Financial Highlights for

the First Quarter of Fiscal Year 2020

July 31, 2020

Outline of Financial Results for the 1Q of FY2020

  • Net income attributable to owners of parent: JPY21.8 bn
    • Down JPY14.8 bn, or 40.5%, YoY
    • Progress rate against the full year target *1 : 18.1%
  • Actual net operating profit: JPY51.7 bn
    Down JPY3.9 bn, or 7.0%, YoY
    • Gross operating profit: JPY154.6 bn Down JPY4.8 bn, or 3.0%, YoY
      • Net interest income from domestic loans and deposits: Down JPY2.3 bn, YoY

Average loan balance : +3.59%, YoY

Loans rate : down by 6bps, YoY

[Excluding loans to the Japanese government and others] Average loan balance : +2.07%, YoY

Loans rate : down by 5bps, YoY

Loans balance surpassed expectation mainly due to increasing loans demand from corporate customers. Loans rate, excluding loans to the Japanese government and others, was almost in line with the plan.

      • Fee income : Down JPY3.9 bn, YoY
        Fee income ratio : 28.3%
        Fee businesses started slow mainly due to the constraint on face-to-face business activities amid the COVID-19 related crisis.
      • Net gains on bonds (including futures) : Up JPY4.2 bn, YoY
        Increased by building-up trading profits in a timely manner.
    • Operating expenses: JPY103.0 bn, improved by JPY0.8 bn, YoY
      Both personnel and non-personnel expenses decreased.
  • Credit related expenses: JPY15.9 bn (cost)
    Increased by JPY13.3 bn, YoY
    Provisioned loan loss reserves from a preemptive standpoint amid an uncertain environment due to the COVID-19 pandemic.

FY2020

HD consolidated

YoY change

Progress rate

1Q

(JPY bn)

v s. Target*1

%

(a)

(b)

(c)

(d)

Net income attributable to

(1)

21.8

(14.8)

(40.5)%

18.1%

owners of parent

EPS (yen)

(2)

9.49

(6.40)

(40.2)%

BPS (yen)

(3)

941.54

+39.97

+4.4%

Gross operating profit

(4)

154.6

(4.8)

(3.0)%

Net interest income

(5)

100.0

(3.1)

NII from loans and deposits*2

(6)

84.0

(2.3)

Fee income

(7)

43.9

(3.9)

Fee income ratio

(8)

28.3%

(1.6)%

Trust fees

(9)

4.4

(0.0)

Fees and commission

(10)

39.4

(3.8)

income

Other operating income

(11)

10.7

+2.3

Net gains on bonds

(12)

7.8

+4.2

(including futures)

Operating expenses (excluding group

(13)

(103.0)

+0.8

+0.8%

banks' non-recurring items)

Cost income ratio (OHR)

(14)

66.6%

+1.4%

Actual net operating profit

(15)

51.7

(3.9)

(7.0)%

Net gains on stocks

(16)

(0.9)

(3.0)

(including equity derivatives)

Credit related expenses, net

(17)

(15.9)

(13.3)

Other gains, net

(18)

(2.7)

+1.1

Net income before income taxes

(19)

32.0

(19.2)

(37.5)%

and non-controlling interests

Income taxes and other

(20)

(8.9)

+4.5

Net income attributable to

(21)

(1.3)

(0.1)

non-controlling interests

*1.

Full year target of FY2020: JPY120.0 bn

*2.

Total of non-consolidated domestic banking accounts of group banks, deposits include NCDs

1

*3.

