更新済
Results of FY2018 May 20th, 2019 Hisashi Shibata President The Shizuoka Bank, Ltd. Contents *In Principle, the amounts etc. in this material are rounded off to the unit 済 Results of FY2018 Reference
Results of FY2018 – Nonconsolidated ・・・・・ 1 Economy in Shizuoka Prefecture and current state ・・・・・ 28
Results of FY2018 – Consolidated ・・・・・ 2 Economic scale of Shizuoka Prefecture ・・・・・ 29
Results Highlights – Gross operating profit ・・・・・ 3 Historical data of loans ・・・・・ 30
Loans ・・・・・ 4 Historical data of deposits ・・・・・ 31
Deposits ・・・・・ 5 Profit levels and productivity improvement ・・・・・ 32
Securities ・・・・・ 6 Loans – Term-end balance ・・・・・ 33
Customer assets ・・・・・ 7 Loans – Loans by industries ・・・・・ 34
Fees and commissions ・・・・・ 8 Sales structure reform ・・・・・ 35
・・・・・ Expenses 9 Global network ・・・・・ 36
・・・・・ Credit-related costs 10 Cross-industry collaboration ・・・・・ 37
・・・・・ Risk-management loans 11 Allocation of risk capital ・・・・・ 38
Capital adequacy ratio ・・・・・ 12 Group companies ・・・・・ 39 Progress of the 13th Medium-term Business Plan・Projected performance in FY2019 Shizugin TM Securities Co., Ltd. ・・・・・ 40 Expanding business fields (1) ・・・・・ 13 Strategic shareholdings ・・・・・ 41 Expanding business fields (2) ・・・・・ 14 Shareholder return – Share buybacks (Time series data) ・・・・・ 42 Developing new business with firms in other industries (1) – Discovery of partners through cross-industry interaction ・・・・・ 15 Overview of the 13th Medium-term Business Plan (1) – Name of the plan/ Group vision, Basic strategy ・・・・・ 43 Developing new business with firms in other industries (2) ・・・・・ 16 – Cases of businesses which have been commercialized by FY2018 Overview of the 13th Medium-term Business Plan (2) – Structural reforms ・・・・・ 44 Market credit investment ・・・・・ 17 Reference (ESG/SDGs part) Consumer loans (1) ・・・・・ 18 ESG/SDGs initiatives (1) – SDGs ・・・・・ 45 Consumer loans (2) – Apartment loans, loans for asset building ・・・・・ 19 ESG/SDGs initiatives (2) – Adoption for constituent brand of ESG index ・・・・・ 46
Consumer loans (3) – Loans for asset building ・・・・・ 20 ESG/SDGs initiatives (3) – Environment ・・・・・ 47
Expansion of non-face-to-face channel ・・・・・ 21 ESG/SDGs initiatives (4) – Diversity and work-life balance ・・・・・ 48
Operation process reform ・・・・・ 22 ESG/SDGs initiatives (5) – Activities to contribute to the region ・・・・・ 49 ESG/SDGs initiatives (6) – Corporate Governance Structure ・・・・・ 50 Next Generation System ・・・・・ 23 ESG/SDGs initiatives (7) – Region-based Relationship Banking (1) ・・・・・ 51 Projected performance in FY2019 (1) ・・・・・ 24 Projected performance in FY2019 (2) ESG/SDGs initiatives (8) – Region-based Relationship Banking (2) ・・・・・ 52 – Comparison with the 13th Medium-term Business Plan ・・・・・ 25 ESG/SDGs initiatives (9) – Regional revitalization ・・・・・ 53 Shareholder return (1) – Profit distribution ・・・・・ 26
Shareholder return (2) – Share buybacks, Trends in EPS/BPS ・・・・・ 27 更新済
Results of FY2018 Results of FY2018 – Nonconsolidated
完成 〔Nonconsolidated〕 YoY Overview : FY2018 Nonconsolidated FY2018 Increase/ Rate of (JPY bn, %) Decrease change Ordinary revenue JPY +12.5bn YoY (first increase in 2 periods)
Ordinary revenue 193.0 +12.5 +6.9 Ordinary revenue increased by JPY 12.5bn YoY to JPY 193.0bn, mainly because of increase in interest on loans (up JPY 6.4bn) Gross operating profit 134.8 +7.5 +5.8 and increase in interest and dividend on securities (up JPY 8.0bn) Net interest income 116.6 +5.1 +4.5 (Interest on loans) (106.0) (+6.4) (+6.3) Gross operating Fees and commissions 15.8 +0.5 +3.5 JPY 7.5bn YoY (continued increase in 2 periods) profit Trading income 0.8 +0.1 +6.6 Other operating profit 1.6 +1.8 +733.1 Gross operating profit increased by JPY 7.5bn YoY to JPY (Bond-related income such as JGBs) (-1.1) (+3.1) (+74.7) 134.8bn, mainly due to increase in net interest income (up JPY 5.1bn) and improvement in bond-related income such as JGBs Expenses (-) 80.9 -1.3 -1.5 (up JPY 3.1bn) Actual net operating profit * 53.9 +8.8 +19.4 Net operating JPY +7.8bn YoY (continued increase in 2 periods) Provision for general allowance for loan losses (-) 1.0 +1.0 - profit
Net operating profit 52.9 +7.8 +17.1 Net operating profit increased by JPY 7.8bn YoY to JPY 52.9bn, mainly due to increase in gross operating profit and decrease in Special profit and loss 3.6 -7.4 -67.3 expenses (down JPY 1.3bn) in spite of increase in provision for Gain from reversal of allowance for loan losses - -4.9 - general allowance for loan losses (up JPY 1.0bn) Bad debt written-off (-) 3.8 +3.4 +816.4 Gain (loss) on stocks 7.5 -1.5 -16.5 Ordinary profit JPY +0.3bn YoY (continued increase in 2 periods) Ordinary profit 56.5 +0.3 +0.5 Ordinary profit increased by JPY 0.3bn YoY to JPY 56.5bn, reflecting decrease in special profit and loss (down JPY 7.4bn) Extraordinary profit and loss 3.3 -2.5 -42.9 mainly caused by absence of gains from reversal of allowance Net income before taxes 59.8 -2.2 -3.4 for loan losses (JPY 4.9bn) and deterioration in gain (loss) on stocks (down JPY 1.5bn) Corporate taxes (-) 17.2 -1.4 -7.4 Net income JPY -0.8bn (first decrease in 2 periods) Net income 42.6 -0.8 -1.8 Net income decreased by JPY 0.8bn YoY to JPY 42.6bn, mainly Credit-related costs (-) 4.8 +9.3 +207.4 because of decrease in gains on return of retirement benefit trust (down JPY 2.5bn) * Actual NOP=NOP + Provision for general allowance for loan losses 1 Results of FY2018 – Consolidated
完成 Ordinary revenue increased by JPY 11.6bn YoY to JPY 235.7bn, and ordinary profit decreased by JPY 2.5bn YoY to JPY 63.4bn Total ordinary profit of consolidated subsidiaries decreased by JPY 1.0bn YoY to JPY 8.8bn
〔Consolidated〕 FY2018 YoY Contents (JPY bn) First increase in 2 periods Ordinary revenue 235.7 +11.6 Due to increase both in interest on loans and in interest and dividend on securities First decrease in 2 periods Due to decrease both in gain from Ordinary profit 63.4 -2.5 reversal of allowance for loan losses and in profit based on the equity-method investment balance
Net profit attributable to parent company shareholders 46.9 -3.3 First decrease in 2 periods
Group companies 【Total ordinary profit of consolidated subsidiaries】 Except for a lump-sum write-down of Monex Group Consolidated Subsidiaries (JPY bn) on the unamortized balance of goodwill (-12.1) Including profit based on the Shizugin Management Consulting Co., Ltd. Shizugin TM Securities Co., Ltd. equity-method investment balance 11.5 Shizugin Lease Co., Ltd. Shizuoka Bank (Europe) S.A. 9.1 8.9 8.3 8.6 9.8 Shizugin Computer Service Co., Ltd. Shizugin General Service Co., Ltd. 8.8 8.8 8.4 Shizugin Credit Guaranty Co., Ltd. Shizugin Mortgage Service Co., Ltd. 7.6 7.9 6.6 Shizugin DC Card Co., Ltd. Shizugin Business Create Co., Ltd. Shizuoka Capital Co., Ltd. Shizuoka Liquidity Reserve Limited
Affiliates under equity method of accounting Shizugin Saison Card Co., Ltd. Monex Group , Inc. Commons Asset Management, Inc. FY 2012 2013 2014 2015 2016 2017 2018 2 未 Results Highlights – Gross operating profit
Profit in the bank branch division increased by JPY 2.7bn YoY, as a result of increase in interest on loans compensating increase in interest paid on deposits etc. Especially, interest on yen-based loans increased by JPY 0.4bn YoY, maintaining growth trend Profit in the market operations division increased by JPY 4.8bn YoY, mainly due to increase in interest and dividend on securities and to improvement in bond-related income such as JGBs
Breakdown of gross operating profit Loan balance (average balance) and loan rate (JPY bn) Breakdown of (JPY bn) YoY Yen based Total loan balance Loan rate gross operating profit by division FY2017 FY2018 7,775.7 (1) Bank branch division (Loans, Deposits, etc.) 105.7 108.4 +2.7 7,446.7 +329.0 Interest on loans 99.6 106.0 +6.4 7,104.1 +342.6 (Yen based) 85.4 85.8 +0.4 (Foreign currencies based) 14.2 20.1 +5.9 Fees and commissions 15.2 15.8 +0.5 Interest paid on deposits etc. (-) 9.1 13.3 +4.3 1.20% 1.14% 1.10%
(2) Market operations division 21.6 26.4 +4.8 FY2016 FY2017 FY2018 Interest and dividend on securities 24.6 32.6 +8.0 Interest on Deposits etc. 4.0 5.7 +1.7 Foreign currencies based Total loan balance Loan rate Interest on Call money etc. (-) 7.6 14.3 +6.7 (JPY bn) Trading income 0.8 0.8 +0.1 590.1 595.3 -34.1 Other operating profit -0.2 1.6 +1.8 +5.2 561.2 (Bond-related income such as JGBs) -4.2 -1.1 +3.1 (Gains on foreign exchange transactions) 1.7 2.1 +0.4 3.58% (Gains on financial derivatives) 2.2 0.9 -1.2 1.72% 2.38% (Reference) Gains and losses on stocks 8.9 7.5 -1.5 FY2016 FY2017 FY2018 Total balance of securities (term-end balance) and Unrealized gains and losses on securities Interest on loans in JPY (JPY bn) Total balance of securities decreased by JPY 201.6bn from the end of Mar. 2018 Maintaining growth 118.0 First increase in End of End of End of Change from 114.3 trend in FY2018 as well (JPY bn) Mar. 2018 Sep. 2018 Mar. 2019 end of Mar. 2018 108.6 9 periods in FY2017 103.9 100.6 +0.2 +0.4 Total balance of securities 1,615.6 1,755.8 1,414.0 -201.6 95.4 89.6 Unrealized gains and 86.3 85.5 85.2 85.4 85.8 losses on securities +272.5 +319.8 +271.5 -1.0 Stocks +265.4 +313.1 +261.8 -3.6 Bonds +5.2 +2.7 +5.9 +0.7 Others +1.9 +4.0 +3.8 +1.9 Foreign bonds -0.6 -2.3 +2.6 +3.2
Investment trusts +1.8 +5.2 -1.2 -3.0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 3 更新済 Loans
Total loan balance (average balance) increased by JPY 294.9bn (+3.6%) YoY mainly reflecting growth in loan balance for SMEs and retail loan balance
Total loan balance (average balance) Annual Average balance YoY growth rate Whole Bank +294.9 （JPY bn） Portion in Shizuoka Pref. 8,336.9 Share of loans in Shizuoka Pref. 8,042.0 Total loan balance JPY 8,336.9bn JPY +294.9bn +3.6% 7,694.2 Loan balance JPY 3,314.1bn JPY +151.4bn +4.7% +21.6 for SMEs
4,739.7 4,837.6 4,859.2 Retail loan balance JPY 3,175.9bn JPY +148.4bn +4.9% Loan balance for large and medium JPY 1,479.7bn JPY -0.7bn -0.0% 29.7% size enterprises 29.3% 29.1% Loan balance JPY 561.2bn JPY -34.1bn -5.7% ～ in foreign currency
by amt. chg. :JPY -43.3bn by ex. rate : JPY +9.2bn FY2016 FY2017 FY2018 Breakdown of year-on-year changes SMEs loan balance (average balance) Retail loan balance (average balance) in loan balance (average balance) Breakdown of YoY change in loans (JPY bn) +151.4 （JPY bn） （JPY bn） Whole Bank Whole Bank +148.4 Portion in Shizuoka Pref. 3,314.1 Portion in Shizuoka Pref. 3,175.9 3,162.7 3,027.5 SMEs 2,975.8 2,859.4 +151.4 +41.5 Retail +294.9 2,235.0 2,276.5 2,170.0 +148.4 2,108.2 Large and 2,044.9 2,100.3 Medium Public Overseas size -3.7 -0.5 enterprises +7.9 -0.7
Portion of outside Shizuoka Pref. +83.9 (Excepting the portion of Credit Investment Dept.) ～ ～ FY2016 FY2017 FY2018 FY2016 FY2017 FY2018 4 Deposits 更新済 Deposit balance (average balance) increased by JPY 337.6bn (+3.6%) YoY mainly due to the increase of retail deposit balance
Deposit balance (average balance) Annual growth Average balance YoY rate Portion in shizuoka Pref. +337.6 (JPY bn) 9,641.2 Total deposit JPY 9,641.2bn JPY +337.6bn +3.6% 9,049.1 9,303.6 balance ≪注意≫ 8,376.8 8,011.4 Deposit balance ＮＣＤ除きの数字 7,692.1 in Shizuoka JPY 8,376.8bn JPY +365.4bn +4.5% Corporate deposit balance JPY 2,240.9bn JPY +30.2bn +1.3% +365.4 Retail deposit balance JPY 6,628.3bn JPY +266.2bn +4.1% Portion in Internet branch JPY 517.2bn JPY +41.7bn +8.7%
NCD JPY 102.4bn JPY -58.8bn -36.4%
FY2016 FY2017 FY2018 Breakdown of year-on-year changes in Corporate deposit balance (average balance) Retail deposit balance (average balance) deposits balance (average balance)
+30.2 (JPY bn) Domestic branches (JPY bn) Breakdown of YoY change in deposits etc. (JPY bn) Domestic branches Portion in Shizuoka Pref. +266.2 Portion in Shizuoka Pref. 6,628.3 2,240.9 2,210.7 6,362.1 6,192.5 6,104.1 5,931.1 2,043.3 5,684.8 Retail 1,819.3 1,860.7 +266.2 1,703.9 Corporate +337.6 +261.4 +30.2 +41.4 Finance Offshore Overseas & Public -24.4 -2.5 +68.1
FY2016 FY2017 FY2018 FY2016 FY2017 FY2018 5 4/28 Securities ・冒頭説明修正（古藤室長指摘） 完成 ・株式等関係損益 The balance of securities at the end of FY2018 decreased by JPY 201.6bn compared to the end of FY2017, mainly ▲14→▲15 because the Bank greatly decreased the balance of JGBs based on trend of interest rate, and because amount of （前のページと平仄） investment trust decreased due to cancellation
