Shinsei IR Day. Shopping Credit, Credit Cards, Settlement and Loan Businesses. APLUS FINANCIAL Co., Ltd February, 2017

Transcription

1 Shinsei IR Day Shopping Credit, Credit Cards, Settlement and Loan Businesses APLUS FINANCIAL Co., Ltd February, 2017

2 1. Business Strategy Vision within the 3 rd MTMP APLUS Group in the Strategy Map High Latent Needs, Market Growth Potential Mid Growth Areas Stable Revenue Areas Strategic Initiative Areas Curtailment Areas Loans to Overseas Nonfinancial Corporates Overseas Expansion Support Shopping Credit Credit Cards SME/Small Business Solutions Corporate Market Solutions Settlement Unsecured Loans Structured Finance Collaboration with regional financial institutions Business Succession Finance Asset Management Consulting Excluding basic banking services such as funding, loans, etc. Loans to local governments Credit Trading Low Mid High Shinsei Bank Group Expertise/Differentiation 2

3 1. Business Strategy Vision within the 3 rd MTMP APLUS Group in the Strategy Map High Latent Needs, Market Growth Potential Mid Growth Areas Stable Revenue Areas Strategic Initiative Areas Curtailment Areas APLUS Group Business Areas Shopping Credit Credit Cards SME/Small Business Solutions Settlement Excluding basic banking services such as funding, loans, etc. Low Mid High Shinsei Bank Group Expertise/Differentiation 3

4 2. APLUS Group Businesses Introduction of Key Businesses The APLUS Group primarily engages in 4 key businesses in the provision of credit facilities (personal credit) and related business areas. The APLUS Group is comprised of APLUS Co., Ltd. (general credit company), Zen-nichi Shinpan Co., Ltd., which operates primarily in the Chugoku and Shikoku regions (installment credit) and Alfa Servicer Co., Ltd. (servicing). Gross Revenue Components (FY2016 3Q) Major Products /Services Shopping Credit Automobile credit (new/used automobiles) Shopping credit (living/non-auto) Credit Card Shopping Partner credit cards (T Card Plus/Luxury Card, etc) Proper credit cards (Shinsei APLUS Card, etc) Loans Housing related loans/credit card cashing/loan card Settlements Other FY2016_3Q Total Gross Revenue JPY 53.0 billion 0% 10% 20% 30% 40% Settlement service for automatic withdrawal, payment at convenience stores, monthly rent payment Subsidiaries i.e. Alfa Servicer 4

5 2. APLUS Group Businesses APLUS Group Medium-Term Management Plan Medium- to Long-Term Vision Basic Policy Through group integration, providing the innovative financial service, seeking the realization of lean operations and outstanding productivity and efficiency Increase corporate value by realizing industry-leading performance in every area Acceleration of growth through the pursuit of higher profitability 1 Expansion of shopping credit and credit card businesses which emphasize customer convenience, profitability and efficiency Enhancement of backup frameworks which support growth 1 Operation Framework 2 Further expansion of customer base by leveraging T point functions 2 Risk Management Framework Outline 3 Providing settlement solutions, primarily those associated with the EC market 4 Engage in meticulous business efforts to meet financial needs in the housing market 5 Realization of business collaboration and promotion of new business through unified Group management 3 4 Information Technology Framework Compliance and Human Resources Framework Financial target: ROA1.0%~1.2% 5

6 2. APLUS Group Business Gross Revenue of Key Businesses After loan business gross revenue bottomed out in FY2015, gross revenue of all the key businesses expected to increase. Gross Revenue of Key 4 Businesses 70.0 Current MTMP Term FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Shopping Credit Credit Card Shopping Settlement Loan Expansion of IT infrastructure Development of credit card system Construction of system supporting business strategy Operations Re-engineering Collections * Figures in the chart above do not match consolidated figures due to the exclusion of Zen-nichi Shinpan. 6

7 2. APLUS Group Business Challenges towards FY2017 <Acceleration of growth through the pursuit of higher profitability> Shopping credit Differentiation by T points and e-order Invite more credit card applications at the time of shopping credit application Credit card shopping Lead customers to apply via smart phone Enlarge new card issuances in collaboration with partnered companies Settlements Promote an increase in member merchants accepting WeChat Pay, GAICA and e-gate Loans Capture housing related needs, and continue engaging in meticulous business efforts <Enhancement of backup frameworks which support growth> Integration of operation and collection centers Expansion of IT infrastructure Complete shift to open system Enhancement of the credit card infrastructure through compliance with the PCDISS security standard Re-organization of subsidiaries Integration of Zen-nichi Shinpan Expansion of Alfa Servicer business Through group integration, providing the innovative financial service, seeking the realization of lean operations, outstanding productivity and efficiency 7

8 3. Market and Business Shopping Credit Market Market scale contraction resulting from the effects of regulatory changes has bottomed out. The market is exhibiting signs of gradual expansion for the past several years as a result of new market development, etc. While the automobile sector accounts for more than 60% of the market on a value basis, competition is intensifying and differentiation is challenging. Shopping Credit Market (Volume) Market Growth Rate (Y-O-Y) 10, % 13.1% 8, % 6.8% 6, % 0.0% -0.9% 1.5% 3.3% 4, % 2, % -13.0% -9.6% % *(Data Source) Japanese Credit Statistics, Japan Consumer Credit Association * Method of calculation changed in

