ir presentation - the 77 bank · • expansion of counters dedicated to insurance (jun. 2014,...
TRANSCRIPT
Materials were prepared for the Bank’s presentation of its results for the fiscal year ended March 31, 2015 held on June 2, 2015.
IR Presentation Results for Fiscal Year Ended March 31, 2015
June 2, 2015
1. Financial Results for FY2015 2. Outline of the Medium-term Management Plan
ContentsContents
3. Projected Performance
Summary of profits and losses 1
Interest income 2
Loans and bills discounted 3
Deposits and certificates of deposits 4
Securities 5
Assets in custody 6
Credit-related expenses/capital adequacy ratio/ credits disclosed under the Financial Reconstruction Law 7
Summary of the previous Medium-term Management Plan “POWER for the Future” 8
Business environment and management issues 9
Outline of the Medium-term Management Plan “VALUE UP: Challenge Value Creation” 10
Basic objectives and long-term vision 11
Priorities 1: Strengthen earthquake recovery support 12
Priorities 2: Reinforce the earnings base 14
Priorities 3: Enhance the value of the region 17
Priorities 4: Smooth migration to and utilization of MEJAR 20
<For reference> Numerical targets 21
Projected performance for FY2016 23
Summary of profits and lossesSummary of profits and losses
1
<Core operating income>
Interest income was basically unchanged YoY owing to the increase in interest and dividends on securities, but core operating income declined, mainly due to the higher IT expenses following the migration to MEJAR.
Both ordinary and net incomes rose, mainly due to the decline in credit-related expenses and gains on money held in trust, mainly due to the rise in stock prices, etc.
<Ordinary income/Net income>
Summary of profits and losses(Non-consolidated) FY2014 FY2015
YoY changeIncrease/decrease
Rate of change %
Gross operating income 77.9 80.1 2.2 2.9[Core gross operating income] [ 80.3 ] [ 80.3 ] 0.0 ] [ 0.0 ]
Interest income 70.0 70.2 0.2 0.2Fees and commissions 10.2 10.3 0.1 1.1Other operating income (2.3) (0.4) 1.9
Gains (losses) on bonds (2.4) (0.2) 2.2Expenses 55.3 57.1 1.8 3.2Operating income before provision of general reserve for possible loan losses 22.6 23.0 0.4 1.9
[Core operating income] [ 25.0 ] [ 23.2 ] [ (1.8) ] [ (7.0) ]Provision of general reserve for possible loan losses — — —
Operating income 22.6 23.0 0.4 1.9Special income and losses 2.9 7.5 4.6
Bad debt disposals (-) 1.3 0.8 (0.5)Gains on reversal of reserve for possible loan loss 2.0 4.6 2.6
Gains (losses) on stocks 0.6 1.0 0.4Gains (losses) on investments in money held in trust 1.2 2.9 1.7
Ordinary income 25.5 30.5 5.0 19.6Extraordinary income 0.2 — (0.2)Extraordinary loss 0.1 0.2 0.1Income taxes (incl. deferred taxes) 10.9 13.4 2.5Net income 14.7 16.9 2.2 14.4
Credit-related expenses (0.7) (3.8) (3.1)
(JPY bn, %)
1. 1. Financial Results for FY2015Financial Results for FY2015
(4.1)
(0.1)
+0.2+1.5
(0.4)
+2.7
+0.4
<Change factors in interest income>
FY2014Interest income70.0
Factors in loans (1.4)
Other
FY2015Interest income70.2
(JPY bn)
Average balances
Yield
Factors in securities +1.9
Yield
<Reference> Trends of market interest rates
<FY2015 summary>
Interest incomeInterest income
2
Factors in deposits+0.1
Interest income was basically unchanged YoY, as the increase in interest and dividends on securities offset the decrease in interest on loans and bills discounted due to lower yields.
FY2014 FY2015YoY change
Interest income 70.0 70.2 0.2Investment income 73.5 73.9 0.4(Interest on loans and bills discounted) 46.8 45.4 (1.4)
(Interest and dividends on securities) 26.3 28.2 1.9
Fund procurement costs 3.5 3.7 0.2
(Interest on deposits) 3.0 2.9 (0.1)
FY2016(Plan) YoY change
69.5 (0.7)
(JPY bn)
(JPY bn)
(%)
* Figures in YoY change (increase/decrease) show percentage points.
Major accounts (average balances) FY2014 FY2015
YoY changeLoans and bills discounted 3,835.4 4,054.5 219.1Securities 3,554.4 3,616.9 62.5Deposits and certificates of deposits 7,431.2 7,544.6 113.4
Interest rates/ Interest margin FY2014 FY2015
YoY change
Loans and bills discounted interest rate 1.21 1.11 (0.10)
Securities interest rate 0.73 0.78 0.05Interest rate on deposits 0.04 0.03 (0.01)Interest rate spread 0.90 0.88 (0.02)Net interest margin 0.17 0.13 (0.04)
FY2014 FY2015 YoY changeJPY TIBOR (3 months) 0.22% 0.20% (0.02) %5-year JGBs 0.24% 0.13% (0.11) %10-year JGBs 0.69% 0.48% (0.21) %
1. 1. Financial Results for FY2015Financial Results for FY2015
Average balances Yield
Average balances
2,070.8 2,281.0 2,442.5 2,580.1
759.4 755.8 810.9 865.8675.6734.0
754.4 781.8
0.0
1,000.0
2,000.0
3,000.0
4,000.0
H23/3 H25/3 H26/3 H27/3
Corporate Retail Public, etc.
3,770.84,007.8
<Loans and bills discounted balances>(JPY bn)
<FY2015 summary>
3,505.8
4,227.7
Loans and bills discountedLoans and bills discounted
3
<Earthquake disaster-related loan performance>
Cumulative total of earthquake disaster-related loans
(after the earthquake to end-Mar. 2015)19,981 cases / JPY 498.2 billion
Mar. 2011 Mar. 2013 Mar. 2014 Mar. 2015(Immediately after the earthquake)
Average balance of loans and bills discounted increased 5.7% YoY, as housing loans and loans to SMEs and loans to large corporations each increased.
