Daiwa Securities : Presentation for 2Q FY2022

10/31/2022 | 02:00am EST

Daiwa Securities Group Inc.

2Q FY2022 Earnings Announcement

October 31, 2022

This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other "forward-looking" information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Groupʼs actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group.

Table of Contents

Highlights	3-4

Financial Summary	5-7

B/S & Financial Management Summary	8-9

P/L Summary	10

Breakdown of SG&A	11-12

Overseas Operations	13

Segment Information	14-21

Reference	22-35

Highlights (2Q/FY2022, YoY)

Both net operating revenues and ordinary income decreased YoY.

Consolidated earnings results

FY2022 1H

FY2021 1H

% Changes vs

1H/FY2021

Net operating revenues

¥217.0 bn

¥255.9 bn

-15.2%

Ordinary income

¥32.9 bn

¥71.9 bn

-54.2%

Profit attributable to owners of parent

¥31.4 bn

¥50.2 bn

-37.3%

Retail Division decreased in both operating revenues and ordinary income due to a decrease in revenues from customer order flow, but maintained ordinary income of ¥12.4 bn led by steady progress in shifting to wealth management business model and cost reduction.
- Contract amount of wrap account service* is ¥297.3 bn and net inflow expanded to ¥165.9 bn.
For Wholesale Division, ordinary income for Global Markets and Global Investment Banking deteriorated due to a decrease in client activities.
Asset Management Division increased net operating revenues but decreased ordinary income.
- In securities asset management, net inflow of publicly offered stock investment trusts (excluding ETF) was ¥269.3 bn, the highest level in seven years.
- Real estate asset management reached a record high in net operating revenue and ordinary income. **
In Investment Division, ordinary income jumped 3.8 times led by revenue expansion from private equity investment.
Overseas operations doubled in ordinary income YoY.

FY2022 interim dividend per share is 11 yen ( Dividend payout ratio : 51.8%)

* Includes Wholesale Division ** Since disclosures of segment information started in FY2010

Summary (2Q/FY2022, QoQ)

Ordinary Income is ¥14.8 bn, decrease of 17.9% QoQ .

Consolidated earnings results
	FY2022 2Q			FY2022 1Q	% Changes vs
						1Q/FY2022

Net operating revenues		¥110.9 bn	¥106.1 bn
				+4.5%


Ordinary income		¥14.8 bn
			¥18.0 bn
				-17.9%


Profit attributable to owners of parent		¥19.5 bn	¥11.8 bn
			+64.8%

For Retail Division, secured ordinary income of ¥6.1 bn with steady progress in shifting to wealth management business model and cost reduction.
For Wholesale Division, Global Markets slowed whilst Global Investment Banking improved.
Recorded a gain of ¥11.2 bn on the sale of a portion of the stake in Tokiwabashi Tower in order to expand assets under management in the real estate asset management business.
Annualized ROE: 5.5%

			Ordinary Income	Profit Attributable to
	Net Operating Revenues
			Owners of Parent
(¥ Billions)	(¥ Billions)	(¥ Billions)

Consolidated

Financial Summary

		FY2021		FY2022	% Change	% Change	FY2021	FY2022	% Change
(¥ Millions)						vs	vs			vs	FY2021
2Q	3Q	4Q	1Q	2Q	1H	1H
	1Q/FY22	2Q/FY21		1H/FY21
Operating revenues	154,702	166,599	148,333	146,640	192,552	31.3%	24.5%	304,538	339,193	11.4%	619,471

Net operating revenues	129,222	134,374	111,776	106,122	110,933	4.5%	-14.2%	255,943	217,055	-15.2%	502,093

SG&A	98,544	98,323	94,817	97,274	98,942	1.7%	0.4%	193,417	196,216	1.4%	386,559

Ordinary income	36,997	40,561	23,340	18,085	14,855	-17.9%	-59.8%	71,919	32,941	-54.2%	135,821

Profit (loss) attributable to	26,642	26,698	17,989	11,878	19,576	64.8%	-26.5%	50,203	31,455	-37.3%	94,891
owners of parent

Total assets	25,510,806	26,415,274	27,531,089	28,747,174	31,461,475			25,510,806	31,461,475		27,531,089

Net assets	1,612,395	1,600,496	1,639,888	1,668,661	1,697,428			1,612,395	1,697,428		1,639,888

Shareholders' equity*	1,344,702	1,331,188	1,373,282	1,400,590	1,428,464			1,344,702	1,428,464		1,373,282

EPS (¥)	17.54	17.90	12.13	8.01	13.24			32.99	21.24		63.06

BPS (¥)	889.70	897.76	925.81	943.71	971.62			889.70	971.62		925.81

ROE (Annualized)	8.0%	8.0%	5.3%	3.4%	5.5%			7.5%	4.5%		7.0%

FY2022 Interim Dividend

* Shareholders' equity = Owners' equity + Accumulated other comprehensive income

11 yen

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Daiwa Securities Group Inc. published this content on 31 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2022 06:59:05 UTC.

DAIWA SECURITIES GROUP INC.

Daiwa Securities : Presentation for 2Q FY2022

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