Hachijuni Nagano Bank, Ltd. TSE:8359

Hachijuni Bank : Financial Results for the 1st half of FY2024 (November 28,2024)

Published

Source: MarketScreener

Tokyo Stock Exchange, Prime Market: 8359

The 54th Information Meeting

November 28, 2024

Inquiries: Planning & Coordination Dept., Investor Relations

Tel: 026-224-5512

Email: [email protected]

  • This document has been prepared for informational purposes only. It should not be construed as an offer or solicitation to buy or sell any securities.
  • This document includes statements concerning future performance. These statements contain uncertainties and do not guarantee future performance. Please note that future performance may differ from forecasts for reasons such as changes in the business environment.
  • Information contained herein may be changed or revised without prior notice.

Overview of The Hachijuni Bank

2

Name

The Hachijuni Bank, Ltd.

Head office

Nagano City, Nagano Prefecture

Established

August 1, 1931

Domestic:151 branches

(131 in prefecture, 20 outside)

Branch network

Overseas:

1 branch (Singapore)

2 representative offices (Shanghai, Bangkok)

*Hong Kong branch closed Mar. 31, 2024

Employees

3,352 (+63 from Mar. 2024)

Capital stock

¥52.2bn

Issued shares

513,767,000

Total assets

¥12,795.7bn (−¥915.6bn from Mar. 31, 2024)

Net assets

¥979.7bn (−¥31.9bn from Mar. 31, 2024)

Deposits

¥8,521.8bn (+¥54.1bn from Mar. 31, 2024)

Loans

¥6,020.1bn (−¥183.2bn from Mar. 31, 2024)

Capital

Consolidated: 20.28% (−0.46% from Mar. 31, 2024)

adequacy ratio

Non-consolidated: 20.11% (−0.89% from Mar. 31,

(Basel III)

2024)

S&P Global Ratings: A−

Ratings

R&I: A+

JCR: AA

Topics

  • Established three new organizations at our head office in June 2024:
    • Structured Finance Team (in the Financial Market Dept.)
    • Solutions Finance Group (in the Business Promotion Dept.)
    • AI Promotion Team (in the Computer Systems Dept.)
  • Signed a "Cooperation Agreement for Medical Practice Successions" with the Nagano Medical Association in October 2024
  • Signed an "Agreement on Achieving Zero Carbon in 2050" with Nagano Prefecture in November 2024

Reference: Overview of The Nagano Bank

Name

The Nagano Bank, Ltd.

Head office

Matsumoto City, Nagano Prefecture

Branch

Domestic: 52 branches

network

(51 in prefecture, 1 outside)

Employees

618

Total assets

¥987.3bn

Net assets

¥20.2bn

Deposits

¥953.4bn

Loans

¥574.7bn

As of Sep. 30, 2024

As of Sep. 30, 2024

Contents

3

Summary of 1H FY2024 Financial Results

4

Status of Medium-Term Management Vision 2021 Initiatives

25

Business Merger

32

Efforts to Increase PBR and Improve ROE

35

4

Summary of 1H FY2024 Financial Results

Summary of 1H FY2024 Financial Results (Consolidated)

5

◆ Consolidated

(¥100mn)

Consolidated gross business profit Profit on interest

Profit on fees & commissions

Trading profit

Profit from other business transactions

General & administrative expenses

Credit related expenses

Gains/losses related to stocks

Gains/losses on money held in trust

Ordinary profit

Extraordinary gains/losses

Gain on negative goodwill

Profit attributable to owners of parent

9/2023

9/2024

YoY

524

591

66

413

503

90

92

86

(5)

1

1

(0)

16

(0)

(16)

316

343

27

10

(4)

(15)

16

49

33

(6)

2

8

170

267

96

168

3

(164)

173

ー

(173)

264

195

(69)

  • Ordinary profit

Ordinary profit grew ¥9.6bn year-on-year due to factors such as the profit on interest of The Hachijuni Bank (non- consolidated) increasing ¥6.5bn year-on- year and gains related to stocks increasing ¥2.4bn year-on-year.

  • Profit attributable to owners of parent Ordinary profit grew, but due to recording extraordinary gains of ¥17.3bn in gains on negative goodwill due to the business merger in the previous year, profit attributable to owners of parent decreased ¥6.9bn.

