1st half of fy2016 earnings presentation · • the earnings presentation and this material are...

Copyright(C)2015 JTRUST Co.,Ltd. All Rights Reserved. 1

Earnings Presentation

1st Half of FY2016

November 2015

J Trust Co., Ltd.

Table of Contents

2

１．Performance of 1H FY2016

２．Segment Performance

• Domestic financial business

• Financial business in South Korea

• Financial business in Southeast Asia

• Non-financial business/Investment business

３．Summary

3

Disclaimer

• The information published in this material, including forecasts, is recognition,

opinion, judgment or projection of the Company at the time of creation of this

material and the Company does not guarantee its achievement. As such, please

be aware that actual results may differ from the forecasts provided in this material

as a result of various factors.

• Please note that figures based on IFRS in this material are unaudited figures

prepared by the Company as a reference.

• The earnings presentation and this material are prepared to provide information to

facilitate greater understanding of the Company. It is not intended for use in

soliciting investments in the securities issued by the Company or its subsidiaries.

• There are three months difference between consolidated accounting period and

accounting period of Bank JTrust Indonesia. (1Q reflects figures of Bank Jtrust

Indonesia from January till March and 2Q reflects figures of Bank Jtrust Indonesia

from April till June.)

• This material is an English translation of the original Japanese document,

prepared solely for the convenience of and reference by overseas investors. If

there exist any discrepancies between the original Japanese language and

English translation, the Japanese language will always prevail. The issuer shall

not be liable for this translation or any loss or damage arising from this translation.

4

Key Point

I. Domestic financial business⇒OP revenue and income on targets under mid-term business plan

II. Financial business in South Korea⇒Satisfactory progress with business and performance under K-GAAP

⇒Performance under J-GAAP slightly behind targets under mid-term business plan

III. Financial business in Southeast Asia⇒Reinforcing measures to achieve full-year target under mid-term business plan

(Target OP income, 1.5 billion yen)

IV. Non-financial business/Investment business⇒Favorable progress

5

6

Performance of 1H FY2016

OP income increased by 1.6 billion yen compared with the 1st quarter

FY2016 Apr-Sep Apr-Jun Jul-Sep Change

Operating revenue 377 195 182 -13

Operating income -23 -19 -3 +16

Ordinary income -22 -15 -6 +9

Quarterly income(loss)

attributable to owners of

parent-23 -27 4 +31

Operating profit ratio -6.18% -9.73% -2.09% +7.64%

ROE -1.35% -1.48% 0.27% +1.75%

7

Performance of 1H FY2016/Key indicators

Ｐｏｉｎｔ

Consolidated P/L (J-GAAP)*Comparison with previous quarter (in 100 million yen)

8

Segment Performance

9

Segment performance/OP revenue per segment

Total OP revenue decreased by 1.3 billion yen owing to sale of NPL in South

Korea (impact of account settlement in South Korea)

Ｐｏｉｎｔ


Domestic financial

business53 26 27 +1

Financial business in

South Korea133 74 59 -15


Southeast Asia*61 32 29 -3

Investment business 8 - 8 +8

Non-financial business 120 61 59 -3

Total after consolidation

adjustment 377 195 182 -13

Operating revenue (J-GAAP) (in 100 million yen)

*Regarding financial business in Southeast Asia, operating revenue for1H FY2016 reflect figures from January till June 2015.

10

Segment performance/OP income per segment

OP income from financial business in Southeast Asia increased by 1.6 billion

yen compared with the 1st quarter

Posted OP income from investment business of 0.7 billion yen, contribution

from JTRUST ASIA

Conducted upfront investment related to brand integration in South Korea

Ｐｏｉｎｔ


Domestic financial

business15 9 6 -3


South Korea-1 0.1 -1 -1


Southeast Asia* -34 -25 -9 +16

Investment business 7 - 7 +7

Non-financial business 1 2 -1 -3

Total after consolidation

adjustment -23 -19 -3 +16

Operating income (J-GAAP) (in 100 million yen)

*Regarding financial business in Southeast Asia, operating income for1H FY2016 reflect figures from January till June 2015.

