Information Meeting The Year Ended March 2013

Transcription

1 Information Meeting The Year Ended March 213 June 7, 213 THE NANTO BANK, LTD

2 Table of Contents I. Financial Results for the Year Ended March 213 (FY212) Financial Results for FY Profit and Loss 2 2. Core Net Business Profit 3 3. Deposits 4 4. Loans 5 5. Securities 6 6. Disposal of Non-Performing Loans 7 7. Capital Adequacy Ratio 8 Business Forecast for FY213 9 II. Management Strategy Business Strategy for Osaka (1) 11 Business Strategy for Osaka (2) 12 Rationalization of the Branch Channel (Existing Sales Area) 13 Sales Force to Retail Customers 14 Business by Assets in Custody 15 Personal Loan 16 Promoting Relationship-based Local Banking 17 Implementation of the Solution Business Approach 18 Overseas Business Support 19 Focus on Growth Sectors 2 Effective Injection of Corporate Resources 21

3 表 紙 Ⅰ I. Financial Results for FY212 II. Management Strategy 1

4 Financial Results for FY Profit and Loss FY211 FY212 Y/Y change 1 Core gross business profit Interest income Fees and commissions Other operating income (*1) (.2) (.2) +. 5 Cost of derivative financial products Expenses Personnel expenses Non-personnel expenses Taxes Core net business profit Gains/Losses on bonds (JGBs, etc.) Net transfer to general provision for possible loan losses (1.4) Net business profit Non-recurrent gains/losses (5.3) (7.6) Gains/Losses on stocks (4.2) (1.5) Disposal of non-performing loans Reversal of bad debt reserve Bad debt recovered Ordinary income Extraordinary gains/losses (.4) (.4) Income before taxes Income taxes Net income Credit cost (*2) *1 Except gains/losses on bonds (JGBs, etc.) *2 (Net transfer to general provision for possible loan losses + Disposal of non-performing loans) (Reversal of reserves) (Bad debt recovered) <No.1 Core net business profit> Despite lower interest income, declines in expenses caused core net business profit to increase by.7 billion year on year to 12. billion. <Breakdown of interest income> FY211 <No.19 Ordinary income, No.23 Net income> Even with an increased in credit cost, factors like improve on securities caused ordinary income to increase by.7 billion year on year to 9.8 billion. Net income increased by 4.2 billion year on year to 7.5 billion due to a decrease in income taxes-deferred. <Breakdown of gains/losses on securities and credit cost> FY212 Y/Y change Interest income Interest on loans and deposits Interest on loans Interest on deposits Interest on market sector Interest on securities Interest on fund management Interest on fund procurement FY211 FY212 Y/Y change Gains/Losses on securities (1.) Gains/Losses on bonds (JGBs, etc.) Gains/Losses on stocks (4.2) (1.5) +2.7 Credit cost Net transfer to general provision for possible loan losses (1.4) -1.4 Disposal of non-performing loans Reversal of bad debt reserve Bad debt recovered

5 Financial Results for FY Core Net Business Profit Analysis of Change Factors in Core Net Business Profit. Profit increase factor Profit decrease factor 15. Core net business profit for FY ) Average balance of loans 2) Interest rate on loans 3) Average balance of deposits 4) Interest rate on deposits Lending/ deposit operations billion 1) Average balance of loans 2,779.5 billion (Y/Y change billion) 2) Interest rate on loans 1.48% (Y/Y change -.12pp) 3) Average balance of deposits 4,416.5 billion (Y/Y change billion) 4) Interest rate on deposits.7%(y/y change -.3pp) 5) Average balance of securities 1,788.7 billion (Y/Y change billion) 5) Average balance of securities 6) Yield on securities 7) Interest on fund management 8) Interest on fund procurement 9) Fees and commissions 1) Others 11) Expenses Market operations +.7 billion ) Yield on securities.98% (Y/Y change -.8pp) 7) Interest on fund management Y/Y change 8) Interest on fund procurement Y/Y change 9) Commissions on investment trust Y/Y change Commissions on life insurance Y/Y change -.5 billion -.51 billion +.1 billion -.2 billion 11) Expenses billion Personnel expenses Y/Y change +.16 billion Non-personnel expenses Y/Y change billion Core net business profit for FY