Securities Gains and有価証券関係損益 losses on securities
〔Duration〕 (JPY bn) FY2017 FY2018 （JPY bn） YoY End of End of End of Mar. 2017 Mar. 2018 Mar. 2019 Interest and dividend on securities 24.6 32.6 +8.0 Yen based 4.72 years 5.42 years 5.02 years bonds Gains on investment trusts 8.7 4.9 -3.8 Foreign bonds 2.89 years 5.07 years 3.96 years Gains and losses on bonds such as JGBs -4.2 -1.1 +3.1
Gain on sell of bonds such as 1.1 4.2 +3.1 +250.2 -201.6 JGBs 1,615.6 Loss on sell of bonds such as JGBs(-) 5.2 5.3 +0.1
1,414.0 Gains and losses on hedges 2.2 0.7 -1.5 1,365.4 -337.4 387.5 50.1
59.2 Unrealized gains and losses on securities
196.0 +2.6 395.1
Customer assets at the end of Mar. 2019 increased by JPY 290.1bn compared to the end of Mar. 2018 due to the growth of Individual annuity insurance products and Yen based deposit balance Sales amount of investment trusts decreased by JPY 46.4bn YoY, and that of insurance products increased by JPY 28.2bn YoY
Customer assets (term-end balance) Investment trusts Shizugin TM Securities (JPY bn) +290.1 8,157.2 （JPY bn） Shizuoka Bank Fee income from offering investment trust (Shizuoka Bank and Shizugin TM Securities) 7,867.1 442.0 130.4 122.3 +8.1 7,686.0 -46.4 Shizugin 4.9 Balance of customer asset excluding JPYdeposits 467.5 TM Securities 4.7 84.0 Compared to 3.4 485.6 end of Mar. 2018 114.0 121.5 -25.5 1,400.4 1,405.4 860.9 74.6 Individual annuity 1,458.5 insurance products 9.4 824.4 +36.5 8.3 8.9 FY2016 FY2017 FY2018 48.8 855.8 32.4 Public & corporate 21.4 Insurance products Total sales amount of investment bonds trusts and insurance products 55.7 -6.9 Others (Fixed amount life insurance, : JPY 189.5bn 29.7 Forign currency life insurance, Educational insurance) (down JPY 18.2bn YoY) 23.1 Variable life insurance
(JPY bn) 67.8 Single premium whole life insurance 105.5 26.6 Deposits in 22.7 foreign currency Fee income from offering insurance products
+28.2
+5.0 Investment trusts 77.3 38.7 6,751.7 +21.3 12.8 56.0 6,466.7 8.9 7.9 Yen based 2.4 6,227.5 deposit 9.4 5.8 4.6 4.3 +285.0 55.6 58.9 44.2
FY2016 FY2017 FY2018 End of Mar. 2017 End of Mar. 2018 End of Mar. 2019 7 Fees and commissions 完成 Ordinary revenue of Shizugin TM Securities decreased by JPY 2.1bn YoY due to slump in sales of investment trust which reflects stagnation of willingness to invest On the other hand, fees and commissions (nonconsolidated) increased by JPY 0.5bn YoY mainly because of increase in sales of insurance products, and ordinary revenue of Shizugin Management Consulting increased by JPY 0.2bn reflecting brisk performance in M&A and business succession
Group-based Fees and commissions Fee incomes related to corporate (include group companies)
Ordinary revenue of Shizugin Management Consulting (JPY bn) (JPY bn) FY2017 FY2018 YoY Private placement bond, syndicated loan, commitment line Market credit investment, etc. (1) Fees and commissions (Nonconsolidated) 15.2 15.8 +0.5 Others (covenants loan and loan for corporate, etc.) Fees and commissions revenue 29.3 30.5 +1.2 6.0 14.1 14.7 +0.6 +1.1 Fees and commissions expense (-) 5.0 4.9 -0.1 1.7
(2) Ordinary revenue of 1.4 Nonconsolidated 1.5 Shizugin Management Consulting 1.5 1.7 +0.2 0.8 1.2 0.8 (3) Ordinary revenue of 2.1 Shizugin TM Securities 8.5 6.4 -2.1 1.2 1.6 1.2 1.0 1.4 Total ((1)+(2)+(3)) 25.2 23.9 -1.3 FY2016 FY2017 FY2018
Shizugin Management Consulting Shizugin TM Securities Sales and fee income from offering investment trusts and insurance products (Shizuoka Bank / Shizugin TM Securities) ・Carried out M&A and business succession ・Leading Group revenue through selling consulting for SMEs stably investment trust and bonds Investment trusts (JPY bn) ・Further expanding M&A and business succession ・Ordinary revenue of FY2018 decreased YoY Individual annuity insurace products, etc field in the 13th Medium-term Business Plan due to worsening investment environment 9.0 +0.5 9.5 -0.3 9.2
(JPY bn) FY2016 FY2017 FY2018 YoY (JPY bn) FY2016 FY2017 FY2018 YoY [ contracts number] 3.4 Ordinary 4.9 7.73 8.50 6.36 -2.14 4.7
Ordinary revenue 1.40 1.49 1.66 +0.17 revenue Consultant 0.33 0.39 0.50 +0.11 (Investment M&A (4.47) (4.69) (3.13) (-1.56) [23] [28] [31] [+3] trust-related)
5.8
fee Business 0.11 0.13 0.17 +0.04 Investment 4.3 4.6 114.0 121.5 74.6 -46.9 succession [40] [51] [71] [+20] trust sales
Settlement service 0.83 0.85 0.85 +0.0 Bond sales 96.7 143.3 106.8 -36.5 FY2016 FY2017 FY2018 8 Expenses 完成 Expenses of FY2018 was JPY 80.9bn (down JPY 1.3bn YoY), and OHR was 60.0% (down 4.6 percent points YoY) Intend to manage OHR around 55% in FY2019, which is the target in the 13th Medium-term Business Plan
Expenses and OHR Main factors for change of expenses
YoY Main factors Tax (JPY bn) Non-personnel expenses -1.3 Tax JPY -0.8bn Consumption tax JPY -0.8bn Personnel expenses Non-personnel Deposit insurance premium JPY -0.1bn JPY -0.6bn OHR expenses Depreciation expense JPY -0.8bn 82.2 80.9 77.5 Personnel 79.2 JPY +0.1bn Health insurance premium JPY +0.3bn 6.3 expenses 5.5 5.5 5.9 Total JPY -1.3bn 80.3% Comparison with initial expenses plan 43.6 FY2017 FY2018 FY2019 40.8 42.9 39.0 Initial plan (13th Medium-term Business Plan) JPY 85.0bn JPY 84.5bn JPY 83.0bn 64.6% Performance/Plan JPY 82.2bn JPY 80.9bn JPY 77.5bn
60.0% Efforts to reduce expenses were successful, with expenses falling below the target level in the 13th Medium-term Business Plan ⇒ Aim for further reductions by charging the cost structure through channel 53.9% and operation process reform
Forecast of expenses related with systems
Expenses related with systems (JPY bn) Depreciation by 32.9 32.3 32.4 32.6 19.9 19.1 investment in the next- 20 generation IT system 17.0 17.1 17.0 16.2 16.3 15.5 are set to rise temporarily, but expenses will be brought down to less 9.9 9.3 than JPY 10bn in the 10 future due to the cost FY2016 FY2017 FY2018 FY2019 reduction effect Plan ※New system is scheduled to come on line in May 2020 0 FY 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 9 Credit-related costs 完成 Credit-related costs in FY2018: JPY 4.8bn (up JPY 9.3bn YoY), Credit-related cost ratio: 0.05%
Breakdown of credit-related costs Credit-related costs and Credit-related cost ratio
FY2017 FY2018 (JPY bn) (JPY bn) YoY 9.6 Credit-related costs Credit-related costs rate Provision for general allowance for loan losses *1 (1) [-10.0] - 1.0 [+11.0] +1.0 * Credit-related cost rate = Credit-related costs / Average loan balance Provision for specific allowance for loan losses (2) [5.1] - 3.4 [-1.7] +3.4 0.15% 4.8 0.03% 4.1 0.05% Other non-performing loans (NPL) disposal *2 (3) 0.4 0.4 -0.0 0.004% 0.002% 0.007% 0.006% 2.4
Reversal of allowance for loan losses *3 (4) 4.9 - +4.9 0.3 0.1 0.5 0.4 0.05%
Credit-related Costs (1)+(2)+(3)-(4) -4.5 4.8 +9.3 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
*1 Breakdown of -10.0 in FY2017: Refinement of calculation method for general allowance for loan losses (-6.7), Down of loan loss ratio(-3.3) -0.05% *2 Including provision for the estimated future payments to credit guarantee corporations, provision for allowance for accidental losses, and losses on sell of loans -4.5 *3 Reversal of allowance for loan losses shows the net amount for provision for general allowance for loan losses and provision for specific allowance for loan losses. Figures in parentheses [ ] is the amount before netting Probability of Default (PD) Provision for allowance for loan losses and other NPL disposal
(JPY bn) Changes in credit rating, etc. 6.7 Decrease in the value of collaterals 0.2
Historical average of PD since Mar. 2008 : 0.94% Upgrade of credit rating, decrease in loan and credit balances by foreclosure, etc. -3.5 3.1 Total 3.4
End of Mar. 2019 0.4 0.6 1.29% 0.5 1.1 0.5 0.4 1.27% 0.98% 0.79% 7.8 1.0 0.4 0.7 0.96% 5.1 3.4 3.1 4.1 4.0 4.1 3.6 3.2 4.0 1.07% 0.2 1.0 0.0 -1.3 -1.6 -3.8 -4.1 0.91% 0.94% -4.5 -4.5 -10.0 0.77% 0.76% Reversed JPY10.0 bn by refinement of the calculation 0.69% method for general allowance for consumer loan losses ※PD of sound borrowers and borrowers needing careful monitoring 0.69% （On the basis of no. of borrowers） Other NPL disposal Provision for specific allowance for loan losses Provision for general allowance for loan losses (negative figures: Appropriate back) FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 End of End of End of End of End of End of End of End of End of End of End of Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Plan 10
更新済 Risk-management loans Total risk-management loans keep decreasing from the peak balance of JPY 242.5bn after the collapse of Lehman Brothers, and the figure at the end of Mar. 2019 was JPY 91.6bn (the ratio of risk-management loans was 1.07%), resulting in the lowest ever Net risk-management loans were JPY 14.8bn (the ratio of net risk-management loans was 0.17%), which shows the soundness in the Bank’s asset
Trends in Risk-management loans Net risk-management loans
(JPY bn) *Borrowers classified as “at JPY 91.6bn Loans to customers Who have gone bankrupt risk of failure” and borrowers classified as “practically Partial direct Loans with interest payment in arrears write-off Loans that have not boon repaid for over 3 months months or have been restructured bankrupt” are written as JPY 5.9bn “ loans with interest payment in arrears ” among the debtor 242.5 228.5 division in accordance with 8.6 Banking Act JPY 36.2bn Guaranteed by credit 9.0 203.6 guarantee associations 6.2 -1.2 Lowest ever 165.5 [Delinquency ratio]
4.9 137.3 In arrears 3.6 117.7 100.8 215.5 201.3 92.8 20% 178.4 3.8 3.0 91.6 Collateral/ 144.2 4.0 4.2 JPY 34.7bn Reserves 118.7 99.8 Not in arrears 84.2 76.3 71.1 80% Net risk-management 18.4 18.2 19.0 16.4 15.0 14.1 13.6 12.5 16.3 loans End of End of End of End of End of End of End of End of End of JPY 14.8bn Mar. '11 Mar. '12 Mar. '13 Mar. '14 Mar. '15 Mar. '16 Mar. '17 Mar. '18 Mar. '19
NPL removal from the balance sheet The ratio of risk-management loans
[Breakdown of JPY -27.3bn] 3.64% (JPY bn) FY2017 FY2018 (JPY bn) 3.41% Risk-management loans Collected from borro wer/ set off against -3.6 2.91% New recognition of NPLs +25.2 +28.3 deposit account 2.28% Lowest ever Removal from the balance sheet Collateral disposal/ 1.85% -33.2 -29.5 subrogated to -11.0 1.53% (NPL to borrowers classified guarantor 1.26% as “at risk of failure” or riskier 1.11% 1.07% (-29.7) (-27.3) Reclassified to better Net risk-management loans categories) categories -7.6 0.40% 0.32% 0.34% 0.26% 0.20% 0.19% 0.15% 0.14% 0.17% Risk-management loans 92.8 91.6 Loans sold-off -4.9 Direct write-off of loans -0.2 End of End of End of End of End of End of End of End of End of -1.2 Mar. '11 Mar. '12 Mar. '13 Mar. '14 Mar. '15 Mar. '16 Mar. '17 Mar. '18 Mar. '19 11 完成 Capital adequacy ratio Both Basel III capital adequacy ratio and Common Equity Tier I ratio at the end of Mar. 2019 are 16.05%, slightly increasing by 0.10 percent points from the end of Mar. 2018 (Common Equity Tier I ratio excluding valuation difference on available-for-sale securities at the end of Mar. 2019 is 12.65%, up 0.15 percent points from the end of Mar. 2018)
BIS capital adequacy ratio (Consolidated basis) Changes in capital and risk-adjusted assets (Consolidated basis)
(JPY bn) Basel III capital adequacy ratio (%) Change from Common Equity Tier I ratio End of End of End of Ⅲ end of [Basel ] Mar. ’17 Mar. ’18 Mar. ’19 Common Equity Tier I ratio excluding valuation difference Mar. ’18 on available-for-sale securities Capital* 850.8 897.9 913.3 +15.4 16.35 15.95 16.05 Common Equity Tier I 850.8 897.9 913.3 +15.4 15.09 16.35 Excluding valuation difference on 15.95 16.05 718.3 703.6 719.9 +16.3 14.79 available-for-sale securities 13.80 Other Tier I 0.0 0.0 0.0 ±0.0 13.03 12.50 12.65 Tier II 0.0 0.0 0.0 ±0.0
