Japan Securities Finance Co., Ltd. · TSE:8511
Japan Securities Finance — 1H FY2012 Earnings Presentation
33 slides from Japan Securities Finance's earnings presentation, March 2012
Slide 1: Financial Presentation for 1st Half, FY2012
Financial Presentation for 1st Half, FY2012 Japan Securities Finance Co.,Ltd This is the English translation of the document originally written in Japanese for non-Japanese convenience. Although Japan Securities Finance intends to faithfully translate the Japanese-written documents into English vers
Slide 2: Financial Summary
a Financial Summary
Slide 3: Financial Summary for 1st Half, FY2012
Financial Summary for 1st Half, FY2012 ¥ mil Parent Consolidated FY2011 FY2012 FY2011 FY2012 Change Change 1H 1H 1H 1H Operating ▲894 ▲2,793 8,136 7,242 (▲11.0%) 11,476 8,682 (▲24.3%) Revenues EX Premium ▲935 ▲2,835 Charges 6,615 5,679 9,955 7,120 (▲14.1%) (▲28.5%) Operating Expenses 4,314 3,771 ▲54
Slide 4: Operating Revenues by Each Business
Operating Revenues by Each Business Real Estate Sep-11 Management, \ mil 3.6% Sep-11 Sep-12 Securities Finance Bussiness 8,079 7,211 Margin Loan, Trust Banking, Margin Loan Business 3,449 3,157 30.1% 26.0% (30.1%) (36.4%) Interest on Loans 1,006 838 Interest on collateral money of securities 309 257
Slide 5: Financial Highlights for 1st Half, FY2012 ①
Financial Highlights for 1st Half, FY2012 ① 1 Margin Margin Loan Loan Balance Balance for for 1 st Half, 1st Half, FY2012 FY2012 \ mil Avg. Margin Avg. Stock Loan Rate Policy Rate Sep-11 Sep-12 Change Loan Loan （as of sep） （as of sep） \ bn \ bn Margin Loan Business 3,449 3,157 ▲8.5% FY2012, 1H 205 1
Slide 6: Financial Highlights for 1st Half, FY2012 ②
Financial Highlights for 1st Half, FY2012 ② 2 Profit Profit on on bond bond investment investment largely largely decreased decreased in in JSF JSF and and JSF JSF Trust Trust Bank. Bank. < Background > JSF: Reducing the amount of bond investment JSF Trust Bank : Disappearance of CDO-sale profit
Slide 7: Financial Results of Group Companies ①
Financial Results of Group Companies ① Subsidiary Affiliate （ ) Shareholding Ratio Japan Securities Finance （100%） （100%） （20.0%） （20.8%） JSF Nihon JBIS JSFIT Trust Bank Building Holdings \ mil FY2012, 1H Results (Reference) Shareholding Operating Recurring Net FY2012 1H Ratio Net Income Revenues In
Slide 8: Financial Results of Group Companies ②
Financial Results of Group Companies ② JSF JSF Trust Trust Bank Bank ¥mil FY2011 FY2012 change 1H 1H Recurring Revenues 2,988 1,192 ▲1,796 Trust charges 152 157 5 Recurring Income 1,645 297 ▲1,347 Net Income 1,644 280 ▲1,364 Equity Ratio 30.11 ％ 35.37 ％ Trust charges slightly increased compared wi
Slide 9: 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
Slide 10: Estimated Figures for FY2012
Estimated Figures for FY2012 Precondition Balance of Margin Loans FY2012 Precondition Excess of ¥mil Margin Loan Excess of FY2012 Estimated Figures (Reference) ¥90bn Stock Loan FY2011 Operating Recurring Net ¥70bn Net Income Income Income Income Matching 1,500 1,700 1,200 ¥110bn Consolidated 779 （+1
Slide 11: Management Matters
Management Matters
Slide 12: Revenue Drivers of Margin Loan Business
Revenue Drivers of Margin Loan Business Outstanding Balance of Loans for Margin Transactions Trend of Margin Transactions Increase of Margin Loans utilization by brokers Funding Margin Loan Rates Monetary policy of the BOJ Securing of stable fund at low interest rates Trend of rates in money market
Slide 13: Margin Transactions & Margin Loans
Margin Transactions & Margin Loans \ tri 9 90% 8 Margin Buying Balance 80% Margin Loan Balance 7 Ratio 70% 6 60% 5 50% 4 40% 3 30% 2 20% 1 10% 0 0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 2.0 ￥tri 100% 1.8 Margin Selling Balance 90% 1.6 Stock Loan Balance 80% Ratio
Slide 14: Improve the convenience of Margin Loan Business
Improve the convenience of Margin Loan Business - Business Strategies for the 3rd Mid-term Management Plan ① Increase the number of Loanable Issues ・ Boost approach to listed companies. JSF Web System JSF Web System Client Ａ Client Ｂ Client ｎ JSF Certificate Authority ・Provide Margin Loans applicati
Slide 15: Features of Cash Funding and Investing in JGBs
Features of Cash Funding and Investing in JGBs Features Average Outstanding Margin Loan Loan balance Balance of Margin Loan Over-night loan FY 2006：¥ 1,444 bn Business is fluctuating FY 2011： ¥ 218 bn Short-term financing Continuous funding of certain Funding amount for a preparation of sharp such a
Slide 16: JGB Balance