Negative figures represent items that would reduce net income

Response to the COVID-19 Pandemic

How we response to the COVID-19 pandemic and what it impacts on our business activities

  • Maintaining smooth, locally-rooted banking operations

Local

Communities and

Customers

Employees

  • All domestic branches have maintained deposit, domestic & foreign exchange, lending and other banking services
  • Expanded non face-to-face services
    • Resona Group App: Approx. 2.6 million downloads as of Jun. '20
      Pay-easy*1 : Approx. 2.4 times, YoY Bank transfer*1 ： Approx. 2.2 times, YoY
  • Supported cash flow
    • Set up help desks and dedicated call centers to accommodate customer needs for cash-flow-related consulting even during public holidays
    • Provided "the COVID-19 support fund" and utilized public-financing system at all group banks to support customers in a swift and timely manner
  • Broadly implemented a "split-team" operation, working shifts with smaller headcounts, teleworking and other
  • 1Q of FY'20: Loan balance surpassed expectation while fee businesses started slow mainly due to the constraint on face-to-facebusiness activities
    Provisioned loan loss reserves from a preemptive standpoint amid an uncertain environment

Cash flow

Support

Fee Business

Credit Costs

  • Loan balance increased mainly due to higher cash flow demand from corporate customers
    • Average loan balance (excluding loans to the Japanese government and others): +2.07%, YoY (Corporate loans*2 +3.59%, YoY)
    • COVID-19related loan origination*3 ： Approx. JPY1.3 trillion

Approx. 40% of which are guaranteed by Credit Guarantee Corporations

  • Despite negative effects mainly on asset formation support business from constraints on face-to-face business activities, income from corporate solution business regarding loans increased
    • Income from Investment trust, FW and Insurance: JPY6.6 bn, down 25%, YoY
    • Income from commitment lines, syndicated loans, covenants and private notes: JPY3.8 bn, up 18%, YoY
  • General reserve increased ⇒ Took into account a greatly uncertain environment to calculate PD
    • Loans balance increased utilizing public-financing system and other
  • Specific reserve increased ⇒ New bankruptcy remained almost the same level on a group bank basis as previous fiscal year although RB recognized some credit cost from certain large borrowers
    • Reversal gains have continued to be on a declining trend due to the progress of turnaround support and other

*1.

Transaction number through Resona Group App as of 1Q of FY'20 (RB・SR・KMB)

*2. Excluding loans to HD

2

*3.

Total of group banks from March 10 to July 3, 2020 based on the report from each bank

Breakdown of Financial Results

Resona Holdings

Total of group banks

Difference

(JPY bn)

(Consolidated)

Resona

Saitama

Total of

group

Resona

YoY

YoY

Bank

Bank

banks under

KMFG

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(a)-(c)

Gross operating profit

(1)

154.6

(4.8)

141.0

(4.8)

81.3

28.6

31.0

13.6

Net interest income

(2)

100.0

(3.1)

98.3

(3.3)

51.3

20.5

26.4

1.7

NII from domestic loans and deposits

(3)

84.0

(2.3)

42.7

17.4

23.8

Gains/(losses) on cancellation of investment trusts

(4)

1.7

+1.2

1.2

+0.7

(0.4)

0.7

0.9

0.4

Fee income

(5)

43.9

(3.9)

32.4

(3.6)

21.5

7.1

3.7

11.4

Fee income ratio

(6)

28.3%

(1.6)%

22.9%

(1.7)%

26.5%

24.9%

11.9%

Trust fees

(7)

4.4

(0.0)

4.4

(0.0)

4.4

(0.0)

Fees and commission income

(8)

39.4

(3.8)

27.9

(3.6)

17.0

7.1

3.7

11.4

Other operating income

(9)

10.7

+2.3

10.2

+2.1

8.3

0.9

0.9

0.4

Net gains on bonds (including futures)

(10)

7.8

+4.2

7.7

+4.0

6.6

0.6

0.4

0.0

Operating expenses

(11)

(103.0)

+0.8

*1

(96.9)

+1.1

(51.5)

(18.6)

*1

(26.7)

(6.1)

(excluding group banks' non-recurring items)

Cost income ratio (OHR)

(12)

66.6%

+1.4%

68.7%

+1.4%

63.4%

65.1%

85.8%

Actual net operating profit

(13)

51.7

(3.9)

44.0

(3.6)

29.7

9.9

4.3

7.6

Core net operating profit *2

(14)

35.9

(4.8)

24.2

8.5

3.0

(excluding gains/(losses) on cancellation of investment trusts)

Net gains on stocks (including equity derivatives)

