Japan Securities Finance Co., Ltd. · TSE:8511

Japan Securities Finance — FY2011 Earnings Presentation

39 slides from Japan Securities Finance's earnings presentation, May 2012

  1. Slide 1: Financial Presentation for FY2011

    Financial Presentation for FY2011 Japan Securities Finance Co.,Ltd This document is an English translation for non-Japanese investors convenience. Although Japan Securities Finance intends to faithfully translate the Japanese documents into English, the accuracy and correctness of translation are no

  2. Slide 2: Financial Summary

    a Financial Summary

  3. Slide 3: Financial Summary for Mar 2012

    Financial Summary for Mar 2012 ¥ mil Parent Consolidated Mar2011 Mar2012 Change Mar2011 Mar2012 Change Operating ▲2,363 ▲2,619 17,639 15,276 22,848 20,229 Revenues (▲13.4%) (▲11.5%) EX Premium ▲1,699 ▲1,955 Charges 13,827 12,128 19,037 17,082 (▲12.3%) (▲10.3%) Operating Expenses 8,977 8,311 ▲665 11,

  4. Slide 4: Operating Revenues by Each Business

    Operating Revenues by Each Business \ mil ( )：ratio of OR Mar-11 Mar-12 Securities Finance Bussiness 17,558 15,186 【Margin Loan】 【Margin Loan】 Margin Loan Business 8,922 6,756 ・The ・The revenues revenues inin the the business business decreased decreased due due to to balance balance (39.0%) (33.4%)

  5. Slide 5: Financial Highlights for FY2011

    Financial Highlights for FY2011 1 Margin Margin Loan Loan Balance Balance for for FY2011 FY2011 \ mil Avg. Margin Avg. Stock Loan Rate Policy Rate Mar-11 Mar-12 Change Loan Loan （ as of Mar） （ as of Mar） Margin Loan Business 8,922 6,756 ▲24.3% \ bn \ bn ％ ％ Interest on Loans 2,809 1,783 ▲36.5% FY201

  6. Slide 6: Outstanding Balance of Standardized Margin Transactions

    Outstanding Balance of Standardized Margin Transactions Standa rdized Marg in Buying Transactions (left) Standardized Ma rgin Se lling Transactions (left) Nikkei225(right ) \tri \ 1.2 10,000 0.8 9,000 0.4 8,000 0.0 7,000 r pr n l u l ug ep c t ov ec an eb r 1-A p 28 -A 3 -Ju 1 -Ju 29 -J 2 6- A 22 -S

  7. Slide 7: Financial Highlights for FY2011

    Financial Highlights for FY2011 2 Profit Profit for for bond bond trading trading largely largely increased increased in in JSF JSF Trust Trust Bank. Bank. Sale gain of CDO：¥1,394mil Profit for bond trading ：¥3,134mil（+¥477mil,YoY） 3 Booked Booked Loss Loss in in Equity-Method Equity-Method and an

  8. Slide 8: Figure of group reorganization with the tender offer application of JBISHD

    Figure of group reorganization with the tender offer application of JBISHD ＪＳＦ ＪＳＦ ＪＳＦ ＪＳＦ NTT NTT Data Data 20％ 80％ ３２．７％ ＪＢＩＳＨＤ ＪＢＩＳＨＤ ＪＢＩＳＨＤ ＪＢＩＳＨＤ Drafting strategy or plans and governing administration for ＪＩＰ ＪＩＰ whole group subsidiaries. １００％ １００％ Sumitomo Sumitomo ＪＳＦ ＪＳＦ ＪＩＰ ＪＳＡ Mitsui Mits

  9. Slide 9: Financial Results of Group Companies

    Financial Results of Group Companies \ mil Mar 2012 Results Shareholding Ratio Operating Recurring Net Revenues * Income Income Consolidated 20,229 2,387 779 JSF - 15,276 1,391 1,229 JSF Trust Bank 100% 4,245 1,635 1,540 Nihon Building 100% 1,159 337 207 Equity-method - Loss in Equity-Method ▲868 *