6 Financial Results for FY Deposits Balance of Deposits by Sector Deposits balance as of March 31, 213 stood at 4,432.1 billion, up billion year on year mainly due to a steady rise in personal deposits. Balance of Deposits by Prefecture Deposits for all prefectures rose year on year. Its balance for Nara Prefecture was 3,69.6 billion, which accounted for 81.4% of Nanto Bank s total as of March 31, ,5. 4, , , ,5. 4, , , , , , ,354. 3, ,69.6 March 31, 211 March 31, 212 March 31, 213 March 31, 211 March 31, 212 March 31, 213 Personal Corporate Government/Banks Nara Pref. Osaka Pref. incl. Hyogo Pref. Kyoto Pref. Others 4

7 Financial Results for FY Loans Balance of Loans by Sector Loans balance as of March 31, 213 rose by billion year on year to 2,99.6 billion. 3,. 2, , , Balance of Loans by Prefecture With outstanding loans of 1,489.8 billion, Nara Prefecture accounted for 51% of total loans. At billion, Osaka Prefecture accounted for 22% of the total. 3,. 2, , , , , ,489.8 March 31, 211 March 31, 212 March 31, 213 Personal loans Retail business loans Wholesale loans Loans for local governments March 31, 211 March 31, 212 March 31, 213 Nara Pref. Osaka Pref. incl. Hyogo Pref. Others 5

8 Financial Results for FY Securities 2,. 1, Balance of Securities Other securities Stocks (domestic and overseas) Foreign securities (excluding stocks) Other domestic bonds Local government bonds (domestic) Japanese government bonds (domestic) 1, , , Unrealized Gains/Losses of Securities Bonds Stocks Others Mar. 31, 21 Mar. 31, 211 Mar. 31, 212 Mar. 31, Bond Duration Yen-denominated bonds ,37.4 1,17. 1,3.8 (Year) Dollar, Euro-denominated bonds Total Mar. 31, 21 Mar. 31, 211 Mar. 31, 212 Mar. 31, Mar. 31, 21 Mar. 31, 211 Mar. 31, 212 Mar. 31, 213 * Book value basis (after deduction of unrealized gains/losses of securities) 6

9 Financial Results for FY Disposal of Non-Performing Loans Credit Cost Credit cost Credit cost ratio FY27 FY28 FY29 FY21 FY211 FY212 *Credit cost ratio = Credit cost / Average balance of loans (%) Total of credit cost Breakdown of Credit Cost Disposable of non-performing loans Bad debt recovered -4.4 Net transfer to general provision for possible loan losses FY27 FY28 FY29 FY21 FY211 FY Disposal of Non-Performing Loans by Region Loans Based on the Financial Reconstruction Law // Non-performing Loans Ratio Nara Pref Osaka Pref. and Hyogo Pref. Others Nara Pref. Osaka Pref. Others FY27 FY28 FY29 FY21 FY211 FY212 Total Bankrupt or de facto bankrupt Special attention Doubtful Non-performing loans ratio Mar. 31, 28 Mar. 31, 29 Mar. 31, 21 Mar. 31, 211 Mar. 31, 212 Mar. 31, (%) 6.. 7

10 Financial Results for FY Capital Adequacy Ratio Capital Adequacy Ratio 4. Capital Capital adequacy ratio Tier I Tier I ratio (%) 12. ( billion, %) Mar. 31, 211 Sep. 3, 211 Mar. 31, 212 Sep. 3, 212 Mar. 31, 213 Change from Mar. 31, 212 Change from Sep. 3, Tier I (Core capital) Preferred securities Tier II (Supplementary capital) General provision for possible loan losses Hybrid debt capital instruments Deductions Capital Risk weighted assets 1, ,84. 1, , , Loan risk 1, , , , , Stock risk Capital adequacy ratio (No.7 / No.8 1) Mar. 31, 211 Sep. 3, 211 Mar. 31, 212 Sep. 3, 212 Mar. 31, Tier I ratio (No.1 / No.8 1)

