Mebuki Financial : Financial Results for FY2023

Financial Results for FY2023

May 10, 2024

Financial Results for FY2023

Highlights	2
FY23 Financial Results	3
Change of Ordinary Profit	4
Growth of Profit from Customer Services	5
Loans (Balance/ Individual and Corporate)	６～７
Average Yield of Loans / Net Interest Income	8
Deposits	9
Customer Assets under Custody / Fees from Corporate Customers	１０～１１
Securities / Strategic Shareholdings	１２～１３
Expenses / OHR	14
Credit Related Costs	15
Status of Non-performing Loans and Delinquent Loans	16
Shareholder Returns / Capital Adequacy Ratio	17
Forecast for FY2024	１８～２０
【Data】 Breakdown of Banking Subsidiaries	２２～２６

＊Unless otherwise mentioned, figures are based on banking subsidiaries (non consolidated-basis).＊The number used for the year is based on western calendar.

1

Highlights

Results for FY23

			Results for FY23	YoY Change	Compared to forecast
Net income attributable to owners of	(Consolidated )	43.3bn	+11.1bn	+3.3bn
the parent
	Profit from customer services*1			47.9bn	+3.5bn	-
	Securities Income				24.8bn	- 12.5bn	-
	（Banks' total）
	Credit related costs			3.4bn	-5.6bn	-
		-
	Gains/losses on securities			11.2bn	+ 15.7bn	-
ROE (on shareholders equity basis)	(Consolidated )			4.5%	+1.1%pt	-

• Net income attributable to owners of the parent increased by ¥11.1bn YoY to ¥43.3bn and exceeded forecast of ¥40.0bn by ¥3.3bn.
• Securities income (interest margin) decreased significantly due to an increase in foreign currencies funding cost by the rise in US interest rates. However, profit from customer services, the core business, maintained an increasing trend and credit related costs and gains/losses on securities improved.

*1 Difference of interests between loans and deposits＋Fees from Customers＋Expenses（-）

Forecast for FY24

		Forecast for FY24	YoY Change
Net income attributable to owners of		52.0bn	+8.6bn
the parent	(Consolidated )
ROE (on shareholders equity basis)		5.3%	+0.8%pt

Shareholder Returns

 We will increase annual dividends per share to ¥14.0 (+¥2.0 from the previous year).  We decided to repurchase own shares up to ￥10.0bn (maximum amount).

 Total return ratio will be 46.0% (scheduled).

(Total return amount of ¥23.9bn= Dividends payout of ¥13.9bn + Share repurchase of ¥10.0bn ).

2

Main Points of FY23 Financial Results

【Mebuki FG (Consolidated)】

Gross Business profit

Net interest income

(o/w Deference of interests betw een loans and deposits)

FY23

Results

155.4

140.8

(113.4)

	(bn)
YoY	Compared to
Chg	forecast

+37.0 -

-8.0-

(+5.9) -

						(bn)
		FY23		YoY		Compared
【Joyo + Ashikaga (Non-consolidated)】
	Results
		chg		to forecast
Gross business profit	147.9	+35.0	-
Net interest income	142.3	-8.6	-
(o/w Gains/losses on cancellation of investment trusts)(1)	(5.2)	(-1.8)	-
Net interest income	137.0	-6.7

Net fees and commissions	45.4	+2.7	-
Net trading income	0.5	-1.3	-
Net other business income	-31.4	+43.7	-
Expenses	107.6	+0.5	-
Credit related cost	5.5	-5.2	-
Gains/losses related to stocks	18.6	-25.1	-
Ordinary profit	63.0	+16.4	+5.5
Extraordinary income/losses	-1.1	-0.5	-
Net income attributable to owners of	43.3	+11.1	+3.3
the parent

FY23
Results	YoY

	Bank Total Net income (a)	40.5	-2.9
	Group Companies Net income (b)	4.9	+0.1
	Mebuki Lease	1.1	+0.2
	Mebuki Securities	0.4	+0.0
	Mebuki Credit Guarantee	2.5	-0.1
	Mebuki Card	0.4	-0.0
	Total of banking subsidiaries	0.3	+0.0
	Consolidation Adjustment*1 （c）	-2.1	+2.1
Net income attributable to owners of	43.3	+11.1
the parent （a）+（b）+（c）

