Tochigi Bank, Ltd. · TSE:8550
Tochigi Bank — The Tochigi Bank — FY2023 Earnings Presentation
44 slides from Tochigi Bank's earnings presentation, Jun 5, 2024
Slide 1: Financial Results Presentation for the Fiscal Year Ended March 31, 2024
Financial Results Presentation for the Fiscal Year Ended March 31, 2024 (June 5, 2024) 0
Slide 2: Contents
Contents Overview of Financial Results The 11th Medium-term Management Plan —Progress status— Overview of Financial Results P.3 The 11th Medium-term Management Plan (Overview) P.22 Net Interest Income P.4 The 11th Medium-term Management Plan (Result) P.23 Deposits and CDs, Loans and Bills Discounted
Slide 3: Overview of Financial Results
Overview of Financial Results 2
Slide 4: Overview of Financial Results
Overview of Financial Results (Billion yen) Main Points on Non-consolidated Financial Results Non-consolidated 2023/3 2024/3 Change % Change Gross operating profit 27.0 28.4 +1.4 +5.3% ●Net interest income decreased by 600 million yen year on year. This was mainly due to a decrease in interest and d
Slide 5: Net Interest Income
Overview of Financial Results Net Interest Income Reasons for Increases (Decreases) in Net Interest Income Trends in Yields on Loans and Discounts and on Securities (Billion yen) (%) Loans/Discounts Securities Average loan (0.4) balance ＋0.5 1.16 290 1.11 Average securities 1.07 1.06 1.04 1.05 (0.04
Slide 6: Deposits and CDs, Loans and Bills Discounted
Overview of Financial Results Deposits and CDs, Loans and Bills Discounted Trends in Deposit/CD Balance Trends in Balance of Loans and Bills Discounted (Billion yen) (Billion yen) All deposits Personal Corporate All loans/bills discounted SMEs/Personal Home loans 3,059.4 3,111.9 2,031.7 2,060.5 2,93
Slide 7: Securities
Overview of Financial Results Securities Trends in Securities Balance at the Fiscal Year-end Valuation Gains (Losses) on Other Securities Government Other bonds Stocks Stocks (Billion yen) (Billion yen) Local government bonds Other Stocks Bonds Other Corporate bonds Corporate bonds Local government
Slide 8: Expenses
Overview of Financial Results Expenses Trends in Expenses and Overhead Ratio (OHR) Number of Employees and Branch Offices Taxes Personnel expenses Non-personnel Non-personnel expenses expenses Employees Branch offices Branch locations Personnel expenses Taxes OHR (After BinB method) (Billion yen) (%
Slide 9: Loans Based on the Banking Act and Financial Reconstruction Act
Overview of Financial Results Loans Based on the Banking Act and Financial Reconstruction Act Loans Based on the Banking Act and Financial Reconstruction Act: Cost of Credit Balance at the Fiscal Year-end 実質信用コスト Real cost of credit 信用コスト率 Credit cost ratio Bankrupt and quasi-bankrupt loans Doubtful
Slide 10: Capital Adequacy Ratio, Dividends and Total Return Ratio
Overview of Financial Results Capital Adequacy Ratio, Dividends and Total Return Ratio Capital Adequacy Ratio (Billion yen) Dividends and Total Return Ratio (Billion yen) Consolidated equity capital Consolidated capital adequacy ratio 190 Down 0.42 pts. 12.0 yen 185 12.06% 11.90% 11.85% Year-end 期末配
Slide 11: Financial Results Forecast
Financial Results Forecast (Billion yen) Non-consolidated 2024/3 2025/3 Change % Change Main Points of Non-consolidated Forecast Gross operating profit 28.4 26.6 (1.8) (6.4%) ●The decrease in net interest income is mainly because gains from cancellation of investment trusts, which were recorded for
Slide 12: Efforts to Enhance Corporate Value
Efforts to Enhance Corporate Value 11
Slide 13: Analysis of Current Status (1) (Relationship between PBR and ROE)
Efforts to Enhance Corporate Value Analysis of Current Status (1) (Relationship between PBR and ROE) ・ROE is currently below the capital cost, and PBR is showing signs of improvement but remains below 1x. ・Given the high correlation between ROE and PBR, we recognize that an increase in ROE leads to
Slide 14: Efforts to Increase PBR
Efforts to Enhance Corporate Value Efforts to Increase PBR In order to increase our price book-value ratio (PBR), we are implementing initiatives for enhancing management effectiveness (as measured by ROE: return on equity) and corporate growth expectations for the Bank (as measured by PER: price ea
Slide 15: Analysis of Current Status (2) (Relationship between ROE and RORA)
Efforts to Enhance Corporate Value Analysis of Current Status (2) (Relationship between ROE and RORA) ROE and RORA are highly correlated. We aim to enhance ROE by improving RORA under appropriate financial leverage control. Strengthen profitability Manage capital appropriately Control risk assets to
Slide 16: Improvement of RORA (Strengthening profitability)