End of End of End of End of Risk-adjusted assets 5,202.8 5,626.9 5,690.1 +63.2 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 ※ 自己資本には、優先株、劣後債務等を含まない Interest rate risk in the banking book (IRRBB) Total credit-risk adjusted assets 4,895.5 5,319.5 5,379.1 +59.6 (Consolidated basis, End of Mar. 2019) Amount corresponding to market risk 15.2 12.7 13.0 +0.3 Results of materiality test: ∆EVE (Economic Value of Equity) (Decrease in economic value of equity due to interest rate shock Amount corresponding to operational risk 292.1 294.7 298.1 +3.4 within IRRBB) Decrease in economic Results of materiality *Capital does not include preferred shares, subordinated debts, etc. value Tier I test* [Other indices related to the Basel III ] JPY 80.4bn JPY 913.3bn 8.8%≦15% (1) Liquidity coverage ratio (Consolidated) ・End of Mar. 2019 : 154.8% (Regulatory level 90% and over) *Financial Services Agency supervision guidelines require ∆EVE to be less than 15% of Tier I capital ・FY2018(Daily average) : 174.5% ΔNII (Net Interest Income):JPY 7.7bn (2) Leverage ratio (Consolidated, end of Mar. 2019) : 7.59% (Rough target 3% and over （Decrease in net interest income due to interest shock Within IRRBB） in trial period) 12 更新
Progress of the 13th Medium-term Business Plan・ Projected performance in FY2019
完成 Expanding business fields (1) Challenge on the expanding business field in the 12th Medium-term Business Plan, is leading to favorable results Aim for further expansion of profitability in these fields as well as development and monetization in new business fields under the13th Medium-term Business Plan
Developing and monetizing business Tokyo metropolitan area Tokyo metropolitan area
fields in the 13th Medium-term Plan 【Market Credit investment】 【Support for asset building】 Interest on loans & Fee income Balance of loans for asset building (term-end balance) （JPY bn） （JPY bn） Areas for further development in Total revenue of interest on loans and fee Total balance 17.7 +16.3 income (Credit Investment Dept.) 205.6 the 13th Medium-term Business Annual interest +6.5 +42.6 189.3 Plan based on 12th Plan policies 6.9
+42.4 146.7 5.7 +3.4 11.2
104.3 4.4 +2.8 7.8 +0.7 +61.5 Ave, rate 5.0 2.4 Growth +2.6 4.3 42.8 3.473% in 1.7 core businesses 0.5 End of End of End of End of End of FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019
Nationwide market Reinforce core businesses 【Consumer finance】 【Business loans for small-sized customers】 Balance of unsecured loans (term-end balance) Funds provided for business turn-around etc. New areas of development and （JPY bn） in which new card loan funds for step-up average rate of three loan （JPY bn） monetization in the 13th Medium- average rate of unsecured products: 3.045% Annual interest loans: 6.464% funds for turn-around +2.6 term Business Plan ( ) Annual Interest of new +2.5 funds for management support 40.6 card loan +8.9 97.7 95.2 Interest amount +5.7 38.0 +17.3 86.3 15.6 17.8 18.2 (Total of three funds above and 32.3 financial services focusing on 0.8 Developing new business fields 69.0 16.5 6.2 +17.7 small business operators) +8.3 0.8 8.0 5.2 (2.1) Guaranty through collaboration with a housing 6.2 24.0 51.3 (1.5) 0.6 16.9 loan specialist, ARUHI (2.0) 13.9 3.6 +14.5 8.8 Collaboration with Monex Group to provide (0.3) financial services 2.5 9.5 0.3 14.4 16.4 17.9 6.8 Development of “HOKEN NO MADOGUCHI @ 11.5 Shizugin” 0.15 3.7 4.0 4.7 4.9 Connection of bank accounts with providers of End of End of End of End of End of 2.7 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 FY2014 FY2015 FY2016 FY2017 FY2018 cashless payment services 13 済 Expanding business fields (2)
Continue to develop business fields and generate JPY 30.0bn revenue by FY2019
Explore new business fields and markets, and expand （JPY bn） Developing and monetizing new business the top line even in the monetary easing environment fields in the 13th Medium-term Plan 30.0
[Revenue from these fields] 27.0 Areas for further development in the 13th Medium-term Business Developing new loan market, Cross-industry collaboration, etc. 0.4 2.0 Plan based on 12th Plan policies Financial services focusing on small business operators Consumer finance Loans for asset building →P19 +7.7 Financial services 6.9 ページ数が Market credit investment →P17 focusing on small 0.3 19.3 business operators 合っている Growth 2.1 か最後もう in * Figures in the parentheses are results in 3Q 2017 +5.4 一度確認す core businesses 0.2 13.9 る 5.7 1.5 +6.2 New areas of development and 4.4 monetization in the 13th Medium- 0.1 7.7 17.7 term Business Plan 0.3 +2.9 2.4 4.8 11.2 +3.1 0.5 Developing new business fields 7.8 Guaranty through collaboration with a housing 1.7 4.3 5.0 loan specialist, ARUHI 1.7 Collaboration with Monex Group to provide financial services FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 Development of “HOKEN NO MADOGUCHI @ Plan Shizugin” 12th Medium-term Business 13th Medium-term Business Connection of bank accounts with providers of Plan Plan cashless payment services 14 Developing new business with firms in other industries (1) 堀川 – Discovery of partners through cross-industry interaction The Bank has built network with venture firms with advanced technology in order to expand new business fields 済 Some of ideas for collaboration with firms that attended the networking event held in Mar. 2018 has been realized Building cross-industry network Cross-industry networking event
• Established “Innovation Promoting Office” , searching for businesses through cross- • Held an event for mid-term reporting in Oct. 2018 to share industry collaboration to create new value-added by building and utilizing network of information on progress of proposed collaboration with 7 firms in other industries companies which the Bank started to connect with since a Established “Innovation Promoting Office” cross-industry networking event (held in Mar. 2018) • Established “Innovation Promoting Office” through revision of organizational structure in Apr. ■ Progress of proposed collaboration 2019 • Intend to flexibly and quickly adopt innovative technologies such as crypto asset, blockchain, Realized collaboration (1) Enhanced marketing by utilizing external data and AI, which have potential to greatly change bank business • By investing in multiple venture funds, the Bank has built relationship with domestic • Collaboration with Treasure Data Inc. and overseas venture firms, come up with ideas for new business, and developed • Connection between internal data within the Bank and external data by building human resources with know-how for start-up and ability to judge promising businesses infrastructure system to manage marketing data ⇒ Efficient proposal and automatic message ■ Network building with venture firms (Started collecting data which can be used in the infrastructure system in Mar. 2019) The Bank Collaboration under consideration (1) Business matching by utilizing of AI Investment • Collaboration with PKSHA Technology Inc. Fund A Fund B Fund C Fund D • Plan to build special platform in which AI helps business matching by searching for needs of matching and choosing partner (Project launched in Mar. 2019)
Collaboration under consideration (2) Index for screening and evaluation based on AI 82 venture firms (as of the end of Apr. 2019) inside and outside Japan • Collaboration with LEEWAYS Inc. Topic • Plan to create index for screening and evaluation by combining the Bank’s logic for Planning “ TECH BEAT Shizuoka” screening and evaluation with AI-based tool by LEEWAYS to analyze real estate ⇒ Enhance accuracy of screening by detailed simulation of income and • Plan to cosponsor a fair featuring advanced technology “TECH BEAT Shizuoka” in expenditure based on AI (Plan to start in FY2019) Jul. 2019 with the prefectural government in order to activate industry and to create Collaboration under consideration (3) Support for clients’ market expansion through EC new businesses in Shizuoka Pref. • Try to realize innovation and to create opportunities for businesses in the region • Collaboration with BASE Inc. through business talks and exhibition of technology by start-up firms with advanced • Plan to support corporate clients to expand market and to rebuild brand by technology and firms within Shizuoka Pref. introducing services offered by BASE, which has abundant know-how in running E- commerce website (Plan to start in FY2019) 15 Developing new business with firms in other industries (2) 堀川 – Cases of businesses which have been commercialized by FY2018 済 New businesses through cross-industry collaboration in various categories have been commercialized by FY2018 Collaboration with Monex Group to provide financial services Guaranty through collaboration with a housing loan specialist, ARUHI
• Monex, Inc. sold some portion of USD-based corporate bond for retail • Shizugin Credit Guaranty Co., Ltd., a group company, started a new business to give investors on the Internet which the Bank issued in Dec. 2018 (total amount was guaranty to a housing loan product “ARUHI Variable S” offered by ARUHI Corporation USD 282mil) (Aug. 2018) • Received 383 applications from Aug. 2018 to Mar. 2019 (Equivalent to 1 Loan Center) • “SHIZUGIN Wrap (MSV LIFE)” based on discretionary investment management (wrap service) by Monex-Saison-Vangurd Investment Partners Clients Application for loan The robo-advisor equipped in the system offers comprehensive service including judgment on investment, exercise of buying and selling, consulting, and so on Housing Loan (Branches in 40 prefectures nationwide) • Financial instruments intermediary services with Monex, Inc. Guaranty Customers can apply to open an account in Monex, Inc. through website ofShizuoka Bank Shizugin Credit Guaranty Co., Ltd. Application for guaranty
Intend to provide financial services with high value-added Develop the scheme in collaboration with other firms, and let such by utilizing know-how and customer base of Monex Group businesses grow to be sources of profit in the nationwide market
Development of “HOKEN NO MADOGUCHI @ Shizugin” Connection of bank accounts with providers of cashless payment services
• Prepare channels to provide financial services including insurance products at one • Started connection of bank accounts with a smartphone settlement service location by developing “HOKEN NO MADOGUCHI @ Shizugin”, joint stores by “Origami Pay” offered by Origami Inc. (Aug. 2018) HOKEN NO MADOGUCHI GROUP INC. and the Bank • Major smartphone QR settlement services are available through connection with accounts • Total 6 stores in Shizuoka Pref. and Kanagawa Pref. Settlement services available through Origami Pay, LINE Pay, Pay Pay
Interest and fee income in market credit investment increased by JPY 6.5bn YoY Build low-risk portfolio by investing in diversified products and focusing on loans with high credit rating
Interest & Fee income in market credit investment Breakdown of loan by product (Monthly average balance in Mar. 2019: JPY 560.4bn) (JPY bn) Interest on loans Corporate credit risk (senior) Corporate credit risk (mezzanine) Fee income 17.7 8% Asset finance Income from PE and others Project finance 18% 35% Real estate non-recourse loan +6.5 Securitized loan (CLO etc.) 11% CLO balance (As of the end of Mar. 2019) +3.4 11.2 JPY 49.6bn (16 contracts, JPY 3.1bn on average) 12.4 All have AAA rating 24% Subordination ratio: 35.0% - 41.8% 4% +2.8 7.8 Well-diversified portfolio +0.7 8.2 JPY-based : Other-currencies-based = 6 : 4 5.0 4.3 6.1 +2.6 1.9 Credit rating of loans (As of the end of Mar. 2019) 1.8 3.9 1.7 0.2 1.4 0.7 3.4 0% 0.2 0.8 2.3 0.7 1.6 0.7 0.4 1.0 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Performing (Equivalent to or higher than single A) 28% Performing (Lower than single A) Requiring caution
Investment in private equity (PE) and others (JPY bn) 72% FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Almost all loans are classified Capital commitment in PE 14.0 16.0 26.1 36.7 47.3 57.6 as performing Amount of investment 1.6 2.8 7.4 12.9 18.2 25.2 in PE Amount in investment * Excluding real estate non-recourse loan 9.8 13.0 15.9 20.2 25.3 29.8 in private placement REIT (Credit ratings of all real estate non-recourse loans are performing with rating lower than single A, and LTV is 61.9%)
