Bank Of The Ryukyus,limited · TSE:8399
Bank Of The Ryukyus,limited — FY2023 Earnings Presentation
55 slides from Bank Of The Ryukyus,limited's earnings presentation, May 2024
Slide 1: Investor Presentation: Financial Results for FY 2023
Investor Presentation Financial Results for FY 2023 Received an Honorable Mention in the General Category of the 32nd (Fiscal 2023) Bingata Design Contest ”Dancing in Blue” by Mie Yamashiro
Slide 2: Contents
Contents 1 ■ Financial Results for the Fiscal 2 ■ Initiatives to Enhance Corporate Value 3 ■ Progress of the Medium-Term Year Ended March 31, 2024 ～ Toward Improving PBR ～ Management Plan Economic Overview of Okinawa Prefecture ････4 Overview of the Medium-Term Management Plan ････40 Current Situati
Slide 3: Financial Results for the Fiscal Year Ended March 31, 2024
Financial Results for the Fiscal Year Ended March 31, 2024 3
Slide 4: Economic Overview of Okinawa Prefecture
Economic Overview of Okinawa Prefecture The Okinawa economy as a whole is in a recovery trend, led by the tourism industry, and is expected to continue to recover going forward in light of planned development projects. Business Conditions DI (Favorable/Unfavorable) Economic Overview of Okinawa Prefe
Slide 5: Financial Summary
Financial Summary Both consolidated and non-consolidated income increased and profit decreased. (100 million yen) FY 2023 Bank of the Ryukyus Ryukyu Lease RYUCOM OCS Ryugin DC Ryugin Hosho (Ended Mar. 2024) [Consolidated] Year on Year on Year on Year on Year on Year on Year on Year Year Year Year Ye
Slide 6: Summary of Profit/Loss Trends
Summary of Profit/Loss Trends (Million yen) Mar. 2020 Mar. 2021 Mar. 2022 Mar. 2023 Mar. 2024 Year on Year Profit from customer services*1 3,619 3,835 5,097 5,691 4,884 -807 Deposit and loan balance*2 22,837 23,249 23,433 23,027 22,872 -155 Profit from service charges*3 5,400 5,775 6,287 6,754 7,688
Slide 7: Profit/Loss During the Fiscal Year Ended March 31, 2024
Profit/Loss During the Fiscal Year Ended March 31, 2024 Although the Trading Division experienced an increase, net income decreased due to decreased profit from customer services and an increase in credit costs. Net income Factors Behind Year-on-year Increases (100 million yen) (Million yen) and Dec
Slide 8: Profit from Customer Services
Profit from Customer Services Although profit from service charges increased, profit from customer services decreased due to an increase in expenses and a decrease in the loan and deposit balance. Note: The loan and deposit balance includes loan-related fees, and the decrease was mainly due to the a
Slide 9: Deposits
Deposits Deposit and other balances increased for both individuals and corporations. Deposit and Other Balances Interest on Deposits, etc. Individual (%) Corporate Interest on deposits (100 million yen) (100 million yen) Public funds, etc. 28,505 16 0.05 Interest on deposits (regional bank average)
Slide 10: Loans
Loans Loan balance increased mainly for corporations, individuals, and syndicated loans. Interest on loans included loan-related fees, and decreased mainly due to the absence of refunds of regional bank group credit life insurance premiums. Note: Excluding loan-related fees, interest on loans increa
Slide 11: Status of Loans
Status of Loans Balances increased for all purposes, especially in mortgage loans and business loans. Yields on rental and real estate loans, mortgage loans, and business loans, which account for a high proportion of total loans, decreased. Syndicated Loans Rental and real estate loans (%) (100 mill
Slide 12: Profit from Service Charges
Profit from Service Charges Corporate customer service charges increased significantly. In addition to the three key businesses (Corporate Customer Services, Card Business, and Inheritance Consulting), there was an increase in all categories excluding domestic exchange and direct deposit. Trends in
Slide 13: Securities
Securities Strategically building up balance of securities, including risk-weighted assets, with the aim of improving profits over the medium to long term. In terms of realized profits and losses of securities, the Bank secured profits through the sale of equity ETFs, etc. while continuing to sell l
Slide 14: Net Credit Costs and Disclosed Bad Debt
Net Credit Costs and Disclosed Bad Debt General provision for doubtful accounts is based on “Forward-looking Provisioning”(*) Despite a reversal due to the release of overlay(*) in the accommodation industry and the healthcare and insurance industries, net credit cost increased due to an increase in
