Chugin Financial Group,inc. · TSE:5832
Chugin Financial Group,inc — FY2022 Earnings Presentation
60 slides from Chugin Financial Group,inc's earnings presentation, Jun 5, 2023
Slide 1: FY2022 Earnings Results Briefing
FY2022 Earnings Results Briefing June 5, 2023
Slide 2: Today's Key Message
Today’s Key Message 1. FY2022 earnings results and FY2023 plan FY2022 earnings results: Profit attributable to owners of parent was 20.4 billion yen (plus 2.1 billion yen as compared with the previous fiscal year). We achieved the plan that has been announced and an increase in the profit for the
Slide 3: Contents
I. Earnings Results for FY2022 and Forecasts for FY2023 II. Medium-term Management Plan - Plan for Creating the Future Together Stage III - Summary 5 Looking Back over the Previous Medium-term Management Plan 24 Solution-related Revenues – Consolidated for the FG – 8 Positioning of the New Medium-te
Slide 4: Section I Earnings Results for FY2022 and Forecasts for FY2023
Section I Earnings Results for FY2022 and Forecasts for FY2023 4
Slide 5: FY2022 Earnings Results – Summary (Consolidated for the FG)
FY2022 Earnings Results –Summary (Consolidated for the FG)– Consolidated financial results for the Chugin Financial Group FY2019 FY2020 FY2021 FY2022 (billion yen) YoY vs. Plan* Consolidated gross profit 80.2 81.9 83.7 73.2 - 10.5 － (excluding profits and losses related 80.7 82.4 86.6 92.9 6.3 － to
Slide 6: FY2022 Earnings Results – Summary (Non-consolidated for the Bank)
FY2022 Earnings Results –Summary (Non-consolidated for the Bank)– Core business Non-consolidated for The FY2022 net profit Chugoku Bank • As for net interest income, interest on loans and securities steadily increased. (billion yen) YoY vs. Plan* *We recorded gains on cancellation of investment Core
Slide 7: FY2022 Earnings Results – Summary (Group companies excluding the Bank)
FY2022 Earnings Results –Summary (Group companies excluding the Bank)– Group companies (billion yen) Ordinary profit YoY Net income YoY * Lease 0.4 0.2 0.3 0.1 * Card 0.4 0.06 0.3 0.04 Human Innovations (Employment placement) 0.01 ― 0.01 ― Capital Partners (Fund management and 0.02 ― 0.01 ― administ
Slide 8: Solution-related Revenues – Consolidated for the FG
Solution-related Revenues – Consolidated for the FG – [Solution-related revenues] (million yen) 9,271 Breakdown of Group companies (million yen) +2,183 Lease 1,115 2,126 Card 936 Group companies* 7,088 Human Innovations 44 6,452 Fees on derivatives +1,355 C Cube Consulting 32 2,011 2,532 Other 2,000
Slide 9: Revenues Related to Assets in Custody – Consolidated for the FG
Revenues Related to Assets in Custody – Consolidated for the FG – [Breakdown of revenues related to assets in custody] (million yen) 7,330 (4,767) 7,023 6,725 -307 (4,741) (4,319) Breakdown of Group Group total companies (million yen) (non-consolidated for the Bank) Securities 1,848 2,563 2,282 Grou
Slide 10: Net Interest Income – Non-consolidated for the Bank
Net Interest Income – Non-consolidated for the Bank – [Factors behind change in net interest income] [Loan yield] (%) Loan yield ■Yen based: 56.8 billion yen ■Foreign currency-based: ¥8.7 billion Loan yield (yen) (+¥5.3 billion YoY) (-¥1.3 billion YoY) • Interest on loans and discounts: • Interest o
Slide 11: Net Fee Income – Non-consolidated for the Bank
Net Fee Income – Non-consolidated for the Bank – [Net fee income] +1,135 18,294 (million yen) 17,159 15,857 15,672 4,741 15,000 4,767 Assets in custody* 4,467 4,319 +651 4,312 Investment banking 3,661 10,000 business 3,074 2,932 Remittance/ 4,440 collection fees 4,814 5,155 5,444 5,000 +884 Other 4,
Slide 12: Expenses – Non-consolidated for the Bank
Expenses – Non-consolidated for the Bank – *Impact of the transformation to the FG [Expenses] A decrease of 0.5 billion yen in expenses for personnel who also work for the FG. (billion yen) → The expenses have been transferred to “business management fee” within other property expenses 60 54.0 -0.6
Slide 13: Credit Costs and Non-performing Loans – Non-consolidated for the Bank
Credit Costs and Non-performing Loans – Non-consolidated for the Bank – [Non-performing loans (NPL) (Loans disclosed [Credit costs] (billion yen) under the Financial Revitalization Act)] (billion yen) Provision of specific Provision of general *The Chugoku Bank does not carry out partial direct writ
Slide 14: Impact of Rising Interest Rates – Non-consolidated for the Bank
Impact of Rising Interest Rates – Non-consolidated for the Bank – • Yen investments: We will seek to expand margins stably during the period of rising interest rates based on the abundant deposits. • Foreign currency investments: We will continue to improve the foreign bond portfolio, which we have
Slide 15: Status of Capital Adequacy
