Fukuoka Financial Group, Inc. · TSE:8354
Fukuoka Financial — Investor Presentation (May 2024)
40 slides from Fukuoka Financial's investor presentation, May 28, 2024
Slide 1: Investor Meeting
To be your Bank of choice Fukuoka Financial Group Investor Meeting May 28, 2024
Slide 2: Contents
Fukuoka Financial Group Contents Part I: Management Strategy Part II: Financial Results & Earnings Projections (Reference) Overview of FY2023 Consolidated Financial Results P5 Summary of Profit & Loss (Breakdown of Banks Total) P22 Progress of the 7th Medium-Term Management Plan P6 Top Line
Slide 3: Initiatives for Improving Corporate Value (Logic Tree)
FY2024 Investor Meeting Fukuoka Financial Group Introduction: Initiatives for Improving Corporate Value (Logic Tree) Today’s presentation ■ Initiatives for improving corporate value (overview) Sales divisions: Improve ROE by transforming the existing business model and strengthening structured fin
Slide 4: Part I: Management Strategy
To be your Bank of choice Fukuoka Financial Group Part I: Management Strategy
Slide 5: Overview of FY2023 Consolidated Financial Results
FY2024 Investor Meeting Fukuoka Financial Group Overview of FY2023 Consolidated Financial Results [Summary of financial results for FY2023] Financial highlights (FFG consolidated) FFG Consolidated FY2023 (excluding non- FY2022 Consolidated core business profit increased by ¥7.0 billion due to stro
Slide 6: Progress of the 7th Medium-Term Management Plan
FY2024 Investor Meeting Fukuoka Financial Group Progress of the 7th Medium-Term Management Plan While steady progress is being made in “transformation of the existing business model” and sales divisions are performing well, the challenge for Minna Bank is profitability Nevertheless, we plan to a
Slide 7: FY2024 Consolidated Earnings Projections
FY2024 Investor Meeting Fukuoka Financial Group FY2024 Consolidated Earnings Projections [Summary of earnings projections for FY2024] Increase/decrease factors in earnings projections (FFG consolidated) FFG consolidated FY2024 Consolidated net income is projected to increase by ¥7.3 billion year-
Slide 8: Earnings Projections (increase/decrease factors in core business profit)
FY2024 Investor Meeting Fukuoka Financial Group FY2024 Consolidated Earnings Projections (increase/decrease factors in core business profit) In the 7th MTMP, we will raise profits while maintaining growth investments ➡ In FY2024, we will capitalize on past investment effects and the — We will prom
Slide 9: Capital Policy and Shareholder Returns
FY2024 Investor Meeting Fukuoka Financial Group Capital Policy and Shareholder Returns Our basic policy is to manage capital in a way that balances shareholder returns with growth investments based on the premise of maintaining soundness. Shareholder returns are based on maintaining/increasing d
Slide 10: Key Points for FFG's Sustainable Growth
FY2024 Investor Meeting Fukuoka Financial Group 5 Key Points for FFG’s Sustainable Growth 1. Making Minna Bank Profitable 2. Transformation of the Existing Business Model 3. Growth of Kyushu Economy 4. From Savings to Investment 5. Rising Domestic Interest Rates 10
Slide 11: Minna Bank #1
FY2024 Investor Meeting Fukuoka Financial Group Minna Bank #1 In FY2023, Minna Bank’s third year of operations, commenced API collaborations in BaaS, and focused on strengthening customer base and earnings In FY2024, in light of identified issues, we will prioritize “promotion of alliances with
Slide 12: Minna Bank #2
FY2024 Investor Meeting Fukuoka Financial Group Minna Bank #2 Projected profit (loss) in FY2024 is -¥9.5 billion (similar level to FY2023) due to recording upfront expenses in an anticipation of profitability We will continue with company-wide efforts across FFG, aimed at making Minna Bank profi
Slide 13: [Reference] Minna Bank | Expansion of BaaS Business
FY2024 Investor Meeting Fukuoka Financial Group [Reference] Minna Bank | Expansion of BaaS Business Consider expanding business domain originating in BaaS by leveraging our in-house service development capability to acquire new customer base and monetization points → Develop services and functions
Slide 14: Transformation of the Existing Business Model (DX Investment)
FY2024 Investor Meeting Fukuoka Financial Group Transformation of the Existing Business Model (DX Investment) In the 7th MTMP, invest in new digital tools as a starting point for transforming the existing business model Increase the number of digital customers ⇒ Improve productivity and sales st
Slide 15: Growth of Kyushu Economy
FY2024 Investor Meeting Fukuoka Financial Group Growth of Kyushu Economy Kyushu’s economy is experiencing vigorous capital investment, particularly in semiconductor-related industries; Gross regional product (GRP) will exceed the national average in FY2024 for the third consecutive year Amid the
Slide 16: Growth of Kyushu Economy_Toward Realization of Silicon Island Kyushu
FY2024 Investor Meeting Fukuoka Financial Group Growth of Kyushu Economy_Toward Realization of Silicon Island Kyushu The economic ripple effects of semiconductor-related capital investment in Kyushu is estimated at ¥20.1 trillion over 10 years from 2021 We will focus on capturing business opport