*The consolidated financial results for 1H FY2023 do not include the gains and losses of The Nagano Bank, Nagagin Lease, and Nagano Card from April to June 2023.

Summary of 1H FY2024 Financial Results (The Hachijuni Bank, Non-consolidated)

6

◆ The Hachijuni Bank

(¥100mn)

Gross business profit (A)

Profit on interest

Profit on fees & commissions

Profit from other business transactions

Gains/losses related to bonds (B)

General & administrative expenses (C)

Actual net business profit (A-C)

Core net business profit (A-B-C)

Excl. gains/losses on cancellation of investment trusts

Transfer to general allowance for credit losses (D)

Net business profit (A-C-D)

Special

Gains/losses related to stocks (E)

profit/losses

Gains/losses on money held in trust (F)

Gains on reversal of allowance for credit losses

Disposal of NPLs

Ordinary profit

Extraordinary gains/losses

Gains/losses on disposal of non-current assets

Profit

Profit/losses related to securities (B+E+F)

Credit related expenses

9/2023 9/2024 YoY

434

489

54

385

450

65

51

50

(1)

(3)

(12)

(8)

(14)

(21)

(6)

269

282

13

165

206

41

180

228

48

191

240

49

(1)

ー

1

166

206

39

16

41

24

(5)

2

8

4

1

(3)

ー

0

0

148

232

83

0

4

4

0

4

4

109

170

60

(4)

21

26

3

1

(2)

• Profit on interest

Profit on interest grew ¥6.5bn year-on- year due mainly to increases in interest and dividends on securities and interest on loans in the domestic sector.

  • Core net business profit Despite increases in general and administrative expenses (such as labor expenses), core net business profit grew ¥4.8bn year-on-yeardue to factors such as increased profit on interest.
  • Ordinary profit

Ordinary profit grew ¥8.3bn year-on- year due mainly to increases in core net business profit and gains related to stocks.

• Profit

Profit grew ¥6.0bn year-on-year to ¥17.0 bn.

Summary of 1H FY2024 Financial Results (The Nagano Bank, Non-consolidated)

7

◆ The Nagano Bank

(¥100mn)

Gross business profit (A)

Profit on interest

Profit on fees & commissions

Profit from other business transactions

Gains/losses related to bonds (B)

General & administrative expenses (C)

Actual net business profit (A-C)

Core net business profit (A-B-C)

Excl. gains/losses on cancellation of investment trusts

Transfer to general allowance for credit losses (D)

Net business profit (A-C-D)

Special

Gains/losses related to stocks (E)

Gains/losses on money held in trust (F)

profit/losses

Gains on reversal of allowance for credit losses

Disposal of NPLs

Ordinary profit

Extraordinary gains/losses

Profit

Profit/losses related to securities (B+E+F)

Credit related expenses

9/2023

9/2024

YoY

48

35

(12)

52

46

(6)

1

(0)

(2)

(5)

(9)

(4)

(6)

(9)

(2)

48

46

(2)

(0)

(10)

(9)

6

(0)

(7)

6

(3)

(10)

5

ー

(5)

(6)

(10)

(4)

7

13

6

(0)

(0)

(0)

37

0

(36)

ー

5

5

(36)

8

45

(64)

(0)

63

(113)

7

121

0

3

3

43

(4)

(47)

• Core net business profit

Core net business profit decreased ¥700mn year-on-year due to factors such as decreases in interest on loans and interest and dividends on securities.

• Ordinary profit

Despite the decrease in core net business profit, ordinary profit grew by ¥4.5bn year-on-year due to a decrease in credit related expenses caused by factors such as the integration of financing transactions with The Hachijuni Bank.

  • Extraordinary gains/losses Extraordinary gains grew ¥6.3bn year- on-yeardue to impairment losses on fixed assets from the unification of accounting standards following the business merger and the recording of reserves in preparation for integration in the previous year.
  • Profit

Profit grew ¥12.1bn year-on-year to ¥700mn.