Slide 15: Provisions
Provisions Calculation of general provision for doubtful accounts is based on “Forward-looking Provisioning”(*) Provisions decreased due to the improvement of various macroeconomic indicators and the release of all of the accommodation business and some of the healthcare and insurance industries fro
Slide 16: Reference: Overview of Forward-looking Provisioning
Reference: Overview of Forward-looking Provisioning What is the purpose of introducing What is forward-looking provisioning? [What is overlay?] forward-looking provisioning? It is a method of rationally estimating future risks based on It was introduced in FY 2020 (Ended Mar. 2021), in This is a met
Slide 17: Expenses
Expenses Expenses increased partly due to system-related expenses (non-personnel expenses), an increase in labor costs, and an increase in consumption tax due to the purchase of the Naha Port Building. Expenses Non-personnel expenses ① Branch offices (100 million yen) (100 million yen) (100 million
Slide 18: Mechanization Investment Plan
Mechanization Investment Plan In the mechanization investment plan for FY 2024, mechanization investment for customer service and profit improvement measures, etc. accounts for approximately 24% of the total investment. We will continue to make strategic investments in order to achieve (1) expansion
Slide 19: Capital Adequacy Ratio
Capital Adequacy Ratio Non-consolidated capital adequacy ratio increased steadily. Consolidated capital adequacy ratio continued to increase steadily, despite a reduction in special factors for the fiscal year under review. Non-consolidated Regulatory Capital Consolidated Regulatory Capital (100 mil
Slide 20: Status of Dividends and Shareholder Returns
Status of Dividends and Shareholder Returns The basic policy is to pay stable dividends, and the total payout ratio for FY 2023 (ended March 31, 2024) was 36.1% as the result of share buybacks. In view of the profit situation, the dividend for FY 2023 (ended March 31, 2024) was increased by 2 yen. W
Slide 21: Forecast for FY 2024 (Ending March 31, 2025)
Forecast for FY 2024 (Ending March 31, 2025) Although expenses are expected to increase due to improved working conditions, including base-pay increases, we expect to see an increase in profits in the fiscal year ending March 31, 2025 as the balance of deposits and loans and interest and dividends o
Slide 22: Initiatives to Enhance Corporate Value ～ Toward Improving PBR ～
Initiatives to Enhance Corporate Value ～ Toward Improving PBR ～ 22
Slide 23: Current Situation and Future Vision
Current Situation and Future Vision We recognize that ROE is below the level of capital costs. We will continuously endeavor to improve PBR while keeping capital costs in mind with the aim of achieving the highest ROE among regional banks in the future. PBR Enhancement through (%) ROE and Cost of Sh
Slide 24: Logic Tree for Improving PBR
Logic Tree for Improving PBR We aim to improve enterprise value (PBR) by improving ROE with an emphasis on the quality of profits, and improving PER by implementing measures to reduce capital costs through information disclosure, etc. We will build a strategic human resources portfolio to advance th
Slide 25: Upgrade traditional banking services (deposits, loans, and securities)
Upgrade traditional banking services Enhance RORA (Strengthen profitability) (deposits, loans, and securities) We will implement ALM reforms to achieve appropriate asset allocation in line with interest rate conditions. We aim to maximize profitability. Vision for ALM Reforms Earning Assets through
Slide 26: Improve Risk-weighted Asset Profitability
Enhance RORA Improve Risk-weighted Asset Profitability (Strengthen profitability) The ALM Committee and the RAF Committee continue to discuss the direction to be taken in line with the nature of the loans. We will strive to maximize profitability relative to risk. Vision for RORA Improvement Initiat
Slide 27: Provide Advanced Financial Services (Corporate Consulting)
Enhance RORA Provide Advanced Financial Services (Corporate Consulting) (Strengthen profitability) Fees for corporate services are on the rise, driven by structured finance, business succession, and M&A, which have been increasingly handled in-house. The number of consultations has been increasing s
Slide 28: Provide Advanced Financial Services (Individual Consulting 1/2)