Status of Capital Adequacy [Capital adequacy ratio] [Status of capital adequacy (Consolidated for the FG)] (%) FY2022 FY2023 (billion yen) Change Consolidated for the FG Total capital adequacy 557.2 530.7 -26.5 13.83 13.50 Of which, common equity Tier 1 546.7 521.4 -25.3 Of which, valuation differen
Slide 16: Shareholder Return Policy
Shareholder Return Policy [Return policy in FY2023] The shareholder return ratio of at least 40% (on a consolidated basis) through dividends and share buybacks ーEnhancement of shareholder returns by stable and continuous increase in dividends and flexible share buybacksー Shareholder 40% or return ra
Slide 17: Cross-held Shares
Cross-held Shares We pursue improvement of capital efficiency by constantly reducing cross-held shares. The Board of Directors will examine Initiatives toward reducing cross-held shares the status on a regular basis. [Judging whether or not [Shares not satisfying the The relevant shares are held o
Slide 18: Earnings Forecasts
Earnings Forecasts Consolidated for the Chugin Profit attributable to owners of parent FY2022 FY2023 Financial Group (billion yen) (billion yen) results forecasts Change 30.0 Consolidated ordinary profit 29.5 21.5 - 8.0 20.4 18.3 Profit attributable to owners of parent 20.4 15.0 - 5.4 14.4 15.0 ・・・
Slide 19: Major Accounts (Non-consolidated for the Bank)
Major Accounts (Non-consolidated for the Bank) 19
Slide 20: Major Accounts (1) Deposits & Assets in Custody
Major Accounts (1) Deposits & Assets in Custody - Non-consolidated for the Bank - [Average balance of deposits and assets in custody] 9,074.2 +3.0% 8,803.4 (8,067.0) (billion yen) Total assets in (7,801.5) custody 8,386.8 184.5 (Deposits + NCD) (7,409.3) 152.1 214.6 8,500 257.3 462.0 Financial instr
Slide 21: Major Accounts (2) Loans
Major Accounts (2) Loans - Non-consolidated for the Bank - [Average loan balance] +4.3% 5,400.9 5,175.7 (billion yen) 5,053.1 4,811.6 30.7 25.1 24.4 5,000 23.3 +3.4% Hong Kong Branch 1,252.2 1,210.0 1,170.6 Personal loans 1,141.9 4,000 Loans to the 776.9 headquarters*3 542.9 633.7 484.0 Local govern
Slide 22: Major Accounts (3) Securities
Major Accounts (3) Securities - Non-consolidated for the Bank - [Average balance of securities] -71.3 [Unrealized gains/losses] End of Mar. End of Mar. 2,435.6 2022 2023 YoY (billion yen) (billion yen) 2,352.4 2,364.3 16.6 Total 94.5 46.2 - 48.3 Investment partnerships 15.4 84.5 17.8 Held to maturit
Slide 23: Section II Medium-term Management Plan Stage III
Section II Medium-term Management Plan Plan for Creating the Future Together: Stage III From April 2023 to March 2027 The following abbreviations are used in this document. FG: Chugin Financial Group, Inc. BK: The Chugoku Bank, Limited 23
Slide 24: Looking Back over the Previous Medium-term Management Plan
Looking Back over the Previous Medium-term Management Plan FY2022 Final year of the Stake- KPI FY2019 Long-term Plan holder Medium-term Plan Result (FY2026) Target Number of projects addressing local Continuous Continuous ー － issues and contributing to the SDGs improvement improvement (1) Sum of the
Slide 25: Positioning of the New Medium-term Management Plan
Positioning of the New Medium-term Management Plan This Plan is the “final stage of the Long-term Management Plan” and the “first Medium-term Management Plan for the Chugin Financial Group.” We aim to achieve the KPIs set forth in the Long-term Management Plan by demonstrating results based on the r
Slide 26: Three Growth Strategies
Three Growth Strategies 1 “Deepening” of regional revitalization SDGs We will contribute to “sustainable development of communities” by Corresponding materiality (priority issues) drawing out its appeal and potential. Revitalization of local economy and society Regional revitalization ▶ Strengthen i
Slide 27: KPI
KPI (On a consolidated basis for the FG, unless indicated otherwise) Aims of the selection Financial KPI FY2022 result FY2026 target Profitability Profit attributable to owners of parent 20.4 billion yen 30.0 billion yen Capital efficiency ROE 3.79% 5% or more Soundness Total capital adequacy ratio
Slide 28: Income Plan
Income Plan Image of income growth +1.5 billion -3.0 billion yen yen +2.0 billion Increase in yen Effects of DX investments in +1.0 billion Growth of Group companies human capital ＋ -2.4 billion KPI +10.5 yen other than the BK Strategic investments yen 30.0 billion billion yen High value-added Other
Slide 29: Income Plan
Income Plan We, the Chugin Financial Group as a whole, will increase high-quality assets by addressing issues of local communities and customers from upstream, and from a wide perspective. (An increase of 10.5 billion yen in net interest income through capital utilization) People Growth of Group 3 S
Slide 30: 1. "Deepening" of Regional Revitalization SDGs
‹#› 1. “Deepening” of Regional Revitalization SDGS 30
Slide 31: "Deepening" of Regional Revitalization SDGs