(15)

(0.9)

(3.0)

0.7

(1.3)

(1.8)

1.2

1.3

(1.6)

Credit related expenses, net

(16)

(15.9)

(13.3)

(14.3)

(13.2)

(11.3)

(0.7)

(2.2)

(1.6)

Other gains/(losses), net

(17)

(2.7)

+1.1

(2.4)

+1.7

(1.7)

(0.8)

0.1

(0.3)

Net income before income taxes

(18)

32.0

(19.2)

28.0

(16.5)

14.8

9.5

3.6

4.0

Income taxes and other

(19)

(8.9)

+4.5

(7.5)

+4.1

(3.8)

(2.7)

(0.9)

Net income attributable to non-controlling interests

(20)

(1.3)

(0.1)

Net income

(21)

21.8

(14.8)

20.4

(12.3)

10.9

6.7

2.6

(attributable to owners of parent)

*1. Exclude goodwill amortization by KMB, JPY(0.1) bn, related to acquisition of former Biwako Bank

3

*2. Actual net operating profit - Gains on cancellation of investment trusts - Net gains on bonds

Factors for the Changes in Net Income Attributable to

HD

Owners of Parent (YoY Comparison)

Consolidated

（JPY bn）

Actual net operating profit (3.9)

Gross operating profit (4.8)

NII from domestic loans and deposits

Other NII

Net gains

on stocks

36.7

Of which,

KMFG

1.0*1

(2.3) (0.8)

Volume factor +2.9

Rate factor

(5.3)

Operating

(including

Fees and

equity

Other GOP,

expenses

commission

net

+0.8

derivatives)

(3.0)

income

+2.3

Credit-

(3.9)

related

expenses,

Other

net

items,

(13.3)

net

+5.4

Net gains on bonds

+4.2

(including futures)

Yen bonds

(1.0)

Foreign bonds

+5.3

Income taxes

and other +4.5

Insurance

(1.3)

Personnel

Act.

Sales commission of

expenses

+0.2

'19/6

(2.6)

investment trust

(0.5)

Non-personnel

'20/6

(15.9)

Fund wrap

+0.0

expenses

+0.7

Corporate solution

+0.3

Taxes

(0.0)

Settlement related

+0.3

(14.8), YoY

21.8

Of which,

KMFG

0.9*1

FY2019

FY2020

1Q

1Q

*1. KMFG consolidated net income x 51.2%

4

Trend of Loans and Deposits (Domestic Account)

Total of

Group Banks

Average loan / deposit balance, rates and spread

Trend of average loan balance, loan rate change

1Q of FY'20 (YoY)

[ Average loan balance (JPY tn)] % represents YoY change

Average loan balance : +3.59%, Loan rate : (6) bps

[Excluding loans to the Japanese government and others]

Corporate (Excluding loans to HD)

Average loan balance : +2.07%, Loan rate : (5) bps

Personal

35.38

36.57

1Ｑ

FY2020

Avg. bal : Trillion Yen

34.90

+1.35%

35.30

+3.59%

Act.

YoY *3

Plan

YoY *3

Income/Cost : Billion Yen

Avg.

(a)

(b)

(c)

(d)

(1)

36.57

+3.59%

35.78

+1.12%

20.86

21.38

Bal.

20.69

20.87

Loans

Rate

(2)

0.93%

(0.06)%

0.94%

(0.04)%

+0.81%

+2.39%

Income

(3)

85.4

(2.7)

339.2

(10.5)

13.20

13.34

Corporate

Avg.

12.86

13.10

(4)

21.38

+2.39%

20.94

+0.40%

+2.65%

+1.84%

Banking

Bal.

Business

Rate

(5)

0.82%

(0.02)%

0.82%

(0.02)%

FY2018

FY2019

FY2019

FY2020

Unit *1

Avg.

(6)

17.77

+3.59%

17.35

+1.00%

1Q

1Q

Corporate

Bal.

Loan

Rate

(7)

0.76%

(0.02)%

0.76%

(0.02)%

[ Loan rate YoY change (%) ]

Personal

Avg.