Efforts to Enhance Corporate Value Improvement of RORA (Strengthening profitability) We will expand earnings from solutions by further enhancing SME loans with high RORA to strengthen profitability (RORA-aware initiatives), as well as by fulfilling our financial intermediary roles for the regional c
Slide 17: Financial Leverage Control (Appropriate capital management)
Efforts to Enhance Corporate Value Financial Leverage Control (Appropriate capital management) Capital Allocation (for illustration purpose) Accumulated Increase in risk assets profits （+ of over 100.0 billion yen) [Increase in risk assets] Increase of over 100 billion yen, Shareholder Valuation los
Slide 18: Efforts to Achieve ROE Targets under the Medium-term Management Plan
Efforts to Enhance Corporate Value Efforts to Achieve ROE Targets under the Medium-term Management Plan The five management strategies to enhance ROE ((1) Strengthening profitability, (2) Cost control, (3) Risk asset control, (4) Growth/strategic investment, and (5) Shareholder returns) are reflecte
Slide 19: Vision of Improving ROE
Efforts to Enhance Corporate Value Vision of Improving ROE We will work to increase corporate value [Vision] ROE of around 8% ROE by achieving a ROE of 3% or higher in this Medium-term Management Plan, 6% (above shareholders’ equity cost) by March 31, 2030 and aiming for even higher target of 8%. [L
Slide 20: Targets for Management Indicators, etc., toward ROE of 6%
Efforts to Enhance Corporate Value Targets for Management Indicators, etc., toward ROE of 6% Equation for Decomposition of ROE Profit Profit Financial Risk assets ROE ＝ RORA × Equity capital Risk assets leverage Equity capital RORA ≒ [Gross operating profit RORA] Gross operating profit Profit Financ
Slide 21: Accumulation of Core Net Business Profit and Improvement of OHR
Accumulation of Core Net Business Profit and Improvement of OHR Accumulation of Core Net Business Profit (excluding gains (losses) from cancellation of investment trusts) Trends in Core Net Business Profit Accumulation of Core Net Business Profit to achieve ROE of 6% (Billion yen) Other Fees and +0.
Slide 22: The 11th Medium-term Management Plan — Progress status
The 11th Medium-term Management Plan —Progress status— 21
Slide 23: The 11th Medium-term Management Plan (Overview)
The 11th Medium-term Management Plan The 11th Medium-term Management Plan (Overview) Theme Realize the Provision of New Value Term of the plan: from April 2023 to March 2026 Basic Strategies Basic strategy 1: Strengthening profitability Basic strategy 2: Strengthening the system —Evolution (deepenin
Slide 24: The 11th Medium-term Management Plan (Result)
The 11th Medium-term Management Plan The 11th Medium-term Management Plan (Result) Basic Strategies: Main Initiatives Basic strategy 1: Strengthening profitability Basic strategy 2: Strengthening the system —Evolution (deepening) of regional financial business and reinforcement of —Promotion of stru
Slide 25: Growth Investment and Strategic Personnel Assignment
The 11th Medium-term Management Plan Growth Investment and Strategic Personnel Assignment “Strengthen Sales Force” through Growth Investment and Strategic Personnel Assignment We will provide highly specialized solutions by deploying our human resources to “operations that only people can perform (t
Slide 26: The 11th Medium-term Management Plan — Basic strategy initiatives
The 11th Medium-term Management Plan —Basic strategy initiatives— 25
Slide 27: Corporate Customer Strategy (1) — Strengthen SME loans
Basic strategy 1: Strengthening profitability Corporate Customer Strategy (1) —Strengthen SME loans— Deepen sales focused on solutions to issues, based on business feasibility assessments We will meet the diverse needs and expectations of our customers by deepening our sales activities with a focus
Slide 28: Corporate Customer Strategy (2) — Expand earnings from solutions
Basic strategy 1: Strengthening profitability Corporate Customer Strategy (2) —Expand earnings from solutions— Provide appropriate solutions for each life stage of companies Founding period One-stop support for founding & new businesses As part of our efforts to promote sustainable Business Plan Con
Slide 29: Corporate Customer Strategy (3) — Enhance business support
Basic strategy 1: Strengthening profitability Corporate Customer Strategy (3) —Enhance business support— Strengthen business support through collaboration between branches and Head Office We will promote support for businesses by not only providing support at the request of branch offices, but also
Slide 30: Individual Customer Strategy (1) — Personal loans
Basic strategy 1: Strengthening profitability Individual Customer Strategy (1) —Personal loans— Strengthen sales through a consultation system via a variety of channels We have established a consultation system for customers via a variety of channels, including direct face-to-face at our six Loan Pl