Loans and bills discounted
(average balances)FY2014 FY2015
YoY change
Loans and bills discounted 3,835.4 4,054.5 5.7Corporate loans 2,372.6 2,485.2 4.7[Excl. spread loans] 1,227.0 1,266.9 3.2[Spread loans] 1,145.6 1,218.3 6.3Retail loans 774.9 833.2 7.5[Housing loans] 734.5 794.3 8.1Loans for local governments 687.9 736.1 7.0
FY2016 (Plan) YoY change
4,117.5 1.5
(JPY bn, %)
Operating Capital expenditure Total
Cases 5,265 1,870 7,135
Amount 205.6 102.7 308.3
Unsecured Housing Total
Cases 3,790 9,056 12,846
Amount 6.6 183.3 189.9
(cases, JPY bn)
(cases, JPY bn)
1. 1. Financial Results for FY2015Financial Results for FY2015
Corporate
Retail
3,778.04,363.6 4,454.0 4,555.9
1,378.71,550.9 1,602.9 1,587.3479.7
1,835.6 1,819.6 1,711.7
0.0
2,000.0
4,000.0
6,000.0
8,000.0
H23/3 H25/3 H26/3 H27/3
Retail Corporate Public, etc.
<Deposits and certificates of deposits balances>(JPY bn)
<Background of an increase in deposits after the earthquake>
<FY2015 summary>
Deposits and certificates of depositsDeposits and certificates of deposits
Approx. JPY 560.0 billion
Insurance payouts, etc. (Miyagi Pref. portion)
• Earthquake insurance payouts ......(Source: The General Insurance Association of Japan HP)
• Relief funds ......................................(Source: Japanese Red Cross Society HP)
Recovery grants from the government (Miyagi Pref. portion) (as of end-Mar. 2015)
• Recovery grants ............................. (Source: Reconstruction Agency HP)
• Special local allocation tax grants for recovery from earthquake disaster ........... (Source: Ministry of Internal Affairs and Communications HP)
Approx. JPY 1,500.0 billion
Approx. JPY 1,070.0 billion
Approx. JPY 182.0 billion
4
Mar. 2011 Mar. 2013 Mar. 2014 Mar. 2015(Immediately after the earthquake)
7,854.97,876.57,750.1
5,636.4
• Average balance of deposits rose 1.5% YoY, as retail deposits and corporate deposits increased.
• Term-end balance decreased 0.2% YoY, mainly due to the decline in public deposits, etc.
(as of May 31, 2012)
(as of Jul. 7, 2014)
Deposits and certificates of deposits
(average balances)FY2014 FY2015
YoY change
Deposits and certificates of deposits 7,431.2 7,544.6 1.5
Retail deposits 4,429.8 4,517.9 1.9Corporate deposits 1,561.8 1,594.9 2.1Public deposits 1,415.5 1,407.8 (0.5)
FY2016 (Plan) YoY change7,327.0 (2.8)
(JPY bn, %)
1. 1. Financial Results for FY2015Financial Results for FY2015
3.47 3.473.27 3.13
2.70
0.98 0.80 0.58 0.53 0.47
0.0
1.0
2.0
3.0
0.0
1.0
2.0
3.0
4.0
Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015
Modified duration
Yields (%)
* Yen-dominated bonds other than investment trusts
<Yields and modified duration of yen-denominated bonds>
Excluding impact of increase in securities after the earthquake
<Balance of securities (based on market value)>
<Additional investment accompanying the significant increase in deposits following the earthquake>
2.84
0.57
SecuritiesSecurities
5
<FY2015 summary>
• Continued investments mainly in short- and medium-term public bonds in light of the decrease in public deposits and the interest rate risk.
• Increase in valuation gains on stocks and investment trusts, mainly due to the rise in stock prices, etc.
End-Mar. 2014 End-Mar. 2015Investment balance Approx. JPY 940.0 billion Approx. JPY 810.0 billion
Yield 0.30% 0.31%Modified duration 2.48 2.35
End-Mar. 2011 End-Mar. 2012 End-Mar. 2013 End-Mar. 2014 End-Mar. 2015Gains (losses)
from revaluation end-Mar. 2015
Change from end-Mar. 2014YoY change YoY change, %
Securities 2,118.0 2,849.4 3,402.9 3,716.5 3,683.6 (32.9) (0.9) % 183.6 69.0 Bonds 2,024.1 2,764.3 3,304.6 3,603.7 3,541.1 (62.6) (1.7) % 103.3 39.3 (Yen-denominated bonds) 1,780.9 2,552.6 2,966.0 3,177.0 3,036.4 (140.6) (4.4) % 39.1 (0.2)
National gov. bonds 864.8 1,577.1 1,993.1 2,152.4 2,003.3 (149.1) (6.9) % 22.5 (0.2)Floating-rate national gov. bonds 365.5 319.6 315.5 318.1 317.4 (0.7) (0.2) % 5.0 (0.7)
Local gov. bonds 107.9 82.2 87.9 76.5 75.6 (0.9) (1.2) % 0.9 0.3Corporate bonds 760.7 865.7 865.7 933.9 950.7 16.8 1.8% 15.7 (0.2)Others 290.7 239.3 357.9 440.9 511.5 70.6 16.0% 64.2 39.4
Investment trusts, etc. 125.1 129.2 190.3 214.6 274.7 60.1 28.0% 63.8 36.5 Foreign bonds 165.6 110.1 167.6 226.3 236.8 10.5 4.6% 0.4 2.9
Stocks 93.9 85.1 98.3 112.8 142.5 29.7 26.3% 80.3 29.7
(JPY bn)
1. 1. Financial Results for FY2015Financial Results for FY2015
195 139 242 234
944 847 770 758
684 741986 1,141
0
1,000
2,000
H23年度 H24年度 H25年度 H26年度
421.7 409.9330.3
91.199.1 91.7 100.2
385.0
149.3 188.6 224.3255.9
0.0
200.0
400.0
600.0
800.0
H23年度 H24年度 H25年度 H26年度
6
Assets in custodyAssets in custody
(JPY bn)
662.1
<Balance of assets in custody>
Strengthened sales of investment trusts and insurance Sales structure
• Cooperation between HQ money advisors and branch representatives, visiting customers together
• Expansion of counters dedicated to insurance (Jun. 2014, Opening of the 77 Nagamachi Minami Insurance Plaza)
<Current status of assets in custody>
Responding to NISA
Number. of tax-exempt accounts opened: 16,943
• Introduction of wrap funds (Jan. 2015, cultivating inexperienced investors)
• Obtaining resident cards on behalf of customers (heightened customer convenience)
Funds sold: 463 /approx. JPY 700 million
<Sales commissions of assets in custody>
Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015
<FY2015 summary>
Investment trusts Insurance Public bonds
697.6 701.0 686.4
(JPY mn)
1,823 1,7291,999
2,135
FY2012 FY2013 FY2014 FY2015
Expansion of product line-up
Fees and commissions increased due to the steady sales of investment trusts and insurance that offset the decline in sales of public bonds owing to lower yields.
