Germany France Italy *1. Source: BOJ, Board of Governors of the Federal Reserve System, UK
Slide 83: Aging of Japan's Population
Aging of Japan’s Population (Population Trends by Age / Actuals and Estimates)*1 Population aging is expected to accelerate Population Trends by Age Groups (mn individuals) under 65 65 to 74 75 and above 140 120 100 80 60 40 20 0 1950 1960 1970 1980 1990 2000 2010 2020 *1. Source: National Institu
Slide 84: Sales of Investment Trusts and Insurance
Sales of Investment Trusts and Insurance Demand for investment products has been increasing, and the ratio sold by banks has surged in the last 10 years due to deregulation As customers buying life insurance through banks are still limited, there is a sizeable room for future expansion Total Net
Slide 85: Housing Data
Housing Data New housing construction starts have been on the rise This trend is a following wind for the housing loan market New Housing Construction Starts*1 (units) 1,500,000 1,285,246 1,249,366 1,200,000 1,035,598 1,039,214 987,254 893,002 900,000 819,020 841,246 775,277 600,000 300,000 0 20
Slide 86: Our Website Information
Our Website Information http://www.resona-gr.co.jp/holdings/english/ Materials for investors are available from here Official You Tube (in Japanese language) http://www.youtube.com/user/ResonaGroup Official facebook account Official Twitter account (in Japanese language) (in Japanese language ) ht
Slide 87: 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