(8)

13.34

+1.84%

13.42

+1.64%

Corporate

Personal

Total

Corporate

Banking

Bal.

(0.02)%

Business

Rate

(9)

1.20%

(0.06)%

1.19%

(0.05)%

Unit *2

Total

Avg.

(10)

54.55

+5.23%

52.86

+1.41%

Bal.

(0.05)

(0.05)

(0.06)%

Deposits

Rate

(11)

0.01%

(0.00)%

0.01%

(0.00)%

(0.06)

(0.06)

Consumer

(Including NCDs)

(0.07)

(0.06)%

Cost

(12)

(1.4)

+0.3

(6.4)

+0.7

(0.09)

Total (excluding loans to the

(0.13)

(0.13)

Japanese Gov and others) (0.05)%

Spread

(13)

0.92%

(0.06)%

0.93%

(0.03)%

Loan-to-deposit

Net

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

interest

(14)

84.0

(2.3)

332.8

(9.8)

income

FY2016

FY2017

FY2018

FY2019

FY'20

*1. Corporate Banking Business Unit : Corporate loans (excluding loans to HD)

3 banks(RB, SR, KO)

After KMFG integration

+ apartment loans, Figures are internal administration purpose

*2. Personal Banking Business Unit: Residential housing loans + other consumer loans,

5

Figures are internal administration purpose

*3. Average balance : rate of change

Term-end Balance of Loans and Deposits

Total of

Group Banks

Term-end loan balance

Term-end deposit balance

JPY tn, % represents YoY change

Corporate (Large companies and other)

Of which, excluding

loans to the Japanese

Corporate (SMEs)

Gov and others

Corporate (Apartment loans)

[1.03] +2.7%

Personal（Consumer loans)

Personal（Residential housing loans)