Sales of assets in custody FY2014 FY2015
YoY changeTotal 185.4 180.7 (2.5)
Investment trusts 32.6 44.1 35.2Insurance 46.3 47.6 2.8Public bonds 106.5 89.0 (16.4)
(JPY bn, %)
1. 1. Financial Results for FY2015Financial Results for FY2015
Investment trusts Insurance Public bonds
56.9
8.8 (1.4) (0.7) (3.8)
1.64
0.24
(0.03) (0.01) (0.08)
(0.5)
0.0
0.5
1.0
1.5
2.0
(20.0)
0.0
20.0
40.0
60.0
80.0
FY2011 FY2012 FY2013 FY2014 FY2015
Credit-related expenses
Credit-related expense rate
29.0 39.9 38.9 32.5 31.8
56.5
96.7 77.1
73.4 74.7
27.3
37.6
28.1 28.8 18.3
3.16
4.71 3.77 3.31 2.91
-22
-20
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
0.0
40.0
80.0
120.0
160.0
200.0
240.0
280.0
Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015
Credit-related expenses Credits disclosed under the Financial Reconstruction Law
* The balance of credits disclosed under the Financial Reconstruction Law as of Mar. 2011 shown above indicates the balance before we carried out self-assessments in consideration of the effect of the earthquake.
(%)
Credit-related expenses and credit-related expense rate trends
Capital adequacy ratio
Capital adequacy ratio
Credits disclosed under the Financial Reconstruction Law
CreditCredit--related expenses/capital adequacy ratio/related expenses/capital adequacy ratio/ credits disclosed under the Financial Reconstruction Lawcredits disclosed under the Financial Reconstruction Law
Loans to bankrupt and quasi-bankrupt
Doubtful loans
Substandard loans
Ratio of credits disclosed under the Financial Reconstruction Law
(JPY bn)
(%)
7
* We are looking to discuss the subordinated loans (public funds) with the authorities around the end of June 2015 to discuss a repayment schedule.
(JPY bn)
112.8
174.2
144.0134.7
124.8End-Mar. 2014 End-Mar. 2015
Capital adequacy ratio (non-consolidated/ domestic standards) (a/c) 12.33 12.19
Capital (a) 359.6 373.8[Core capital: instruments and reserves] 359.6 373.8
[Subordinated loans] * (b) 20.0 20.0[Core capital: regulatory adjustments] — 0.0
Risk assets (c) 2,916.1 3,065.9(Ref.) Capital adequacy ratio [excluding subordinated loans] (a –
b) / c 11.64 11.53
(JPY bn, %)
1. 1. Financial Results for FY2015Financial Results for FY2015
471 498
468 583
Mar. 2012 Mar. 2015
15,482
17,074
323
675
FY2012 FY2015
8
Summary of the previous MediumSummary of the previous Medium--term Management Planterm Management Plan ““POWER for the FuturePOWER for the Future””
Outcome and assessment of priority measuresOutcome and assessment of priority measures
Support earthquake recovery and revitalize the regional economy
Strengthen loan and consulting capabilities
Further improve productivity
Continue to develop the financial services platform
Ability to build relationships with customers Ability to ascertain needs for funds Ability to enhance productivity Ability to solve problems
Number of customer visits, net number of business loan customers
Increase in the number of loan officers and sales representatives
Promoting business matching
939
Time creation through BPR at branches
• Over an average of 5 hours per branch per day • Trade fairs (after the earthquake to end-Mar. 2015)
Number of business matching contracts total
Approx. 3,000 casesLoan performance related to the business matching
Approx. JPY 41.2 billion
1,081(In thousand)
POWER (abilities) to be enhanced(Problems)• Decline in the share of loans in Miyagi Pref.
• Decline in yield on loans (FY2015: 1.11%) • Active attempts to identify problems and needs of customers
• More extensive use of the network inside and outside of the bank
ちから
Establishment of over1,000
+362+1,592
Earnings power (profitability) Proposal capabilities
Japan 20 meetings(668 customers attended)
Overseas 12 meetings(98 customers attended)
POWER (abilities) that has been acquired: (achievement)
Outcome and assessment of basic objectivesOutcome and assessment of basic objectives
Net number of business loan customers
Visits
7691,131
Mar. 2012 Mar. 2015
Loan officers Sales representatives
Basic targets FY2012 FY2013 FY2014 FY2015 vs. Basic targetsBalance of retail loans and bills discounted (at the end of FY2015) JPY 2,150 billion or more 2,093.3 2,138.3 2,261.3 2,410.3 Achieved
+260.3Balance of retail loans and bills discounted in Miyagi Pref. (at the end of FY2015)
JPY 2,000 billion or more 1,931.1 1,969.9 2,086.3 2,214.6 Achieved+214.6
Sales of investment trust, insurance, and public bond (total during Medium-term Management Plan)
JPY 450 billion or more ― 144.5 329.9 510.6 Achieved+60.6
Net income In mid-years: JPY 11 billion or moreFinal year: JPY 13 billion or more
10.6 12.1 14.7 16.9 Achieved every year
Core OHR (core gross operating income expense ratio) (FY2015) Less than 67% 67.18% 68.52% 68.87% 71.07%
Unachieved+4.07%
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
(JPY bn)
Note: Balance of loans and bills discounted excluding local government and other public authority, Tokyo, Osaka, and Nagoya areas branches as well as head office accounts
(Customers)
Deployment of part-time staff(People)
(People)
Business environment and management issuesBusiness environment and management issues
9
Intensifying competition due to more banks entering the market in expectation of loan demand
Ongoing management integration and wide- area alliances for survival
1. Socioeconomic environment
Regional banks
2. Financial environment
Ultra-low rates to continue on the back of monetary easing
Rise of online and retailer-affiliated banks
Move away from deposits toward investments
Uncertainty in the international financial markets
1.92.4THE Aomori BANK Michinoku Bank
3.3
THE BANK OF IWATE
1.4
0.8The Tohoku Bank
Kita-Nippon Bank
2.6The Akita Bank
Hokuto Bank
7.9 77 BANK
THE SENDAI BANK
Distribution of regional banks in Tohoku and total deposits
Eight management issues that need to be resolved in light of the achievements and reflection of the previous Medium-term Management Plan and changes to the business environment
Accelerating earthquake Accelerating earthquake reconstruction reconstruction
Growth and development of theGrowth and development of theregion (regional revitalization)region (regional revitalization) Strengthening profitabilityStrengthening profitability Maintaining and improving Maintaining and improving
financial soundnessfinancial soundness
Differentiation from competitorsDifferentiation from competitors ActivatingActivatingintraintra--bank communicationsbank communications
Training of personnel andTraining of personnel andraising motivationraising motivation
Migration to and effectiveMigration to and effectiveuse of MEJARuse of MEJAR
• Disaster prevention mass relocation business, etc.