9 3. Market and Business Shopping Credit Business Develop and introduce T point shopping credit to differentiate from aggressive competitors. Achieve rapid credit screening and operational efficiency through expansion of the online application channel e-order introduced in FY2012. Improve profitability through focus on shopping credit (non-auto). While volume has remained flat, gross revenue on a growth trend. Volume Gross Revenue, T Point Shopping Credit Volume Growth Rate % % % 300% 200% Shopping Credit (non-auto) Automobile Credit 5 0 Automobile Credit Shopping Credit (non-auto) T Point Shopping Credit Volume (FY2012=100%) 100% 0% * Automobile Credit volume decreased due to dissolution of alliance with BMW in October

10 3. Market and Business Credit Card Shopping Market Anticipating high growth in the market due to: Credit Card Shopping Market (Volume) Continuous growth in the credit card shopping market due to the expansion of the EC market and the undertaking of utility payments. 60,000 50, % 16.0% 14.0% 40, % Market (value) increased 7.7% Y-O-Y in 2015 and approaches the 50 trillion yen level. 30, % 8.0% Infrastructure development has been further advanced by movement toward the cashless society proposed in the Japan Revitalization Strategy. 20,000 10, % 4.0% 2.0% 0.0% Credit Card Shopping Volume Card Payment Ratio (%) * Card Payment Ratio=Market scale of Credit Card Shopping/Private Final Consumption * (Data Source) Market scale of Credit Card Shopping: Japanese Credit Statistics, Japan Consumer Credit Association * (Data Source) Private Final Consumption: National Accounts of Japan, Cabinet Office * Method of calculation changed in

11 3. Market and Business Credit Card Shopping Business While a slight decline has been observed in the total volume of the credit card shopping business, due in part to the effects of the decline in prices of high profit margin gasoline, the expansion of the revolving credit volume has resulted in increased revenues. Revolving credit volume is increased due to the introduction of a default revolving credit setting of new credit cards and outbound marketing. Volume expected to bottomed out as a result of increased new card issuances in cooperation with partnered companies and by promoting credit card use through campaigns, etc. Volume Gross Revenue, Revolving Balance Growth Rate % 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% Gross Revenue Revolving Balance Rate(FY2010=100%) 11

12 3. Market and Business Settlements Market EC Market EC market has continued to grow due to proliferation of smart phones. Settlement methods in EC market include credit card, carrier settlements and e-money. APLUS is engaged in the EC market by providing various settlement means such as credit cards, convenience store payment collections and settlements of automated account transfers (autonet) either individually or as a comprehensive package. 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, % 4.8% 4.5% 4.4% 4.0% 3.8% 3.4% 3.5% 3.2% 3.0% 2.8% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% EC Market Scale (billion) EC Ratio (%) * EC Ratio (%) : EC/All commercial transactions in product sales area * (Data Source) FY2015 E-Commerce Market Survey, Ministry of Economy, Trade and Industry 12

13 3. Market and Business Settlement Business In addition to the existing settlement service (e.g. auto-net), APLUS is developing new settlement services, developing merchant networks for GAICA (foreign currency prepaid cards) and of WeChat Pay (China-based mobile settlement service). Volume Operating Revenue 1,400 1,200 1,

14 3. Market and Business Loan Market Housing Loan New Lending New lending of housing loan remains largely stable despite the effects of the consumption tax rate hike. Housing loan market is expected to shrink due to a decline in new housing starts. 25,000 20,000 15,000 APLUS engages in the market through 10,000 the provision of My Home Plan, loans for initial expenses related to the purchases of new homes and 5,000 investment loans for high quality second hand apartments, primarily located in the Tokyo area. 0 * (Data Source) Housing Loan New Lending, Japan Housing Finance Agency 14

15 3. Market and Business Loan Business Following a portfolio review, housing loan volume has significantly increased and loan revenue has returned to growth in FY2015 (Y-O-Y). APLUS seeks to continue engaging in meticulous business efforts to capture housing related needs. Volume Gross Revenue Housing Loan Loan Card Card Cashing Housing Loan Loan Card Card Cashing

16 Disclaimer The preceding description of Shinsei Bank Group s Medium-Term Management Plan contains forward-looking statements regarding the intent, belief and current expectations of our management with respect to our financial condition and future results of operations. These statements reflect our current views with respect to future events that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may vary materially from those we currently anticipate. Potential risks include those described in our annual securities report filed with the Kanto Local Finance Bureau, and you are cautioned not to place undue reliance on forward-looking statements. Unless otherwise noted, the financial data contained in these materials are presented under Japanese GAAP. The Company disclaims any obligation to update or to announce any revision to forward-looking statements to reflect future events or developments. Unless otherwise specified, all the financials are shown on a consolidated basis. Information concerning financial institutions other than the Company and its subsidiaries are based on publicly available information. These materials do not constitute an invitation or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever. 16