Hokuhoku Financial Group, Inc. · TSE:8377
Hokuhoku Financial — H1 FY2008 Earnings Presentation
44 slides from Hokuhoku Financial's earnings presentation, Sep 30, 2008
Slide 1: Investor Meeting: Interim Results for FY 2008
Hokuhoku Financial Group,Inc. Investor Meeting ～Interim Results for FY 2008～ (ended September 30, 2008)
Slide 2: Table of Contents
Table of Contents Hokuhoku Financial Group,Inc. 【Summary of Interim Results for FY 2008】 【Operating Performance】 ・ Summary of Interim Results Ⅰ-① (P/L:consolidated) 2 ・Loans 17 ・ Summary of Interim Results Ⅰ-② (P/L:each bank) 3 ・Housing Loans 18 ・ Summary of Interim Results Ⅱ-① (B/S:consolidated) 4
Slide 3: Summary of Interim Results for FY 2008
Hokuhoku Financial Group,Inc. Summary of Interim Results for FY 2008 1
Slide 4: Summary of Interim Results Ⅰ-① (P/L: Consolidated)
Summary of Interim Results Ⅰ-① Hokuhoku Financial Group,Inc. ＜P/L : Consolidated and Total of Two Banks＞ Released on 09/26/2008 〈Consolidated〉 (JPY Bn) 〔'08/09 Forecasts〕 FY08 1H change FY07 1H Ordinary income 〔123.0〕 123.8 (1.9) 125.7 〈Consolidated〉 Ordinary profits 〔21.5〕 19.6 (13.0) 32.7 Net inco
Slide 5: Summary of Interim Results Ⅰ-② (P/L: each bank)
Summary of Interim ResultsⅠ-② Hokuhoku Financial Group,Inc. <P/L : Non-Consolidated, each bank> 〈Hokuriku Bank〉 〈Hokkaido Bank〉 (JPY Bn) FY08 1H change FY07 1H FY08 1H change FY07 1H Core gross business profits 50.0 (3.3) 53.3 37.5 0.4 37.0 Net interest income 37.6 (0.9) 38.6 28.6 (0.6) 29.2 Domesti
Slide 6: Summary of Interim Results Ⅱ-① (B/S: Consolidated)
Summary of Interim Results Ⅱ-① Hokuhoku Financial Group,Inc. <B/S : Consolidated and Total of two Banks> 〈Total of two banks〉 (JPY Bn) Sep-08 change Sep-07 Loans 7,006.3 111.3 6,895.0 〈Total of two banks〉 Loans to SMEs & individuals 4,977.0 (47.3) 5,024.4 Loans: +¥111.3Bn compared to Sep-07 Housing
Slide 7: Summary of Interim Results Ⅱ-② (B/S: each bank)
Summary of Interim Results Ⅱ-② Hokuhoku Financial Group,Inc. <B/S : Non-Consolidated, each bank> 〈Hokuriku Bank〉 〈Hokkaido Bank〉 (JPY Bn) Sep-08 change Sep-07 Sep-08 change Sep-07 Loans 4,245.9 54.6 4,191.3 2,760.3 56.6 2,703.6 Loans to SMEs & individuals 2,969.9 (62.3) 3,032.3 2,007.1 15.0 1,992.1
Slide 8: Breakdown of Business Profits ① Net Interest Income
Breakdown of Business Profits① Hokuhoku Financial Group,Inc. <Net interest income> ¾ Although average balances of loans and securities increased, loan-deposit margin decreased. ⇒ Rise of deposit rate, decline of loan rate by intensified competition. 【Breakdown of net interest income (domestic)】 FY20
Slide 9: Breakdown of Business Profits ② Fee Revenue
Breakdown of Business Profits ② Hokuhoku Financial Group,Inc. <Fee revenue> ¾ Fees from investment trusts decreased owing 【Core gross business profits】 〈Total of two banks〉 to the deteriorated market environment. Fee revenue ¾ Fees from insurance increased. (JPY Bn） 23.46% 24.50% 23.54% 24.89% 24.24
Slide 10: Breakdown of Business Profits ③ G&A Expenses
Breakdown of Business Profits ③ Hokuhoku Financial Group,Inc. <General and administrative expenses> ¾ General and administrative expenses increased 9% below the average OHR of regional banks due to the increase in personnel and IT system. (Ave.61%) 【Breakdown of G&A expenses】 【G&A expenses ・ OHR】 〈T