* Numbers stand for total deposits as of end- Mar. 2015 (JPY trillion)
1.1
• Trends in infrastructure improvements accompanying the reconstruction and regional developments, etc.
Infrastructure improvements in the reconstruction
Complete opening of JOBAN EXPRESSWAY (Mar. 2015)
Reopening of JR Senseki Line (May 2015)
Extension of SANRIKU EXPRESSWAY (as far as Hachinohe)
Trends in regional developments, etc.
Redevelopment of Sendai Station East Exit
Relocation of the campus of TOHOKU UNIVERSITY
(TOYOTA MOTOR EAST JAPAN, INC.)Automotive industry, IED industry, etc.
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
Globalization and hollowing-out of domestic industry
• Progressing earthquake reconstruction (A new approach to town planning)
• Industrial transformation through agglomeration of manufacturing industries (Ex. TOYOTA MOTOR EAST JAPAN, INC.)
Miyagi Pref.
1.2
1.3
1.3
2.1The Yamagata Bank
THE SHONAI BANK
Kirayaka Bank
5.60.80.7
THE DAITO BANKFUKUSHI
MA-BANK
Progress of the regional development project in the Sendai Economic Zone• Sendai Umino-mori Aquarium (to open in Jul. 2015)• Sendai Subway Tozai Line (to open in Dec. 2015)• Privatization of Sendai Airport etc.
Aging and decreasing population
Two developments
• 195 planned zones• Approx. 15,500 houses are
planned to be built as public housing for victims
• Approx. 10,500 housing lots planned to be developed as land lease/lots for sale
THE TOHO BANK
• Vitality
• Activity (Action)
• Low-cost(Improved productivity)
• Utility (Contribution)
• Effort
Bank Image Sought by The 77 Bank
“Value-creating bank that grows together with and is the most trusted by the region”““ValueValue--creating bank that grows together with and is the most trusted bcreating bank that grows together with and is the most trusted by the regiony the region””
Name
Medium-term Management Plan “VALUE UP: Challenge Value Creation”MediumMedium--term Management Plan term Management Plan ““VALUE UP: Challenge Value CreationVALUE UP: Challenge Value Creation””
PeriodThree years Three years ((from April 1, 2015 to March 31, 2018from April 1, 2015 to March 31, 2018))
Basic policies
We will take action with vitality, undeterred by changes, and further improve productivity. At the same time, in order to contribute to the region, we will make our best efforts and unceasingly take on challenges of value creation.
Code of Conduct of Officers and EmployeesCode of Conduct of Officers and Employees
10
1. Strengthen earthquake recovery support
2. Reinforce the earnings base
3. Enhance the value of the region
4. Smooth migration to and utilization of MEJAR
Outline of the MediumOutline of the Medium--term Management Planterm Management Plan ““VALUE UP: Challenge Value CreationVALUE UP: Challenge Value Creation””
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
Enhancement of profitability
• Net income (*) JPY 20.0 billion or more• Increase of interest on loans and discounted [compared with FY2015] JPY 1.5 billion or more• Fees and commissions JPY 10.5 billion or more
• Core OHR (core gross operating income expense ratio) Less than 65%
• Increase of loans and bills discounted in Miyagi Prefecture JPY 250.0 billion or more(balance as of March 31,2018) [compared with the balance as of March 31,2015] Increase of loans and bills discounted in Sendai JPY 150.0 billion or more(balance as of March 31,2018) [compared with the balance as of March 31,2015]
Targets for the final year of the Plan (FY2018)
*When net income of JPY20.0 billion or more is achieved, ROE (net income basis) is expected to be around 5%.
Basic objectives and longBasic objectives and long--term visionterm vision
11
Basic objectivesBasic objectives
The BankThe Bank’’s Configuration in 10 Years (Longs Configuration in 10 Years (Long--term vision)term vision)“Leading bank in the Tohoku region with scale and earnings power ranked within the top 10 regional banks based on the established earnings base capable of coping with any change in the business environment through creation of new value in the region”
1.Total of deposits, loans and assets in custody: around JPY 15 trillion —Achieve deposits of JPY 8 trillion and loans of JPY 5 trillion—
2. ROE (net income basis): around 7%
(as of March 31,2015: JPY 12.8 trillion)
(FY2015: 4.0%)
Pursuit of efficiency
Increase of the market shares
FY2005(10 years ago)
FY2012(3 years ago) FY2015
Net income 8.9 10.6 16.9
Interest on loans and bills discounted 54.9 52.7 45.4
Fees and commissions 10.4 9.5 10.3
Core OHR 66.20% 67.18% 71.07%
Loan balance in Miyagi Pref. 2,425.7 2,657.5 2,917.7
(ref.) ROE 2.71% 3.51% 4.00%
(ref.) Market capitalization 297.8 139.9 260.6
FY2018 Target
JPY 20.0 billion or more
JPY 47.0 billion or more
JPY 10.5 billion or more
Less than 65%
JPY 3,170.0 billion
(ref.) around 5%
—
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
Ear
ning
s po
wer
Pro
posa
l ca
pabi
litie
s
(JPY bn)
0.6 2.3 7.2
12.0 16.0
0.0
5.0
10.0
15.0
FY2014 FY2015 FY2016 FY2017 FY2018
PrioritiesPriorities 1:1: Strengthen earthquake recovery support (1)Strengthen earthquake recovery support (1)
Active provision of risk money
ABL performance (after the earthquake to end-Mar. 2015)
Strengthening support for business reconstruction and for operations improvement
12
Assessment by resident credit officer (presence of locally-based credit officer)
90 cases / JPY 15.0 billion
Redoubled efforts to provide more funds
Use of reconstruction support fund
Use of guidelines for Individual Debtor Out-of-Court Workouts
Support (to be) provided: 219 cases(after the earthquake to end-Mar. 2015)
Agreements :192 cases
We will continue to deal squarely with business reconstruction and operations improvement
External specialists in the Credit Supervision Division (Mar. 2015: six experts) (on an on-going basis)
Cooperation with the Regional Economy Vitalization Corporation of Japan (REVIC)
Housing loans dedicated for borrowers subject to mass relocation for disaster prevention
• Swift credit response in earthquake-affected areas (trial in Apr. 2015)
• Miyagi Reconstruction and Regional Revitalization Support Fund (established in Dec. 2014 with REVIC and DBJ) Executed the first loan in Mar. 2015
Follow-ups for businesses that used credit purchase corporations
• Provision of funds, business matching, introduction of public support schemes, etc.