Enhance RORA Provide Advanced Financial Services (Individual Consulting 1/2) (Strengthen profitability) Our efforts to address inheritance needs have been recognized, and the number of consultations and contracts is on the rise. Going forward, we aim to further expand the business. Actively hold sem
Slide 29: Provide Advanced Financial Services (Individual Consulting 2/2)
Enhance RORA Provide Advanced Financial Services (Individual Consulting 2/2) (Strengthen profitability) In addition to the success of measures to strengthen proposal capabilities, the market remained strong and the balance of investment trusts and single-premium life insurances increased. Based on t
Slide 30: Provide Advanced Financial Services (Card-related Business 1/2)
Enhance RORA Provide Advanced Financial Services (Card-related Business 1/2) (Strengthen profitability) As both numbers of Visa debit cards issued and card affiliates steadily increased, charges from card users and card affiliates increased. Against the backdrop of the recovery in inbound tourism, t
Slide 31: Provide Advanced Financial Services (Card-related Business 2/2)
Enhance RORA Provide Advanced Financial Services (Card-related Business 2/2) (Strengthen profitability) We aim to expand cashless payments to realize a cashless island. We have started supporting the new J-Debit scheme as a new payment method. We are using this opportunity to enable access to cashle
Slide 32: Take on Challenges of Entering New Business Areas
Enhance RORA Take on Challenges of Entering New Business Areas (Strengthen profitability) Aim to strengthen and expand our business foundation and revenue opportunities by taking on the challenges of entering new business areas with the aim of providing advanced financial services. Consider Establis
Slide 33: Reduce Costs through Improved Efficiency and Collaboration with Other Banks
Reduce Costs through Improved Efficiency and Enhance RORA (Cost control) Collaboration with Other Banks, etc. Expenses increased more than planned partly due to system-related expenses, an increase in base pay, and an increase in consumption tax due to the purchase of the Naha Port Building. As we a
Slide 34: Continue Measures to Reduce Risk-weighted Assets
Control of capital levels Continue Measures to Reduce Risk-weighted Assets (Risk assessment control) By refining our Risk Weight (RW) assessment, we have been able to effectively reduce risk assets, thereby contributing to an increase in our capital adequacy ratio. In the future, we aim to transitio
Slide 35: Capital Management (Effective use of capital)
Control of capital levels Capital Management (Effective use of capital) We will define a level at which a capital adequacy ratio of 8% or more can be maintained even in the event of unforeseen circumstances. While bearing in mind the level of capital adequacy ratio, we will increase assets to maximi
Slide 36: Support Regional Decarbonization and Improve ESG Evaluations
Support Regional Decarbonization and Enhancement of Corporate Branding (Implement Sustainability Management) Improve ESG Evaluations Signed PRB in March 2024. Going forward, we will promote initiatives that will lead to solving social issues and increasing economic value. Signed PRB (Principles for
Slide 37: Build a Strategic Human Resources Portfolio
Build a Strategic Human Resources Portfolio In order to implement various measures and provide advanced financial services, we will increase opportunities for employees to acquire a wide range of specialized skills, including by increasing external secondments for training purposes, and build a stra
Slide 38: Reference: Various Rankings
Reference: Various Rankings Highly Ranked for Certified Health & Okinawa Main Bank NIKKEI Financial Bank “Growth Environment for Productivity Management Ranking Ranking Those in their 20s” Outstanding Organization Okinawa Prefectural Ranking National ranking National ranking Survey: Apr. 2024 Survey
Slide 39: Progress of the Medium-Term Management Plan
Progress of the Medium-Term Management Plan 39
Slide 40: Overview of the Medium-Term Management Plan
Overview of the Medium-Term Management Plan We create a sustainable and valuable future through collaboration with local communities by improving “corporate value, environmental value, and social value” with the goal of realizing our long-term vision of “achieving a beneficial cycle in the local eco
Slide 41: Progress and Outlook for the Profit/Loss Plan