Total income 0.7 2.3 0.4 1.0 1.6 3.4 Return to risk End of Mar. 2019 Targeting well-diversified portfolio by continuously investing every fiscal year Amount of Credit Investment Dept. JPY 43.6bn ⇒ Leading to generation of constant revenue as no. of cases of investment which is risk capital used (Share in total) (13.9%) on the growth phase in J-Curve effect increases Return to risk (Risk-adjusted return / Amount of risk capital used) 39.2% 17 完成 Consumer loans (1)
Consumer loan balance (term-end balance) increased by JPY 122.8bn from the end of Mar. 2018, maintaining increase trend mainly due to growth of housing loans
Consumer loan balance (term-end balance) Unsecured loan balance (term-end balance)
Unsecured loans (Unsecured but guaranteed) (JPY bn) Unsecured loans +2.5 （JPY bn） Housing loans New card loans Education loans 95.2 97.7 Loans for asset building +122.8 Auto loans 86.3 5.8 5.5 Apartment loans Others 5.0 Educational 15.6 Others 18.2 loan 69.0 16.5 3,238.6 3.3 +1.7 15.6 3,115.8 13.9 97.7 8.0 11.8 2,945.1 95.2 9.8 2,774.6 86.3 34.3 37.7 25.4 30.2 Auto loan 69.0 +3.4
+102.4 22.5 22.8 23.0 23.3
End of End of End of End of 2,105.8 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 2,003.4 1,879.2 1,760.1 Interest amount and rate of consumer loans
Unsecured loans (JPY bn, %) Housing loans Loans for asset building Apartment loans Others +1.1 104.3 146.7 189.3 205.6 Average rate of consumer loans 45.2 46.3 41.6 43.6 6.2 3.6 5.2 6.2 726.0 725.4 728.0 734.9 23.0 23.0 23.1 23.5
1.552% 1.531% 1.498% 1.463% 115.2 107.5 99.9 94.6 2.4 4.4 5.7 6.9 10.6 9.4 End of End of End of End of 8.7 8.3 2.0 1.6 1.5 1.4 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 FY2016 FY2017 FY2018 FY2019 18 完成 Consumer loans (2) – Apartment loans, loans for asset building
Build a sound loan portfolio of apartment loans (including loans to businesses) and loans for asset building by conducting appropriate assessments of business risks
Term end balance and delinquency of Apartment loans Term end balance of Asset building loans
（JPY bn） Corporate * （JPY bn） +16.3 Retail outside Shizuoka Pref. Retail in Shizuoka Pref. Total balance +37.2 205.6 Delinquency rate (3 months or longer, excluding retail and inheritance-related) Delinquency rate (3 months or longer) 189.3 938.8 901.6 815.6 816.6 861.1 173.7 203.9 146.7 65.8 90.6 135.6
217.5 206.2 198.9 196.5 201.8 104.3
Ave rate 42.8 519.8 526.6 3.473％ 532.3 531.4 533.1 0.00% 0.05% 0.00% 0.00% 0.00% 0.10% 0.10% 0.11% 0.09% End of End of End of End of End of 0.05% Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 End of Mar. 2015 End of Mar. 2016 End of Mar. 2017 End of Mar. 2018 End of Mar. 2019 *Corporate : apartment loans for asset management companies which are not classified as customer loan
LTV of retail apartment loans at the end of Mar. 2019: 69.2% Delinquency rates (Inside Shizuoka Pref.: 70.4%, Outside Shizuoka Pref.: 66.1%) on apartment loans are low and occupancy rates remain high Apartment loan： 【Survey on occupancy for rental property】 Help customers who already have land and other real estate to better utilize Inside Shizuoka Pref. Outside Shizuoka Pref. Loan for asset building： Total ≪Reference≫Vacancy rate statistical data Help customers with high income to start building assets from now on 94.9% 94.4% 94.4% Ministry of Public Management “Housing, 93.6% Land survey statistics”(2013) 93.0% ％ 91.8% Shizuoka Prefecture :24.8 Both in apartment loans and loans for asset building, appropriate 91.2% 92.1% 91.4% 92.0% Tokyo :16.2％ assessments involve reviewing the repayment capability of borrowers and Kanagawa Prefecture :17.3％ assessing risk at businesses, including the profitability of lease properties 91.2% 91.4% 90.7% National average :18.9％ based on factors such as vacancy risk and downside risk to rents 90.2% 90.5%
Jan. 2014 Dec. 2014 Dec. 2015 Dec. 2016 Dec. 2017 survey survey survey survey survey 19 Consumer loan (3) – Loans for asset building 完成 Stance Credit risk maintains low (JPY bn) System for strict stance in acceptance of application & Total balance 205.6 Credit review with emphasis on profitability of property itself (risk at business) 189.3 Delinquency rate (3 months or longer) Customers can apply for those loans in limited locations and only staff who have 146.7 completed specialized internal training can deal with them Only original documents are accepted as evidence for financial assets and so on 104.3 (Strict rule to check such information directly from the customers themselves, not from brokers) Credit review is based on simulation where stated stresses are put on occupancy rates, 42.8 0.05% 0.00% loan interest rate, and so on (Whether or not the property is used for sublet is considered only 0.00% 0.00% 0.00% as reference, and credit review does not depend on that aspect) End of End of End of End of End of Objective evaluation of real estate collateral by external party (independent on sales dept.) Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 is adopted
Information on loan applications accepted (Data on loans financed by Asset Building Support Division in FY2018) Limited credit risks with sound borrowers’ profile Property expected to keep high occupancy rate Loan portfolio made up of diversified small-amount loans
Annual income of borrowers (As of acceptance of loans) Geographic distribution of property Loan amount per deal Average annual income: JPY 14mil Most are in metropolitan area, and expected to keep high Average loan amount per deal: JPY 66mil occupancy rate due to closeness to stations and main roads 6% JPY 7mil < * 5% 5% 1% 10% JPY 7mil ≤ and < JPY 10mil * 5% 2% Tokyo inside the 23 wards JPY 50mil < JPY 10mil ≤ and < JPY 15mil 7% (central part) 6% Tokyo outside the 23 wards 34% JPY 15mil ≤ and < JPY 20mil 11% JPY 50mil ≤ and < 15% JPY 20mil ≤ and < JPY 30mil Kanagawa Pref. JPY 100mil 22% ≤ JPY 30mil JPY 100mil ≤ and < Chiba Pref. 48% 30% JPY 150mil * Borrowers with sufficient credibility Saitama Pref. JPY 150mil ≤ and < because of total income of family, financial 34% JPY 300 mil asset, repayment ratio to income, and so on Aichi Pref. 35% ≤ JPY 300mil 24% Shizuoka Pref. Financial assets borrowers have (As of acceptance of loans)
Average financial assets: JPY 33mil Introduction of potential customers is not Among all loan deals, about 50% is less than JPY 50mil, concentrated to specified brokers 16% JPY 10mil < and more than 80% is less than JPY 100mil, 4% 17% JPY 10mil ≤ and < JPY 20mil showing portfolio made up of diversified small-amount loans JPY 20mil ≤ and < JPY 30mil Asset Building Support Division holds various seminars for customers, supporting 13% JPY 30mil ≤ and < JPY 40mil 29% JPY 40mil ≤ and < JPY 50mil asset building in areas other than real estate investment as well 21% ≤ JPY 50mil Plan to expand relationship with customers from medium-and-long-term viewpoint 20 堀川未 Expansion of non-face-to-face channel Non-face-to-face channel has become important point of contact with clients through expansion of lineup of services Internet Branch, with its deposit balance more than JPY 500.0bn, has grown into an established funding channel in nationwide 済 market Lineup of non-face-to-face channel Loans transaction in non-face-to-face channel
Internet Branch Shizugin Direct Shizugin Shizugin Money Forward Data of application for unsecured loan (*) * Excluding such products that are assumed Direct Lite STATION for Shizuoka through non-face-to-face channel to be offered through face-to-face channel Bank Ratio of application through non-face-to-face channel 97% Face-to- Of which through smartphone 84% PC etc. face Account solely 23% 2% Internet banking App of household Type offered on the Internet banking Smartphone app (Lighter version) account book Smartphone Internet 75% Request to check PC etc. Face-to-face balance and Automatic housing Request to check balance and record Request to check 13% 3% record of account, account book, Major services of account, Bank transfer, Transaction balance and Provision of asset FY2016 related to time deposit, etc record of account Smartphone various management information 84%
No. of users at the FY2018 234K 285K 457K 389K 100K end of Mar. ‘19 (+34K) (+20K) (+107K) (+192K) (17K) (Compared to end of Mar. ‘18) Data of acceptance of housing loans in Direct Loan Center Funding deposit in nationwide market No. of acceptance of application Loan amount launched (JPY bn) Historical data on no. of accounts and amount of deposit No. of accounts at the end +1,311 3,305 +1.5 14.8 (JPY bn) (accounts K) of Mar. 2019 : 234K 600 Term-end balance (Left axis) 250 560.5 Distribution of customers (by region) 1,994 13.3 Number of accounts at the term end (Right axis) 502.3 500 475.3 200 Tokyo 396.4 390.9 400 13% Kanagawa 347.3 Pref. 150 Shizuoka 11% FY2017 FY2018 FY2017 FY2018 300 260.1 Pref. 39% 100 Aichi Pref. 189.4 200 5% About Direct Loan Center Others • Established in the headquarters in Apr. 2017 to enhance convenience for customers who 50 32% 100 prefers transactions in non-face-to-face channel 34.1 21.2 • A counter-less loan center focusing on non-face-to-face transactions which can complete 0 0 Outside Shizuoka Pref. : 61% whole process of loans End of End of End of End of End of End of End of End of End of End of Mar. '10 Mar. '11 Mar. '12 Mar. '13 Mar. '14 Mar. '15 Mar. '16 Mar. '17 Mar. '18 Mar. '19 （At the end of Mar. 2010 : 16％ ） 21 これまで実施してきた業務BPRをより一層加速し、最少人数で業務運営可能なデジタル店舗の構築を目指す
Operation process reform
Aim to realize “digital branch”, a branch managed by less staffs, by further accelerating operations BPR which the Bank continued so far
FY2005 - FY2008 - FY2011 - FY2014 - FY2017 - 9th Medium-term Business Plan 10th Medium-term Business Plan 11th Medium-term Business Plan 12th Medium-term Business Plan 13th Medium-term Business Plan -
Standardization, systematization, centralization of operation BPR in operation Ongoing BPR, Operation process of deposit, domestic exchange, and loan for housing loan Operational concentration reform
Reduction of workload Reduction of time to process Number of personnel in at branches workload on housing loans front and back office Management of branches -23% -57% -20% -48% -63% (people) End of End of Increase/ Mar. 2008 Mar. 2017 Decreas at low cost through drastic BPR Front-office Higher productivity Deposit and domestic exchange at branches 2,411 2,919 +508 Public fund and agency services by introducing RPA Assuming workload in FY2010 is 100％ Back-office Teller service 1,693 902 -791 at branches Sales structure reform →P,35 100% 80% 52% 37% Shizuoka Bank * 5,164 4,782 -382 FY2007 FY2009 FY2010 FY2010 FY2011 FY2012 FY2013 * Including temporary employees Back-office workload at Time to process workload Staff at back-office branches reduced by 60% on housing loans reduced by 60% relocated to front-office Even further enhancement of productivity Building new sales structure Shift to “5 less” at branches Use of RPA Development of sales structure reform ・System for uniform development of RPA prepared in Aug. 2018 • Integrate staffs in a business area and engage them in Paperless Seal-less ・Operations requiring 12K hours per year have been automated businesses with high added-value including inheritance Integrate branches and staff in business area (in FY2018) and business succession Cashless • Maintain branch network through decreasing required Target in FY2019 staffs and equipment in branches Improve efficiency and reduce cost of branch operation Counter-terminal-less Automate operations requiring 200K hours per year • Start the reform in 13 additional Areas in FY2019 Share expertise and know-how among branch personnel （equivalent to workload of 100 staffs） (resulting in 18 Areas in total) Counter-less by expanding operations to use RPA Realization of “digital branch” Strengthen solutions marketing and ensure provision of highly targeted financial services without shrinking the Speed-up of BPR ATMs with branch network Restructuring of headquarters NEW in operations enhanced function Integration of section for business Establishment of Further improvements in customer convenience promotion at branches and that for Synergy Realization of “digital branch”, “Operations BPR Project Team” and satisfaction planning branch channel a branch managed by less staffs • Initial trial of sales structure reform started in two Areas in Apr. 2018 • Demonstrate function of planning branch channel • Speed-up of BPR in operations reflecting branch • The trial started in three other Areas in Jul. 2018 Decrease of based on strategy for business promotion at branches function • The reform will start in 13 additional Areas during FY2019 branch-related cost 22