37.90

35.29

35.92

35.85

36.28

35.91

36.22

36.05

36.73

+5.5%

6.41

5.12

5.03

5.41

4.99

5.17

5.14

5.07

5.02

+26.5%

13.90

14.31

14.20

14.53

14.19

14.48

14.27

14.57

14.72+3.7%

3.57

3.56

3.54

3.53

3.50

3.47

3.45

3.43

3.39

(3.2)%

0.40

0.40

0.40

0.40

0.40

0.40

0.40

0.40

0.39

(0.9)%

12.40

12.47

12.56

12.68

12.73

12.83

12.90

12.91

12.97+1.8%

'18/6

'18/9

'18/12

'19/3

'19/6

'19/9

'19/12

'20/3

'20/6

FY2018

FY2019

FY`20

JPY tn, % represents YoY change

Other

Corporate

Personal

55.48

53.02

+7.7%

50.13

50.39

50.25

51.21

51.48

51.70

52.05

3.69 +5.8%

3.45

3.49

3.27

3.16

3.48

3.15

3.11

2.98

17.21

14.76

15.16

14.61

15.32

15.04

15.73

15.34

16.21

+14.4%

32.20

32.12

32.65

32.44

32.94

32.70

33.53

33.32

34.57+4.9%

'18/6

'18/9

'18/12

'19/3

'19/6

'19/9

'19/12

'20/3

'20/6

FY2018

FY2019

FY`20

6

Housing Loan Business

Total of

Group Banks

New housing loan origination

Term-end housing loan balance

JPY tn, % represents YoY change

JPY tn, % represents YoY change

Apartment loan

Flat 35

Residential housing loan

0.46

0.40

0.07

0.42

0.41

0.05

0.05

0.36

0.02

0.34

0.07

0.34

0.02

0.02

0.04

0.32

0.31

0.02

0.04

0.05

0.02

0.03

(7.4)%

0.02

(38.5)%

0.02

0.02

0.02

0.01

(29.7)%

0.36

0.34

0.34

0.30

0.26

0.29

0.27

0.27

0.27

(1.1)%

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY2018

FY2019

FY`20

Apartment loan

Residential housing loan

16.22

16.24

16.31

16.35

16.34

16.37

15.98

16.04

16.10

+0.7%

3.56

3.54

3.53

3.50

3.47

3.45

3.43

3.39

3.57

(3.2)%

12.40

12.47

12.56

12.68

12.73

12.83

12.90

12.91

12.97+1.8%

'18/6

'18/9

'18/12

'19/3

'19/6

'19/9

'19/12

'20/3

'20/6

FY2018

FY2019

FY`20

7

Fee Income

HD

Consolidated

  • Consolidated fee income ratio*1 : 28.3%
  • While income from insurance and investment trust sales has decreased, fund wrap (+4.8% YoY), corporate solution (+8.4%,YoY) and settlement related (+2.2%, YoY), have increased.

[FY results and plans]

JPY bn, % represents

28.8%

About 30%

YoY change

30.3%

30.0%

30.0%

Fee income ratio*1

28.3%

30.0%

195.0

200.0

190.2

+2.5%

9.0

Insurance

48.1

47.8

10.7

25.0%

43.9

25.0%

9.5

Investment trust

Insurance

9.0

(sales commission)

3.2

2.8

(8.2)%

11.0

Investment trust

Investment trust

(trust fees)

2.4

1.8

12.8

6.0

Fund wrap*2

(sales commission)

1.5

(41.5)%

3.0

4.8

Investment trust

3.3

1.2

20.0% *2

2.6

(trust fees)

0.8

1.1

20.0%

23.5

Trust related

1.2

24.0

Fund wrap*2

5.1

4.9

Trust related*2

4.6

28.5

Corporate solution

3.8

3.8

Corporate solution

4.1

27.0

15.0%

1.5

15.0%

Real estate

1.7

1.1

(4.5)%

13.5

Real estate

12.5

Settlement

15.4

15.8

16.2

10.0%

10.0%

related*3

・Debit card

0.6 [+33.4%]

69.0

Settlement

・EB

2.8 [+26.5%]

65.7

related*3

5.0%

5.0%

Other

12.0

12.7

11.1

・Housing loan related

Other

23.3

25.0

4.7 [+9.9%]

0.0

FY2018

FY2019

FY2020

0.0%

0.0

FY2019

FY2020

0.0%

1Q

1Q

1Q

(Plan)

(a)

(b)

(c)

(d)

(e)

*1.

(Fees and commission income + trust fees) / Consolidated gross operating profit

*2. Including fee income earned by Resona Asset Management

*3.

Fees and commission from domestic exchange, account transfer, EB, debit card and fee income earned by Resona Kessai Service

8

and Resona Card

Major Fee Businesses(1) (Asset Formation Support Business)

HD

Consolidated

Balance of asset formation support products sold to individuals

(JPY tn)

13.9%

13.1%

13.1%

  • Balance of fund wrap*1:'20/6 JPY378.5 bn

Foreign currency deposits, (JPY417.4 bn including corporation)

5.29

5.08

5.24

0.53

0.49

0.49

2.53

2.54

2.56

Public bonds etc. Insurance

Fund wrap*1

  • Change in balance of investment trust
    and fund wrap: 1Q FY'20 Approx. +JPY140.0 bn
  • Net inflow (new purchase - withdrawal and redemption): Approx. JPY(12.0) bn

0.31

0.35

0.37

1.91

1.66

1.78

2019/3

2020/3

2020/6

Investment trusts*1

Number of individual customers having

investment trust, fund wrap and insurance

Asset formation support products : '20/6 925 thousand

product ratio*2

NISA account holders*3: 369 thousand, +7.8%, YoY

iDeCo participants*4: '20/6 122 thousand , +17.4%, YoY

Investment trust and fund wrap income

Insurance income

(JPY bn)

(JPY bn)

Sales commission

Fund wrap

Trust fees

6.6

7.4

6.6

6.3

6.1

6.2

7.0

7.2

2.9

2.4

2.7

5.1

2.4

2.3

2.0

1.8

1.8

1.0

1.2

0.8

1.1

1.1

1.1

1.1

1.2

1.2

1.2

3.3

3.4

3.2

3.2

3.0

3.2

3.2

3.2

2.6

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY2018

FY2019

FY`20

4.2

4.1

4.1

3.2

2.8

3.1

2.4

2.3

1.5

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY2018

FY2019

FY`20

*1. Based on market value

*2. Balance of asset formation support products sold to individuals / (balance of asset formation support products sold to individuals and yen deposits held by individuals)