Slide 17: From Savings to Investment_Asset Management Business
FY2024 Investor Meeting Fukuoka Financial Group From Savings to Investment_Asset Management Business Since the launch of our Investment Trusts Palette service in 2020, we have developed a business model that encourages long-term asset building, resulting in increased stock revenue as the balance o
Slide 18: Rising Domestic Interest Rates_Impact on Net Interest Income
FY2024 Investor Meeting Fukuoka Financial Group Rising Domestic Interest Rates_Impact on Net Interest Income If money market rates remain at the same level based on the current policy interest rate, net interest income related to yen interest rates will increase by about ¥10 billion as the loan po
Slide 19: Toward Sustainable Profit Growth/ROE Improvement
FY2024 Investor Meeting Fukuoka Financial Group Toward Sustainable Profit Growth/ROE Improvement Company-wide RORA* [Initiatives aimed at ROE of 8% in FY2027] Current: Approx. 0.6% ➡ Approx. 0.8% FY2024 Future FY2027 *Consolidated net income (after tax) /Risk assets *100 (Impact on bottom line) Cons
Slide 20: [Reference] Structured Finance/Diversified Investment
FY2024 Investor Meeting Fukuoka Financial Group [Reference] Structured Finance/Diversified Investment Structured finance (Bank of Fukuoka) Diversified investment (Unit: ¥ bil.) (Unit: ¥ bil.) RORA RORA High 1% range High 1% range 1,600.0 20.0 RORA* RORA* Low 1% range Low 1% range 18.0 1,400.0 16.0 1
Slide 21: Part II: Financial Results & Earnings Projections (Reference)
To be your Bank of choice Fukuoka Financial Group Part II: Financial Results & Earnings Projections (Reference) For detailed financial results for FY2023, refer to the Financial Highlights FY2023 disclosed on the FFG website. https://www.fukuoka-fg.com/en/investorimg/pdf/20240521_ir.pdf
Slide 22: Summary of Profit & Loss (Breakdown of Banks Total)
FY2024 Investor Meeting Fukuoka Financial Group Summary of Profit & Loss (Breakdown of Banks Total) Profit & loss (FFG consolidated) FY2024 projected Banks total Bank of Fukuoka Kumamoto Bank Juhachi-Shinwa Bank Fukuoka Chuo Bank (non-consolidated) (non-consolidated) (non-consolidated) (non-consolid
Slide 23: Top Line (Consolidated Core Business Profit)
FY2024 Investor Meeting Fukuoka Financial Group Top Line (Consolidated Core Business Profit) Core business profit (FFG consolidated) (Unit: ¥ bil.) Breakdown of year-on-year changes (FFG consolidated) (Unit: ¥ bil.) YoY chg. +¥1.6 billion [Non-interest income] excluding gains (losses) on bonds [Over
Slide 24: Bottom Line (Consolidated Net Income)
FY2024 Investor Meeting Fukuoka Financial Group Bottom Line (Consolidated Net Income) Consolidated net income (Unit: ¥ bil.) Breakdown of year-on-year changes (Unit: ¥ bil.) YoY chg. +¥7.3 billion +¥7.3 billion 68.5 +12.3 Consolidated 61.2 -21.5 net income +25.3 68.5 54.1 21.5 -10.4 Gain on negative
Slide 25: Net Interest Income (banks total)
FY2024 Investor Meeting Fukuoka Financial Group Net Interest Income (banks total) Net interest income (banks total) (Unit: ¥ bil.) Domestic interest on deposits and loans (banks total) (Unit: ¥ bil.) Domestic deposits and loans: Excluding loans to Government and Bank of Fukuoka loans to FFG Domestic
Slide 26: Non-Interest Income (excluding gains (losses) on bonds)
FY2024 Investor Meeting Fukuoka Financial Group Non-Interest Income (excluding gains (losses) on bonds) Non-interest income (banks total) (Unit: ¥ bil.) Asset management product sales (Group total) (Unit: ¥ bil.) * Corporate-related fees: Loan fees (syndicated loans, structured finance, etc.), M&A f
Slide 27: Consolidated Expenses
FY2024 Investor Meeting Fukuoka Financial Group Consolidated Expenses Overhead expenses (FFG consolidated) (Unit: ¥ bil.) Breakdown of year-on-year changes (Unit: ¥ bil.) [Excluding non-recurring expenses] FY2023 YoY chg. +¥9.0 billion FY2024 +¥9.0 billion Subsidiaries, etc. +0.8 Banks total +8.2 15
Slide 28: Consolidated Credit Cost / NPLs Disclosed under the FRL, Reserve
FY2024 Investor Meeting Fukuoka Financial Group Consolidated Credit Cost / NPLs Disclosed under the FRL, Reserve Changes in credit cost (-) (FFG consolidated) (Unit: ¥ bil.) Balance and ratio of NPLs disclosed under the FRL (FFG consolidated) (Unit: ¥ bil.) Excluding loans to Government and Bank of
Slide 29: Average Balance of Loans
FY2024 Investor Meeting Fukuoka Financial Group Average Balance of Loans Average balance by bank (Unit: ¥ bil.) Average balance by segment (Unit: ¥ bil.) Excluding loans to Government (public) and Bank of Fukuoka loans to FFG (large-sized enterprises) Excluding loans to Government (public) and Bank
Slide 30: Deposits, etc. (including CDs)
FY2024 Investor Meeting Fukuoka Financial Group Deposits, etc. (including CDs) Average balance by bank (Unit: ¥ bil.) Balance by segment (Unit: ¥ bil.) +6.4% +6.4% +3.6% +3.1% +2.6% +3.6% +3.1% +2.6% Annual rate Annual rate 21,924.3 21,924.3 Total 21,363.5 Total 21,363.5 285.1 20,724.6 518.8 20,724.