預金・為替・融資事務の 住宅ローン 継続的なＢＰＲ 標準化・システム化・集中化 業務BPR 業務集中化の拡大 第9次中計 第10次中計 第11次中計 第12次中計 営業体制改 働き方改革 Next Generation System The Next Generation System was scheduled to start operation in Jan. 2019, but the startup date has been pushed back to sometime during FY2020 to secure sufficient time for testing; the decision was made to ensure the system is stable, as it needs to be compatible with other various systems, including the updated Japanese Banks’ Payment Clearing Network (Zengin System), which currently faces delays Updates to hardware in the current system were completed in May 2017 and there is no impact on the stable operation of the system or on our strategies in the 13th Medium-term Business Plan
Current system (main frame system) Each system program is complex and complicated → Factors that impede flexible system development
Speed up responses to environmental changes through shorter development periods and realize cost reductions and Next generation system (Open system) efficiency by transitioning to open systems and simplifying system architecture
Scheduled to run during FY2020 Run in May 2017 (Apr. 2018, reviewed startup date) Use of external technology Core system Front-Hub system Other Component Component Component AI （CRM, EBM etc.） public of deposits of exchanges of loans clouds Run in Oct. 2018 Open API (Under internal trial) Pursue speed and efficiency by componentization and use of tables Run in Oct. 2017 API Infrastructure Public DMP* Integrated database 営業店営業店 Branchシステム system 等 《Cloud》 システム 等 ● etc. ● Data accumulation・Unified management ●
* Data Management Platform
Department systems Internet
Vision to realize by building next generation system Realization of “location-free” bank Speed-up in provision of products Reduction of cost Offer services with the same level of quality both in Enable speedy provision of products through Reduce costs related with systems through face-to-face and non-face-to-face channels simplification of program structure enhancement of efficiency and so on ATM Less time required Merger of systems At branches Customers Tablets Transaction to introduce new products Effect of can be Less time required reducing PCs Trial, monitoring Private cloud infrastructure At home completed to realize strategy in every costs related Continuation Revision of with systems Outside home Smartphone channel Abolition Reduction of counter-terminals , Expansion products (Use of tablets) 23 Projected performance in FY2019 (1) Ordinary profit and profit attributable to owners of the parent in FY2019 (both consolidated) are projected to be JPY 73.0bn and JPY 51.5bn, respectively, based on change in environment from the time when the 13th Medium-term Business Plan was made
(JPY bn) Plan FY2019 Projected performance FY2019 Change in FY2016 FY2017 FY2018 YoY (Mid-term in FY2019 (Projected) 3years Business Plan)
Ordinary profit 47.1 65.8 63.4 73.0 +9.6 +25.9 77.0 or more Consolidated Profit attributable to owners 29.3 50.1 46.9 51.5 +4.6 +22.2 54.0 or more of the parent ROE 3.15% 5.21% 4.67% 5.1% +0.43pt +1.95pt 6% level
OHR 76.4% 62.4% 59.0% 53.9% -5.1pt -22.5pt 55% level
Common Equity Tier I ratio 16.35% 15.95% 16.05％ 14.9% -1.15pt -1.45pt 14% level
Gross operating profit 98.6 127.3 134.8 137.7 +2.9 +39.1 147.3 Net interest income 109.5 111.5 116.6 117.7 +1.1 +8.2 121.7 15.2 16.2 +0.4 +1.0 17.0
Fees and commissions 15.2 15.8 Nonconsolidated Trading income 0.3 0.8 0.8 0.9 +0.1 +0.6 1.7 Other operating profit -26.4 -0.2 1.6 2.9 +1.3 +29.3 6.9
(Bond-Related income such as JGBs) (-30.1) (-4.2) (-1.1) (1.5) +2.6 +31.6 (3.7) Expenses (-) 79.2 82.2 80.9 77.5 -3.4 -1.7 83.0
Ordinary profit 51.8 56.2 56.5 61.5 +5.0 +9.7 64.0
Net income 24.4 43.4 42.6 43.0 +0.4 +18.6 44.5
Credit-related costs (-) 4.1 -4.5 4.8 4.6 -0.2 +0.5 3.7
24 Projected performance in FY2019 (2) – Comparison with the 13th Medium-term Business Plan
堀川 While projected performance in FY2019 is lower than target in the 13th Medium-term Business Plan based on 作業中 consideration in environment of stock market and of interest rate inside and outside Japan, profit from new business fields is likely to reach to JPY 30.0bn, a target in the 13th Medium-term Business Plan
Intend to further grow core business field and to develop and monetize new business fields in FY2019, leading to sustainable growth in the 14th Medium-term Business Plan
Comparison of consolidated ordinary profit between target in (JPY bn) the Medium-term Business Plan and current projection
Plan for FY2019 Projected performance The 14th Medium-term (Target in the 13th Medium-term in FY2019 Business Plan Business Plan) (FY2020 -) -4.0 compared to target in the Gap between consolidated th and nonconsolidated 13 Medium-term Business Plan
Market Others Interest on loans Consolidated operations +2.5 -2.0 +2.0 Consolidated ordinary profit division Expenses -12.0 -5.5 ordinary profit 77.0 73.0
Bank branch division +9.6 +2.5 (+15%) Increase interest on loans, and fees and incomes Gains on investment trust Consolidated and gains and losses on bonds ordinary profit such as JGBs : -8.5 in FY2018 Generate JPY 30.0bn 63.4 in new business fields Increase in funding cost of foreign currencies : -3.5 Decrease expenses centering system-related and branch- Revise target in market operations related expenses division based on the change in investment environment 25 未 Shareholder return (1) – Profit distribution
For FY2018, the Bank plans to pay an annual dividend of JPY 22 per share (up JPY 1 YoY), and completed share buyback during Nov.-Dec. 2018 (Buyback period: Nov. 9 - Dec. 10, no. of shares: 10mil, buyback amount: JPY 10,069mil) The Bank maintains the target shareholder return ratio of “50% level in medium and long term ” under the 13th Medium- term Business Plan
Dividend trends 13th Medium-term Business Plan
FY2015 FY2016 FY2017 FY2018 Plan FY2019 (E)
Annual dividend per share JPY20.00 JPY20.00 JPY21.00 JPY22.00 JPY22.00 (JPY10.00) (JPY10.00) (JPY10.00) (JPY11.00) (JPY11.00)
( ) : Figures of interim dividend per share Profit distribution to shareholders (JPY bn) FY ’09– ‘18 FY2015 FY2016 FY2017 FY2018 Plan (10years) Accumulated total Annual dividend (1) 12.3 12.2 12.5 13.0 106.0 Repurchase of shares (2) 7.0 8.5 9.7 10.1 Accumulated total (Shares bought back: million shares) (5) (10) (10) (10) 111.0 Accumulated total Shareholder returns (3)=(1)+(2) 19.3 20.7 22.2 23.0 217.0 Net income (4) 44.0 24.4 43.4 42.6 Accumulated 382.9 Nonconsolidated Dividend payout ratio (1)/(4)x100 27.91% 49.83% 28.74% 30.38% Average 27.67% Shareholder return ratio (3)/(4)x100 43.82% 84.60% 51.16% 53.99% Average 56.68%
Profit attributable to owners of the 47.9 29.3 50.1 46.9 Accumulated total parent (5) 433.9 Consolidated Dividend payout ratio (1)/(5)x100 25.62% 41.58% 24.90% 27.63% Average 24.41% Shareholder return ratio (3)/(5)x100 40.23% 70.60% 44.32% 49.11% Average 50.01%
[Reference] Average in 5years ROE (Consolidated) 5.18% 3.15% 5.21% 4.67% 4.78%
26 完成 Shareholder return (2) – Share buybacks, Trends in EPS/BPS
The bank has regularly bought its own shares since FY1997, resulting in accumulated number of shares repurchased of 226mil In FY2018, the Bank cancelled 30mil shares on May 31st. In addition, the Bank bought back 10mil shares by Dec. 10th
As of the end of Mar. 2019 Historical share buybacks No. of outstanding shares (including treasury stocks) : 615,129 thousands Shares Repurchase Number of shares Cancellation No. of treasury stocks : 31,226 thousands bought back amount of shares cancelled amount (thousand shares) (JPY mil) (thousand shares) (JPY mil) FY1997-FY2015 Cancel 10mil shares in May 2019 195,811 186,873 140,404 128,892 （Accumulated total） FY2016 10,000 8,496 20,000 20,578 Buy back 10mil shares in May and Jun. 2019 FY2017 10,000 9,736 － －
FY2018 10,000 10,069 30,000 30,530 After cancellation and buyback Total 225,811 215,175 190,404 180,000 No. of outstanding shares (including treasury stocks) : 605,129 thousands No. of treasury stocks : 31,226 thousands Bought 28% of outstanding shares at the end of Mar. 1997
(JPY) 【EPS(Earnings Per Share)】 (JPY) 【BPS(Book-value per share)】 90 1,800 1,638.17 80 72.14 1,600 70 1,400 60 1,200 50 1,000 40 800 30 600 587.56 20 400 20.39 10 200 0 0 FY1997 FY2000 FY2003 FY2006 FY2009 FY2012 FY2015 FY2018 FY1997 FY2000 FY2003 FY2006 FY2009 FY2012 FY2015 FY2018 27 更新なし
Reference Economy in Shizuoka Prefecture and current state
Positions as distribution hub between Tokyo and Osaka/Kyoto Represents leading manufacturing prefecture in Japan Mt.Fuji Owns a lot of export-driven manufacturers handling 完成 machinery of transportation and music instrument and etc. Has many representative tourist locations with rich natural resources
Percentage breakdown of The Port of GDP in Shizuoka Prefecture by industries Tagonoura ●TOSHIBA MACHINE (%) ● SHIZUOKA BANK 37.1 Other The Port of Shimizu 46.2 ● Construction Shin-Tomei Expressway STAR MICRONICS 4.8 7.3 The Port of Yaizu 5.7 Wholesale/Retail 10.6 Izu Peninsula 13.2 Tomei ● HAMAMATSU PHOTONICS Real estate Expressway 12.2 ● YAMAHA Mt. Fuji Shizuoka Airport 40.2 Manufactuing ● SUZUKI ● YAMAHA MOTOR 22.7 The Port of Omaezaki All-Japan Shizuoka Pref. Izu Peninsula awarded Global Source: Cabinet Office , Government of Japan, FY2015 UNESCO World Heritage Site in Shizuoka Prefecture Geopark status by UNESCO No. of listed companies with HQs Mt. Fuji Nirayama Reverberatory Furnaces • The Izu Peninsula was certified as a UNESCO in Shizuoka Prefecture (Registered in Jun. 2013) (Registered in Jul. 2015) Global Geopark in Apr. 2018 Inscribed on the World Heritage List as • Global Geoparks are natural parks of * As of the end of Mar. 2019 Inscribed on the World Heritage List as “Fujisan, sacred place and source “Sites of Japan’s Meiji Industrial Revolution: topographical and geological significance. Listing No. of companies of artistic inspiration” Iron and Steel, Shipbuilding and Coal Mining” There are nine UNESCO Geoparks in Japan TSE 1st section 23 TSE 2nd section 8 Mothers 1 Jasdaq 17 Nagoya Stock Exchange 2nd section 1 Total 50 28 Economic scale of Shizuoka Prefecture
完成 The Prefecture accounts for 3% share of all-Japan, and ranks 10th in the scale of economy among prefectures The Prefecture has greater GDP than total GDP of 4 prefectures in Shikoku and 3 prefectures in Hokuriku GDP in the Prefecture is next to those in New Zealand, Algeria, and Qatar
Shizuoka Prefecture indices Shizuoka Prefecture economic scale
Prefectural GDP (FY2015, Nominal) Share of all-Japan National ranking Rank Prefecture/Region (USD bn) Population 3.68mil 2.9% 10th of 47 (2017) 9 Fukuoka Prefecture 157.0
No. of households 1.57mil 2.7% 10th of 47 (2018) 10 Shizuoka Prefecture 144.0 11 Ibaraki Prefecture 108.2 Nominal prefectural GDP JPY 17.3tn 3.2% 10th of 47 (FY2015) - 4 prefectures in 118.0 Per-capita income JPY 3.316mil ― 6th of 47 (FY2015) Shikoku - 3 prefectures in No. of business Hokuriku 103.7 170K 3.1% 10th of 47 (2016) establishments GDP comparison with countries (2015)
Amount of shipments of Rank Country (Region) (USD bn) JPY 16.7tn 5.3% 4th of 47 (2017) manufactured goods, etc. (*) 55 New Zealand 175.8
Agricultural output(*) JPY 226.3bn 2.4% 15th of 47 (2017) 56 Algeria 166.0 57 Qatar 161.7 Fishery production volume 200k tons 6.2% 4th of 47 (2017) - Shizuoka Prefecture 144.0 No. of industrial locations (*) 67 6.0% 4th of 47 (2018) 58 Hungary 122.8
No. of new housing starts 23K 2.5% 10th of 47 (2018) 59 Angola 116.2
* Based on flash reports *Sources: Economic and Social Research Institute (ESRI) Cabinet Office , Government of Japan 29 完成 Historical data of loans
Total loan balance (average balance) had increased by JPY 3,320.6bn for 14 years since FY2004 to FY2018, of which JPY 1,447.4bn was in Shizuoka Pref. SMEs loan balance: JPY +1,219.2bn, consumer loan balance: JPY +1,746.2bn