*3. NISA, Junior NISA, Cumulative NISA9

*4. iDeCo participants + members giving investment instructions

Major Fee Businesses(2)

(Trust, Corporate Solution, Real Estate Business)

HD

Consolidated

Trust-related business income

(JPY bn)Resona Asset Management

Trust solution offered for asset and business succession

Expand business opportunities through providing group

banks' customers with trust functions

10

Pension/Securities trust

[Number of new asset succession-related contracts]

6.5

6.7

6.6

7.1

5.1

0.1

5.3

0.0

4.9

0.4

5.3

1.6

1.5

1.4

5

0.0

0.1

1.6

0.5

4.6

0.4

1.5

0.6

0.7

0.6

0.7

1.4

4.3

4.9

4.3

5.1

3.8

4.4

3.9

3.9

0.4

2.7

0

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY2018

FY2019

FY`20

Corporate solutions business income

(JPY bn) M&A Private notes Commitment line, Syndicated loans, Covenants

KMFG

1,004

SR

808

177

804

RB

146

158

456

356

293

306

371

353

FY2018

FY2019

FY2020

1Q

1Q

1Q

Real estate business income*1

(JPY bn)

Corporate

Consumer

11.4

5

90..78

8.6

1.3

8.0

2.1

0.7

2.6

0.9

2.4

1.6

4.3

4.1

3.8

3.8

0.6

3.0

0.2

0.7

6.7

0.5

7.5

0.6

0.4

0.9

0.7

5.4

0.6

5.5

3.0

0.6

2.8

2.4

2.5

1.9

0

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY2018

FY2019

FY`20

4.8

5.2

5.3

4.3

1.1

1.1

1.5

1.2

1.7

3.3

1.4

4.0

1.5

4.1

1.3

3.1

1.1

0.3

0.3

1.3

0.4

0.3

0.2

0.9

1.1

0.9

0.8

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

FY2018

FY2019

FY`20

*1. Excluding gains from investments in real estate funds

10

Credit Costs and NPL

HD Consolidated

Total of Group Banks

Credit costs

NPL balance and ratio

(Total of Group Banks)

FY2018

FY2019

FY2020

(JPY bn)

1Q

1Q

Plan

(a)

(b)

(c)

(d)

(e)

Net credit cost

(1)

(1.3)

(2.6)

(22.9)

(15.9)

(50.0)

(HD consolidated)

Net credit cost

(2)

0.1

(1.1)

(18.8)

(14.3)

(42.0)

(Total of group banks)

General reserve

(3)

11.2

5.3

(4.7)

(4.3)

Specific reserve

(4)

(11.0)

(6.5)

(14.0)

(10.0)

and other items

New bankruptcy,

(5)

(31.3)

(10.4)

(27.1)

(11.0)

dow nw ard migration

Collection/

(6)

20.2

3.8

13.1

1.0

upward migration

Difference (1) - (2)

(7)

(1.4)

(1.4)

(4.1)

(1.6)

(8.0)

HL guarantee

(8)

3.0

(0.3)

(2.3)

(1.0)

subsidiaries

Resona Card

(9)

(2.2)

(0.6)

(2.1)

(0.4)

(bps)

HD consolidated*1

(10)

(0.3)

(2.8)

(6.2)

(17.0)

(13.4)

Total of group banks*2

(11)

0.0

(1.2)

(5.0)

(15.0)

(11.1)

(Financial Reconstruction Act criteria)2% )

1,000

Unrecoverable or valueless claims

Risk claims

Special attention loans

NPL ratio

1.18%

1.14%

1.16%

(JPY bn)

1%

500

442.2

433.5

451.3

71.0

68.0

67.8

280.8

270.5

279.5

90.3

94.9

103.8

0

2019/3

2020/3

0%

2020/6

*(Note) Positive figures represent reversal gains

*1.