Slide 31: Breakdown of Loans and Deposits & CDs by Type
FY2024 Investor Meeting Fukuoka Financial Group Breakdown of Loans and Deposits & CDs by Type [Domestic] Balance of loans (portfolio by short-term/long-term/base rate) [Domestic] Balance of deposits, etc. (portfolio by floating/fixed) Breakdown (total = 100%) Breakdown (total = 100%) Mar. 2022 Sep.
Slide 32: Securities
FY2024 Investor Meeting Fukuoka Financial Group Securities Balance at end of period, unrealized gains (losses) (FFG consolidated) (Unit: ¥ bil.) Bond duration (banks total) (Unit: Years) After considering hedges; including marketable securities held to maturity Unrealized gains ● Domestic bonds 95.4
Slide 33: Minna Bank
Financial Highlights_ FY2023 Fukuoka Financial Group Minna Bank Minna Bank Profit & loss summary (related to Minna Bank*) (Unit: ¥ bil.) Number of downloads and accounts (Unit: Thousand) Balance of deposits (excluding special deposits) (Unit: ¥ bil.) FY2023 results FY2023 FY2022 +¥2.8 billion result
Slide 34: Part III: Topics (Reference)
To be your Bank of choice Fukuoka Financial Group Part III: Topics Contributing to Sustainable Local Communities/ Human Resources Strategy (Reference)
Slide 35: Contributing to Sustainable Local Communities_SX Support for Clients
FY2024 Investor Meeting Fukuoka Financial Group Contributing to Sustainable Local Communities_SX Support for Clients Sustainable finance results Sustainable Scale Index Clients can benchmark and visualize their own ESG/SDGs initiatives by answering about Sustainable finance target 200 evaluation i
Slide 36: Contributing to Sustainable Local Communities_Realizing SX at FFG
FY2024 Investor Meeting Fukuoka Financial Group Contributing to Sustainable Local Communities_Realizing SX at FFG CO₂ emissions (Scope 1, 2) Scenario analysis Various measures have been implemented to achieve FFG’s own CO2 emissions (Scope 1, FFG conducts scenario analysis to identify the impact
Slide 37: Financial and Economic Education
FY2024 Investor Meeting Fukuoka Financial Group Contributing to Sustainable Local Communities_Financial and Economic Education Financial and economic education Support for asset building in the era of 100-year life expectancy Long-term financial and economic education KPI Active communication on
Slide 38: Human Resources Strategy: Strategic Human Resources Portfolio and Engagement
FY2024 Investor Meeting Fukuoka Financial Group Human Resources Strategy_Building of a Strategic Human Resources Portfolio and Improvement of Employee Engagement Building a strategic human resources portfolio Improving employee engagement • Recruitment of new graduates by divisions • Distribution of
Slide 39: Human Resources Strategy: DE&I, Organizational Culture
FY2024 Investor Meeting Fukuoka Financial Group Human Resources Strategy_DE&I, Organizational Culture Promotion of DE&I Fostering an organizational culture that ensures psychological safety Support for work-life With an aim of sustainable growth, FFG will foster an organizational culture that ensu
Slide 40: Fukuoka Financial Group
To be your Bank of choice Fukuoka Financial Group This document has been prepared solely for the purpose of providing information and does not constitute a solicitation for the purchase or sale of any specific securities. All or part of the matters contained in this document may be amended or ch
Fukuoka Financial Group — Investor Presentation (May 2024) on 6ix