Slide 11: Net Gains (Losses) related to Securities
Net Gains (Losses) related to Securities Hokuhoku Financial Group,Inc. ¾ Net gains (losses) related to bonds: -¥1.6Bn ･･･Lehman bonds, etc ¾ Net gains (losses) related to stocks: -¥3.5Bn ･･･Impairment loss mainly due to decline of stock prices 【Net gains (losses) related to securities】 〈Total of two
Slide 12: Securities Portfolio and Valuation Difference ①
Securities Portfolio and Valuation Difference ① Hokuhoku Financial Group,Inc. ¾ Government bonds and Local government bonds led the increase of total balance of securities. ¾ Unrealized losses on bonds increased. 【Balance of securities】 【Balance of securities】 1,749.0 〈Consolidated〉 (JPY Bn) Sep-08
Slide 13: Securities Portfolio and Valuation Difference ②
Securities Portfolio and Valuation Difference ② Hokuhoku Financial Group,Inc. ¾ No securitization products related to Sub-prime nor SIV are included in our portfolio 【 Balance of securitization products 】 <Total of two banks＞ （JPY Bn） As of Sep 30，2008 Securitization Products RMBS CMBS CDO ABS (*1)
Slide 14: Credit Costs and Non-Performing Loan
Credit Costs and Non-Performing Loan Hokuhoku Financial Group,Inc. ¾ Total credit costs was ¥15.6Bn (+¥2.7Bn compared to Sep-07）,Credit cost ratio was 0.45% (+0.07%） ¾ NPL ratio was 3.48% (-0.16% compared to Mar-08) ･・・continues to decrease 【Total credit costs】 〈Total of two banks〉 【Non-performing l
Slide 15: Capital Adequacy Ratio
Capital Adequacy Ratio Hokuhoku Financial Group,Inc. ¾ Capital adequacy ratio was 10.39% (±0.00% from Mar-08). ¾ Repaid public funds ¥25.0Bn in Jun-08, the outstanding balance is ¥59.9Bn. 【Capital adequacy ratio】 【Capital adequacy ratio and public funds】 (JPY Bn） (JPY Bn) Sep-08 change Mar-08 800 10
Slide 16: Deferred Tax Assets
Deferred Tax Assets Hokuhoku Financial Group,Inc. ¾ Net deferred tax assets : ¥96.0Bn (+¥31.3Bn compared to Mar-08) ¾ Net deferred tax assets to tier1 capital ratio : 24.08% (+7.98% compared to Mar-08) 【Breakdown of deferred tax assets】 【Change of deferred tax assets】 (JPY Bn） 〈Consolidated〉 (JPY Bn
Slide 17: Forecasts
Forecasts Hokuhoku Financial Group,Inc. 【Earnings Forecasts】 【Dividend Forecasts】 〈Consolidated〉 〈Non-consolidated〉 Interim Full year Change from Interim Year-end Annual Change from (JPY Bn) Results Forecasts FY2007 FY2007 Ordinary income 123.8 246.0 (15.2) Dividend per common share - ¥3.00 ¥3.00 ¥0
Slide 18: Operating Performance
Hokuhoku Financial Group,Inc. Operating Performance 16
Slide 19: Loans
Loans Hokuhoku Financial Group,Inc. ¾ Loans +¥111.3Bn(+1.6%) compared to Sep-07 ¾ Loans to SMEs and individuals -¥47.3Bn(-0.9%) compared to Sep-07 ¾ Housing and consumer loans +¥80.1Bn(+4.4%) compared to Sep-07 〈Hokuriku bank〉 5,000 【Balance of loans】 〈Total of two banks〉 % of housing & consumer loa
Slide 20: Housing Loans
Housing Loans Hokuhoku Financial Group,Inc. ¾ Sales amount of residential housing loans kept the same level as previous year. 〈Hokuriku bank〉 ¾ Balance of housing loans increased by ¥37.4Bn 200 compared to Mar-08. 133.4 107.6 113.5 【Sales amount of residential housing loans】 〈Total of two banks〉 33.