  10. Slide 10: Financial Results of JSF Trust Bank

    Financial Results of JSF Trust Bank ¥mil Mar-11 Mar-12 change Recurring Revenues 4,414 4,245 ▲169 Trust charges 308 300 ▲7 Recurring Income 1,116 1,635 518 Extraordinary Profit 1,260 ― ▲1,260 Net Income 2,391 1,540 ▲851 Equity Ratio 23.63% 33.07% Financial Financial Highlights Highlights  Trust cha

  11. Slide 11: Main Assets of JSF Trust Bank

    Main Assets of JSF Trust Bank ● Securities Holdings ● Ratio of Securities(as of Mar-12) \mil 0% Mar-11 Sep-11 Mar-12 Notes JGB 930,443 488,822 407,669 28% JGB less than 1Y less than 1Y 830,509 428,939 327,732 42% over 1Y 99,933 59,882 79,937 JGB over 1Y Municipal Bond 196,775 187,486 158,248 Mainly

  12. Slide 12: Financial Results of JBIS Holdings

    Financial Results of JBIS Holdings ¥mil Mar-11 Mar-12 change Revenues 37,707 35,195 ▲2,512 Operating Income 157 191 34 Recurring Income 1,728 1,002 ▲726 Extraordinary Loss 1,485 2,819 1,333 Corporation Tax etc. 851 764 ▲86 Net Income ▲618 ▲2,598 ▲1,980 Financial Financial Highlights Highlights  Rev

  13. Slide 13: Estimated Figures for FY2012

    Estimated Figures for FY2012 ¥mil Parent Consolidated FY2012 FY2012 FY2011 FY2012 FY2012 FY2011 1Q-2Q 1Q-4Q Results 1Q-2Q 1Q-4Q Results Operating 400 1,100 1,108 700 1,700 3,039 Income Recurring 600 1,400 1,391 800 2,100 2,387 Income Net Income 400 900 1,229 500 1,400 779 EPS (Yen) 4.30 9.67 13.21 5

  14. Slide 14: Precondition Balance of Margin Loans

    Precondition Balance of Margin Loans Mar-12 Results FY2012 Precondition Excess Excess of of Stock Loan Excess of Margin Loan Excess of ¥142bn Margin Loan ¥90bn Stock Loan Matching ¥130bn ¥90bn ¥108bn Matching Margin Loan Stock Loan ¥130bn ¥198bn ¥250bn Margin Loan Stock Loan Apr-12 Results ¥260bn ¥2

  15. Slide 15: Consolidated Estimated Figures

    Consolidated Estimated Figures \ mil Mar 2012 Results Mar 2013 Estimated Figures Shareholding Ratio Operating Recurring Net Operating Recurring Net Income Income Income Income Income Income Consolidated 3,039 2,387 779 1,700 2,100 1,400 JSF － 1,108 1,391 1,229 1,100 1,400 900 JSF Trust Bank 100% - 1

  16. Slide 16: Management Matters

    a Management Matters

  17. Slide 17: Achievement situation of the 2nd Mid-term Management Plan①

    Achievement situation of the 2nd Mid-term Management Plan① Management Policy (1) Establish solid social reliance by sound business management, with recognizing social responsibility such as influence on securities market or investors and completing compliance, corporate governance and control of man

  18. Slide 18: Achievement situation of the 2nd MMP②

    Achievement situation of the 2nd MMP② Increasethe thenumber numberof ofLoanable LoanableIssues Issues Loansfor Loans forNegotiable NegotiableMargin MarginTransactions Transactions Increase ○○ByBybusiness businesspromotion, promotion,the theaverage averagebalance balance 【事業戦略】 ☆Margin ☆ MarginTransa

  19. Slide 19: Increase the number of Loanable Issues

    Increase the number of Loanable Issues Increase the number of Loanable Issues to improve convenience and to strengthen competiveness of Margin Loan Business. ☆ To increase the number of Loanable Issues ● Select foreign stocks、Exchange Traded Funds (ETFs) and newly Exchange Traded Notes (ETNs) from A

