Credit Saison : FY2025 3Q Summary of Financial Results with notes

Credit Saison Co., Ltd.

Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2026 February 16, 2026

[Speaker]

Masaki Negishi Managing Executive Officer, CFO

Negishi: Move on to page three. Net revenue was JPY353.7 billion, which was 112% of the previous year. Business profit was JPY83.3 billion, which was 104% of the previous year. Quarterly profit was JPY48.8 billion, which was 84% of the previous quarter.

The reason quarterly profit was below the previous year is that, in addition to the extraordinary loss related to the sale of shares in affiliated companies that we recorded in H1, we recorded a loss of approximately JPY5.8 billion in Q3 associated with Concerto's withdrawal from the amusement business.

In addition, progress rates of both business profit and quarterly profit were 86% and 82% respectively, which are very good.

In light of the progress made up to Q3 and the current business environment, we believe that there is a high possibility that we will exceed our medium-term plan. However, there are several variables such as the timing of the completion of profitable projects and the execution of expenses, and the range of the upward swing is a little wide at this point.

We hope you will understand that the current forecast remains unchanged as a highly accurate level at this time.

Next, on page six, is business profit or loss by segment.

For payment, JPY30.5 billion, 113% YoY. Progress in premium strategy and business restructuring has been very strong, and this has been reflected in our business performance.

In the finance segment, sales were JPY34.1 billion, 117% YoY. Credit Saison and SAISON FUNDEX are doing well in the real estate finance business and credit guarantee business, and Suruga Bank, our investee, is also doing very well.

In addition, the global segment landed at negative JPY1.8 billion. Compared to the end of Q2, the deficit has narrowed on a cumulative basis. The reason for this is that the Indian business, which struggled in H1, recovered to the point where it can once again contribute to profits in Q3. I will touch on this a little later.

Move on to page eight. I would like to mention a few things by company.

Looking at consolidated subsidiaries, SAISON FUNDEX posted JPY13.3 billion, up JPY3.8 billion from the previous year.

And for Saison Realty Group, posted JPY9.8 billion. Although they posted JPY0.8 billion less than the previous year, this is partly a reaction to the impact of a very large profitable transaction in the previous year. However, the current fiscal year is basically progressing according to plan.

Kisetsu Saison Finance in India posted JPY2.9 billion. Although sales were JPY1 billion lower than the previous year, Q3 turned profitable after a very difficult H1.

The main equity method affiliates. Suruga Bank posted JPY5.2 billion, an increase of JPY0.9 billion from the previous year.

And HD SAISON Finance posted JPY1.1 billion, a decrease of JPY1.1 billion from the previous year, but new local lending is very good. Because of the strengthening of that lending, a lot of IFRS adjustments have been made in this Q3, so we have been affected by that. I will touch on this a little later.

Next, the status of the three main segments.

See page 11. We are experiencing an unstable connection. We can see the slide, but I would like to explain verbally.

We have had several experiences in H1. I will discuss India later, but for Indonesia, we added approximately JPY4.7 billion to the allowance expected credit losses in H1. In Q3, additional provisioning of JPY300 million was made. We view this as basically in line with our plan. Since we have basically curbed new loans, we see almost no new risks in Indonesia going forward.

As we expect to gain significant experience during this fiscal year, we will focus on four countries over the medium term: India, Brazil, Vietnam, and Mexico.

In this context, we withdrew from the joint venture in Thailand at the end of December 2025.

Next is the situation in India. Move on to page 12.

Profit of JPY2.6 billion was recorded in Q3. The cumulative total was JPY2.9 billion. H1 was plagued by changes in the RBI's provision policy and changes in the interpretation of the compensation system. However, we completed all these measures at the end of H1, and in Q3 we have moved back to an offensive stance.

Once again, we would like to accelerate the pace of growth in our bond outstanding balance. At the same time, the quality of the bonds at embedded finance and branch lending has stabilized, and we are putting a structure in place that will allow us to post solid profits going forward.

Move on to page 15.

Brazil is on the left. Cumulative contributed profit is JPY1.3 billion. We are now in a situation where we have a solid pipeline and a system in place to steadily accumulate profits. We would also like to discuss various issues regarding Brazil for the next steps.

And on the right is Vietnam. The contribution to business profit was JPY1.1 billion, which was a decrease of about JPY270 million from Q2. This is because, in Q3, we significantly increased the amount of new loans as we advanced the digitalization of our processes and other initiatives.

As we increased the amount of new loans, an IFRS adjustment of approximately negative JPY0.9 billion was recorded. While our 49% share under local accounting was JPY0.7 billion, the negative JPY0.9 billion IFRS adjustment had an impact.

Our policy for Q4 is to strengthen lending for future growth. Although there is a possibility that we may fall short of our target for Vietnam for the current fiscal year, we ask for your understanding that we are taking this action with a view to medium-term growth.

And page 16, the payment business.

Segment business profit was JPY30.5 billion this year. There was a reversal of JPY6.5 billion of the special allowance related to COVID. Excluding this reversal, profit increased by approximately JPY10 billion.

As I mentioned earlier, in the course of promoting our premium strategy, we have been able to increase revolving and installment revenues, and we have also been reviewing our product lineup to promote business structure reform.

As a result, the change in revenue from the review of annual membership fees and various commissions has been well reflected in our business performance, and we continue to see a very muscular transformation in our business.

Page 20, finance business.

Segment business profit was JPY34.1 billion, an increase of about JPY5 billion YoY. Credit Saison has also been able to increase its real estate finance business volume since H1, centered on loans provided in collaboration with Suruga Bank.

Meanwhile, SAISON FUNDEX has achieved steady growth in lending through financial institutions with which we have tie-ups. In addition to solid growth in the guarantee business, our advertising has been effective in the direct lending and real estate finance areas, and awareness of the company is increasing. We believe this is creating a positive cycle.

Page 22, Credit Risk.

Please see non-consolidated area shown on the right side of the slide. The delinquency rate of 90 days or more is settling down, although I think there may be a slight seasonal factor in Q3.

In terms of costs, it was JPY8.9 billion for the three-month period, and we believe that we will be able to meet the JPY40 billion planned for this fiscal year.

And finally, Capital policy related topic. No updates as of today.

Once again, we are currently discussing plans for the next fiscal year, and we will inform you at the time of the full-year earnings announcement.

That's all from me.