11


-25.2

0.2

1

2

3

4

Q1 FY2016 Q2 FY2016

Reversal of allowance for doubtful

accounts by Bank JTrust Indonesia

South Korea Southeast Asia

-1.4

-9.5

Q1 FY2016 Q2 FY2016

+16

Advertising expenses to integrate JT

brand has increased

Upfront investment

Operating revenue from savings bank business decreased due to the

following factors:

1. Certain level of gain on sale of NPL was recorded for the 1st quarter

2. Interest income decreased due to the early repayment of mortgage

loans assumed from JTCK

3. Interest income decreased because the number of individual

rehabilitation cases increased temporarily

-7.9

8.3

Reversal of allowance for doubtful accounts was

made because the loan loss ratio has improved

thanks to a declining delinquency ratio in savings

bank business

0.6-2

Q2 FY2016(excluding upfront

investment)

Others

-0.3

Income from financial business in South Korea excluding expense related to

branding activities such as TV commercial stayed the same level as the 1st

quarter

Loss from financial business in Southeast Asia decreased due to reversal of

allowance for doubtful accounts for secured loans at Bank JTrust Indonesia

Ｐｏｉｎｔ

*Please refer to page 7 of supplementary presentation.

(unit:100 million yen)

-19

＋7

-3

-3

-1

＋16

-3

-25

-20

-15

-10

-5

0

5

1st quarter

Domesticfinancialbusiness

Financialbusiness in

South Korea

Financialbusiness in

Southeast AsiaInvestmentbusiness

Non-financialbusiness &

others 2nd quarter

12


With contribution from financial (SE Asia) and investment business, OP income

increased by 1.6 billion yen compared with the 1st quarter

Ｐｏｉｎｔ

Operating income (J-GAAP) *Comparison with the 1st quarterUnit: 100 million yen

13

Domestic financial business

12

1

13

21

15

J Trust PartirServicer

NihonnHoshou

Partir One J TrustCard

Internaltransaction

1st half

-14

15

7

45

3 3

53

J Trust PartirServicer

NihonHoshou

Partir One J TrustCard

Internaltransaction

1st half

-20

14

FY2016

J-GAAPApr - Sep Apr - Jun Jul - Sep Change

Operating revenue 53 26 27 +1

Operating income 15 9 6 -3

Domestic financial business/Highlight

OP revenue stayed at the same level as the 1st quarter

OP income declined by 0.3 billion yen due to recording of allowance at Nihon

Hoshou

Ｐｏｉｎｔ

Unit: 100 million yen

Operating revenue Operating income



75

23

3633

27

9

6

29

3635

37

Apr May Jun Jul Aug Sep

Amount Number of approvals

362 367 370 371 377 379 364

6 7 14 20 21 28

123

368 374384 391 398 407

487

Apr May Jun Jul Aug Sep FY2016(target)

Credit guarantee balance

Rental housing loan

15

Domestic financial business/Credit guarantee business

Credit guarantee balance is in line with target under medium-term business

plan. Number of approvals for rental housing loan steadily increased. Good

progress toward year-end target of 48.7 billion yen under mid-term business

plan.

Ｐｏｉｎｔ

Credit guarantee balance at Nihon Hoshou Number of approvals for rental housing loan

Unit: 100 million yenUnit: 100 million yen

16

Domestic financial business/Receivable collection business

During the 2nd quarter, Partir Servicer successfully implemented large scale

NPL purchase

Already achieved and considerably exceeded FY2016’s target of 384.1 billion

yen (120% against target)

Ｐｏｉｎｔ

Principal balance of receivable

1,196 1,251 1,471

2,572 2,833

3,492 3,421

4,612

3,841

2010/03 2011/03 2012/03 2013/03 2014/03 2015/03 2015/06 2015/09 FY2016(target)


Considerably exceeded

target

11

19

32

2015/06 2015/09 FY2016(target)

17

1H FY2016

J-GAAP

1H FY2016

IFRS

FY2016

IFRS

Progress against

full-year target

(IFRS)