  20. Slide 20: Achievement situation of the 2nd MMP③ Strengthen Management Foundation

    Achievement situation of the 2nd MMP③ 【Strenghthen Management Foundation】 ImproveBusiness Improve BusinessManagement ManagementSystem System UpgradeBusiness Upgrade BusinessContinuity ContinuityPlan Plan ☆Group ☆ GroupRisk RiskManagement Management ☆Build ☆ Buildand andrun runBack-up Back-upSystem S

  21. Slide 21: The 3rd Mid-term Management Plan (FY2012-FY2014)

    The 3rd Mid-term Management Plan（FY2012～FY2014）  Business Environment Long-term Long-termsluggish Movement Movementto tostrengthen Developing sluggish strengthen Developingglobalized globalizedand and Stock market the the functions offinancial functions of sophisticated financial Stock market finan

  22. Slide 22: Business Strategies for the 3rd MMP

    Business Strategies for the 3rd MMP ① Improve the convenience of Margin Loan Business Increase the number of loanable issues Improve the convenience of Margin Loan Business ② Further Expand Loans for Negotiable Margin Transactions ③Respond to Diverse Funding Needs of Financial Instruments Companie

  23. Slide 23: Reinforcing Management Foundations for the 3rd MMP

    Reinforcing Management Foundations for the 3rd MMP ① Improve the Effectiveness of Business Management Structure  Further improvement to compliance, internal audit and risk management ② Strengthen Business Structure  Establish “Business Promotion Meeting” ③ Improve the Efficiency of Organizational

  24. Slide 24: Business Strategies of JSF Trust Bank

    Business Strategies of JSF Trust Bank ￥mil Management Policy (Outline) FY2012 As a trust bank supporting the business FY2010 FY2011 (Forecast) infrastructure of securities companies, etc., Recurring revenues 4,414 4,245 2,200 JSF Trust and Banking Co., Ltd. provides Trust Charge 308 300 ― customers

  25. Slide 25: Dividend Policy

    Dividend Policy   Ｎｅｗ Dividend Policy Basically, Dividend Payout Ratio of about 40% on Consolidated Financial Results, Results considering Dividend on Equity (DOE) Ratio. FY2012 Forecast：Annual ¥14（Interim ¥7, year-end ¥7） FY FY FY FY FY FY FY 2006 2007 2008 2009 2010 2011 2012 Annual Dividend per

  26. Slide 26: Appendix

    a Appendix

  27. Slide 27: Operating Revenues by Each Business

    Operating Revenues by Each Business \ mil Mar-07 Mar-08 Mar-09 Mar-10 ※ Mar-11 Mar-12 Securities Finance Bussiness 34,917 38,619 34,427 20,817 17,558 15,186 Margin Loan Business 23,186 23,156 19,638 12,954 8,922 6,756 (53.3%) (45.8%) (44.3%) (46.5%) (39.0%) (33.4%) Interest on Loans 10,954 10,581 3,

  28. Slide 28: Avg. & Outstanding Loan Balance

    Avg. & Outstanding Loan Balance \ mil FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 avg. 1,444,347 917,219 336,324 324,205 293,429 218,059 Margin Loans term-end 1,634,700 508,587 244,306 328,755 305,083 241,035 Bond Financing & General avg. 79,425 76,941 51,887 46,863 45,850 50,893 Loans term-end 79,859

  29. Slide 29: Margin Buying Transactions & JSF Margin Loans

    Margin Buying Transactions & JSF Margin Loans \ tri 10 60% Margin Buying Balance 9 Margin Loan Balance Ratio 50% 8 7 40% 6 5 30% 4 20% 3 2 10% 1 0 0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Japan Securities Finance Co.,Ltd 29