		(excl.Gains/losses on cancellation of investment trusts)
		(o/w Deference of interests between loans and deposits(2))	(112.2)	(+5.7)	-
		(o/w Securities Income)	(24.8)	(-12.5)	-
		Net fees and commissions(3)	36.5	+1.0	-
		Net other business income	-30.9	+42.5	-
		(o/w gains/losses on bond transactions) (4)	(-39.2)	(+48.1)	-
		(o/w gains/losses on futures and options) (5)	(3.9)	(-4.1)	-
		(o/w other income related to customers) (6)	(4.3)	(-1.4)	-
	Expenses(7)	105.2	+1.8	-
	Net business income	42.7	+33.2	-
	(before general allowance for loan losses)
	Core net business income	81.9	-14.9	-
	(excl. gains/losses on cancellation of investment trusts)	76.6	-13.0	-
	Core net business income	72.7	-8.9	-
	(excl. gains/losses on cancellation of investment trusts and futures
	and options)
	Net transfer to general allowance for loan losses (8)	-5.8	-5.2	-
	Net business income	48.5	+38.4	-
	Net non-recurrent gains/losses	9.9	-25.1	-
		(o/w Disposal of non-performing loans (9))	(9.3)	(-0.3)	-
		(o/w Gains/losses related to stocks, etc. (10))	(18.7)	(-26.3)	-
	Ordinary profit	58.5	+13.3	+3.5
	Extraordinary income/losses	-1.1	-12.5
	Net income	40.5	-2.9	+2.0
	Profit from customer services (2)+(3)+(6)-(7)	47.9	+3.5
	Credit related cost (8)+(9)	3.4	-5.6
	Gains/losses on securities (1)+(4)+(5)+(10)	-11.2	+15.7	3

Change of Ordinary Profit (Bank Total non-consolidated)

Although securities' income (interest margin) decreased significantly due to an increase in foreign currencies funding cost, etc., ordinary profit (bank total) increased significantly, driven by an increase of profit from customer services and an improvement of credit related costs and gains / losses on sales of securities.

Year -on-Year Changes of Ordinary Profit (Bank total) (bn)

		Net non-
Profit from Customer Services*1
Credit related	recurrent
YoY ¥3.5bn	gains
	costs （-）	/losses

-5.6

+0.8

Deference of

Gains

interests

Fee from

/losses on

between loans

Expenses

securities*2

customers

and deposits

（-）

Security

+15.7

+5.7

-0.3

+1.8

margins

Ordinary

-12.5

profit

（Breakdown）

¥45.2bn

Gains/losses on

(Breakdown）

bond transactions ＋48.1

related to stocks

-26.3

Fee from corporate customer +0.4

investment trusts

-1.8

(including derivatives CVA)

futures and options

-4.1

Customer assets related

-0.2

Remittance fee etc.

+0.5

Dividends related to mortgage group credit insurance, etc. -0.9

Increase Decrease

Ordinary

profit YoY

¥58.5bn +13.3bn

（Breakdown）
Yen denominated loans	+3.2
Foreign currency
denominated loans	+4.0
Yen denominated
deposits(-)	-0.0
Foreign currency

denominated deposits(-) +1.6

（Breakdown）
Interest and dividend on securities
(Yen denominated)	-3.1
(Foreign currency denominated)	+10.4
Market Procurement Cost
（Yen denominated） （-）	-0.1
（Foreign currency denominated ）（-）	+18.6

Special Funds-Supplying Operations by Bank of Japan -1.2

FY2022	*1	Difference of interests between loans and deposits＋Fees from Customers＋Expenses（-）	FY2023	4
*2	Gains/losses on "Bond transactions +Related to stocks + Cancellation of investment trusts + Futures and options

Highlights

Profit from customer services maintained an increasing trend after bottoming out in FY 2019.

Regarding securities' income (interest margin), the maintenance of our portfolio, mainly in bonds, is expected to be completed soon, and we will increase the balance and expect a reversal in securities' income for FY2024.

Changes of Profit from customer services, Core net business income and Securities' income	(bn)

Annual

63.0

Core net business

income(*2)

36.5

Securities' income(*3)

68.1

39.3

	84.7	81.6
71.0	69.5	72.7
	65.5

		51.4	47.9
42.6	40.8	40.6	44.3
		33.2	37.3

+¥3.5bn (YoY)

o/w Interest on loans +¥5.7bn

				28.7
Profit from Customer
	26.5
Services*(1)

28.3	28.9
24.6	24.8

FY16	FY17	FY18	FY19
Business			System
Integration			Integration

FY20	FY21	FY22	FY23
*1	Difference of interests between loans and deposits＋Fees from Customers＋Expenses（-）
*2	Excluding gains/losses on cancellation of investment trusts and futures and options	5
*3	Excluding gains/losses on cancellation of investment trusts

(¥bn)

Loans （１） Term-end Balance

Amount of loans increased by 523.3bn YoY.

The growth rate of loans was +4.4% and remained at the 4% level.

Interests between domestic loans and deposits in FY23 turned to an increase for the first time since our business integration.