Slide 21: Interest Margins ①
Interest Margins① Hokuhoku Financial Group,Inc. ¾ Loan rate -0.04% compared to FY2007 ¾ Deposit rate +0.04% compared to FY2007 ¾ Net interest margin -0.07% compared to FY2007 【Interest margin between loans and deposits (Domestic operations)】 〈Total of two banks〉 (%) 2.50 2.07 2.03 Loan rate 1.94 1.9
Slide 22: Interest Margins ②
Interest Margins② Hokuhoku Financial Group,Inc. ¾’08/2Q Loan rate : 2.01% (+0.11% compared to ’06/1Q) ¾’08/2Q Deposit rate : 0.31% (+0.27% compared to ’06/1Q) 【Interest rate of yen denominated loans and deposits】 【Interest rate of yen denominated loans】 〈Total of two banks〉 〈Total of two banks〉 (%)
Slide 23: Investment Products
Investment Products Hokuhoku Financial Group,Inc. ¾ Balance of investment products : -¥32.7Bn compared to Mar-08 (Investment trusts -¥31.9Bn) ⇒ Sales amount of insurance increased, sales amount of investment trusts decreased owing to the deteriorated market environment. 【Balance of investment produc
Slide 24: Bond Portfolio (yen denominated bonds)
Bond Portfolio (yen denominated bonds) Hokuhoku Financial Group,Inc. 【Bond portfolio; balance, yield, and Value at risk】 〈Total of two banks〉 〈Hokuriku bank〉 〈Hokkaido bank〉 (term-end balance) (term-end balance) (JPY Bn) (JPY Bn) 1,450 850 Size of a circle = Interest rate risk (Value at Risk) 800 Ho
Slide 25: Management Strategy
Hokuhoku Financial Group,Inc. Management Strategy 23
Slide 26: Plans for Restoring Sound Management: Financial Target
Plans for Restoring Sound Management Hokuhoku Financial Group,Inc. Financial Target 【Statement of Income】 (Total of two banks) （JPY bn） Com parison to M ar-08 M ar-09 M ar-10 M ar-11 M ar-12 Mar-12(plan) Maintaining top-level profitability among regional banks Results Plan Plan Plan Plan & Mar-08(re
Slide 27: Strategy in Retail Banking
Strategy in Retail Banking Hokuhoku Financial Group,Inc. Strengthen Our Retail Banking Business Develop and open new type of branch to further Increase the number of staff to beef up improve customers’ convenience marketing capabilities Number of branch 246 (Mar.2008) → 250 (Mar.2012) (+4) Number of
Slide 28: Expanding Retail Banking Business
Expanding Retail Banking Business Hokuhoku Financial Group,Inc. Increasingcontact contactwith withcustomers customers Providingsolutions solutions Increasing Providing “SS” Campaign Each of 2 banks has Consulting Division in head office * “SS” = “Shoe Spirit (Footwork)” and ” Speed & Service” provid
Slide 29: Diversifying product lines for individual customers
Diversifying product lines for individual customers Hokuhoku Financial Group,Inc. Enhancing loan consultation services Hokuriku Bank Hokugin Loan Plaza：53 spots （29 are open on weekends) Hokkaido Bank Dogin Housing Loan Plaza：12 spots (2 are open on Saturdays) Diversified product lines ・Housing Loan
Slide 30: Extensive Regional Network
Extensive Regional Network Hokuhoku Financial Group,Inc. Unique business model by capitalizing on extensive regional network Events for Business Matching Mar-08::Product Mar-08 Productselection selection2008 2008in inToyama Toyama Hokkaido Commemorating open of Tokai-Hokuriku Highway, the event was
Slide 31: Overseas Business Support
Overseas Business Support Hokuhoku Financial Group,Inc. We support clients expanding into overseas market Our support Business matching conference Jul-08 (Shanghai) Sponsored by 12 regional banks Jul-08 (Dalian) Preparatory inspection Beijing Shenyang Office Sponsored by Hokuhoku FG Office of Hokkai
Slide 32: Cementing Customer Loyalty: Capital Policy
Cementing Customer Loyalty Hokuhoku Financial Group,Inc. <Capital policy> Aiming to accumulate retained earnings enough to repay outstanding public funds Type Type 1 preferred stock Type 4 preferred stock Number of stocks 50 million stocks 61.4 million stocks (¥59.9Bn) by March 2009 Issue price @ JP
Slide 33: Appendix
Hokuhoku Financial Group,Inc. Appendix 31