• Specialized support in coordination with the Enterprise Assistance Dept (12 members)
• Honing of bank employee skills by visiting customers together with external specialists
• Dispatching specified experts (on contracts dated Aug. 2014)• Learning expertise through personnel exchanges (From Mar. 2015, one employee
dispatched to REVIC)
With reconstruction support according to the stage, we will support the reconstruction from the earthquake.
Recovery development assistance projects for SME group facilitiesRelated loans (after the earthquake to end-Mar. 2015)
• Bridging finance performance
• Portion of own funds performance
637 cases / JPY 45.7 billion
144 cases / JPY 10.9 billion
<Plans for housing loans dedicated for borrowers subject to mass relocation for disaster prevention>
(JPY bn)
(Plan) (Forecast) (Forecast)
(after the earthquake to end-Mar. 2015)
Earthquake disaster-related loan (after the earthquake to end-Mar. 2015)
19,981 cases / JPY 498.2 billion
Respond to housing loan needs in accordance with the reconstruction stage
• Aiming to accelerate mass relocation for disaster prevention
(*)
(*) No cases of disagreement so far
Business operations improvement support
2,709 customers
(FY2015)
• Number of business operations improvement support plans developed
294 customers• Of which, upgraded to higher borrower category
Use of credit purchase corporations
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
(The Great East Japan Earthquake SME Reconstruction Support Fund, Organization for Industry Promotion)
Support
Priorities 1:Priorities 1: Strengthen earthquake recovery support (2)Strengthen earthquake recovery support (2)
Contribution to the reconstruction and development of the region
13
Help in applications for start-up subsidies and promotion of related loan schemes
Industry-academia-government cooperation and use of other organizations
• Cooperation with other support organizations Support for start-ups and new operations
Accumulation and use of support expertise Organizational structure for support (Apr. 2015)
• Thirty-three branch managers dealing with local public entities assigned as regional revitalization officers
• Establishment of the “Regional Revitalization Desk” (Three members of the Regional Development Dept.)
• Sendai Startup Support Network (Jul. 2014)
• Japan Finance Corporation (Jul. 2014)
• General Incorporated Association MAKOTO (Aug. 2014)
• SHOKO CHUKIN BANK (Dec. 2014)
• Approach to PPP/ PFI
<77> Community-building College
• Providing local government workers with information on problems relating to the aging public infrastructure and the use of PFI for solutions.
• Creation of regional comprehensive strategy, active involvement for promotion
Support for the growth of local industry
Promoting regional revitalization
Focus on growth fields
Refining support expertise through cooperation with outside experts
Helping local manufacturers expand into new operations
Expansion of loan product line-up for growth fields
Active involvement as a regional bank
Comprehensive strategy for revitalizing the community, people, and work
• Realizing self-supportive and sustainable local communities• Using local resources, creating jobs, revitalizing the regional economy
Entrepreneurial seminar for women (Oct. 2014)
Renewable energies
Medical and nursing care Manufacturing
Agriculture, the sixthindustrialization
• Dedicated staff in the Regional Development Dept.
Use of the sixth industrialization fund
<Headquarters>Regional Revitalization Desk
<Branches>Regional Revitalization OfficersCollaboration
Local Public Entities Other entitieslike REVIC,
etc.
Local industry- academia-
governmentnetwork
Support Support
77 BANK
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
CooperationCooperation
2,766.3 2,917.7
1,918.0 2,031.2
0.0
1,000.0
2,000.0
3,000.0
734.5 794.3
600.0
700.0
800.0
900.0
28.7 28.5
0.0
10.0
20.0
30.0
40.0
Priorities 2:Priorities 2: Reinforce the earnings base (1)Reinforce the earnings base (1)
14
Concerted efforts to address low profitability
• Strengthening SME lending in the region
• Identifying high-yielding loan deals
• Closer cooperation between HQ public relations, Credit, and branch offices
• Promoting cross-border loans and structured financing, etc.