Overview of Medium-Term Management Plan “Value 2023” Progress and Outlook for the Profit/Loss Plan Loan and deposit balance (Loan and deposit balance) (100 million yen) Plan 239 Management Targets and Results Interest on loans increased and the loan and deposit balance 230 228 increased due to great
Slide 42: Summary of Okinawa Economy
Summary of Okinawa Economy 42
Slide 43: Tankan/Economic Overview of Okinawa Prefecture
Tankan/Economic Overview of Okinawa Prefecture The prefectural economy is in an expansionary trend. Business Conditions DI (Favorable/Unfavorable) Economic Overview of Okinawa Prefecture 35 Prospects 40 Nationwide Okinawa ◼ According to the Tankan’s business conditions DI, the 20 12 30 economy in Ok
Slide 44: Increase/Decrease in Population and Projected Future Households
Increase/Decrease in Population and Projected Future Households The total population in Okinawa Prefecture has remained nearly unchanged, but declined for the first time since 2022. However, the number of households is likely to continue increasing for now. Population Change Rate (Right Axis) (%) Pr
Slide 45: Number of Tourists, Hotel Occupancy Rates and Room Rates
Number of Tourists, Hotel Occupancy Rates and Room Rates The number of tourists in FY 2023 recovered to the fifth highest level ever due to the lifting of movement restrictions against COVID-19, and the resumption of international air routes and cruise ships, etc. (No. of Persons) Numbers of Tourist
Slide 46: Hotel and Theme Park Opening Plans
Hotel and Theme Park Opening Plans Investment in Okinawa remains strong, and openings, including for luxury hotels, are expected to continue into the future. Opening date Location Hotel name No. of rooms Hotel Apr. 11, 2024 Senagajima, Tomigusuku city THE SENAGAJIMA STORYLINE 101 condominium-style r
Slide 47: Unemployment Rates, Job-openings-to-applicants Ratios, and Corporate Bankruptcies
Unemployment Rates, Job-openings-to-applicants Ratios, and Corporate Bankruptcies Regarding the employment situation, the job-openings-to-applicants ratio remains above 1. The number of corporate bankruptcies has been calm. Unemployment Rates and No. of Corporate Bankruptcies Job-openings-to-applica
Slide 48: Official Land Price and Construction Unit Price
Official Land Price and Construction Unit Price Official land prices increased 5.5% year-on-year on average for all land uses, representing an increase for the eleventh straight year and a gain of 1.9 points year-on-year. The growth rate in residential areas was the highest in the nation. Constructi
Slide 49: Public Construction Contract Amounts and Backlog Amounts
Public Construction Contract Amounts and Backlog Amounts from Construction Order Public construction contract amounts remain robust. The variation rate of backlog amounts from the construction order has also remained strong. Public Construction Contract Amounts The Variation Rate of Backlog Amounts
Slide 50: Numbers of New Housing Construction Projects Started and Consumption Trends
Numbers of New Housing Construction Projects Started and Consumption Trends Numbers of new housing construction projects started has recovered the the 10,000 unit range on an annual basis. Consumption trends remain steady. (Units) Numbers of New Housing Construction Consumption trends 18,000 Project
Slide 51: About Bank of the Ryukyus
j About Bank of the Ryukyus 2) FRIRERAT TI ILS BANK OF THE RYUKYUS GROUP
Slide 52: Bank of the Ryukyus Overview
Bank of the Ryukyus Overview Company Profile Affiliated Companies Establishment May 1, 1948 Address 1-7-1 Kumoji, Naha, Okinawa Prefecture Establishment May 10, 1972 Capital 346 million yen (100% stock ownership by Bank of the Ryukyus) Business Fields Leasing and installment-selling of information-r
Slide 53: Bank of the Ryukyus History
Bank of the Ryukyus History May 1948 Precursor organization established via the Military Government Ordinance No. 1 Bank of the Ryukyus was originally established on May 1, 1948 as a special banking organization via the Military Government Ordinance, and the US government provided The Bank changed f
Slide 54: Glossary
Glossary This is an important indicator that the Bank has established that places importance on management strategy, and mainly indicates profits from Profit from Customer Services customer departments, such as branches. Calculated as loan and deposit balance + profit from service charges - expenses
Slide 55: About This Document
About This Document 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 document is on a non-consolidated basis unless otherwise specified. Information