Operating revenue 53 51 111 48.2%

Operating income 15 19 32 62.3%

Domestic financial business/Full-year target

Both OP revenue and income was on the target under mid-term business plan

Collection of off-balance receivables assumed from Takefuji progressed well

Ｐｏｉｎｔ

Unit: 100 million yenOperating income (under IFRS)


18

Financial business in South Korea

95

9 17

66 -54

133

JT Chinae TA JT Savings JT Capital Internaltransaction

1st half

13

3 2

34

-52

-1JT Chinae TA JT Savings JT Capital Internal

transaction1st half

OP revenue was at the same level as the 1st quarter, excluding impact of gain

on sales of receivables during the 1st quarter

Upfront investment related to brand integration amounted to approximately 0.2

billion yen

19

FY2016



Operating income -1 0.1 -1 -1

Financial business in South Korea/Highlight

Ｐｏｉｎｔ


Operating revenue Operating income



20

Financial business in South Korea/New loan balance

Amount of loan disbursed per month

768

464

767 727

516652

854

92

225

298

165

223

213

270115

102

113

130

167

143

160

975

790

1,178

1,022

906

1,008

1,284

2015/04 2015/05 2015/06 2015/07 2015/08 2015/09 2015/10

JT Capital

JT Savings

JT Chinae

Unit: 100 million won

Supported by improvement in brand recognition, the amount of loan disbursed

per month stayed around level of 100 billion won

Ｐｏｉｎｔ

avg 981 avg 979

1,280 over

21

Financial business in South Korea/Loan balance

Loan balance Unit: 100 million won

Loan balance stayed at the same level compared with the 1st quarter

In October 2015, loan balance increased by 50 billion won

Ｐｏｉｎｔ

17,327 17,341 17,175 17,212 17,267 17,295 17,800 20,053

63 112

7,698-4,939

2015/04 2015/05 2015/06 2015/07 2015/08 2015/09 2015/10 New loan Repayment/write-off

FY2016(target)

Total Sales

Net increase of

50 billion won

per month

Total of following three companies

JT Chinae Savings Bank

JT Savings Bank

JT Capital 505

225.3 billion

won below

full-year

target

22

Financial business in South Korea/Operating assets

Loan balance and delinquency ratio at savings banks/capital companyUnit: 100 million won

Loan screened and disbursed by group companies (bad debt ratio below 3%)

contributed to decrease in NPL (delinquent for 30 days or longer)

Ｐｏｉｎｔ

13,453

4,347

6,156

9,645

17,327 17,800

34.5%%

18.60%

8.74%7.93%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

14/04 05 06 07 08 09 10 11 12 15/01 02 03 04 05 06 07 08 09 10

Loan disbursed by group companies Purchased receivables

23

Financial business in South Korea/ (Reference) Amortization of goodwill

Gain on bargain purchase posted in FY2015 affects this year’s profit

Sum of OP income of subsidiaries in South Korea (unconsolidated figures

under J-GAAP) amounted to 4.6 billion yen

Ｐｏｉｎｔ

Impact of amortization of goodwill on operating income (as of end September)

unit: 100 million yen

-1

46-38

-11

1

OP income (J-GAAP) forSouth Korean

subsidiaries (beforeconsolidationadjustment)

Decrease in goodwilldue to sales of NPL

Decrease in goodwilldue to other reasons

Others OP income (J-GAAP) forSouth Korean

subsidiaries(afterconsolidationadjustment)

*1 won = 0.1 yen

Impact of gain on bargain purchase related to acquisition of JT Savings Bank

and JT Capital which was posted in FY2015

Ｐｏｉｎｔ

24

Financial business in South Korea/(Reference) Amortization of goodwill

Decrease in balance of goodwill

10 9 8

50

123

8

4

35

30

25

104

55

36

As of March 31, 2015 As of September 30, 2015 March 31, 2016 (forecast)

Operating assets

NPL

NPL (to be sold)