• Promoting unsecured loans• Enhancing sales and contract response capabilities• Ensuring that cross-sale opportunities are taken
• Promoting housing loans
<Plans for year-end loan balance in Miyagi Pref. and Sendai City>
(JPY bn)
(JPY bn) <Plans for average balance in housing loans>
<Plans for average balance in unsecured loans>(JPY bn)
• Information-based marketing tailored to customer needs
• Proposal-based marketing from the perspective of experts
• Targeting housing manufacturers through closer cooperation withloan centers (seven in the prefecture) and branch offices
Corporate loans
Retail loans
FY2014 FY2015 FY2017 FY2018FY2016(Plan) (Forecast) (Forecast)
Mar. 2014 Mar. 2015 Mar. 2018(Forecast)
Medium-term Target
Total loans in Miyagi: Increase of JPY +250 billion or more
(vs. end of FY2015)
• Redoubling efforts to deal with sub-performing loans
• Region-wide marketing targeting prime customers
• Ascertaining fund needs with an eye on community building developments, such as the promotion of mass relocation for disaster prevention and the opening of the Tozai subway line
• Capturing renovation deals
Miyagi Pref. Sendai City
Mar. 2016 Mar. 2017(Forecast)(Plan)
Rebalancing of loan assets—Aiming to increase interest income by shifting to high-profitability assets
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
FY2014 FY2015 FY2017 FY2018FY2016(Plan) (Forecast) (Forecast)
Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Plan
National gov. bonds 40.6% 55.4% 59.5% 59.1% 56.6% 50.3%
Local gov. bonds 5.1% 2.8% 2.6% 2.1% 2.1% 3.7%
Corporate bonds 36.0% 30.3% 25.5% 25.5% 26.7% 28.0%
Stocks 3.4% 2.4% 1.9% 1.7% 1.8% 1.8%
Others 14.9% 9.1% 10.5% 11.6% 12.8% 16.2%
Investment trusts, etc. 6.9% 5.2% 5.4% 5.2% 6.0% 7.6%
Foreign bonds 8.0% 3.9% 5.1% 6.4% 6.8% 8.6%
3,312.03,601.9 3,500.0
59.5% 59.1%56.6%
50.3%
0
0.3
0.6
0.0
2,000.0
4,000.0
H24年度 H25年度 H26年度 H27年度 H28年度 H29年度
Securities (amortized) JGB ratio
Priorities 2:Priorities 2: Reinforce the earnings base (2)Reinforce the earnings base (2)
Reinforcing income sources through diversificationof investment targets
Securing income through responsive trading
Shift from a JGB-centered portfolio
Continuing to invest and source yen and foreign currencies in a stable and efficient manner
<Composition ratio by type > (on an amortized cost base)
<Plans for balance of securities and JGB ratio>
(JPY bn)
FY2014 FY2015FY2013 FY2017 FY2018FY2016(Forecast)
15
(%)
30%
60%
Rebalancing securities portfolio —Rebalancing the portfolio response to changes in the investment environment and reinforcing income sources
Efficient use of securities holdings through repo and other transactions
Sophistication of risk management(Proactive management of the risk of rising interest rates)
(Plan) (Forecast)
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
Sales of assets in custody
Previous mid-term 3 years
New mid-term 3 years Change
Total 236.2 270.0 14.3Investment trusts 97.9 120.0 22.6Insurance 138.3 150.0 8.5
(JPY bn, %)
FY2014 FY2015 FY2016 (Plan) FY2017 (Forecast)
FY2018 (Forecast)
68.8 71.0 79.5 68.6 64.9
(%)
28.8 28.2
23.9 25.8
2.6 3.1
0.0
20.0
40.0
60.0
Personnel expenses Non-personnel expenses Tax
Boosting non-interest income
Expenses
Pursuit of further productivity
(JPY bn)
16
55.3
Priorities 2:Priorities 2: Reinforce the earnings base (3)Reinforce the earnings base (3)
Ascertaining customer needs, responding to cuts in market interest rates
Reinforcing efforts to market assets-in-custody services
Target for investment trusts and insurance sales (during the mid-term plan): JPY 270 billion
• Opening of NISA accounts (17,000 (Mar. 2015) 35,000 (Mar. 2018 target))
Diversification of sources of income
Cultivation of new business fields
• Reinforced measures for business succession• Identifying latent needs for M&A
• Achievement of the previous medium-term target: investment trusts,insurance, public bonds sales JPY 450 billion
• Proposal-based marketing for the wealthy through cooperation between the HQ and branches
Creation of new business opportunities through measures for business succession and inheritance• Ascertaining fund needs and promoting assets in custody services
through proposal-based marketing Boosting the M&A business
• Cooperation with Nihon M&A Center (one employee dispatched)
• Costs related to the migration to MEJAR will peak in FY2016 when it goes live, and are then expected to decrease
Further pursuit of operating efficiency
Use of MEJAR
HQ operation BPR: Review day-to-day operations Loan operation BPR: Electronic credit application
Strengthening the sales organization, creating more time for dealing with customers
• BPR applied to more operations
• Ongoing efforts to reduce costs through the use of outside consultants (From May 2013)
FY2014 FY2015 FY2017 FY2018FY2016(Plan) (Forecast) (Forecast)
57.162.8
55.0 54.0
Reinforcement of the securities business• All branches in Tohoku and Hokkaido now handle securities (public structured bonds) (Mar. 2015)
Decrease in hours during previous mid-term planOver 5 hours (Average of per day per branch)
Targets for Core OHR (FY2018): Less than 65%
JPY 510.6 billion sold
355 proposalsduring FY2015
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
Priorities 3:Priorities 3: Enhance the value of the region (1)Enhance the value of the region (1)
Demonstrating a marked presence in the region
17
Realizing sustainable growth through enhancing of the values of the region and 77 bank
Reinforcing the customer base and sales power
Increasing the number of effective meetings (improving the quality of meetings)
• Closer cooperation between HQ public relations and branches
Reinforcing and utilizing the information network
Identifying customer issues and needs and proposing solutions
Expansion of non-face-to-face channels
• Measures to attract younger customers• Effective use of MEJAR, a shared system
• Enhanced functionality of ATMs and online banking
支 援
Branch and ATM network that reflects regional development and demographics
Sendai Station
Subway Nanboku Line
Subway Tozai LineTo open in Dec. 2015
Expansive use of the flow of commerce, goods, people and information, centered around the Sendai Economic Zone
Effectively utilizing the network with outside organizations, experts, and other banks
• Our second eco-friendly branch has solar panels and high-functionality window panes
Opening of newly rebuilt Izumi Branch (Feb. 2015)
Tourism
Fishery
Agriculture
• Located in East Sendai where a land readjustment project is ongoing
Opening of Roku-Chonome loan center (Apr. 2015)• The branch has a loan center and
dedicated insurance counter, enabling it to provide a one-stop service
Opening of Nagamachi Minami Branch (Jun. 2014)
Manufacturing
Regional banks present a manufacturing enterprise business matching fair
International Linear Collider
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
International projects
• Currency risk hedge
• Trade
• Support in overseas expansion
• Providing local information
• Financing
75200151
388
0
200
400
Number of clients w ith an overseas presence Number of overseas business locations
0.7
3.2
1.8
2.8
719
4049
0
30
60
0.0
1.0
2.0
3.0
4.0Number of loans executedNumber of loans
Priorities 3:Priorities 3: Enhance the value of the region (2)Enhance the value of the region (2)
18
上海上海
香港香港
大連大連
【合計7名】
アジア地域への行員派遣数
【1名】
【4名】
【1名】
マニラマニラ
インドステイト銀行(2013/2~)
アジアビジネス支援室アジアビジネス支援室((2011/32011/3~)~)
上海駐在員事務所上海駐在員事務所(開所(開所1010周年)周年)
香港貿易発展局(2010/11~)
メトロポリタン銀行(2013/6~)
バンクネガラインドネシア(2012/11~)ジャカルタジャカルタ
ムンバイムンバイ
ベトコムバンク(2014/1~)
ユナイテッド・オーバーシーズ銀行(2014/6~)
ハノイハノイ
シンガポールシンガポール
【1名】
中國信託HD(2014/12~)
バンコクバンコク
台湾台湾
バンコック銀行(2011/4~)バンコク・コンサルティング・パートナーズ(2013/6~)
ハノイ
Support tools in JapanLocal public entities, JETRO,
seminars, etc.