11 Business Forecast for FY213 FY212 FY213 Forecast Y/Y change 1 Core gross business profit Interest income Fees and commissions Other operating income (*1) (.2) Cost of derivative financial products Expenses Personnel expenses Non-personnel expenses Taxes Core net business profit Gains/Losses on bonds (JGBs, etc.) Net transfer to general provision for possible loan losses (1.4) Net business profit Non-recurrent gains/losses (7.6) (2.7) Gains/Losses on stocks (1.5) Disposal of non-performing loans Reversal of bad debt reserve 18 Bad debt recovered Ordinary income Extraordinary gains/losses (.4) (.) Income before taxes Income taxes Net income Credit cost (*2) <No.1 Core net business profit> Interest income is to decline by 2.4 billion year on year, however, with increased fees and commissions (by 6 million) and lower expenses (by 1. billion), core net business profit is expected to remain unchanged from the previous fiscal year at 12. billion. <Breakdown of real net interest income> FY212 FY213 Forecast Y/Y change Interest income Interest on loans and deposits Interest on loans Interest on deposits Interest on market sector Interest on securities Interest on fund management Interest on fund procurement <No. 23 Net income> Lower gains on securities is anticipated to reduce net income by 1.9 billion year on year to 5.5 billion. <Breakdown of gains/losses on securities and credit cost> FY212 FY213 Forecast Y/Y change Gains/Losses on securities Gains/Losses on bonds (JGBs, etc.) Gains/Losses on stocks (1.5) Credit cost Net transfer to general provision for possible loan losses (1.4) Disposal of non-performing loans Bad debt recovered *1 Except gains/losses on bonds (JGBs, etc.) *2 (Net transfer to general provision for possible loan losses + Disposal of non-performing loans) (Reversal of reserves) (Bad debt recovered) 9

12 I. Financial Results for FY212 II. Management Strategy 1

13 Business Strategy for Osaka (1) The Market Situation in Osaka Megabank RB Second Association of RB Trust bank 4, 37, , , , , ,59.1 Hyogo 1 branch C Kyoto 15 branches 3, , ,25.5 3,55.8 3,34. 2, , , ,85.6 2,92.1 2, ,994.7 B 9,75.3 9,755. 9, , ,79.5 1, ,117. 2, , , , ,722.7 Eiwa Wakaeiwata Nara 92 branches 1, 9/21 3/211 9/211 3/212 9/212 3/213 Tezukayama 7. ( billion ) Nanto Bank's Lending Balance Nanto Bank's share in Osaka % A Focus Resources on Priority Strategic Areas % 1.51% % % % 1.75% 9/21 3/211 9/211 3/212 9/212 3/213 <June 213> The number of branches in Wakayama City increased from 1 to 2 1.4% Osaka 16 branches Wakayama 8 branches Build a dense branch network aiming for the establishment of the geographically broadbased business foundation (Branch setting in the most recent one year period) Jul. 212 Eiwa Branch / Wakaeiwata Branch Apr. 213 Tezukayama Branch (relocated in Oct. 213) (Current development (installation in Apr. 213) A: Sakai-shi southern area Sakai Minami Corporate Business Promotion Team B: Osaka-shi northeast area Joto Corporate Business Office C: Hokusetsu area Hokusetsu Corporate Business Office Increase the number of branches in Osaka Pref. to 2 or more during the current medium-term management plan period. 11