“Deepening” of Regional Revitalization SDGs Through its business activities, the Chugin Group aims to co-create future together with local communities and customers, where we mutually develop. We will draw out appeal and potential of communities by working to “co-create appealing local communities t
Slide 32: Initiatives That Capture Communities from a Wide Perspective
Initiatives That Capture Communities from a Wide Perspective We will strengthen initiatives that capture communities from a wide perspective by leveraging the strengths of the Group that provides various solution services, such as C Cube Consulting which offer a high level of Case study C Cube Consu
Slide 33: Initiatives That Capture Communities from a Wide Perspective
Initiatives That Capture Communities from a Wide Perspective Case study Chugin Financial Group, Inc. Case study Chugin Energy Comprehensive collaboration and alliance with Establishment of a new electric power company, Shinjo-son, Okayama Prefecture toward “Nishi-awakura Hyakunen-no Shinrin Denki,”
Slide 34: Initiatives to Support Startups
Initiatives to Support Startups We will strengthen startup community support, hands-on support across the Groups, and collaboration with external organizations building on the foundation of the “startup ecosystem” formed centered around the two businesses, namely Okayama Innovation Project and Okaya
Slide 35: Community Support Activities (1)
Community Support Activities (Corporate and Business Manager Customers) (1) We aim to provide comprehensive financial services as a “co-creation partner” toward realization of sustainability management of customers. Upstream Mid-stream Downstream More diversified and advanced Management Organization
Slide 36: Community Support Activities (2)
Community Support Activities (Corporate and Business Manager Customers) (2) We will work together as a Group to improve the sustainability of entire communities Priority areas through “active engagement activities*1 with customers” and “support from both (SDGs, decarbonization, consulting and financ
Slide 37: Community Support Activities (3)
Community Support Activities (Corporate and Business Manager Customers) (3) According to customers’ stage and management issues, Transformation of service delivery systems we pursue timely approaches. Provision of solutions according to segments Consolidation of corporations Size of sales of Store A
Slide 38: Community Support Activities (4)
Community Support Activities (Corporate and Business Manager Customers) (4) Opening of the Singapore Branch Objective We opened a branch in Singapore which is a financial center in Asia along with Hong Kong and is a hub for Southeast Asia High profitability (SP rate and RORA) (made the representativ
Slide 39: Community Support Activities (5)
Community Support Activities (Corporate and Business Manager Customers) (5) Create and demonstrate Group synergies Direction of the seven Group collaboration system corporate-strategy companies We aim to demonstrate Group synergies through the collaboration system originating from the bank’s custo
Slide 40: Life Planning Support Activities (Retail Customers) (1)
Life Planning Support Activities (Retail Customers) (1) Through our Group-wide comprehensive financial services, we support realization of customers’ dreams in line with their life plans including “planning of prosperous lives,” “elimination of economic anxiety,” and “smooth transfer of assets to th
Slide 41: Life Planning Support Activities (Retail Customers) (2)
Life Planning Support Activities (Retail Customers) (2) Co-creation of prosperous future and deepening of comprehensive financial services Support for visualization and realization of life plans Restructuring of segments Trust of customers Large [Sharing of dreams] Bank’s sales offices and Financial
Slide 42: Life Planning Support Activities (Retail Customers) (3)
Life Planning Support Activities (Retail Customers) (3) Improvement of customer experience Non-face-to-face sales through From FY2025 Improvement of convenience the use of digital technology onward (planned) Allowing banking procedures to be completed non-face- The Contact Center (tentative name
Slide 43: Channels (Customer Contact Points)
Channels (Customer Contact Points) Direction of channels App users investment Increase contact points throughout the Group by Image Growth developing digital contact points, non-face-to-face Digital technology From 0.16 million to contact points, offices open on holidays, etc. 0.5 million Digital
Slide 44: 2. Creation of Innovations
‹#› 2. Creation of Innovations 44
Slide 45: Toward Creation of Innovations
Toward Creation of Innovations This Plan aims to create innovations in order to overcome changes in the environment that is becoming increasingly uncertain and continue to solve issues in local communities and meet the diversifying needs of our customers, while steadily “‘deepening’ regional revital
Slide 46: DX – Overview