Support tools overseasPartner banks, trade fairs, etc.
• Cultivation of overseas markets
Customer needs
Reinforced support for overseas business
Providing specialized help through the “Asia Business Support Dept.”
Promoting new and comprehensive deals prompted by overseas business
*10 years since the opening of the Shanghai Representative Office (Jul. 2015)
Mar. 2015Mar. 2005
The number of clients with an overseas presence and
corresponding bases has increased 2.5-times in 10 years.
<The overseas expansion of our clients >
ASIA Business Exchange 2015 (Feb. 2015)
<Overseas business support tools>
Expanding the overseas network
<Loans related to overseas business support>
FY2014 FY2015FY2012 FY2013
(JPY bn)(case)
77 BANKAsia Business Support Dept.
Shanghai Representative Office
Bank employees dispatched overseas
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
Number of employees sent on detachment to Asia
[7 in total] Asia Business Support Dept.(from Mar. 2011)
Shanghai Representative Office (10 years since the opening)
Dalian [1 person]
Mumbai Hong Kong Trade Development Council(from Nov. 2010)
Hong Kong Taiwan
Shanghai [4 persons]
CTBC HD (from Dec. 2014)HanoiState Bank of India (from Feb. 2013)Vietcombank (from Jan. 2014)
Bangkok Bank (from Apr. 2011)Bangkok Consulting Partners Co., Ltd. (from Jun. 2013)
Bangkok [1 person] ManilaMetropolitan Bank(from Jun. 2013)
United Overseas Bank Limited (from Jun. 2014)
Singapore [1 person]
Bank Negara Indonesia (from Nov. 2012)Jakarta
(Customers)
Priorities 3:Priorities 3: Enhance the value of the region (3)Enhance the value of the region (3)
Enhance the 77 Bank Brand
19
Boosting of the value of the 77 BANK Group
Individual commendation in the area of sales
Increasing the value of human resources
Developing personnel with specialized knowledge
Enhancing loan and consulting abilities
• Now that we have over 1,000 employees in loan and sales, we are continuing with the focus points of the previous medium-term plan.
• Overseas trainees (investment, supporting overseas business), studying overseas for short periods, dispatching to REVIC, etc.
Boosting organizational and employee motivation
Promoting diversity (promoting the activities of women employees, etc.)
* Promoting female employees
Provision of comprehensive financial services
Improving shareholder value
Increased IR events (during previous medium-term plan)
Responding properly to the corporate governance code
Continuing to provide stable dividend payouts
Streamlining document requirements
Improving customer convenience
Providing “heartwarming,” customer services
Increase in paperless, non-seal-based transactions
Decreasing waiting time
七十七
事務代行
七十七
カード
七十七
ビジネス
サービス
七十七
信用保証
七十七
リース
七十七
銀行
七十七
コンピューター
サービス
7 occasions for individuals (835 people attended), 25 occasions by region (1,526 people attended)
77 Card
77 BANK
77 Outsourcing
77 Credit
Guarantee
77 Leasing
77 Business Services
77Computer Services
Wheelchairs at the ready in all branches in Miyagi
Pref. (Dec. 2014)
<Ref.> Recent case of a share buy-back
• Period: Feb.–Apr. 2011 •Number of shares acquired: 5,563,000
• Total value of shares acquired: Approx. JPY 2.5 billion
* Apr. 2011: Suspended due to the effects of the earthquake
Promoting BPR through streamliningand the centralizationof operations
Realizing synergies through cross-introduction ofdeals
Providing solutions through the use of group functions
Reinforcing retail loans through closer cooperation with credit guarantee companies
Ratio of female employees
End-Mar. 2009
End-Mar. 2015
Increase from end-Mar. 2009
Managerial position 7% 10% Approx. 40
Loan officers/sales rep. 9% 24% Approx. 190
Mar. 2010 Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015(Estimate)
Mar. 2016(Forecast)
Annual dividends 7.0 6.0 7.0 7.0 7.5 8.5 9.0
Dividend ratio 22.7% - 24.6% 21.5% 19.0% 18.8% 23.2%
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
(JPY)
Priorities 4:Priorities 4: Smooth migration to and utilization of MEJARSmooth migration to and utilization of MEJAR
20
With the concerted efforts of the bank and the group, we are aiming to realize a smooth migration to MEJAR on Jan. 4, 2016
MEJARMost Efficient Joint Advanced Regional
banking-system
Cooperation between different channels (counter, ATM, online banking)
• Boosting ability to provide proposals tailored to customer attributes
• Presenting optimal products and promotional messages through direct channels
• Improvement of customer convenience and marketing targeted at younger customers through enhancing online banking functions
• Improved profit opportunities through enhancing the functions of ATMs
• Electronic handling of loan operations with a loan support system
• Further centralization of operations
Hokuhoku FG
77 BANK
The Hokkaido Bank
THEHOKURIKU
BANK
The Bank of Yokohama
Sharing of expertise
<Systems to be shared>• Core systems (including deposits, exchange, loans, etc.)• ATM, online banking• Divisional system, other
• Reducing system-related expenses through the joint development and operation of systems and the joint procurement of equipment, etc.
Expe
cted
effe
cts
of m
igra
tion
App
rox.
7 m
onth
s to
go
Creation of sales power through operational efficiency
Enhanced functionality in non-face-to-face channels
Rapid presentation of attractive new products and services
Reduction and leveling out of system expenses
Our handling of the migration to MEJAR• 46 dedicated employees were deployed and
are preparing for the migration (conducting tests, etc.)