JGB Balance \ bn JSF 3,000 2.0 \ mil 2,500 975 1.5 JSF Sep-11 Mar-12 Sep-12 2,000 776 JGB Balance 2,702,225 2,094,731 1,681,442 1,500 (1.19) (1.13) 1.0 1 year or less 1,727,065 1,318,655 946,967 (0.96) 734 over 1Y 975,160 776,076 734,475 1,000 1,727 0.5 (15Y floating JGB) 1,319 156,760 152,747 152,8
Slide 17: Respond to Diverse Funding Needs
Respond to Diverse Funding Needs - Business Strategies for the 3rd Mid-term Management Plan ② Stabilization Fund Loan ・Respond to medium- and long- term stable funding needs corresponding to Basel 3 rules. ・Provide constant loan period more than 1 year by [2 year loans] + [Evergreen Structure]. Liqu
Slide 18: Dividend Policy
Dividend Policy Ｎｅｗ Dividend Policy Basically, Dividend Payout Ratio of about 40% on Consolidated Financial Results, Results considering Dividend on Equity (DOE) Ratio. FY2012 Forecast：Annual ¥14（Interim ¥7, year-end ¥7） FY FY FY FY FY FY 2007 2008 2009 2010 2011 2012 Annual Dividend per share ¥
Slide 19: Initiation of joint deliberation toward the business integration
Initiation of joint deliberation toward the business integration After the Business Combination (TSE + OSE) Present Situation （January 1, 2013） Securities Japan Exchange Group, Inc. TSE OSE Exchange (tentative name） Self-regulatory Derivatives market Clearing corporation operating company organizati
Slide 20: Appendix
a Appendix
Slide 21: The 3rd Mid-term Management Plan (FY2012–FY2014)
The 3rd Mid-term Management Plan（FY2012～FY2014） ・Establishsolid ・Establish solidcredibility credibility ・Retainsolid ・Retain solidequity equitycapital, capital, stable stableand andlong-term long-term returnof return ofprofits profitstotoshareholders shareholders ・Furthersolidify ・Further solidifyth
Slide 22: Operating Revenues by Each Business
Operating Revenues by Each Business \ mil Mar-08 Mar-09 Mar-10 Mar-11 Sep-11 Mar-12 Sep-12 Securities Finance Bussiness 38,619 34,427 20,817 17,558 8,079 15,186 7,211 Margin Loan Business 23,156 19,638 12,954 8,922 3,449 6,756 3,157 (45.8%) (44.3%) (46.5%) (39.0%) (30.1%) (33.4%) (36.4%) Interest on
Slide 23: Avg. & Outstanding Loan Balance
Avg. & Outstanding Loan Balance \ mil FY2011 FY2012 FY2007 FY2008 FY2009 FY2010 FY2011 Interim Interim avg. 917,219 336,324 324,205 293,429 247,465 218,059 205,739 Margin Loans term-end 508,587 244,306 328,755 305,083 237,766 241,035 172,283 Bond Financing & General avg. 76,941 51,887 46,863 45,850
Slide 24: 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
Slide 25: Securities Account
Securities Account Sep-12 notes Sep-12 notes Assets Liabilities \mil \mil Collateral Money of Securities Loans 398,482 859,394 Lent Margin Loans 172,283 margin loan Margin Loans 203,884 stock loan Collateral Money of Securities 967,917 Borrowed Excess of Stock Loan 124,459 stock loan Securities Acco
Slide 26: 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
Slide 27: 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
Slide 28: 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
Slide 29: Maintenance of Cash Funding Sources
Maintenance of Cash Funding Sources JCR R&I Standard & Poor’s As of 30/Sep/2009 Rating Outlook Rating Outlook Rating Outlook Japan Securities Long-term AA- Stable AA- Stable A Stable Finance Short-term J-1+ a-1+ A-1 （Highest） （Highest） CP Issue ¥1tri ¥1tri ― JSF Trust Bank Long-term A+ Stable A+ Sta
Slide 30: Securities-related Business by JSF Group Companies
Securities-related Business by JSF Group Companies TSE TSE Securities Finance Business Sapporo Sapporo Loansfor Loans forMargin Margin Fukuoka JapanSecurities Japan SecuritiesFinance Finance Transactions Transactions Fukuoka Designated as Loansfor fornegotiable negotiable Loans securitiers margin tr
Slide 31: JSF Trust Bank
JSF Trust Bank As Asaatrust trustbank banksupporting supportingthe thebusiness businessinfrastructure infrastructureof ofsecurities securitiescompanies, companies, etc., JSF Trust and Banking Co., Ltd. provides customers with finely-tuned etc., JSF Trust and Banking Co., Ltd. provides customers with
Slide 32: A summary of JSF and OSF
A summary of JSF and OSF JSF OSF Common Stock \10,000mil \5,000mil Retained Earnings \96,401mil \9,118mil Recurring Income \1,045mil \47mil Net Income \740mil \44mil Outsatanding Balance of Loan Loans for Margin Transactions \205.7bn \34.9bn General Loans \58.3bn \39.1bn Number of Issued Shares Comm
Slide 33: Notice
Notice This document includes statements for business forecast. These statements don’t guarantee company’s future achievement and that 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
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