Others

5

4

38

1

5

4

9

1

Decrease due to NPL sales: approximately 3.8 billion yen

Decrease due to other reasons : approximately 1.1 billion yen


2-4 years

* 1 won = 0.1 yen

MonthNumber of

PV

Apr 2,633

May 2,655

Jun 4,818

Jul 6,294

Aug 5,155

Sep 11,188

Oct 28,096

25

Financial business in South Korea/Marketing and PR

TV commercial and sports marketing strategies implemented as a part of

brand integration effort was at the forefront of South Korean media and

affected figures after October

TV coverage about sponsorship for

professional baseball team (Oct)

September: Media coverage about TV commercial featuring the most popular actress in South Korea

October: Media coverage about corporate sponsorship for professional baseball team

MonthMedia

coverage

Apr 86

May 23

Jun 49

Jul 148

Aug 94

Sep 517

Oct 423

Number of media coverageNumber of view of J Trust HP

(South Korean version)

Ｐｏｉｎｔ

J Trust group brand CM

(Sep)

Tremendous

improvement in brand

recognition!

Amount of new loan

disbursed in October

2015 totaled 128

billion won (record

high)

0.1-1

-7

15

6

5

25

2015/06 2015/09 Gain of sales of NPL Reduction in advertisingexpenses

Reinforcement of salesactivities/Gain on collection

of receivable

FY2016(target)

26

1H FY2016

J-GAAP

1H FY2016

IFRS

FY2016

IFRS(target)

Progress against

full-year target

(IFRS)


Operating income -1 -8 25 -

Financial business in South Korea/Full-year target

With gain on sale of NPL: 1.5 billion yen/Impact of reduction in advertising

expenses: 0.6 billion yen/Reinforcement of sales activities: 0.5 billion yen,

expect to achieve full-year target

Ｐｏｉｎｔ


Amortization of

goodwill is reflected

Expected to be resolved by fiscal year-end

with establishment of accounting system


27

Financial business in Southeast Asia

28

2016/03



Operating income -34 -25 -9 +16

Financial business in SE Asia/Highlight

Reversal of allowance for doubtful accounts boosted profit

Ｐｏｉｎｔ

3229

2015/06 2015/09

-25

-9

2015/06 2015/09


Operating revenue of Bank JTrust Operating income of Bank JTrustUnit: 100 million yen


784 780 790 801 807 831 838 840

863 886

12 2015/01 02 03 04 05 06 07 08 09

29

Financial business in SE Asia/Operating assets of Bank JTrust Indonesia

Operating assets which was declining prior to acquisition rebounded

Although operating assets are expected to decrease temporarily owing to sale

of NPL, established asset expansion through improvement in financial health

Aim to achieve full-year target of 109.5 billion yen through reinforcement on

sales and credit screening structure

Balance of operating assets

Ｐｏｉｎｔ


192

221

241 241 252

267 276 278

284

2015/01 02 03 04 05 06 07 08 09

30

Financial business in SE Asia/Multi-finance loan

Loan disbursed in alliance with multi-finance companies is progressing

smoothly

Balance of multi-finance loan


Ｐｏｉｎｔ

31

Financial business in SE Asia/KPI

Average interest rate of deposit declined continuously and already hit

FY2016’s target

Online banking for business was introduced from October and KPI is expected

to improve during the 2nd half

Improvement in KPI

Target for FY2016As of end September

2015

Average deposit interest rate 8.2% 7.7%

Average lending interest rate 12.7% 10.6%

CAR 13.7% 16.2%

CASA ratio 18.4% 18.1%*

NIM 4.5% 0.9%

LDR 92.0% 82.4%

Ｐｏｉｎｔ

*including temporary factors

32

Financial business in SE Asia/Structural reform 1

Advance structural reform under J Trust Group corporate culture

Expect to generate operating income on monthly basis by the end of FY2016

Structural reform

Human resource

management

• Hire an expert with knowledge on local bank management

• Optimize personnel placement through adoption of elective

retirement plan and hiring of experienced human resources

(Boost employees’ motivation by reviewing incentive and

compensation)

(Hire highly capable people with experience in receivable

collection)

Establish special task

force to handle NPL

• Prevent deterioration of loan quality by implementing measures

tailored to obligor category

Further decrease in

funding cost

• Maximize synergy of JT Group

(On the back of favorable relationship with partnered banks,

establish scheme of procuring rupiah-denominated deposit to secure

low cost funds.)