Term-end Balance (Joyo+Ashikaga) (bn)

＊Not including borrow ing from special account of MoF

Year on Year Changes

(bn)

										（＋4.4%）
						（＋4.5%）		（＋523.3）
			（＋0.2%）	（＋511.3）
			（＋30.6）
							12,343.4
							11,820.1
10,852.3	10,957.5	11,278.1	11,308.8
		5,369.6	5,347.4	5,694.8	6,099.4
5,139,1	5,181.3

Corporate

Individual

		FYE21	FYE22	FYE23
	Total	+30.6	+511.3	+523.3
	+0.2%	+4.5%	+4.4%
	Corporate	-22.2	+347.4	+404.5
	-0.4%	+6.4%	+7.1%
	Individual	+120.5	+91.3	+77.5
	+2.4%	+1.8%	+1.5%
	Public	-67.7	+72.5	+41.1
	-6.8%	+7.9%	+4.1%

（Reference) YoY changes of interests of domestic loans since the business integration

4,674.8

4,795.9

4,924.8

5,045.4

5,136.7

5,214.3

			Average balamce factor		Yield factor		YoY
								+5.1	Average
Public			+3.2					+3.2
						balance
			+2.1
	+1.5	+1.8	+1.0	+1.6			+¥ 563.5bn

1,038.2	980.2	983.7	915.9	988.5	1,029.6
	FYE18	FYE19	FYE20	FYE21	FYE22	FYE23
(Reference) Loans to 'borrowing from special account of MoF

	-1.6	-1.8
-3.2		-3.7
-4.7	-4.9

-1.6

-3.8

-1.3

-2.3

-0.7
-2.3	-1.8	Yield
- 1.6bp

(FYE18)	(FYE19)	(FYE20)	(FYE21)	(FYE22)	(FYE23)
¥ 399.4bn	¥ 519.8bn	¥ 521.5bn	¥ 586.7bn	¥ 768.4bn	¥ 466.2bn

FY17	FY18	FY19	FY20	FY21	FY22	FY23	6

Loans （2） Corporate / Individual

Loans to individual customers maintained increase trend both in housing related loans and in unsecured loans.

In particular, the growth rate of unsecured loans increased significantly from 8% level to 13% level on an annual basis. Loans to corporate customers also grew and its growth rate expanded to 7% level on an annual basis.

【Individual】Housing Related Loans

(￥bn)

【Corporate】Term-end Balance by Company Size (￥bn）

Growth rate of Housing Related Loans（YoY）
As of Mar.31, 2024	＋1.1%
As of Mar.31, 2023	＋1.8%														＜YoY Change＞
						4,616.7	4,734.5	4,820.2	4,874.5
			4,483.0		■ Loans for asset
4,357.9	2.4			1.9			1.6
	2.6					823.4
	2.9			2.8					871.2		845.2				building
				902.3
		933.6
958.5
																	Apartment Loans
																					(-2.5%)
																4,049.4				（-21.7）
3,396.3	3,546.5	3,711.7	3,860.8	3,972.9				Housing Loans
																					(+1.9%)
																							（+76.5）

Growth rate of Corporate Loans（YoY）
As of Mar.31, 2024	＋7.1％
As of Mar.31, 2023	＋6.4％
			6,099.4
	5,694.8
5,139.1	5,181.3	5,369.6	5,347.4
1,633.7	1,635.4	1,688.2	1,674.3	1,890.4	2,140.5
3,505.4	3,545.9	3,681.3	3,673.0	3,804.4	3,958.9

＜YoY Change＞

Large

(+13.2%) （+250.0）

Medium / SMEs

(+4.0%) （+154.5）

FYE18

FYE19

FYE20

FYE21

FYE22

FYE23

FYE18 FYE19 FYE20 FYE21 FYE22 FYE23

【 Individual】Unsecured Loans （￥bn）

Growth rate of Unsecured Loans（YoY）		＜YoY Change＞

【Corporate】Term-end Balance by Area （￥bn）

As of Mar.31, 2024 +13.8％			232.5	Card Loans
As of Mar.31, 2023 +8.2％			(+6.1%)
	204.2		（+4.0）
		177.1	188.6
	169.9		70.1	Free Loans
160.0
		62.4	66.0	10.8	(+10.2%)
		61.2	（+1.0）
	65.4	9.7
65.0	9.3	55.8
9.1	Educational Loans
			49.3
9.1	9.8	43.4	45.4		(+13.1%)
39.0	42.5			79.0	95.7	（+6.5）
46.7	52.0	63.3	71.4	Car Loans
						(+21.1%)
FYE18	FYE19	FYE20	FYE21	FYE22	FYE23	（+16.7）

5,139.1	5,181.3	5,369.6	5,347.4	5,694.8	6,099.4
1,908.8	1,967.5	2,021.9	2,009.4	2,235.5	2,507.5
3,230.3	3,213.8	3,347.6	3,337.9	3,459.3	3,591.9
FYE18	FYE19	FYE20	FYE21	FYE22	FYE23

＜YoY Change＞

Tokyo

(+12.1%) （+271.9）

Local (+3.8%) （+132.6）

7

Average Yield of Loans / Net Interest Income

Difference of interests between loans and deposits increased significantly in both yen and foreign currency denominated loans by 5.7bn YoY.