Profit on Interest

8

  • Domestic sector: Increase of ¥5.3bn year-on-year mainly due to improved yields on loans and securities and an increase in the balance of securities.
  • International sector: Increase of ¥1.1bn year-on-year mainly due to an increase in the balance of loans and securities.
  • Profit on interest (¥100mn) 9/2023 9/2024 YoY

Domestic sector

342

396

53

Interest income

351

425

73

Interest on loans

201

218

17

Interest and dividends on securities

135

171

35

Funding costs

8

29

20

Interest on deposits

0

10

9

International sector

42

54

11

Interest income

203

237

33

Interest on loans

90

98

7

Interest and dividends on securities

106

131

25

Funding costs

161

183

22

Interest on deposits

21

18

(3)

◆ Yield

(%)

9/2023

9/2024

YoY

Domestic sector

Yield

0.59

0.72

0.13

Yield on loans

0.67

0.75

0.07

Yield on securities

1.33

1.48

0.14

Funding yield

0.01

0.05

0.03

Yield on deposits

0.00

0.02

0.02

International sector

Yield

4.85

4.80

(0.05)

Yield on loans

5.62

5.47

(0.14)

Yield on securities

4.44

4.41

(0.02)

Funding yield

3.93

3.76

(0.16)

Yield on deposits

3.87

3.62

(0.25)

Loans and Deposits

9

  • Although the balance of business and consumer loans increased, the total balance of loans decreased due to a decrease in loans to the central government.
  • The balance of deposits continued increasing steadily.

(Combined

◆ Average balance of loans

◆ Average balance of deposits

outstanding

balance)

(Combined

(¥100mn)

94,753

(¥100mn)

outstanding

85,199

(Nagano

9,534

balance)

82,677

82,758

65,949

80,963

Bank)

Outside

5,883

60,921

62,364

62,545

61,136

6,184

5,952

5,948

(Nagano

5,747

Nagano

Outside

32,007

33,549

33,650

32,196

Bank)

Nagano

In

76,724

76,809

79,316

85,218

(Hachijuni

60,201

Nagano 74,779

Bank)

(Hachijuni

In

Bank)

Nagano

28,914

28,815

28,895

28,940

3/2023

9/2023

3/2024

9/2024

9/2024

3/2023

9/2023

3/2024

9/2024

9/2024

YoY (%)

3/2023

9/2023

3/2024

9/2024

YoY (%)

3/2023

9/2023

3/2024

9/2024

All branches

4.83

2.86

2.66

(1.96)

All branches

3.90

2.01

2.21

3.05

Outside Nagano

8.71

5.74

5.13

(4.03)

Outside Nagano

0.37

(6.41)

(3.80)

(1.15)

In Nagano

0.84

(0.29)

(0.06)

0.43

In Nagano

4.20

2.72

2.71

3.37

Business Loans

10

  • The balance of both business loans and SME loans grew due to steady demand for capital investment and working capital. However, the number of borrowers decreased as interest-free, unsecured loans were repaid upon the expiration of their deferment periods.
  • Outstanding balance of business loans

(Combined outstanding balance)

(¥100mn)

40,082

37,404

36,881

36,659

2,678

(Nagano

Bank)

35,921

Outside

23,350

24,252

23,926

24,458

Nagano

37,404 (Hachijuni

Bank)

In

12,628

12,733

12,946

Nagano 12,570

  • Number of borrowers

29,078

28,630

28,420

28,327

Outside

3,762

3,738

3,767

3,741

Nagano

In

Nagano 25,316

24,892

24,653

24,586

3/2023 9/2023 3/2024 9/2024

  • Outstanding balance of business loans for SMEs*

(¥100mn)

Ratio of SME loans to total business loans

24,500

48.5%

25,000

24,000

47.1%

23,500

46.9%

49.0%

22,500

23,000

46.7%

22,000

21,500

21,000

20,500

47.0%

20,000

19,500

19,000

18,500

18,000

17,500

45.0%

17,000

16,500

16,000

15,500

15,000

43.0%

14,500

14,000

13,500

13,000

12,500

12,000

41.0%

11,500

11,000

10,500

10,000

9,500

17,447

17,238

17,203

17,642

39.0%

8,000

9,000

8,500

7,500

7,000

6,500

6,000

37.0%

5,500

5,000

4,500

4,000

3,500

3,000

35.0%

2,500

2,000

1,500

1,000

500

0

33.0%

3/2023

9/2023

3/2024

9/2024

3/2023

9/2023

3/2024

9/2024

9/2024

*Small and medium enterprises (excluding local governments

and public corporations) and sole proprietorships