Ｐｏｉｎｔ

33


With Ritsuo Ando, selected as “Best CEO, Indonesian Banking Award 2013”

implement mid-term business plan through structural reinforcement

Brief career history of Ritsuo Ando

1979 Joined Daiwa Bank (current Resona Bank)

1989 PT Bank Resona Perdania (Indonesia)

1996 Indonesia Division, International Department,

Daiwa Bank

2001 President, PT Resona Indonesia Finance

2007 General Manager, Overseas Business Development Department, ACOM CO., LTD.

2008 Vice President Director, PT Bank Nusantara Parahyangan Tbk

2009 President Director, PT Bank Nusantara Parahyangan Tbk

2013 Best CEO, Indonesian Banking Award 2013

2015 Joined Bank JTrust Indonesia on November 1, 2015 as full-time advisor

Ｐｏｉｎｔ

34


Adopt aggressive measures to increase operating assets

Separation of NPL established structure to reinforce sales activities

Reinforce measures to expand loan business

Established structure to

reinforce marketing

effort

• Improve NPL ratio drastically by separating NPL from performing

loan and establish structure to reinforce marketing effort

(22 billion yen as of October 22, 2015)

Capital injection

• Strengthened capital structure through capital injection

(approximately 3.5 billion yen) and issuance of subordinate bond.

CAR to increase to 18% (expected for end October 2015)

Increase in loan

• Conduct credit screening on potential obligors which were put on

hold owing to insufficient capital and disburse loans

• Reinforce sales structure along with loan disbursement plan

totaling approximately 20 billion yen by December and aim to

accumulate loan balance after 2016

Partnership• Preparing to expand multi-finance loan balance in collaboration

with Group Lease and aim to start partnership from next year

Ｐｏｉｎｔ

-6

15

-29

2015/06 2015/09 FY2016(target)

-35

OP revenue on target under mid-term business plan

Temporary expenses such as provision of allowance for doubtful accounts will be

recovered through collection of NPL during the 2nd half

Sale of NPL improves delinquency ratio and reversal of allowance is expected for year-

end*

Ｐｏｉｎｔ

35

1H FY2016

J-GAAP

1H FY2016

IFRS

FY2016

IFRS (target)

Progress against

full-year target

(IFRS)


Operating income -34 -35 15 -

Financial business in SE Asia/Full-year target


*Amount of reversal is to be scrutinized

*Jan – Jun 2015 *Apr – Sep 2015 Unit: 100 million yen

36

Non-financial business/Investment business

37

Non-financial & Investment business /Highlight

OP revenue stayed at the similar level

Good performance in real estate business

Ｐｏｉｎｔ

2016/03


Operating revenue 128 61 67 +5

Operating income 8 2 6 +4


Operating revenue Operating incomeUnit: 100 million yen

27

91

4

122

Real estatebusiness

Generalentertainment

business

Internaltransaction

1st half

2

1

2

1

Real estatebusiness

Generalentertainment

business

Internaltransaction

1st half

1

2

3

2015/06 2015/09 FY2016(target)

OP income (under IFRS) is 50% of full-year target

Contribution from investment business by JTRUST ASIA

Ｐｏｉｎｔ

38

Non-financial & Investment business /Full-year target

2015/09

J-GAAP

2015/09

IFRS

2016/03

IFRS

Progress against full-

year target (IFRS)


Operating income 8 3 6 50.0%

Operating income (under IFRS)Unit: 100 million yen


3

6

39

Overview

40

Overview/Roadmap to achieve full-year target

Performance for the 1st half is behind target under mid-term business plan.

Each business is expected to make steady progress towards achieving

operating income of 7.5 billion yen

Ｐｏｉｎｔ

FY2016Full-year

targetApr - Sep

Oct - Mar

target

Domestic financial

business32 19 13


South Korea25 -8 33


Southeast Asia15 -35 50

Non-financial business 6 3 3

Consolidation adjustment -3 -18 15

Total 75 -39 114


-39

75

2015/09 FY2016(target)

1st half of fy2016 earnings presentation · • the earnings presentation and this material are...

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