  30. Slide 30: Margin Selling Transactions & JSF Stock Loans

    Margin Selling Transactions & JSF Stock Loans ￥tri 2.0 100% 1.8 Margin Selling Balance 90% Stock Loan Balance 1.6 Ratio 80% 1.4 70% 1.2 60% 1.0 50% 0.8 40% 0.6 30% 0.4 20% 0.2 10% 0.0 0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Japan Securities Finance Co.,Ltd 30

  31. Slide 31: Features of Balance Sheet (Parent)

    Features of Balance Sheet （Parent） Features of Assets Features of Liabilities (1) Fluctuation of Loan Balance (1) Fluctuation of money funding amount Loan balance moves everyday because margin loan is Need to response flexibly to fluctuating cash demands, over-night loan because of the fluctuation o

  32. Slide 32: Securities Account (Consolidated)

    Securities Account（Consolidated） Mar-12 notes Mar-12 notes Assets Liabilities \mil \mil Collateral Money of Securities Loans 453,784 1,100,016 Lent Margin Loans 241,035 margin loan Margin Loans 259,058 stock loan Collateral Money of Securities 1,127,046 Borrowed Excess of Stock Loan 152,816 stock lo

  33. Slide 33: JGB Balance

    JGB Balance \ bn JSF \ mil 3,000 2.0 JSF Mar-11 Sep-11 Mar-12 2,500 1,117 975 1.5 JGB Balance 2,987,211 2,702,225 2,094,731 2,000 776 1 year or less 1,870,087 1,727,065 1,318,655 1,500 (1.19) 1.0 over 1Y 1,117,124 975,160 776,076 (1.03) (.96) (15Y floating JGB) 1,000 194,809 156,760 152,747 1,870 1,

  34. Slide 34: Share Buyback Program

    Share Buyback Program total shares start end purchased amount cancellation shares issued shs \ mil shs shs FY2008 2008/4/1 2008/4/18 4,312,800 2,999 99,704,000 2008/5/15 2008/6/11 978,900 999 99,704,000 2008/6/27 2008/7/25 1,000,000 881 99,704,000 2008/9/24 6,004,000 93,700,000 6,291,700 4,881 N u m

  35. Slide 35: Margin Loan Rates

    Margin Loan Rates Margin Loan Stock Loan BOJ Policy Interest Rate  Jul 2006 Uncollateralized O/N Call Rate:0.25％ Securities Company Securities Company  Feb 2007 Uncollateralized O/N Call Rate:0.50％ JSF Loan Rate Lending  Oct 2008 Uncollateralized O/N Call Rate:0.30％（▲0.20%） 0.77% Fee 0.40%  Dec

  36. Slide 36: Loan Rate of Loans for Margin Transactions

    Loan Rate of Loans for Margin Transactions 10.0% 9.0% 8.75% Loan R ate Interest R ate on Collateral Money of Stock Loan 8.0% Lending Fee 7.0% Profit M argin 6.0% 5.00% 5.0% Sep-93 4.0% 3.75% Nov-10 3.0% Jan-09 2.0% M ay-02 1.17% 1.0% 0.0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 0

  37. Slide 37: Rating Information

    Rating Information JCR R&I Standard & Poor’s As of 31/Mar/2012 Rating Outlook Rating Outlook Rating Outlook Japan Long-term AA- Stable AA- Stable A Stable Securities Short-term J-1+ a-1+ A-1 Finance （Highest） （Highest） CP Issue ¥1tri ¥1tri ― JSF Trust Long-term A+ Stable A+ Stable ― ― Bank Short-ter

  38. Slide 38: Securities-related Business by JSF Group Companies

    Securities-related Business by JSF Group Companies TSE TSE Securities Finance Business Sapporo Sapporo Loansfor forMargin Margin Loans Fukuoka JapanSecurities Japan SecuritiesFinance Finance Transactions Transactions Fukuoka Designated as Loansfor fornegotiable negotiable Loans securitiers margin tr

  39. Slide 39: Notice

    Notice This document includes statements for business forecast. These statements don’t guarantee company’s future achievement and that involve risk or uncertain factors. Company’s future achievement may be changed drastically up to stock market or financial conditions. Japan Securities Finance Co.,L

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