Total loan balance (average balance) SMEs loan balance (average balance) (JPY bn) (JPY bn) +3,320.6 Portion in Shizuoka Pref. +1,219.2 Portion in Shizuoka Pref. 8,336.9 3,314.1 8,042.0 3,162.7 7,694.2 2,975.8 7,011.5 2,726.2 2,579.8 6,325.6 2,437.5 5,791.3 2,094.9 5,016.3 +1,447.4 +417.4 2,108.2 2,044.9 2,100.3 4,739.7 4,837.6 4,859.2 4,576.6 2,047.3 4,276.6 1,994.2 3,858.5 1,874.4 3,411.8 1,690.8 8th Medium-term 9th Medium-term 10th Medium-term 11th Medium-term 12th Medium-term 13th Medium-term Business Plan Business Plan Business Plan Business Plan Business Plan Business Plan
FY2004 FY2007 FY2010 FY2013 FY2016 FY2017 FY2018 FY2004 FY2007 FY2010 FY2013 FY2016 FY2017 FY2018 Share of loans in Shizuoka Prefecture Consumer loan balance (average balance) (%) (JPY bn) Shizuoka Bank Portion in Shizuoka Pref. 30.3 30.2 30.2 30.2 29.7 +1,746.2 3,162.6 28.9 29.1 29.3 29.1 29.2 29.4 3,015.5 27.3 28.0 26.5 2,849.6 2,401.2 2,166.8 24.4 24.2 23.9 23.9 24.2 23.9 24.0 23.6 23.2 23.0 22.9 22.9 23.1 23.3 2,261.6 1,819.2 2,157.6 2,221.0 1,416.4 +1,065.0 Shinkin banks Mega banks 1,931.1 9.8 9.4 9.2 9.0 1,766.6 8.0 7.9 8.0 1,511.9 7.2 6.7 6.8 6.9 7.4 7.0 7.1 1,196.6
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2004 FY2007 FY2010 FY2013 FY2016 FY2017 FY2018 30 完成 Historical data of deposits Total deposit balance (average balance) had increased by JPY 2,962.6bn for 14 years since FY2004 to FY2018, of which JPY 2,802.2bn was in Shizuoka Pref. The Bank has received highest level of credit ratings from two overseas and one Japanese agencies
Deposit balance (average balance) Retail deposit balance (average balance) (JPY bn) (JPY bn) +2,962.6 Portion in Shizuoka Pref. Portion in Shizuoka Pref. +1,898.7 9,303.6 9,641.2 6,628.3 9,049.1 6,362.1 6,104.1 5,689.1 8,408.6 4,925.0 5,184.8 8,376.8 4,729.6 7,615.6 8,011.4 6,678.6 6,759.2 7,692.1 +1,929.1 7,045.1 6,192.5 5,931.1 5,644.8 6,407.9 5,834.3 +2,802.2 5,259.8 5,574.6 4,757.9 4,263.4 4,490.7 Deposit balance (average balance ) in Internet Branch 8th Medium-term 9th Medium-term 10th Medium-term 11th Medium-term 12th Medium-term 13th Medium-term Business Plan Business Plan Business Plan Business Plan Business Plan Business Plan 517.2 475.4 26.8 302.4 423.3 FY2004 FY2007 FY2010 FY2013 FY2016 FY2017 FY2018 FY2004 FY2007 FY2010 FY2013 FY2016 FY2017 FY2018
Loan-Deposit ratio / Security-Deposit ratio (excluding NCD) External ratings (As of the end of Mar. 2019) (%) Has received high credit ratings from two overseas and Loan-Deposit ratio + Security-Deposit ratio one Japanese agencies ＜Standard & Poor’s＞ 119.4 Shizuoka Bank 113.2 116.8 116.3 113.5 115.1 114.5 114.4 110.1 111.8 106.1 105.3 A+ 104.3 100.0 98.8 (Seven Bank, Ltd., Japan Post Bank Co., Ltd.) 89.9 89.1 88.9 85.7 88.8 87.9 88.0 86.8 86.4 82.4 84.9 85.0 85.5 A 75.1 78.0 Loan-Deposit ratio Security-Deposit ratio A-
Regional banks Except for regional banks (Mega banks, Trust banks etc.) 29.2 32.1 30.8 31.2 29.6 27.1 24.6 26.3 26.6 26.4 25.0 21.2 20.3 ＜Other external ratings＞ 13.6 13.3 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Moody’s A1 R&I AA- 31 更新済 Profit levels and productivity improvement
Ongoing BPR program increased front-office staff and revenue without boosting the overall headcount Productivity improvement (IT investment, BPR) prevented increase of expense while net income remained stable
Gross operating profit and Net income Productivity Improvement （JPY bn） 〈10th Medium-term Business Plan〉 152.0 151.4 FY2008 – FY2010 Reduction of workload at branches 148.7 148.3 146.3 144.5 144.5 145.4 133.5 136.5 134.8 Increased efficiency through IT 127.3 -23% 123.3 124.3 investment and the expansion of -57% centralized processing 98.6 * Depositt and domestic exchange • Back-office workload at branches reduced by 60% Pubic fund and agency services • Repositioned back-office staff in sales Teller service positions 40.9 42.8 42.6 44.0 43.4 42.6 36.3 35.0 31.4 35.2 32.1 35.4 34.7 24.4 Top-line growth FY2007 FY2009 FY2010 12.8 〈11th Medium-term Business Plan〉 Reduction of time to process FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2011 – FY2013 workload on housing loans Extend productivity improvements -20% -48% -63% 9th Medium-term 10th Medium-term 11th Medium-term 12th Medium-term 13th Medium-term Business Plan Business Plan Business Plan Business Plan Business Plan to the front office workload *Decrease in gross operating profit in Treasury Dept. :JPY -47.0bn • Time to process workload Expenses and Number of employees on housing loans reduced by 60%
Expenses All employees Bank employees (JPY bn, Employees) 100% 80% 52% 37% 5,289 5,273 5,164 Further boost top-line growth FY2010 FY2011 FY2012 FY2013 4,976 * Assume the amount of business in FY2010 is set to 100 4,975 4,942 4,915 4,936 4,901 4,829 4,652 4,757 4,782 4,779 4,745 Number of personnel in 79.6 81.0 79.7 81.5 77.7 79.3 81.1 78.7 79.5 79.2 〈 th 〉 front and back office 72.6 73.2 74.1 12 Medium-term Business Plan 82.2 80.9 FY2014 – FY2016 Mar. Mar. Increase / 2008 2017 Decrease Ongoing BPR, Operational concentration Front-office 2,411 2,919 +508
3,077 Back-office 1,693 902 -791 2,953 2,881 2,851 2,841 2,874 2,855 2,865 2,860 2,851 2,830 “SHIZUGIN Headquarters Tower” 2,789 2,753 2,739 2,736 started operation Shizuoka Bank [inc. temporary 5,164 4,782 -382 →Established new work-style employee] FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 32
完成 Loans – Term-end balance
Total loan balance (term-end balance) increased by JPY 269.4bn (+3.2%) compared to the end of Mar. 2018 mainly due to the increase of SMEs loans and retail loans
Total loan balance (term-end balance) +269.4 Term-end Change from the Annual Whole Bank (JPY bn) balance end of Mar. ’18 growth rate Portion in Shizuoka Pref. Total loan JPY 8,556.9bn JPY +269.4bn +3.2% 8,556.9 balance 7,955.3 8,287.5 SMEs loan +6.2 JPY 3,448.8bn JPY +120.0bn +3.6% balance 4,865.1 4,923.8 4,930.0 Retail loan balance JPY 3,252.0bn JPY +123.5bn +3.9%
Large and Medium JPY 1,497.5bn JPY +37.3bn +2.5% sized enterprises ～
End of Mar. '17 End of Mar. '18 End of Mar. '19 Loan balance in foreign currencies SMEs loan balance (term-end balance) Retail loan balance (term-end balance) (term-end balance) +120.0 (JPY bn) (JPY bn) (JPY bn) Domestic Oversas Whole Bank Whole Bank +123.5 Portion in Shizuoka Pref. 3,448.8 Portion in Shizuoka Pref. -23.8 by amt. chg. : JPY +25.2bn 3,328.8 3,252.0 by ex. rate : JPY -1.4bn 3,134.6 3,128.5 2,956.1 628.2 588.9 565.1 224.7 214.2 2,302.5 217.7 2,216.6 2,272.7 2,141.5 2,176.2 2,151.7
403.5 -24.5 +29.8 374.7 347.4
～ ～
End of Mar. '17 End of Mar. '18 End of Mar. '19 End of Mar. '17 End of Mar. '18 End of Mar. '19 End of Mar. '17 End of Mar. '18 End of Mar. '19 33 完成 Loans – Loans by industries
Business loans to real estate account for approximately 13%, and those to each industry such as construction, leasing, and money lending and investment account for less than 10% of loan balance respectively. Build a credit portfolio with borrowers from diverse industries Expected Loss (EL) for all industries : JPY 7.7bn Unexpected Loss (UL) for all industries : JPY 70.5bn
Contemporary status of business loans to particular industries
[ Credit balance (as of the end of Mar. 2019) ] [ Credit balance vs. expected loss rate* ] (JPY bn, %) (JPY bn) Excluding borrowers classified as “practically bankrupt” and below Balance Composition Change from the 850 ratio end of Mar. ’18 Real estate All industries 5,655.4 100.0 +153.8 750
Real estate (*1) 771.3 13.6 +64.0 650 ・Expected loss ratio is up 0.03%, same Wholesaler (*2) 419.4 7.4 +4.3 level with the previous fiscal year. ・The Bank strictly manages credit risk.
Credit balance 550 Money lending Transportation 267.4 4.7 -16.8 machinery
and investment 450
Transportation Wholesaler machinery 402.4 7.1 +9.9
350 Leasing
Construction 238.0 4.2 -13.4 Retailing 250 Retailer 260.2 4.6 -11.6 Construction Leasing 346.1 6.1 +12.2 150 Money lending and investment Accommodation Accommodation 82.3 1.5 +5.6 50 0 0.4 0.8 (%) (*1) excluding apartment loans and loans for asset building *Expected loss (EL) amount / Credit balance (*2) excluding a general trading companies 34 完成 Sales structure reform
Reform sales structure to address changes in customer needs and the operating environment, aim to further improve customer convenience and satisfaction by offering high-quality financial services without shrinking the branch network
• The Bank divides Shizuoka Pref. into three Companies which consist Increase in need for solutions for business succession Background Customer of 19 Blocks planning, business matching, business turnaround etc. needs • The 19 Blocks are further divided into 37 Areas Diversification of customer need
Decrease in population and number of business sites Dense branch network covers the whole of Shizuoka Pref. (144 branches)
Operating Decrease in branch customer traffic because of shift environment to online banking Projected contraction in the workforce
Sales structure reform is aimed at integrating branch functions and personnel in each area to improve efficiency, to reduce the cost of branch operation and to share expertise and know-how among branch personnel
Central Company Strengthen solutions marketing and ensure provision of highly targeted financial services without shrinking the branch network Eastern Company Western Company
Further improvements in customer convenience and satisfaction
Progress of sales structure reform
Apr. 2018 Started as trial in 2 Areas Company Block 1st phase (trial) Eastern Company Shimoda, Atami, Mishima, Numazu, Fuji-Chuo Jul. 2018 Started as trial in 3 other Areas
FY2019 Plan to start in 13 other Areas Central Company Honten, Gofukucho, Ekinan, Shimizu, Yaizu, Fujieda-Eki 2nd phase (expansion) Western Company Kakegawa, Iwata, Fukuroi, Hamamatsu, Naruko, FY2020 - Plan to start in more Areas Hamamatsu-Chuo, Aoicho, Hamakita 35 未 Global network The Bank’s global network with 3 branches, 2 rep. offices, 1 subsidiary and total 54 staffs (26 staffs in Asia) abroad helps clients’ oversea expansions In Asia, the Bank has 3 overseas offices and business tie-ups with 14 banks in 9 countries/regions Global network New York Branch ・・・ Our own offices ● Los Angeles Branch ● ・・・ Offices owned by Shizuoka Bank ● ● our affiliates (Europe) S.A. Shizuoka 【Mexico】 International Department BBVA Bancomer Manage and control for overseas strategy Support customers for overseas expansion Has supported overseas expansion of about 300 Our network in Asia companies since FY2010 Countries No. of companies 【 】 【China】 Korea Thailand 96 China Construction Bank Shinhan Bank China 44 Bank of Shanghai Daegu Bank Indonesia 42 Vietnam 33 India 14 ● Shanghai Rep. Office Others (Asia) 29 Others (Excluding Asia) 37
【India】 Hong Kong Branch
Total 295
State Bank of India ● 【Taiwan】 Chinatrust Financial Holding Topic 【Vietnam】 ANZ Bank(Vietnam) Launched cross-border loan in Indonesian 【Thailand】 BIDV Rupiah, the first case for Japanese banks KASIKORN BANK (1 dispatched employee) 【Philippine】 (3 dispatched employees) Bank of the Philippine Islands • Build scheme for loans in Indonesian Rupiah through Bangkok Bank BDO Unibank collaboration with CIMB Niaga, one of our affiliates, ● and JBIC 【 】 Singapore Rep. Office Indonesia • Launched cross-border loan in Indonesian Rupiah to CIMB Niaga local subsidiary of our domestic corporate client in Mar. (2 dispatched employees) 2019, the first case not only for the Bank but also for all Bank Resona Perdania Japanese banks 36 完成 Cross-industry collaboration
Create added value in each business field by cross-industry collaboration Make new growth opportunities and build a revenue base which leads to sustainable growth
Business development in three business fields z Core business (region-based) Tokyo metropolitan Area Nationwide market
HOKEN NO MADOGUCHI INC.
Business tie-up in Jun. 2016 Memorandum for collaboration exchanged in May 2018 Connection of accounts with “Origami Pay” in Aug. 2018 Operating joint desks for insurance Development of housing loan products and Connection of bank accounts with a consultation, and developing a one-stop research for higher efficiency in operation smartphone settlement service “Origami Pay”
channel for financial services
Face
Non
-
to
-
channel
face -
face channel Renoveru, Inc.