• Training at all branches (testing at all branches starting in Jun. 2015)
• Working to explain to customers the changes in products and services, etc. due to the migration
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
<For reference> Numerical targets (1)<For reference> Numerical targets (1) (The targets are formulated and reviewed every year)(The targets are formulated and reviewed every year)
21
FY2015 results FY2016 plan
Loans and bills discounted 4,054.5 4,117.5
Corporate loans 2,485.2 2,541.0
Retail loans 833.2 863.5
Deposits and certificates of deposits (notes) 7,538.9 7,322.0
Retail deposits 4,507.5 4,577.0
FY2017 forecast FY2018 forecast Change vs. FY2015
Change4,250.5 4,397.0 342.5 8.4
2,626.0 2,710.0 224.8 9.0
891.5 927.0 93.8 11.2
7,220.0 7,159.0 (379.9) (5.0)
4,645.0 4,708.0 200.5 4.4
1. Average balances of major accounts
2. Term-end balances
(JPY bn, %)
FY2015 results FY2016 plan
Loans and bills discounted 4,227.7 4,193.0
Balance of loans in Miyagi Pref. 2,917.7 2,880.0
Deposits and certificates of deposits (notes) 7,851.0 7,321.0
Sales of investment trusts and insurance 91.7 74.0
Balance of investment trusts and insurance 356.1 384.5
FY2017 forecast FY2018 forecast Change vs. FY2015
Change4,375.0 4,551.0 323.3 7.6
3,030.0 3,170.0 252.3 8.6
7,259.0 7,195.0 (656.0) (8.3)
96.0 100.0 8.3 9.0
430.5 485.0 128.9 36.1
Note: We are expecting a decrease in the amount of deposits, mainly due to the outflow of public deposits in conjunction with the progress of the earthquake reconstruction.
(JPY bn, %)
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
22
<For reference> Numerical targets (2)<For reference> Numerical targets (2) (The targets are formulated and reviewed every year)(The targets are formulated and reviewed every year)
3. Incomes and losses (JPY bn, %)
FY2015 results FY2016 plan
Core gross operating income 80.3 79.0
Interest income 70.2 69.5
Interest on loans and bills discounted 45.4 44.1
Fees and commissions 10.3 9.9
Expenses 57.1 62.8
Core operating income 23.2 16.2
Net income 16.9 14.5
Core OHR 71.0 79.5
Capital adequacy ratio (domestic standard) 12.2 12.2
FY2017 forecast FY2018 forecast Change vs. FY2015
80.1 83.1 2.8
71.1 74.5 4.3
45.0 47.1 1.7
10.2 10.6 0.3
55.0 54.0 (3.1)
25.1 29.1 5.9
Target for the final year of the medium-term plan: JPY 20 billion or more
68.6 64.9 (6.1)
12.2 12.3 0.1
(Forecasts for main interest rates)
FY2015 (results) FY2016
Unsecured call rate O/N 0.07 0.07JPY TIBOR (3 months) 0.20 0.185-year JGBs 0.13 0.0810-year JGBs 0.48 0.45Exchange rate (JPY/USD) 110 123
Nikkei Average (At the term-end) 19,206 18,000
FY2017 FY2018
0.07 0.070.18 0.180.18 0.280.65 0.85127 131
18,500 19,000
2. Outline of the Medium2. Outline of the Medium--term term Management PlanManagement Plan
(%, JPY)
Projected performance for FY2016Projected performance for FY2016
23
<Interest rates and other assumptions underlying the projection>
<Annual dividends>
Projected performance (non-consolidated)
FY2015(Results)
FY2016(Plan) YoY change
Gross operating income[Core gross operating income]
80.1[ 80.3]
78.0[ 79.0]
(2.1)[ (1.3)]
Interest income 70.2 69.5 (0.7)Fees and commissions 10.3 9.9 (0.4)Other operating income (0.4) (1.4) (1.0)
Gains (losses) on bonds (0.2) (1.0) (0.8)Expenses 57.1 62.8 5.7Operating income before provision of general reserve for possible loan losses
23.0 15.2 (7.8)
[Core operating income] [ 23.2] [ 16.2] [ (7.0)]Provision of general reserve for possible loan losses — — —
Operating income 23.0 15.2 (7.8)Special income (losses) 7.5 6.8 (0.7)
Bad debt disposals (-) 0.8 0.5 (0.3)Gains on reversal of reserve for possible loan losses 4.6 5.5 0.9
Gains (losses) on stocks 1.0 1.3 0.3Ordinary income 30.5 22.0 (8.5)Extraordinary losses (0.2) (0.2) 0.0Income taxes (incl. deferred taxes) 13.4 7.3 (6.1)Net income 16.9 14.5 (2.4)
(JPY bn)
Major accounts(average balances)
FY2015(Results)
FY2016(Plan) YoY change
Loans and bills discounted 4,054.5 4,117.5 1.5
Securities 3,616.9 3,434.6 (5.0)Deposits and certificates of deposits 7,544.6 7,327.0 (2.8)
Investment trusts and insurance (term-end balances)
356.1 384.5 7.9
(JPY bn, %)
(%)
Interest rates/ Interest margin
FY2015(Results)
FY2016(Plan) YoY change
Loans and bills discounted interest rate 1.11 1.07 (0.04)
Securities interest rate 0.78 0.85 0.07Interest rate on deposits 0.03 0.03 0.00Interest rate spread 0.88 0.90 0.02Net interest margin 0.13 0.05 (0.08)
FY2015(Results)
FY2016(Forecast)
Unsecured call rate O/N 0.07% 0.07%
JPY TIBOR (3 months) 0.20% 0.18%
5-year JGBs 0.13% 0.08%10-year JGBs 0.48% 0.45%Exchange rate (JPY/USD) ¥110 ¥123
Nikkei Average (At the term-end) ¥19,206 ¥18,000
FY2010 (Results)
FY2011 (Results)
FY2012 (Results)
FY2013 (Results)
FY2014 (Results)
FY2015 (Estimate)
FY2016 (Forecast)
7.0 6.0 7.0 7.0 7.5 8.5 9.0
Ref.
Note: Figures in YoY change shows percentage points.
(JPY)
3. Projected Performance3. Projected Performance
Credit-related expenses (3.8) (5.0) (1.2)
This is a Japanese-English translation of the presentation material for your convenience. In the case that there is any discrepancy between the Japanese and English versions, the Japanese version is assumed to be correct. Please note that the projections described in this document do not guarantee future performance. Future performance projections may differ from actual results due to uncertainty caused by factors such as changes in the business environment.