Credit cost / (Loans and bills discounted + acceptances and guarantees)

(Simple average of the balances at the beginning and end of the term)

*2.

Credit cost / total credits defined under the Financial Reconstruction Act

11

(Simple average of the balances at the beginning and end of the term)

Securities Portfolio

Total of

Group Banks

Securities Portfolio*1

2019/3

2020/3

2020/6

(JPY bn)

Unrealized

gains/(losses)

(a)

(b)

(c)

(d)

Available-for-sale

(1)

2,566.5

3,055.7

3,213.5

554.5

securities

Stocks

(2)

353.8

336.9

334.8

554.2

Bonds

(3)

1,188.2

1,722.8

2,046.3

(8.8)

JGBs

(4)

46.1

459.6

641.8

(11.8)

Average duration

(5)

6.7

14.8

14.3

-

(years)

Basis point value

(6)

(0.03)

(0.68)

(0.91)

-

(BPV)

Local government and

(7)

1,142.0

1,263.1

1,404.5

2.9

corporate bonds

Other

(8)

1,024.5

995.9

832.2

9.1

Foreign bonds

(9)

472.3

554.1

337.7

11.9

Average duration

(10)

5.3

2.4

4.0

-

(years)

Basis point value

(11)

(0.18)

(0.00)

(0.09)

-

Status of policy-oriented stocks held

  • Balance of listed stocks disposed in 1Q of FY2020 (acquisition cost basis): JPY2.0 bn,
    Net gain on sale: JPY2.8 bn (HD consolidated: JPY1.2 bn)
    Breakeven Nikkei average: Approx. 6,800 yen
  • Policy for holding policy-oriented stocks
    • After the injection of public funds, Resona Group reduced the balance of stockholdings in order to minimize the price fluctuation risk.
    • Resona Group will continue to determine whether or not to hold policy-oriented stocks after examining risks and returns, including the realizability of medium- and long-term business prospects.
      • Plan to reduce JPY30.0 bn level in 3 years from Mar. '20
      • Aim to reduce the balance to 15% level of the CET1 capital*2

【Stock holdings】

(BPV)

Investment trusts

(12)

540.6

435.0

490.5

(4.4)

(Domestic)

Ratio to CET1 (ex. unrealized gains on available-for-sale securities)

(JPY bn) 40%

Net unrealized gain

(13)

598.3

420.7

554.5

Bonds held to

(14)

2,127.4

1,968.4

2,100.1

21.5

maturity

JGBs

(15)

1,539.5

1,144.2

1,269.0

15.0

Net unrealized gain

(16)

47.1

28.1

21.5

Unrealized gains/(losses) in 3 assets (4)+(9)+(12)

1,000

500

28.8%

26.3%

1,397.0

22.8%

Approx.

JPY(1) tn

693

(75)%

351.5

19.4% 18.2%

30%

20%

10%

'19/3 +JPY2.4 bn ⇒ '20/3 JPY(6.9) bn ⇒ '20/6 JPY(4.3) bn

348.3

343.8

353.7 336.9 334.8

CLO: Zero

0

0%

2003/3 2004/3 2016/3 2017/3 2018/3 2019/3 2020/3 2020/6

*1.

Acquisition cost basis. The presented figures include marketable securities only

3 banks(RB, SR, KO)

After KMFG integration

12

*2.