Capital and business tie-up in Oct. 2015 -
Offering asset-building services for the Capital and business tie-up in Apr. 2014 to
-
Business tie-up in Aug. 2016 working-age people and young adults Most important partner face Investment in Jul. 2017 in terms of bank-security collaboration in Developing new financial products and non-face-to-face channels
services to energize the property renovation market
Investment in Dec. 2015
Gaining ideas about new business, and fostering Capital and business tie-up in Aug. 2015 human resources with startup know-how Offering financial services in FinTech fields
Joint-venture established in Sep. 2015 (The Bank delegates an employee as an outside director) Establishing a housing-related service Became LP investor in venture fund set up Business tie-up with Japan Digital Design platform by WiL, LLC. in Feb. 2018 Inc. in Oct. 2017
37 未 Allocation of risk capital
Allocation of risk capital for 2H FY2018 (the end of Mar. 2019 basis) amounted to JPY 719.8bn, of which JPY 168.0bn was allocated to credit risk, JPY 390.0bn to market risk, JPY 3.4bn to strategic investments, and JPY 23.6bn to operational risk JPY 91.6bn of risk capital was used for loans (credit risk), and JPY 193.7bn for the Treasury division
配賦原資 Risk capital Risk capital Ratio of risk Allocation source allocated used capital used (JPY bn)
Loan (Credit risk) 116.4 91.6 79% Credit risk 168.0 Treasury division 433.1 193.7 45%
(strategic shareholdings) (184.0) (80.3) (44%) Market risk Core capital 390.0 JPY 719.8bn Consolidated subsidiaries 8.5 3.4 40% (End of Mar. 2019 basis) Strategic investments 3.4 0.0 0% Strategic investments Operational risk 23.6 23.6 100% 3.4 Operational risk Sub total 585.0 312.3 53% 23.6 Buffer capital, etc. 134.8 － － Buffer capital, etc. 134.8 Total 719.8 － －
・Core capital = common equity Tire I (Basel III standard), excluding other marketable securities valuation difference ＜Fully-loaded basis＞ ・Risk capital amount =
In FY2018, the total ordinary revenue of 12 consolidated subsidiaries was JPY 58.0bn (down JPY 0.7bn YoY) and the ordinary profit was JPY 8.8bn (down JPY 1.0bn YoY) (JPY bn)
Company name Business Ordinary Ordinary Revenue YoY Profit YoY
Shizugin Management Consulting Co., Corporate and financial management advisory services 1.7 +0.2 0.5 +0.1 Ltd. Bill collection services
Shizugin Lease Co., Ltd. Leasing 31.5 +0.4 1.8 +0.1
Shizugin Computer Service Co., Ltd. Computer system development and operation 3.8 -0.0 0.3 +0.1
Shizugin Credit Guaranty Co., Ltd. Guarantee of housing loans, etc. 4.3 +0.2 2.8 -0.0
Shizugin DC Card Co., Ltd Credit card and guarantee of consumer loans 2.7 +0.2 0.7 +0.1
Shizuoka Capital Co., Ltd. Public-offering assistance 0.5 +0.0 0.2 +0.0 Support for corporate rehabilitation Shizugin TM Securities Co., Ltd. Securities 6.4 -2.1 1.5 -1.8
Shizuoka Bank (Europe) S.A. Finance and securities-related services 0.8 +0.2 -0.0 -0.1
Shizuoka Liquidity Reserve Ltd. Purchases of monetary receivables 0.9 +0.5 0.9 +0.5
Shizugin General Service Co., Ltd. Fee-based job placement service, general administration 0.9 -0.0 0.0 +0.0
Shizugin Mortgage Service Co., Ltd. Appraisal of real estate for loan collateral 1.7 -0.0 0.0 -0.0 Operation center for loans
Shizugin Business Create Co., Ltd. Operation center for remittance and bill collection 3.0 -0.3 0.0 +0.0 Part-time employee management Total(12 companies) 58.0 -0.7 8.8 -1.0
(Ref.) Affiliates under equity method of accounting *1 Total revenue, *2 Profit before income tax
Shizugin Saison Card Co., Ltd. Credit card, prepaid card, and guarantee of consumer loans 2.5 +0.1 0.3 -0.0
Monex Group, Inc. Holding stocks of companies practicing securities and so on *1 53.5 -0.7 *2 1.8 -6.8 39 Shizugin TM Securities Co., Ltd.
更新済 Shizugin TM Securities Co., Ltd (securities subsidiary) has expanded its scale of customer assets and led Group revenue Customer assets at the end of Mar. 2019 : JPY 652.1bn, up JPY 333.0bn compared to the end of Mar. 2009 after the collapse of Lehman Brothers
Customer assets (year-end balance) and number of branches Ordinary revenue (JPY bn) (JPY bn) 【Overview of Shizugin TM Secrities, Co,. Ltd. 】 +333.0 Establishment : Dec. 2000 8.9 8.7 Capital Stock : JPY 3.0bn 8.5 Number of Branches : 17 （End of Mar. 2019） 7.8 7.7 6.4 Corporate customer etc. 652.5 650.4 652.1 5.6 Retail customer 618.0 604.2 Number of branches 108.9 4.5 3.7 543.3 182.9 3.3 102.5 132.5 210.1 2.6 505.0 543.6 93.1 501.7 437.7 92.4 485.5 421.3 467.5 406.9 450.2 442.0 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 81.8 412.6 82.8 86.1 Ordinary profit 319.1 355.9 338.5 (JPY bn) 320.8 4.0 70.5 3.7 3.4 3.3 248.6 3.0
2.4
17 17 17 17 17 17 1.6 1.5 15 15 15 13 13 1.0 1.0
0.3 End of End of End of End of End of End of End of End of End of End of End of Mar. '09 Mar. '10 Mar. '11 Mar. '12 Mar. '13 Mar. '14 Mar.'15 Mar. '16 Mar. '17 Mar. '18 Mar. '19 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 40 Strategic shareholdings 更新 Strategic shareholdings are limited to such stocks that the Bank recognizes are beneficial in terms of business investment, strengthening of business relationships, or contribution to the regional economy By reviewing the reasons and assessing the economic rationale for strategic shareholdings on a regular basis, the Bank has reduced the holding amount on the basis of acquiring cost
Prime cost of strategic shareholdings* Policy on strategic shareholdings (Corporate Governance Code : general principles 1-4) * (JPY bn) < Reason for increase in acquisition cost at the end of Mar. 2018 and 2019 > • Return of shares in Daiichi Sankyo Co., Ltd. and Nikon Corp Acquisition cost after cancellation of retirement benefit trust The Bank has its policy to decrease strategic Market value 〈Breakdown of change in acquisition cost〉 End of Mar. 2018 End of Mar. 2019 shareholdings, and only owns such stocks that are Daiichi Sankyo Co. Ltd. JPY +11.8bn JPY +7.4bn Nikon Corp JPY +2.5bn JPY +1.5bn considered to be significant in terms of business 144.1 Decrease due to sales of strategic shareholdings JPY -3.6bn JPY -2.5bn investment, strengthening of business Decrease due to amortization - JPY -0.1bn Total JPY +10.7bn JPY +6.3bn relationships, or contribution to the region.
In addition, the Bank regularly reviews benefit from 111.3 110.2 107.6 +6.3 104.3 shareholdings and profitability compared to cost of 101.8 99.8 +10.7 102.3 96.0 capital, and decides annual policy on strategic 85.3 Daiichi Sankyo Co. Ltd shareholdings in annual business plan which are and Nikon Corp approved by the Board of Directors. 81.7 76.1 387.1 The Bank reviews significance and economic rationality of shareholdings based on various data 364.1 359.1 361.5 such as cost of capital. 308.1 304.4 258.0 230.5 Figures without When counterparties of shareholdings show their 201.5 effect of 198.2 retirement intention to sell the Bank’s stocks, the Bank agrees benefit trust with them without preventing in principle.
End of End of End of End of End of End of End of End of End of End of * The Bank has changed contents in Corporate Governance Report in Dec. 2018 Mar. 2010 Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 based on the revision of general principles of Corporate Governance Code in Jun. 2018 *Except for equity method affiliate 41 完成 Shareholder return – Share buybacks (Time series data)
The bank has regularly bought its own shares since FY1997, resulting in accumulated number of shares repurchased of 226mil
Shares Repurchase Number of Cancellation Shareholder Shareholder EPS BPS DPS bought back amount of shares amount return ratio return ratio
*Consolidated financial statements have been prepared since FY1998 42 Overview of the 13th Medium-term Business Plan (1)
変更なし – Name of the plan/ Group vision, Basic strategy Name of the plan / Group vision
Name of the plan “TSUNAGU” has several meanings in Japanese TSUNAGU …“connect”, “link”, “unite”, etc. Group vision Innovative Bank “Shizugin” will continue to create new value along with the region
Basic strategy 1. Reinforce core businesses by focusing on regional economic growth 2. Build a new business model for regional bank by developing and monetizing new business fields 3. Reform sales operations using retail channel and IT infrastructure 4. Help realize the dreams and increase the wealth of the region, customers, employees, and shareholders Realize our vision by promoting four basic strategies in three business fields: core business (region-based), Tokyo metropolitan area, and nationwide market, while at the same time engaging in three structural reforms: earnings, people, and channels.
Promoting four basic strategies
structural business
reform • Earnings-based field • Core business (region-based) • People-based • Tokyo metropolitan Area
(personnel/human resource) • Nationwide market • Channel-based
Realize Group vision「Innovative Bank」 43 Overview of the 13th Medium-term Business Plan (2) – Structural reforms 変更なし • Under the 13th Medium-term Business Plan, the Bank will engage in three structural reforms targeting earnings, people, and channels, aiming to create sustainable business model in the future
12th Medium-term Business plan Challenge on the new Earnings-based structural reforms business fields Core business growth Converse earnings structure through growth Strategic investment of bank branch division Growth in a monetary easing environment Continue to develop opportunities in new business fields Reforms of expense structure Create a low cost operating structure along 13th Medium-term Business plan with channel changes
Maintain growth strategy through three People-based (personnel/human resource) structural reforms structural reforms Work style-based structural changes Aim to be an attractive Bank for employees through diverse work style values Improvement in balance between Reform management structure operation and its cost corresponding to profitability of operations
Channel-based structural reforms
th 14 Medium-term Business plan Non-face-to-face channel expansion Change in customer behaviors, expansion of cross-regional transactions Construct Changes in roles and targets of Sales force structural reforms corresponding non-face-to-face channel sustainable business to future population dynamics model
44 更新済 Reference (ESG/SDGs part) ・ SDGs ・ Adoption for constituent brand of ESG index ・ Environment ・ Diversity and work-life balance ・ Activities to contribute to the region ・ Corporate Governance Structure ・ Region-based Relationship Banking (1) ・ Region-based Relationship Banking (2) ・ Regional revitalization ESG/SDGs initiatives (1) – SDGs 完成 The Bank has continued various initiatives up to now in order to realize rich, energized, and sustainable regional community The Bank began to provide products which support initiatives for SDGs in wealth management and loan
SDGs (Sustainable Development Goals) TOPIC Shizugin TM Securities Co., Ltd. started trading in “NISSAY SDGs Global Select Fund” SDGs are development goals for international society which consist of 17 items and are adopted in the UN Summit in 2015 In Jul. 2018, started trading in investment trusts As a financial institution rooted in the region, the Bank has targeting companies which are selected among listed continued various initiatives up to now in order to realize rich, companies engaging in businesses leading to achievement of SDGs and whose stock prices are energized, and sustainable regional community expected to rise in medium and long term The Bank plans to keep actively coping with social issues to achieve SDGs as a regional financial institution
* Related initiatives in this presentation are shown with pictogram of SDGs TOPIC The Bank started offering “Shizugin SDGs Private Placement Bond”
In Nov. 2018, started offering “Shizugin SDGs Private Placement Bond” with special treatment of interest rates in order to support capital funding of companies actively working on SDGs On announcing overview of issuance of the bond in newspapers and so on, it is articulated there that the bond is SDGs Private Place Bond if the issuer hopes
- What are SDGs (Sustainable Development Goals)? Goals for 2030 globally adopted in the UN Summit in Sep. 2015 in order to achieve sustainable world. They consist of 17 comprehensive goals aiming for sustainable development with good balance among economy, society, and environment
45 ESG/SDGs initiatives (2) – Adoption for constituent brand of ESG index 更新済 The Bank is adopted as a constituent brand of three out of four indices selected for ESG investment by the Government Pension Investment Fund (GPIF) There are only two regional banks selected for three or more indices
MSCI Japan ESG Select Leaders Index (Comprehensive type ESG Index) Companies in each industry are selected for the excellence of their ESG initiatives based on information disclosed by the company and MSCI independent research
MSCI Japan Empowering Women Index (Theme type ESG Index) Companies are selected among Japanese corporations leading their industry in the promotion of employee gender diversity, the promotion of women’s participation and advancement * MSCI: A leading index company providing a variety of investment information for institutional investors around the world
S&P/JPX Carbon Efficient Index (Theme type ESG Index) Companies are selected for high carbon efficiency (low level of carbon emissions per unit of revenue) and sufficient disclosure
Shizuoka Bank will continue to fulfill its social responsibility with the aim of earning stakeholders’ trust and realizing an abundant society
【Reference】
[Number of constituent brands of indices selected by GPIF] ((1) and (2) are as of Dec. 2018, (3) is as of Mar. 2019, and (4) is as of Aug. 2018) (1) MSCI Japan ESG Select Leaders Index ：Constituent brands…268, of which five are regional banks (including Shizuoka Bank) (2) MSCI Japan Empowering Women Index ：Constituent brands…215, of which five are regional banks (including Shizuoka Bank) (3) FTSE Blossom Japan Index ：Constituent brands…153, no regional bank is included (4) S&P/JPX Carbon Efficient Index ：Constituent brands…1,694, of which 64 are regional banks (including Shizuoka Bank)
46 完成 ESG/SDGs initiatives (3) – Environment Make efforts as a corporate citizen to pass our rich natural environment to next generations
Action guidelines ■ Address environmental issues through financial operations for environment ■ Reduce the environmental impact of the Shizuoka Bank Group issues ■ Reinforce employee efforts to tackle environmental issues in the community and at home
Donation on issuance of USD-based corporate bond ECO Accounts
• The Bank, as an initiatives for environmental protection, donated JPY 10mil • Work to reduce paper usage by offering two ECO Accounts – “the to FUJISAN Fund (*) in order to contribute to maintaining Mt. Fuji, Integrated Web Account”, an account without bank book, and a representative world heritage in Shizuoka Pref., on the “WebWallet”, an online banking account, in order to protect the issuance of the Bank’s USD-based corporate bond to environment through our financial operations retail investors in Dec. 2018 • Donate a part of reduced costs by not issuing bank book to groups that May Mt. Fuji be a World Heritage forever! * Fund run by NPO National Council on Fujisan World Heritage promote environmental protection Shizugin Furusato Environmental Protection Fund Charitable Trust Ask new customers to select an ECO Account in principle when opening an account and encourage existing customers to switch to • Provide financial support through the Shizugin Furusato Environmental an ECO Account Protection Fund Charitable Trust to individuals and groups in Shizuoka Pref. that promote environmental protection Plan to donate JPY 50 to the FUJISAN Fund for every ECO Account opened in our branches in FY2018 • Provided a total of JPY 3mil to 15 projects in FY2018 Donated JPY 1,904,350 based on the number of accounts opened in FY2018 • Cumulatively provided JPY 75.2mil to 586 projects since the fund was set up in 1993 【Ratio of ECO Accounts among newly opened accounts】 ECO Ideas Contest
• Hold the Shizugin Eco Ideas Contest, which calls on primary school students Accounts with bank Among newly opened in Shizuoka Pref. to develop solutions for environmental issues every year accounts in FY2018, book • Received a total of 830 highly creative ideas, with one student receiving the ECO more than half were 42% grand prize, 11 students receiving distinctions, and five schools receiving top Accounts ECO Accounts. school awards in the FY2018 contest (7th contest) 58% The grand prize in FY2018 was awarded for the “Book jacket warmed by sunlight” Book jacket warmed by sunlight which enables us to read a book without cooling hands even in winter 47 更新済 ESG/SDGs initiatives (4) – Diversity and work-life balance Empower women in the workplace and encourage all employees to demonstrate their personality and abilities to the full extent
Work-style reform Plan to found “Shizugin Heartful Co., Ltd.”