14 Business Strategy for Osaka (2) Loan Balance in Osaka Pref. More Staff Assigned in Osaka Pref. 8. Net general retail Net general wholesale Loans for local government The loan balance for Osaka Pref. as of March 31, 213 had risen to billion, double the figure as of March 31, (People) 35 Aggressive increase of the staff in to Osaka Pref. April 213: 31 (up 188 from March 2) 31 Retail lending as a percentage of the total 35.1% Mar. 21 Mar. 211 Mar. 212 Sep. 212 Mar. 213 Retail lending as a percentage of the total 67.1% Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar. Mar Apr. 213 Outstanding Loans of New Branches Reinforce Relations with Corporate Customers 22. Lending balance largely increased among eight retail branches opened since FY22. * 4 branches 6 branches 8 branches Strengthen the relations with corporate customers by establishing a NANTO 23.3 Relationship Meeting at each branch in Osaka Pref. for the purpose of intersector coordination and exchange among our corporate customers ( million) 11, 94,161 Total deposit and loan balance with corporate customers who participate the Relationship Meeting 97,952 1,4 1 branch 1.5 Mar. 23 Mar. 24 Mar. 25 Mar. 26 Mar. 27 Mar. 28 Mar. 29 Mar. 21 Mar. 211 Mar. 212 Sep. 212 Mar , Mar. 211 Mar. 212 Mar. 213 *New retail branches opened since FY22: Osaka-Higashi, Daitoh, Osaka-Kita, Sakai, Shin-Osaka, Amagasaki, Eiwa, Wakaeiwata. 12

15 Rationalization of the Branch Channel (Existing Sales Area) Rationalized the operation of 6 branches to sub-branch operations in May-June 213, recognizing the need for rationalizing the operation and staff allocation of branches according to market characteristics in order to strengthen cost competitiveness and sales capability. Shifting branch office from leasing to own property. ATMs are installed or abolished in a more flexible manner. Branch Network of the Bank (An excerpt) Osaka Pref. Kyoto Pref. Mie Pref. A Branch B Branch Nara Pref. (Residential area) Change to sub-branch operations (Concentration of business offices, plants, residences, apartments, etc.) Branches are rationalized to sub-branch operations in case their business market volume and business loan balance are small Wakayama Pref. A Branch Sales staff Loan officer Front office staff A Branch Sales staff Loan officer Front office staff Further cost reduction Aim to cut cost further in FY213 and beyond by converting more branches to sub-branches and using the bank agency system. Shift branch office spaces from leasing to own property. ATMs will be installed or abolished in a more flexible manner. B Branch Sales staff Loan officer Consolidation of business loan customers Consolidation of sales staff and loan officers Front office staff B Sub-branch of A Branch Front office staff <Effect> Reduced cost resulting from rationalization Reallocation of staff to more profitable areas 13

16 Sales Force to Retail Customers Sales System CUSTOMERS NANTO BANK Retail Banking Type Very affluent Affluent (Including clients with real-estate loans) Middle Mass Housing related company Needs Estate and business succession consultation Various asset management needs Asset formation tailored to different lifestyles Other services Offer regional information Build up a win-win relationship Career-oriented staff Branch Manager/Officers Corporate Business Promotion Staff Regional Promoter Branch Manager/Officers Regional Promoter Regional Promoter Branch Channels Specialized Specific staff Retail sales staff Over the counter Marketing Support System WIN Headquarters Business Channels Nara Corporate Business ASIA Business Support Corporate Solution Venture Business Support Corporate Finance Support L-PLAZA Financial Advisory (FA) Offices Call center Sales Network Hyogo 1 branch Kyoto 15 branches Nara 92 branches Mie 3 branches L-PLAZA Housing Loan Centers and Life Consultation Office have been integrated as L-PLAZAs since April 211 to strengthen the consulting services for personal loans and assets in custody (open also on Saturdays and Sundays). 7 locations in Nara Prefecture and 4 locations outside of Nara Prefecture Financial Advisory (FA) Offices Branches L-PLAZA Osaka 16 branches (FA) Offices Financial Advisory Offices currently includes 17 staff with highly specialized financial knowledge (three locations in Nara Prefecture). They respond to the various needs of customers by providing consultation for asset management, inheritance, business succession and effective use of real estate. Call Center Wakayama 7branches About 37, ATM in convenience stores in Japan Actively respond to customer needs in coordination with branches by providing information about sales products and services through direct mails and telephone calls. Retail Sales Staff The retail sales staff currently includes talented 8 female staffs with significant experience and financial knowledge to provide attentive services. 14