Excluding unrealized gains on available for sale securities

(Reference) Outline of Financial Results of Each Segment

HD

Consolidated

(JPY bn)

FY2020

YoY

(JPY bn)

1Q

Change

Customer

Gross operating profit

(1)

106.6

(7.8)

Operating expense

(2)

(74.7)

+0.3

Divisions

Actual net operating profit

(3)

31.9

(7.5)

Personal

Gross operating profit

(4)

50.0

(6.2)

Operating expense

(5)

(40.7)

(0.0)

Banking

Actual net operating profit

(6)

9.3

(6.3)

Corporate

Gross operating profit

(7)

56.6

(1.6)

Operating expense

(8)

(34.0)

+0.4

Banking

Actual net operating profit

(9)

22.6

(1.1)

Markets and

Gross operating profit

(10)

12.6

+1.4

Operating expense

(11)

(0.5)

+0.0

Other

Actual net operating profit

(12)

12.1

+1.4

Gross operating profit

(13)

33.2

(1.4)

KMFG

Operating expense

(14)

(27.8)

+0.4

Actual net operating profit

(15)

5.4

(0.9)

Gross operating profit

(16)

152.5

(7.8)

Total

Operating expense

(17)

(103.0)

+0.8

Actual net operating profit

(18)

49.6

(7.0)

Markets

Personal

and

KMFG

(6.3)

Corporate

Other

(1.1)

+1.4

(0.9)

Actual

Customer

Actual

net

net

Divisions

operating

(7.5)

operating

profit

Next page for details

profit

56.6

49.6

(7.0)

FY2019

FY2020

1Q

1Q

Definition of management accounting

  1. "Customer Divisions" and "Markets and Other" segment refers to the HD Consolidated subsidiaries, except KMFG consolidated subsidiaries.
  2. Gross operating profit of "Markets" segment includes a part of net gains/losses on stocks. "Other" segment refers to the divisions in charge of management and business administration.

13

(Reference) Outline of Financial Results of Customer Divisions

HD Consolidated

(exclude KMFG)

Personal Banking Segment

  • Actual net operating profit : Down JPY6.3 bn, YoY

(JPY bn)

Gross operating profit (6.2)

Segment

interest

spread

Investment

(1.8)

products Real

sales

estate

(1.6)

(0.1)

Other

Operating

Actual

items, net expenses

(2.7)

(0.0)

net

Deposits (0.7)

operating

Resona Card (0.5)

Loans

(1.0)

Actual

profit

ATMs related (0.4)

15.6

net

(6.3)

operating

profit

FY2020 1Q

9.3

Gross

Operating

operating

Segment

Inv estment

Real

interest

Other

expenses

profit

products

estate

spread

50.0

32.1

4.0

0.2

13.5

(40.7)

Corporate Banking Segment

  • Actual net operating profit : Down JPY1.1 bn, YoY

(JPY bn)

Gross operating profit (1.6)

Segment

interest

spread

Corporate

(0.0)

+0.0

(0.3)

solution

Pension

Other

+0.6

and

items,

Operating

Real estate

securities

net

(excluding

trust

(1.9)

expenses

equity

+0.4

Actual

investments)

net

operating

Dividends from

Actual

profit

Deposits (0.0)

policy-oriented

net

23.8

Loans +0.0

stocks held

(1.2)

operating

(1.1)

profit

FY2020 1Q

22.6

Gross

Operating

operating

Segment

Real

Corporate

Trust

Other

expenses

profit

interest

estate

solution

related

spread

56.6

29.2

0.7

4.5

4.8

17.2

(34.0)

FY2019

FY2020

FY2019

FY2020

1Q

1Q

1Q

1Q

14

  • Abbreviations and definitions of the figures presented in this material are as follows:

[HD] Resona Holdings, [RB] Resona Bank, [SR] Saitama Resona Bank,

[KMFG] Kansai Mirai Financial Group, [KMB] Kansai Mirai Bank*, [MB] Minato Bank

* [KU] Kansai Urban Banking Corporation and [KO] Kinki Osaka Bank merged on April 1, 2019

Figures include data for internal administration purpose.

The forward-looking statements contained in this material may be subject to material change due to the following factors.

These factors may include changes in the level of stock price in Japan, any development and change related to the government's and central bank's policies, laws, business practices and their interpretation, emergence of new corporate bankruptcies, changes in the economic environment in Japan and abroad and any other factors which are beyond control of the Resona Group.

These forward-looking statements are not intended to provide any guarantees of the Group's future performance. Please also note that the actual performance may differ from these statements.

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Resona Holdings Inc. published this content on 31 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 July 2020 07:05:10 UTC