Securities' income (excluding gain on cancellation of investment trusts) decreased by 11.2bn YoY due to the increase of costs such as market borrowings.

We will continuously enhance net interest income by increasing the balance of loans and restructuring our securities portfolio.

Average Yield on Loans(Joyo+Ashikaga)		Change of Interest Income(Joyo+Ashikaga)	（ bn）
(Domestic and Overseas)		＊Not including borrowing from special account of MoF
	＊Figures in parentheses are changes on a year on year basis

＊Not including borrow ing from special account of MoF

YoY Change

Results

Chg. in

Chg. in

(Factor)

Domestic

Overseas

5.02% 【Overseas】

Factors

Factors

Avg

+4.9

+5.1

(+563.5)

-0.1

(-3.1)

Interest on loans and

Balance

+2.3

-1.8

+4.2 (+199.1bp)

bills discounted

Yield

(-1.6bp)

116.3

+7.3

+3.2

－ +4.0

－

Interest on deposits (－)

4.0

+1.5

+0.0

－ +1.6

－

Difference of interests between

①

112.2

+5.7

+3.3

－ +2.4

－

loans and deposits

Avg

-6.8

-4.5

(-450.5)

-2.3

(-62.9)

Interest and dividend on

Balance

Yield

+12.2

-0.5

(-1.5bp)

+12.7 (+157.3bp)

securities

3.02%

63.9

+5.3

-5.0

－ +10.4

2.67%

(o/w gains on cancellation of

－

5.2

-1.8

-1.8

－

±0

－

Investment Trusts)

(excluding gains on cancellation

58.6

+7.2

-3.1

－ +10.4

－

of Investment Trusts）

Market borrowings, etc. (－)

36.8

+18.5

-0.1

－ +18.6

－

1.29%

Securities' Income

21.7

-11.2

-3.0

-8.2

【Domestic】

(excluding gains on cancellation of

②

－

－

1.02%

0.96%

1.04%

0.95%

0.97%

Investment Trusts）

3.0

-1.2

-1.2

±0

【Overseas】

by Bank of Japan

③

－

－

＋

Special Funds-Supplying Operations

0.94%

0.99%

0.96%

0.93%

0.91%

0.90%

【Domestic】

Securities' Income*

1

② +③ =④

24.8

-12.5

-4.2

－

-8.2

－

-3.5bp

-2.1bp

-2.1bp

-1.6bp

Net Interest Income

137.0

-6.7

-0.9

-5.7

(excluding gains on cancellation of

①+④

－

－

Investment Trusts）

8

FY19

FY20

FY21

FY22

FY23

*1 Excl. gains on cancellation of Investment Trusts, and incl. Special Funds-Supplying Operations by Bank of Japan.

Deposits Term-end Balance

Balance of deposits increased by 542.0bn YoY (+3.1% annualized).

Deposits from all sectors such as corporate, individual and public, have maintained an increasing trend.

Term-end Balance (Joyo+Ashikaga) (bn)

（＋3.1%）

Year on Year Changes

(bn)

		（＋3.6%）	（＋1.8%）	（＋542.0）
		（＋305.8）
		（＋599.8）
												17,705.2
								17,163.1
				16,857.3
		16,257.4
14,438.3	14,786.5			3,953.5	4,009.7	4,170.3
		3,887.4
3,325.5	3,364.1

		11,400.1	11,787.3	12,035.1	12,222.5
	10,685.0
10,362.7

750.1	737.3	969.9	1,116.4	1,118.2	1,312.3
FYE18	FYE19	FYE20	FYE21	FYE22	FYE23

Corporate

Individual

Public

	FYE21	FYE22	FYE23
+599.8	+305.8	+542.0
	Total
+3.6%	+1.8%	+3.1%
	+66.1	+56.1	+160.5
	Corporate
	+1.7%	+1.4%	+4.0%
	+387.2	+247.8	+187.4
	Individual
	+3.3%	+2.1%	+1.5%
	+146.5	+1.7	+194.0
	Public
	+15.1%	+0.1%	+17.3%

9