Slide 31: Individual Customer Strategy (2) — Financial services
Basic strategy 1: Strengthening profitability Individual Customer Strategy (2) —Financial services— Strengthen consulting capabilities by leveraging digital technology We are committed to support customers to realize stable medium- to long-term asset building in preparation for the era of 100 years
Slide 32: DX Strategy (1) — Individual customer
Basic strategy 1: Strengthening profitability DX Strategy (1) —Individual customer— Provide applications that can fulfill customers’ “requests” By enhancing the functions of the Tochigin App, we will improve customer convenience to increase the number of subscribers. Phase 1 & 2 Raise the number of
Slide 33: DX Strategy (2) — Corporate customer
Basic strategy 1: Strengthening profitability DX Strategy (2) —Corporate customer— Support digitalization of business operators We support our customers’ digitalization by providing a variety of DX services to meet their increasingly diverse and sophisticated needs. Number of Tochigin Digitalization
Slide 34: Downsizing and Consolidation of Branch Offices, and Streamlining of Business Operations
Basic strategy 2: Strengthening the system Downsizing and Consolidation of Branch Offices, and Streamlining of Business Operations Further transform branch offices from “places of office work” to “place of sales” We will “realize the provision of new value” for customers by investing management reso
Slide 35: New Business (New Service) Strategy (1) — New business ideas
Basic strategy 2: Strengthening the system New Business (New Service) Strategy (1) —New business ideas— Create new businesses based on employees’ ideas Financial institutions, which are the solution providers for regional issues, are expected to be sensitive to diversified issues and work together w
Slide 36: New Business (New Service) Strategy (2) — The Graduate School of Project Design
Basic strategy 2: Strengthening the system New Business (New Service) Strategy (2) —The Graduate School of Project Design— Open the “New Sustainability Business Project Research” course for the creation of new businesses and services. In the 11th Medium-term Management Plan, under the theme of “Real
Slide 37: Human Resource Strategy (1)
Basic strategy 3: Strengthening investment in human capital Human Resource Strategy (1) ・Measures are set for each of the four key elements: retention, recruitment, development, and assignment. (Each measure is linked to each element). ・Along with organizational culture transformation (from a long-t
Slide 38: Human Resource Strategy (2)
Basic strategy 3: Strengthening investment in human capital Human Resource Strategy (2) “Invest more in human capital” and “develop more human resources” Based on the human resource development policy, we will develop expected personalities “who can understand and practice various policies” and “who
Slide 39: Initiatives for Sustainability
Initiatives for Sustainability 38
Slide 40: Initiatives for Diversity, Equity & Inclusion (1)
Initiatives for Sustainability Initiatives for Diversity, Equity & Inclusion (1) Develop a workplace where personnel can work energetically and contribute actively In addition to support for the child-rearing generation, we will further foster an organizational climate that is open and lively with n
Slide 41: Initiatives for Diversity, Equity & Inclusion (2)
Initiatives for Sustainability Initiatives for Diversity, Equity & Inclusion (2) Initiatives to improve “Engagement” We aim to understand the status of all employees’ workplaces and organizations to improve their relationships (engagement improvement) with the company and workplaces through PDCA cyc
Slide 42: Initiatives for Environment — TCFD
Initiatives for Sustainability Initiatives for Environment —TCFD— Response to climate change ( initiatives for TCFD recommendations) The Group will contribute to the sustainable development of the region by promoting the decarbonization of its customers and the Bank. Reduction of CO2 emissions Targe
Slide 43: Initiatives with the Regional Communities
Initiatives for Sustainability Initiatives with the Regional Communities Aim for sustainable community development in partnership with local governments Under on our management philosophy of “contributing to the creation of prosperous regional community,” we will keep contributing to the realization
Slide 44: Disclaimer and contact for inquiries
Transcribing, copying, or distributing this material to third parties without prior written permission from THE TOCHIGI BANK, LTD. is prohibited. This material is prepared for informational purposes only and is not intended as a solicitation to buy or sell any particular securities. All or part of t