DX －Overview－ We intend to become a DX company ourselves, and aim to lead and design DX of communities and customers. We will develop and provide customer-oriented services by reviewing existing operations without any exceptions and generating the necessary manpower. We will also strengthen the syst
Slide 47: DX – Operational Process Reforms
DX －Operational Process Reforms－ We will implement operational process reforms from an operation-by-operation perspective across the Group on an end-to-end basis “in all areas, without any exceptions.” We aim to use the resources generated from the 30% reduction of the operation volume in the new fi
Slide 48: DX – Transformation into Next-generation Channels
DX －Transformation into Next-generation Channels－ We will improve functions to enable non-face-to-face transactions, and aim to allow 90% of transactions to be completed on a non-face-to-face basis by FY2026. We will work to improve customer experience (CX) by enhancing the functions of “Chugin App”
Slide 49: DX – New Businesses
DX －New Businesses－ Instead of trying to complete everything on our own, we will build a system to create new businesses unique to the Group by integrating communities, digital technology, and human resources, while also actively utilizing external networks. In addition, we will enhance and advance
Slide 50: DX – Realization of Organizational Transformation
DX －Realization of Organizational Transformation－ We will strengthen development and recruitment of digital technology-oriented human resources to promote DX We aim to transform ourselves into an organization that strategically develops a system infrastructure with superior agility and scalability,
Slide 51: Alliances
Alliances It is not possible for us to create new value with only our own management resources, know-how, and ideas. We aim to co-create new value through active collaboration with various stakeholders, including different industry players. Basic stance Co-creation and promotion of measures that c
Slide 52: 3. Strengthening of the Group Business Base
‹#› 3. Strengthening of the Group Business Base 52
Slide 53: Strengthening of the Group Business Base
Strengthening of the Group Business Base For the “deepening” of regional revitalization SDGs and creation of innovation, it is necessary to establish a strong Group business base. Under this Plan, in order to flexibly respond to the changing business environment, we will strengthen the Group busines
Slide 54: Toward Improvement of Corporate Value
Toward Improvement of Corporate Value We aim to increase PBR by raising ROE through an increase in the profitability and improvement of the capital efficiency. Awareness of the current situation Initiatives • During the Long-term Management Plan period (since ROE Medium-term Management Plan KPIs FY2
Slide 55: Capital Policy – Capital Utilization
Capital Policy－Capital Utilization－ Leveraging our high level of soundness, we will actively use capital for regional revitalization. Balance plan Capital utilization • We will use assets for regional development by taking advantage of our high level of Core areas Strategic investments soundness Abo
Slide 56: Capital Policy – Reduction of Cross-shareholdings and Shareholder Return Policy
Capital Policy －Reduction of Cross-shareholdings and Shareholder Return Policy－ We will reduce cross-shareholdings and use the capital generated for an agile capital policy to realize our growth strategy. We will increase returns to shareholders to further clarify our stance on shareholder returns.
Slide 57: Human Capital Investments
Human Capital Investments We define human capital investments as “investments of money and time in employees which contribute to the enhancement of corporate value,” and intend to increase human capital investments significantly, with a focus on investments related to human resource development and
Slide 58: Diversity and Inclusion
Diversity and Inclusion We will form the foundation for creation of innovations by having diverse human resources within the Group and establishing an environment in which each of them can demonstrate their individuality and strengths and play an active role. Promotion of active participation Mid-ca
Slide 59: Organizational Culture Reforms
Organizational Culture Reforms We not only encourage each employees to take on challenges through our values and slogans, but also aim to create a corporate culture that allows them to continue to take on challenges by continuing efforts to give shape to those challenges. Chugin Values (Partially ex
Slide 60: Forward-looking statements notice
This material contains forward-looking statements. These statements do not guarantee our future business performance and include risks and uncertainties. It should be noted that future performance may differ from the targets mentioned herein due to changes in the management environment and other fac
Chugin Financial Group — FY2022 Earnings Presentation on 6ix