Slide 34: About Japanese Regional Banks ①
About Japanese Regional Banks ① Hokuhoku Financial Group,Inc. Financial Institutions in Japan Source: Home page of Regional Banks Association of Japan 1 Central Bank - Bank of Japan Hokuhoku Financial Group, Inc. 2 Private Financial Institutions (Hokuriku Bank, Hokkaido Bank) City banks Banks Region
Slide 35: About Japanese Regional Banks ②
About Japanese Regional Banks ② Hokuhoku Financial Group,Inc. Outline of Regional Banks Outline of Regional Banks Main Financial Institutions in the Regions As of March 31, 2008, there are 64 regional The regional banks have branch networks banks. Headquarters for regional banks are mainly in the pr
Slide 36: History of Hokuhoku FG
History of Hokuhoku FG Hokuhoku Financial Group,Inc. Hokuriku area Hokkaido area 1877 Established in Ishikawa prefecture Ishikawa 1878 Fukui Trade between Hokkaido and Hokuriku area Established in Fukui prefecture flourished in the 19th century, and A lot of people immigrated from Hokuriku to Hokkai
Slide 37: Goals and Strategy of the Management Integration
Goals and Strategy of the Management Integration Hokuhoku Financial Group,Inc. Goals and Strategy of the Management Integration Strengthening Increasing Cementing Marketing Capabilities Management Efficiency Customer Loyalty We possess a wide network including We will create a highly profitable and
Slide 38: About Hokuhoku FG ①: Loan Market Share
About Hokuhoku FG ① Hokuhoku Financial Group,Inc. Market Share in Our Home Market (Loans, Mar-08) Hokuriku Area Hokkaido Area Shinkin Banks HFG 27% Shinkin Banks HFG 25% 20% 26% Other Banks O ther Banks Main 11% Main Competitor 21％ 32% Competitor 38% S.B 44% S.B HFG 18% S.B HFG 15% HFG ※Figures of t
Slide 39: About Hokuhoku FG ②: Deposit Market Share
About Hokuhoku FG ② Hokuhoku Financial Group,Inc. Market Share in Our Home Market (Deposits, Mar-08) Hokuriku Area Hokkaido Area Shinkin Banks HFG 27% HFG 21% Shinkin Banks 24% 32% Main 30% O the r Banks Competitor 19% Other Banks Main 13% Competitor 34% S.B 48% S.B HFG 15% S.B HFG 13% HFG ※Figures
Slide 40: About Hokuhoku FG ③: Lending by Industry
About Hokuhoku FG ③ Hokuhoku Financial Group,Inc. Lending in the Region by Industry (Sep-08) Hokuriku Bank Hokkaido Bank Others Manufacturing 0.5% Manufacturing Others 7.5% 15.9% 0.5% Construction 4.7% Communications & Individual Transportation 32.6% Construction Individual 3.6% 6.7% 37.4% Wholesale
Slide 41: The Present Condition of the Regional Economy ①
The Present Condition of the Regional Economy ① Hokuhoku Financial Group,Inc. Characteristics of Our Main Business Area Population and Square Measure Data from Ministry of Public Management, Home Affairs, Posts and Telecommunications Same as Osaka, Toyama Ishikawa Fukui Total Hokkaido Total Kanagawa
Slide 42: The Present Condition of the Regional Economy ②
The Present Condition of the Regional Economy ② Hokuhoku Financial Group,Inc. Economic Conditions Monthly MonthlyEconomic EconomicReport Report Regional RegionalEconomic EconomicReport Report (By the Cabinet Office) (By the Cabinet Office) (By Bank of Japan) (By Bank of Japan) All AllJapan Japan Hok
Slide 43: The Present Condition of the Regional Economy ③
The Present Condition of the Regional Economy ③ Hokuhoku Financial Group,Inc. Big Projects in Hokuriku and Hokkaido Area Hokkaido Hokkaido ◎Construction of the Hokkaido Bullet Train Constructing a 360 KM line from Shin-Aomori Station to Sapporo Station. Expected to be completed in FY 2015 （Shin-Aomo
Slide 44: Inquiries and Disclaimer
Inquiries related to this presentation should be addressed to Hokuhoku Financial Group, Inc. Planning Group TEL(81)76-423-7331 FAX(81)76-423-9545 E-MAIL:honsha2@hokuhoku-fg.co.jp http://www.hokuhoku-fg.co.jp/ This document may not be reproduced or distributed to any third party without prior approva
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