Established a project team to promote cross-departmental work-style • Plan to found a new company in order to actively support independence and reform (in Oct. 2017) participation to the society by handicapped people, and to further promote
Encourage the correction of long working hours through internal award employment of those people (in Oct. 2019) system (from Oct. 2017) • Plan to apply for “the special subsidiary company” while expanding business Support employees realize work-life balance by introducing various The special subsidiary company systems including flextime, paid leave by the hour (both in Jul. 2018), and telework (in Oct. 2018) • A subsidiary company approved by the Minister of Health, Labor , and Welfare as a company specially taking handicapped people into consideration Networking events for women from different industries • Handicapped people working for the special subsidiary company can be included in the calculation of the parent comany’s ratio of employment of • Have held networking events for women with local companies since 2015 handicapped people in order to support women advance their careers through interaction with local companies Recognized under “White 500” • Held a networking event in Feb. 2019 based on the collaboration among industry, government, and academia, • The Bank was recognized under “the 2018 Certified Health and Productivity which attracted 92 women including those Management Organization (large enterprise category) -White 500-” in Feb. who working for government or for 2018 for various initiatives to maintain and enhance employees’ health, such member corporates of Shiuginship, as creating favorable environment and supporting employees’ own activities and university students
Shizuoka Bank has been recognized by the Japanese Minister of Health, Labour and Welfare as a superior company for its efforts supporting the empowerment of Certified Health and Productivity Management Organization Recognition Program women in the workplace. The Bank received "Eruboshi" certification, which is The program is conducted by the Ministry of Economy, Trade and Industry based on the Act on Promotion of Women's Participation and Advancement in the (METI) and Nippon Kenko Kaigi (*). Under the program, the Nippon Kenko Kaigi Workplace, and "Platinum Kurumin" certification, which is based on the Act for examines enterprises engaging in initiatives for overcoming health-related Measures to Support the Development of the Next-Generation Children. challenges in regional communities or for promoting health-conscious activities by the Nippon Kenko Kaigi, and recognizes outstanding enterprises engaging in efforts for health and productivity management. Eruboshi Platinum Kurumin (*) Nippon Kenko Kaigi : An organization that takes practical community- and workplace-based actions, under the collaboration of private organizations and with full administrative support, for the elongation of the healthy life-span and to provide appropriate medical care 48 完成 ESG/SDGs initiatives (5) – Activities to contribute to the region As activities to realize its corporate philosophy to “expand dreams and affluence with our community”, the Bank engages in some activities to contribute to the region such as promotion of local culture and sports, education of finance and economy Considering a situation where Nankai Trough Earthquake is likely to occur, the Bank also actively works on disaster prevention and mitigation
Promotion of local culture Business continuity in emergency
Regularly hold concerts by domestic and foreign • Create outline of measures against emergency as a business continuity plan first-class artists and events of Rakugo, Japanese • Establish a system where the Bank can traditional storytelling performance, for people in the instantly resume operation in emergency region by introducing base isolation, installing standby generators, and preparing back-up Promotion of sports of systems • Build a system to support people in the region Facilitate promotion of children sports by supporting in emergency by utilizing a special room [Equipment for videoconference tournaments of soccer and baseball for boys and girls in the headquarters (in a special room for emergency)]
Support activities of a local sports club which engages in training and supporting female athletes as a sponsor with Yamaha Motor Corp. Ltd., etc. Measures against tsunami * Mr. Katsuyuki Kiyomiya, a former coach of professional rugby team of Yamaha Motors, took an important role in establishing the sports club. The club will found a team of female rugby sevens. • Deploy life jackets for customers and employees in branches in areas where people should immediately evacuate when tsunami occurs • Prepare shelters against tsunami which work by floating in branches in areas Education of finance and economy where altitude is not high enough • Take measures against tsunami when reconstructing branches on the coast Actively work on education of finance and economy by providing people with opportunity to learn banks’ role in economy and society through Structure to prevent collapse by tsunami, study tour in the Bank and lecture by the Bank’s staff rooftop higher than expected height of tsunami Hold Shizuoka-Prefectural tournament of “Economics Koshien”, a competition Outdoor upstairs to rooftop on economic and financial knowledge by high school students
[Life jackets] [Outdoor upstairs to rooftop] 49 完成 ESG/SDGs initiatives (6) – Corporate Governance Structure As the foundation for fulfilling corporate social responsibility, The Shizuoka Bank Group is strengthening its management systems and enhancing enhance corporate value
Shizuoka Bank Group’s Corporate Governance System
General Meeting of Shareholders Audit & Supervisory Board Members (5 board members including 3 outside members) Audit & Supervisory Board ･ Office of Audit & Supervisory Board Members Board of Directors Remuneration Comittee
CommitteeCommittee of Administrative of Administrative SupervisionSupervision President Advisory Board
*Other major committees Executive Committee and Compliance Committee other major committees* Committee for Integrated Risk and Budget Management Credit Committee
Internal Audit Div. Banking Div. Corporate Center (Complementing supervisory function of the Board of Directors) (Operation Staff) (Management Staff)
Outside Directors・Outside Audit & Supervisory Board Members
／ 2 Outside Directors 10 All Members • One third of bank’s directors and Kumi Fujisawa President, SophiaBank Limited audit & supervisory members are Professor Emeritus, The University of Tokyo outside appointments Motoshige Itoh Professor, Faculty of International Social Sciences, Gakushuin University • The Bank is using independent ／ 3 Outside Audit & Supervisory Board Members 5 All Members opinions of these individuals in Former Director and Executive Vice President, decision making, oversight and Mitsuhiro Ishibashi Nippon Life Insurance Company auditing of The Shizuoka Bank Former Director and Executive Vice President, Group Kazuo Kouzuki Tokio Marine & Nichido Fire Insurance Co., Ltd. ⇒ Increase corporate value Yoshihiro Yamashita President, Yamashita Yoshihiro Law Office
*All have submitted notification to the Tokyo Stock Exchange of their independent director status (As of Apr. 2019) 50 更新済 ESG/SDGs initiatives (7) – Region-based Relationship Banking (1) The Bank is supporting clients from various perspectives through supporting entrepreneurs, business matching services, and “Shizuginship” etc.
Initiatives for supporting entrepreneurs “Shizuginship” – training club for the next generation managers
Business matching services The Bank Collaboration Advisory board
〔Leading companies in Shizuoka Pref.〕 Support customers in expanding their business by creating new sales opportunities • Various Strong appreciation 【Historical data of no. of cases】 events and and support from seminars Requests Support companies Have regularly held “Shizugin Elected local corporates & Amount of new loans （Cases, JPY bn） @gricom (agricom)”, a business • Providing among information opinions Support for members No. of cases networking event for business • Growth of next- on Internet activities 5,965 meetings among companies in the generation 5,355 5,382 5,494 agricultural, forestry, fisheries and business leaders 4,932 food processing sector with buyers • Human network 4,360 since Feb. 2006 Shizuginship members among members Participate in “Regional bank food selection” and “Super Market Trade 【No. of members】 At the end of Mar. 2019 / 774 corporates, 1,133 people 75.3 Show” 66.5 58.2 50.5 【Activities in FY2018 】(No. of members participated: total 1,981 people) 48.7 31.6 Support nationwide sales of food produced in Shizuoka Pref. through Content Records mail order by collaboration with AFC Co. Ltd Overall forum (Lecturer: Mr. Kawanabe, Chairman in NIHON KOTSU Co., Ltd.) 1 Forum FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Regional forum (Lectures and networking in each region) 3 Forums Subsidies application support Lectures by top executive and specialists 9 Lectures
Actively working to maintain regional industrial base and employment through support for business restructuring and turn-around targeted to clients suffering from performance downturn or business succession as social issues, etc.
Support for business restructuring and turn-around Support for business succession
Support restructuring through building business plans, alliances Support business succession including share transfers and M&As, with external agencies, and utilizing business regeneration fund mainly by Solution Business Department and Shizugin Management Consulting Co. Ltd. No. of M&As contracted *1
【Historical data of no. of projects】 （Cases） No. of business successions contracted *1 (Cases) No. of M&As and business successions contracted Has completed business No. of firms under the projects (business matchings services for a fee) *2 No. of projects completed restructuring for about 220 firms since FY 2005 69 216 65 58 59 58 54 31 Saves labor opportunities for 150 opportunities for labor for about 71 21,000 people and maintain 28 economic power in the local 17 81 51 14 11 16 15 13 community FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 23 114 40 71 Support for companies transforming or exiting businesses 18
Important initiatives contributing to stabilization of regional economy FY2016 FY2017 FY2018
Bank branches Headquarters *1 No. of cases contracted by Shizugin Management Consulting Co. Ltd. *2 No. of business matching services for a fee introduced to external partner companies Business transformation / exit support Consult officers Divisions responsible for Loans related to business succession (Monitor project progress) business regeneration support in FY2018 : 252 cases / JPY 32.8bn Report Advice (down 108 cases / down JPY 2.8bn YoY) Person in charge Person in charge Regional manager ※Only for long-term loans
Consult / advise / support Introduce “Support Guide for Client Hands-on support Specialist inheritance and business succession” [Cumulative results until FY2018] Explain easily to understand about inheritance Projects handled: 105 and business succession from both individual Projects completed: 51 (business transformation: 10, business exit: 41) and corporate perspective(Issued in Oct. 2017) 52 ESG/SDGs initiatives (9) – Regional revitalization 完成
Promotes regional industry development by working as a coordinator among industry, government, academia and etc., and contributing to embody businesses which help the development of the region
4th meeting to discuss regional revitalization Multi-prefectural initiatives for revitalization of tourism industry • In Jul. 2018, about 500 people including the mayors of each town in Shizuoka Pref., Created multi-prefectural framework for officials from all local governments, members of the Chamber of Commerce and other revitalization of tourism industry in Fuji, Hakone, groups, and Shizuoka Bank employees participated in a video conference and Izu areas by establishing “Kanagawa- Yamanashi-Shizuoka Prefectural Region 〔Lecture〕 Revitalization Liaison Group” , which consist of 9 Mr. Akira Torizuka, organizations (3 banks, 3 prefectures, and 3 Former President of Isumi Railway Co. Ltd. Chambers of Commerce) “How to activate the region through Implementing various initiatives, including creation local railway” of tourism map without prefectural border, support Mr. Shohei Kitamura, for local governments to launch website for foreign Mayor of Fujieda City tourists, and development of cycle tourism “Initiatives for regional revitalization in Fujieda City” Mr. Teruyuki Shirouzu, from the Cabinet Office’s Headquarters for Vitalizing Honored for good practice for 3 consecutive years Towns, People and Jobs through innovative projects “Basic policy in 2018 for vitalization of towns, people, and jobs” Honored by the Cabinet Office’s Headquarters for Vitalizing Towns, People and Jobs in Mar. 2019 for good practice leading to regional revitalization by financial institution, resulting in the first case for a regional bank to be honored for 3 consecutive years Shizuoka Kids Academy The Bank encourages and helps elementary schools and junior high schools in Shizuoka Pref. to introduce “Qubena” (*), educational tablet devices utilizing AI, in order to contribute to Shizuoka Pref. Government’s policy to develop human resources good Aims at developing human resources for regional areas by encouraging local at science and IT. Such initiatives were well appreciated, which led to the honor. children to learn about their home towns in a fun way, fostering a greater attachment to their home towns and encouraging them to live locally in the future * Qubena is educational table devices
In 2H FY2018, held three events with offered by COMPASS Inc., an IT regional companies including Kimura venture firm producing and delivering Foundry Co. Ltd., Shunkado Co., Ltd., educational contents. Matsuzakaya Shizuoka, Shizuoka Qubena has been adopted in Broadcasting System Co., Ltd., “Future Classroom” demonstration which attracted 171 parents and projects by METI, and introduced in children (61pairs) public junior high schools in Tokyo since Jul. 2018 53 更新 なし
This document includes statements concerning future business results. These statements do not guarantee future business results, but contain risks and uncertainties. Please note that future business results may differ from targets for reasons such as changes in the business environment.
〔Contact〕 The Shizuoka Bank. Corporate Planning Department (Yasumasa Koto) TEL: 054-261-3131 (main) 054-345-9161 (direct) FAX: 054-344-0131 E – mail: [email protected] URL: https：//www.shizuokabank.co.jp/