17 Business by Assets in Custody CUSTOMERS Financial Products Sales System Very affluent Affluent Middle/Mass Savings Balance per Household by Prefectural Capital Main financial products Channels 7. Yen-denominated deposit / public debt securities Foreign currency deposit, investment trust, personal pension insurance Foreign bond, Single premium whole-life medical and nursing insurance, Single premium whole-life insurance Corporate bonds, publicly offered structured bonds Privately placed structured bonds <Branch> Branch manager <Headquarters> > Officer FA Offices Sales by Assets in Custody Commissions Sales of securities Sales of insurance Sales of investment trust Products sold by FA Offices Sales staff (specialized staff), Front office staff H FY29 2H FY29 1H FY21 2H FY21 1H FY211 2H FY211 1H FY212 2H FY Tsu-shi Maebashi-shi Shizuoka-shi Tokyo 23 wards Kyoto-shi Otsu-shi Takamatsu-shi Nara-shi Gifu-shi Sales by FA Office Other Life insurance Investment trusts Securities Average number of FA specialists ,66 19,15 19,3 18,95 19, ,2 21,98 21, , th place in terms of savings balance per household National average 16,18 15, 25, ( thousand) (Ministry of Internal Affairs and Communications ) H FY29 2H FY29 1H FY21 2H FY21 1H FY211 2H FY211 1H FY212 2H FY212 (People)

18 Personal Loan 1,. Personal Loan Balance by Prefecture Nara Pref. Osaka Pref. (incl. Hyogo Pref.) Others (Thousand of people) 1,5 Population and Households in Nara Pref. Population Households (Thousand of households) 6 1,425 1,419 1,414 1,411 1,46 1, Mar. 212 Sep. 212 Mar. 213 Mar. 214 (Plan) 1, Mar. 27 Mar. 28 Mar. 29 Mar. 21 Mar. 211 Mar Composition of Housing Loans Actually Executed by Rating System 1% Low 19.36% A~C D~E F~G 3.15% 41.67% Housing Loan Delinquency Housing Loan (with Nanto credit guarantees) Delinquencies / Delinquency Rate *Based on number of loans (Cases) 延 滞 率 はリーマンショック (%) 1.11 The delinquency rate returned 6 以 前 の 水 準 へ 1.2 to the pre-lehman Shock levels Ranking 5.91% Rank A-C increased approx. 25 points 55.18% High 29.73% % 1H FY27 2H FY27 1H FY28 2H FY28 1H FY29 2H FY29 1H FY21 2H FY21 1H FY211 2H FY211 1H FY212 2H FY212 2H FY27 1H FY28 2H FY28 1H FY29 2H FY29 1H FY21 2H FY21 1H FY211 2H FY211 1H FY212 2H FY

19 Promoting Relationship-based Local Banking Support System Management improvement Overseas business New business development Customers Market expansion Business succession Business rehabilitation Inheritance Branch Solution!! Specialized sections at the headquarters Corporate Solution ASIA Business Support Group Venture Business Support Office Corporate Finance Support Office Business succession support Provision of information on entering overseas markets Venture business loans Support for making the turnaround plans Business matching M&A advisory services Support for growth areas, etc. Help in local fund procurement Conduct of overseas observation tours Overseas business matching, etc. Investment through investment funds IPO support, etc. Effective use of Business Support Council for SME Finance support in cooperation with public organizations, etc. 17

20 Implementation of the Solution Business Approach Business Matching Business Matching Navigator Intermediary function for effective, efficient matchmaking Client-A Branch-A Intermediation of the matching between individual companies by the specialist staff at the headquarters Accumulation of data on potential suitor companies Collection of information on companies and their needs Number of Matching Requests to Business Matching Navigator 16 (Case) Number of matching requests (Case) Number of referrals 187 Department stores/ Supermarkets Manufacturing B2B Network Value-creation Div. Development Navigator WIN BB site JBA s e-business market 99 Industrygovernmentacademia collaboration Branch-B Client-B Business Fair < Venture Business Matching Fair 212 > November companies/organizations of participants 82 negotiation cases New initiative: Establishment of Overseas Expansion Support Plaza to provide face-to-face consultation on overseas matters < Consumer Monitor Fair > June 212, March companies/organizations of participants An event at which housewives, female office workers, and other female monitors test and sample the products of exhibitors (companies) and provide them with feedback on what to improve from a consumer s perspective < Traditional Cool Fair > September companies/organizations of participants Matching between the companies manufacturing traditional goods or new products combining traditional goods with revolutionary new design technology and the companies that see value in such products Other matching sites FY211 Special Recognition for Relationship-based Local Banking Lifecycle Start-up, new business development Further development in the growth stage Management improvement, Business rehabilitation and business domain changes Business succession Special recognition for relationship-based local banking FY212 Subject of recognition Business Matching Sales mediation (purchase and sales needs) International development support Number of customers who developed a management improvement plan, monitoring status, Number of customers who developed a business plan M&A Business succession consultation Recognition system Recognition is given in two sections: the solution section and the corporation support section Solution section (Promotion area) FY211 Company support section FY212 (Management area) 18

21 Overseas Business Support Customers Japan External Trade Organization (JETRO) etc. Nanto Economic Research Institute Support Value-creation Division ASIA Business Support Group Representative offices in Shanghai and Hong Kong Alliance Mizuho Corporate Bank, Ltd. Nippon Export and Investment Insurance Foreign banks Leasing company Consulting companies Non-life insurance companies (Case) <Number of Cases of Support by the Bank> Total cases of support Cases of support for local representative offices (Case) 45 <Network in Asia> 1H FY21 2H FY21 1H FY211 2H FY211 1H FY212 2H FY212 Asia 26% U.S., Europe, etc. 7% China 67% Shanghai Rep. Office Hong Kong Rep. Office Overseas Business by Nanto Bank Customers Alliance <Partnership with foreign banks> (Areas covered )) Bangkok Bank Thai Industrial and Commercial Bank of of China Limited China Bank of of China China ANZ Bank Vietnam Bank Negara Indonesia Indonesia State Bank of of India India Standard Chartered Bank Whole Asia (US$ million) 4 <Trade Volume with Local Corporate Customers> Export Import FY21 FY211 FY212 19

22 Focus on Growth Sectors New customers Clinics Medical and Nursing Business Promotion System Medical institutions Existing customers Value-creation Div. Support In Nara Pref. Hospital Branch Outside Nara Pref. Promotion of cooperation Alliance Loan Balance in the Environmental Sector Elderly nursing facilities Facilities Covered by Public Aid Providing Long-Term Care to the Elderly Long-Term Care Health Facilities Group home Elderly nursing homes <External organizations> Business affiliates Our Group companies 1. Loan Balance in the Medical and Long-term Care Sector Hospital and clinics Social security and welfare services and nursing homes End-Mar. 21 End-Mar. 211 End-Mar. 212 End-Mar. 213 Breakdown of Loans to the Medical and Long-term Care Sector 15. Balance Number of cases (Case) 25 Action item of FY212 = 6.1billion End-Mar. 211 End-Mar. 212 End-Mar. 213 * The figures in the graph above represent the balance of loans provided under the BOJ growth support fund (loans to the environmental and energy sectors) 2

23 Effective Injection of Corporate Resources Change in Expenses Non-personnel Expenses ( billion) 51. Expenses 75.6 OHR 78. BEST VALUE NANTO (%) IT investment-related costs Other non-personnel expenses FY28 (Result) FY29 (Result) FY21 (Result) FY211 (Result) FY212 (Result) FY213 (Forecast) 6. FY21 FY211 FY212 FY213 (Plan) Change in Personnel Measures to Streamline Operations 2,9 (People) 2,83 2,755 2,696 Expense Reduction Project (since November 21) Cost reduction through business process reengineering and prioritization. Reduction of office related maintenance expense, contractor fees, and security service fees. 2,5 FY211 (Result) FY212 (Result) FY213 (Forecast) Branch Operations Staff Rationalization Project (since October 212) More accurate calculation of the standard staff level for each branch based on administrative work volume data. We will rationalize the administrative staff such as the service counter and loan staff and strengthen the sales force. 21

24 In this material, we refer to the future performance of the bank. However, please be aware that these contents do not guarantee our future performance and it may change due to the unexpected risks and uncertainties in the operating environment. [Contact, if any:] THE NANTO BANK, LTD. General Planning Division IR Group TEL: FAX: URL: