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Received a technical mention in the 28th (fiscal 2019) Bingata Design Contest
“Flowers Blossoming on the Way Home” by Hiroko Kyan
Financial Results
for FY2019
1Economic Overview ofOkinawa Prefecture
2
* Annual statistical indicators are based on the calendar year.
▲ 60
▲ 40
▲ 20
0
20
40
60
End Mar. ’99 End Mar. ’06 End Mar. ’13 End Mar. ’20
Nationwide Okinawa
Tankan Survey
End Mar. ’20▲1
End Mar. ’20▲4
Source: The Bank of Japan Naha Branch* New base data has been used since Dec. 2014 and Dec. 2017 (discontinuous with the previous data).
Like in other prefectures, business confidence in Okinawa fell significantly due to Covid-19.
Business Sentiment DI (Good/Bad)
0
5
10
15
20
25
30
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
Nationwide Okinawa
End Mar. ’20▲13
End Mar. ’20+14
* New base figures have been used since Dec. 2014.Source: The Bank of Japan Naha Branch
Cash Flow Sentiment DI (Good/Bad)
3
115193 224 243 260
84
95132 107
148
13
86
130 143147
0
8
15 2821
7
5
14 75
219
387
515 528581
0
100
200
300
400
500
600
700
2015 2016 2017 2018 2019
Naha Port Ishigaki PortTaira Port Nakagusuku PortOthers(Times)
6,266 6,640 6,887 7,003 6,978
1,670 2,129
2,692 3,000 2,490
7,936 8,769
9,579 10,004
9,469
2,000
4,000
6,000
8,000
10,000
12,000
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(1,000)
Number of foreign touristsNumber of domestic tourists (Japan)
Tourism
Source: Okinawa Prefecture
The number of tourists for FY2019 significantly decreased compared to the previous fiscal year due to Covid-19. Cruise ship calls reached an all-time high in 2019 (calendar year) but the number isexpected to decrease in the future.
Number of Tourists and Tourism Revenues
Source: Okinawa General Bureau, Cabinet Office
Number of Cruise Ship Calls in Okinawa Prefecture
2020/3
4
10,726 11,135 11,263 11,282 9,227
3,170 3,103 3,018 2,696
2,922
2,077 1,933 2,258 2,614
2,791
16,136 16,201 16,591 16,803
15,098
0
5,000
10,000
15,000
2015 2016 2017 2018 2019
(Numbers) Rented Owned
Built for Sale Issued
Population, Number of Households, and Housing Starts
Source: Data from Census and the Nansei Shoto Industrial Advancement Center (NIAC)
Okinawa’s population is expected to grow until 2025, while the number of households is expected to keep growing onward.The number of new housing starts will decline as a whole due to the significant decrease in rental housing.
Okinawa’s Future Population and Number of Households
Source: "Housing Starts Statistics" by Ministry of Land, Infrastructure, Transport and Tourism
Okinawa Housing Starts
559
600
627642 646 648
1,434
1,453 1,457 1,454
1,445
1,432
1,400
1,450
1,500
2015 2020 2025 2030 2035 2040400
500
600
700
(Thousands People)
(Thousands Households)
Forecast of total number ofhouseholds (right axis)Population forecast (Left axis)
5
Growth rate of land prices and unit construction costs have surpassed the national average.
Source: Prepared by Ryugin Research Institute based on the MLIT’s Housing Starts Statistics
Source: Land prices listed by the ministry of Land, Infrastructure, Transport and Tourism (MLIT)
+0.8%
+9.5%
▲ 10.0
▲ 5.0
0.0
5.0
10.0
1995 2000 2005 2010 2015 2020
(%) Nationwide Okinawa
19.219.7
20.5 20.3
21.3
19.1
21.1
22.2 22.3
24.9
15.0
17.5
20.0
22.5
25.0
2015 2016 2017 2018 2019
Nationwide Okinawa
+3.1%
+13.3%
▲ 15.0
▲ 10.0
▲ 5.0
0.0
5.0
10.0
15.0
1995 2000 2005 2010 2015 2020
(%) Nationwide Okinawa
Source: Land prices listed by the ministry of Land, Infrastructure, Transport and Tourism (MLIT)6
Real Estate
Unit construction costPrice Growth Rate of Residential Areas
Price Growth Rate of Commercial Areas
(10,000 yen/m2)
EmploymentEmployment has improved, with the unemployment ratio declining up to 2019. The labor shortage is also currently improving due to Covid-19.
Source: The Bank of Japan Naha Branch
Job-openings-to-applicants Ratio and Unemployment Ratio
0.84
0.971.11
1.17 1.19
5.1
4.43.8
3.42.7
0
2
4
6
8
10
0.00
0.50
1.00
1.50
2.00
2015 2016 2017 2018 2019
(%) (Times)Job openings-to-applicants ratioUnemployment rate (right axis)
7Source: Okinawa Prefecture, the Cabinet Office, and the Ministry of Internal Affairs and Communications
Employment Sentiment DI (Good/Bad)
▲ 28
▲ 40
▲ 70
▲ 60
▲ 50
▲ 40
▲ 30
▲ 20
▲ 10
0
10
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
Nationwide Okinawa
Economic Trends in Okinawa Prefecture Economic conditions in Okinawa Prefecture worsened significantly (in April) mainly in the tourism-related industry, which is likely to be greatly affected by Covid-19.
8(Source: Ryukyu Shimpo)
Consumption-related Situation The sales proceeds of department stores decreased year on year
for eleven consecutive months due to shortened business hours, temporary closures, and other measures to prevent the spread of Covid-19.
The number of new vehicles sold declined year on year for seven consecutive months due to decreased demand for rental cars as well as the effect of the consumption tax hike.
Tourism-related Situation The number of tourists decreased year on year for four consecutive
months. The number of domestic tourists decreased by approximately 90%, and no foreign tourists visited the prefecture.
Both the rate of operation and sales proceeds of major hotels in Okinawa declined year on year.
The number of visitors to major tourist facilities declined year on year. The number of visitors to golf courses decreased year on year. The outlook for the industry is expected to remain negative due to the
following factors: uncertainty about when the global spread of Covid-19 will end; foreign tourists having difficulty in entering Japan; and domestic tourists tending not to visit other prefectures.
Employment-related Situation The number of new job openings declined by 42% year on
year, and as a result, the number decreased compared to the same month last year for five consecutive months. Several industries (including accommodation, food service, living-related service, entertainment, and information and communication industries) saw declines.
9
2Financial Resultsfor Fiscal YearEnded March 31, 2020
Financial Summary (Non-Consolidated）
10
FY2019 FY2018Year-on-year change
Ordinary income 424 +4 420
Business gross profit (a) 315 +7 308
Expenses (b) 243 +4 239
Real net business profit (c=a-b) 71 +2 69
Net credit costs (d) 8 +10 ▲2
Other extraordinary gain/loss (e) ▲10 ▲12 2
Ordinary profit (f=c-d+e) 53 ▲20 73
Net income 40 ▲13 53
(100 million yen)
Revenue increased, but profit decreased. The decrease in profit is due to increased net credit costs and reduced profit/loss balance in the Trading Division.
* Year on year calculation is spreadsheet-based.
Financial Summary (Consolidated）
11
(100 million yen)
Revenue increased, but profit decreased. Consolidated profit also decreased due to our bank’s situation.
FY2019 FY2018Year-on-year change
Ordinary revenue 627 +6 621
Ordinary expenses 558 +24 534
Ordinary profit 69 ▲17 86
Profit attributable toowners of the parent
49 ▲12 61
* Year on year calculation is spreadsheet-based.
Summary of Profit/Loss Trends (Non-consolidated: Mar. 2016–Mar. 2020)
12
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20 Year on Year
Profit from customer services *1 5,312 3,325 3,395 3,472 3,619 +147
Deposit and loan balance *2 22,901 22,127 21,890 22,278 22,837 +559
Profit from service charges *3 4,849 4,893 5,277 5,347 5,400 +53
Expenses ▲22,438 ▲23,694 ▲23,772 ▲24,153 ▲24,618 ▲465
Profit/loss in Trading Division 4,171 4,386 4.937 3,238 2,054 ▲1,184
Profit/loss in Securities &International Department 4,009 2,828 4,425 1,845 1,778 ▲67
Interest and dividends 2,982 3,163 2,911 2,298 1,597 ▲701
Gains/losses from forex and commodities trading 255 369 ▲36 821 149 ▲672
Class 5 bonds 734 ▲691 387 ▲169 421 +590
Share 3 balance of account ▲99 ▲100 1,123 ▲730 ▲1,089 ▲359
Policy-related investment 162 1,537 511 1,393 276 ▲1,117
Net credit costs ▲1,310 ▲806 1,808 217 ▲869 ▲1,086
General provision for doubtful accounts *4 ▲787 ▲241 850 ▲644 ▲1,591 ▲947
Miscellaneous, corporate tax, etc. ▲3,121 ▲1,893 ▲2,314 ▲1,553 ▲795 +758
Net income 5,052 5,012 7,826 5,374 4,009 ▲1,365
(Million yen)
*1 Profit from customer services = Deposit and loan balance + Profit from service charges - Expenses
*2 Balance of deposits and loans (incl. loan-related fees: consumer loan guarantee fees, group credit life insurance premiums). Interest on deposits is calculated based on currency swap income in real terms.
*3 Profit from service charges (excl. loan fees).*4 General provision for doubtful accounts: Negative amounts indicate a provision, and positive amounts indicate a reversal.
50 50
78
53
40
0
10
20
30
40
50
60
70
80
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
Net income
Profit/Loss during Fiscal Year Ended March 31, 2020
5,374
4,009
758
147
1,184
1,086
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Factors Increasing and Decreasing Year on Year
End Mar. ’20End Mar. ’19▲1,365 million yen
13
Reduced corporate taxes, etc.
Increased profit from services
provided to customers
Increased net credit costs
Decreased profit/loss balance in Trading Division
【Profit/Loss Breakdown in Trading Division】Class 5 bonds ：
¥590 million gainInterest and dividends ：
¥701 million lossGains/losses from trading in forex and trading account ： ¥672 lossBalance of 3 share accounts :
¥359million loss
* “Reduced corporate taxes, etc.” incl. other profit and loss balances.
The profit from customer services increased, but total profit decreased due to increased net credit costs and decreased profit/loss balance in the Trading Division.
(100 million yen) (Million yen)
3,472 3,619
559
53
465
0
1,000
2,000
3,000
4,000
Factors Increasing and Decreasingfrom FY 2018
End Mar. ’20End Mar. ’19
229 221 218 222 228
▲ 224 ▲ 236 ▲ 237 ▲ 241▲ 246
48 48 52 53 54
53
33 33 34 36
▲ 30
▲ 20
▲ 10
0
10
20
30
40
50
60
▲ 300
▲ 250
▲ 200
▲ 150
▲ 100
▲ 50
0
50
100
150
200
250
300
350
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
Profit from Customer servicesProfit from service charges (excl. loan-related fees)ExpensesDeposit and loan balance (incl. loan-related fees)Profit from customer services (right axis)
(100 million yen)
(100 million yen)
Profit from Customer Services
14
Expenses increased, but total profit increased due to increased deposit and loan balance and profit from service charges.
* Profit from customer services = Deposit and loan balance + Profit from service charges – Expenses* Among balances of deposits and loans, interest on deposits is calculated based on currency swap
income in real terms.
+147 million yen
Increased profit from
service charges
Increased income from
deposits and loans
Increased expenses
(Million yen)
Although the yield declined, the balance steadily increased, resulting in an increase in loan interest income for two consecutive periods.
Loans
15
6,945 7,415 8,013 8,408 8,819 9,144
5,128 5,476
5,632 5,858
6,493 6,562 1,196 1,225
1,161 1,337
1,448 1,408
721 538
492 589
444 340
13,992 14,655
15,300 16,194 17,206 17,456 17,800
246 246
234 227 228
232
270
200
210
220
230
240
250
260
270
280
0
5,000
10,000
15,000
End Mar. ’15
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
End Mar. ’21
Loan BalanceSyndicated loansLocal government and other (excl. syndicated loans)Commercial (excl. Syndicated loans)Retail loansLoan interest income (right axis)
(100 million yen)
(100 million yen)
▲ 1,008
▲ 2,303
▲ 1,641 ▲ 1,451
▲ 812
1,373 1,321 1,3201,617
1,209
365
▲ 982
▲ 321
166397
▲ 2,500
▲ 1,500
▲ 500
500
1,500
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(Million yen)
Factors Increasing and Decreasing Loan Interest IncomeBalance factorsYield factorsYOY difference of loan interest income
1.94 1.78 1.68 1.59 1.54
1.30 1.20 1.14 1.10
0.50
1.00
1.50
2.00
2.50
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(%)
Loan Interest RateLoan Interest RateLoan interest rate (Nationwide regional banks)
* Loan-related fees are deducted from the amount of loan interest income.
16
BREAKDOWN OF LOANBALANCES BY USE
Rental/realestate loans
31%
Mortgageloans30%
Business loans25%
Localgovernment
loans andother loans
8%
Personalconsumption
loans5%Syndicatedloans 2%
5,355 5,3711.67 1.62 1.63
0.00
1.00
2.00
4,000
5,000
6,000
End Mar. ’17
End Sep. ’18
End Mar. ’19
End Sep. ’19
End Mar. ’20
(%)
Real estate-related loansBalanceInterest rate (right axis)
(100 million yen)
822 841
3.08 3.04 2.85
2.00
3.00
4.00
500
1,500
2,500
End Mar. ’17
End Sep. ’18
End Mar. ’19
End Sep. ’19
End Mar. ’20
(%)
Personal loans (excl. mortgage loans）
BalanceInterest rate (right axis)
(100 million yen)
1,418 1,408
0.41 0.20 0.20
(1.00)
0.00
1.00
1,000
2,000
3,000
End Mar. ’17
End Sep. ’18
End Mar. ’19
End Sep. ’19
End Mar. ’20
(%)
Local government loans and other loans
BalanceInterest rate (right axis)
(100 million yen)
434 340
0.29 0.39
(1.00)
0.00
1.00
0
1,000
2,000
End Mar. ’17
End Sep. ’18
End Mar. ’19
End Sep. ’19
End Mar. ’20
(%)
Syndicated loanBalanceInterest rate (right axis)
(100 million yen)
4,058 4,2911.63 1.57 1.57
0.00
1.00
2.00
3,000
4,000
5,000
End Mar. ’17
End Sep. ’18
End Mar. ’19
End Sep. ’19
End Mar. ’20
(%)
Business loans (excl. Syndicated/real estate loans)
BalanceInterest rate (right axis)
(100 million yen)
The balance of mortgage loans, especially rental housing and lending to real estate agents, is increasing. The interest rate charged to borrowers is tending to decline.
Loans
* Loan-related fees are deducted from yield calculation.
0.30
5,112 5,2020.92 0.84 0.80
(1.00)
0.00
1.00
4,000
5,000
6,000
End Mar. ’17
End Sep. ’18
End Mar. ’19
End Sep. ’19
End Mar. ’20
(%)
Mortgage loansBalanceInterest rate (right axis)
(100 million yen)
Deposits
12,742 13,170 13,596 14,039 14,555
5,808 5,861 6,052 6,385
0
1,833 1,442 1,547
1,561 20,384 20,474 21,196
21,986 22,568 23,400
17
12
8
6
44
0
5
10
15
20
0
5,000
10,000
15,000
20,000
25,000
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
End Mar. ’21
Balance of depositsPublic funds, etc.CommercialRetailInterest on deposits (right axis）
(100 million yen) (100 million yen)
17
Deposits for both retail and corporate customers are steadily increasing. Annual percentage yield dropped due to a decline in time deposit balances.
* Incl. CDs (certificates of deposit)
113 116 119 124 126
100
110
120
130
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
Number of Main Accounts
* The main account is a personal account that is used for a certain service or product,in addition to using direct deposit of payroll, pension, or mortgage loan.
10,295 10,972 11,964 12,996 14,014
9,559 9,238 8,609 8,221 7,914 5,000
10,000
15,000
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
(100 million yen) Liquid, timed Deposit balanceLiquid Timed
* Excl. CDs (certificates of deposit)
(Thousands)
0.08
0.06
0.04 0.02 0.02
0.00
0.05
0.10
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
(%) Annual percentage yield
Structured finance
44%
M&A18%
Businesssuccession
16%
Businessmatching ,etc.
5%Others
17%
Profit from Service Charges
2,069 2,071 2,086 2,101 2,115
1,248 1,262 1,512 1,278 988
206 235227
89500 591
567 621
668
820 722 603
733 830
26 92 302 400
6 49 191 224 400 4,849 4,893
5,278 5,348 5,401
6,095
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
End Mar. ’21
(Million yen)
Trend of Profit from Service Charges (excl. group credit life insurance premiums and loan guarantee fees)
Service feesfor corporate customers
Visa debit cardAffiliate partnershipATM lottery service
Others *
Biz NetOnline bankingConvenience store paymentATM-related
Assets in Custody
Domestic exchange/Directdeposit
18
Profit from service charges is steadily increasing due to increased service fees for corporate customers and card-related services.
* “Others” include debt guarantee fees, forex related fees, loan-related fees, safe deposit boxes, night deposits, and administration fees for outsourced loans. For the March 2020 period, ATM-related fees (-16 million yen) are included in “Others.”
259 213
1,039
1,294 1,307
0
500
1,000
1,500
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(Numbers)Number of visits for consulting activities
Percentage of Service Fees for Corporate Customers by Division
Assets in Custody
19
The balance of assets in custody turned negative due to a decline in net asset values of mutual funds or other factors.
269 194 235 216 139
191 175
254 134
145
460369
489350
284
0100200300400500
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
Assets on custody sales revenueSingle-premium life insurance Investment trusts
808963
1,1251,281 1,265
645
613
630
634506150
106
87
67
521,604
1,682
1,843
1,982
1,825
0
500
1,000
1,500
2,000
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(100 million yen)
Assets in custody balanceInvestment trusts Government bonds 合計
95
566362
540
200
400
600
800
End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
Commercial insurance sales and the number of policies
22.1 21.7 22.222.8
22.1
20
21
22
23
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
Number of investment trust accounts(with balance)
(Million yen)
(1,000 accounts)
(100 million yen)
Expenses
20
Personnel expenses decreased due to a reduction in number of personnel. Non-personnel expenses increased due to investment to streamline operations and ensure various revenue sources.
98 105 106 107 106
110114 113 115 120
1417 18 18 18224
236 237 241 246
0
50
100
150
200
250
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
ExpensesPersonnel Expenses Non-personnel expenses Taxes
* Personnel expenses include employees’ past salaries with respect to retirement benefits, and impacts (loss/profit) of actuarial differences.
44 45 45 45 48
22 22 22 24 2615 14 15 15
1612 14 13 14157 8 7 6610 10 11 119
0
20
40
60
80
100
120
140
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
Breakdown of non-personnel expensesOthersDeposit insurance premiumsGeneral and administrative expensesSubcontracting expensesOutsourcing expensesEquipment and system-related expenses
(100 millionyen)
110 114 113 115120
Major factors of increased non-personnel expenses in FY 2019 include: Amortization expenses related to next-generation systems
(TfACE, FTB, etc.) introduced in sales offices Expenses for card payment terminals (consumer return
initiative) Consulting fees for stronger risk management, and so on.
(100 million yen)
Securities
21
The profit/loss balance in the Trading Division decreased due to the decreased profit from forex trading, balance of three share accounts, interest and dividends, etc.
▲ 36
31 33 32 27
21
7
▲ 6
3
▲ 1
4
▲ 1
1212
1
▲ 13
2
3
8 1
41 43
49
32
20
▲ 10
0
10
20
30
40
50
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(100 million yen)
Profit/loss in Trading DivisionGains/losses from trading in forex and trading account securitiesBalance of 3 share accountsBalance of 5 bond accountsInterest and dividendsOhtersTotal
1.13 1.13
1.27 1.26
0.57
0.76 0.82 0.78
0.69
0.00
0.50
1.00
1.50
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(%)
Securities investment yieldSecurities investment yield (nationwide banks)Securities investment yield
SecuritiesAn increase in local government bonds led to the prolonged duration of the bonds. The securities balance moved to a risk-off position.
59
37 26 22
5
14
▲ 6▲ 2
6
11
6
6 3
3
85
36 30 33
9
▲ 10
10
30
50
70
90
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(100 million yen)
Difference between market value and book value of securities
Cross-shareholdings (stocks, investment trusts)
Portfolio investments (stocks, investment trusts,foreign bonds, monetary claims bought)Yen-denominated bonds
Total
22
683 886 1,324
979 458
1,518 1,096 906
559
77
150140
82
75
1,195
2,075
1,644 1,222
746 739
284
489572
460 143
4,713
4,257 4,107
2,820 2,613
2.79 2.82 2.58
2.82
4.54
0.00
1.00
2.00
3.00
4.00
5.00
0
2,000
4,000
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(Number of years)(100 million
yen)
Securities balanceStocks, ETF, investment trustsGovernment bondsLocal government bondsCorporate bondsOthers (foreign bonds, etc.)Duration of yen-denominated bonds (right axis)
31 37 31 30
186189 190 195 189
15487 75 56 56
82
308 303283 276
423
2.09 1.97
1.73 1.60
2.40
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
0
100
200
300
400
500
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(%)
Disclosed bad debt
合計
Bankrupt claims
Doubtful claims
Disclosed bad debt (right axis)
(100 million yen)
23
Net Credit Costs/Disclosed Bad Debt
72
▲ 8
6
157
5
▲ 5
▲ 5
▲ 9
4
5
1
3
5
1
▲ 7 ▲ 7
▲ 6
▲ 7
▲ 3
13
8
▲ 18
▲ 2
8
▲ 20
▲ 15
▲ 10
▲ 5
0
5
10
15
20
25
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
Net credit costsRecoveries of written-off claimsOther processing costsLoan amount written offIndividual provision for doubtful accountsGeneral provision for doubtful accountsTotal
(100 million yen)
The general provision for doubtful accounts and substandard claims increased due to Covid-19 (changes of conditions, etc.).
▲8
1
1
Capital Adequacy Ratio
24
10,227 10,853 10,921 11,669 12,065
1,458 1,560 1,663 1,470 1,294 11,685 12,413 12,584 13,139 13,359
0
5,000
10,000
15,000
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
Risk assetsLoan Department Others(100 million yen)
The capital adequacy ratio increased due to stronger management of risk assets in addition to accumulation of profit and allowance for doubtful accounts.
8.21 8.20 8.70 9.01 9.19
7.59 7.53 7.86
8.24 8.41
6.00
8.00
10.00
End Mar. ’16 End Mar. ’17 End Mar. ’18 End Mar. ’19 End Mar. ’20
(%)
Capital adequacy rate (fully implemented under Basel Ⅲ）
Consolidated capital adequacy rateNon-consolidated capital adequacy rate
903 936 990 1,069 1,091
23 2617
23 39
96 84721,022 1,046 1,079 1,092 1,130
9.52 9.22 9.40
9.07 9.23
8.75 8.42 8.57 8.31 8.46
0.00
2.00
4.00
6.00
8.00
10.00
0
300
600
900
1,200
1,500
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
(%)
Regulatory capital and capital adequacy rate自己資本額計
Subordinated debt portion
General provision for doubtful accounts
Consolidated capital adequacy ratio (right axis)(100 million yen)
* In Sep. 2018, public offering was made to raise capital (5.6 billion yen). In Oct. 2018, subordinated debt (12 billion yen) was repaid before the maturity date.
* The fully implemented capital adequacy ratio was calculated by setting capital computation of subordinated debt and the difference in land revaluation as zero, and summing up the entire amount of intangible fixed assets and prepaid pension cost as adjusted capital.
229 221 218 222 228 234
▲ 224 ▲ 236 ▲ 237 ▲ 241▲ 246 ▲ 255
48 48 52 53 54 60
53
33 33 34 36 39
▲ 30
▲ 20
▲ 10
0
10
20
30
40
50
60
▲ 300
▲ 250
▲ 200
▲ 150
▲ 100
▲ 50
0
50
100
150
200
250
300
350
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
End Mar. ’21
Profit from customer servicesProfit from service charges (excl. loan-related fees)ExpensesDeposit and loan balance (incl. loan-related fees)Profit from customer services (right axis)
(100 million yen)
(100 million yen)
3,6193,934
590
695970
0
1,000
2,000
3,000
4,000
5,000
Factors increasing and Decreasing from FY 2018
End Mar. ’21End Mar. ’20
Profit from Customer Services Plan
25
Although expenses increased due to continued necessary investments, profit is expected to grow due to improved balance of deposits and loans and increased profit from service charges.
* Profit from customer services = Deposit and loan balance + Profit from service charges – Expenses Among balances of deposits and loans, interest on deposits is calculated based on currency swap income in real terms.
+315 million yen
Increased profit from
service charges
Increased income from
deposits and loans
Increased expenses
(Million yen)
Concept and Planning for Securities Operations
26
Operations of securities reduce risks, ensuring further profit gains.
31 33 32 27
21
7
▲ 6
3
▲ 1
4
▲ 1
1212
1
▲ 13
2
3
8
1
▲ 3
6
41 43
49
32
20 17
▲ 20
▲ 10
0
10
20
30
40
50
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
End Mar. ’21
Profit/Loss Balance in Trading DivisionOthersGains/losses from trading in forex and trading account securitiesBalance of 3 share accountsBalance of 5 bond accountsInterest and dividendsTotal
(100 million yen)
4,755
3,596
2,984 2,206 2,516
376
403
474
749 282
89
74
67
6661
196
329
438
541207
5,418
4,404
3,966
3,563
3,068 3,000
0
2,000
4,000
6,000
End Mar. ’16
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
End Mar. ’21
Average Securities BalanceYen-denominated bonds Foreign bonds Stocks Other bonds
(100 million yen)
Actively committed to supporting customers in terms of funding. Customers will continue to be affected by Covid-19 during FY2020.
Responses to Covid-19
27
17
10
53 2
10
15
18
20
0
5
10
15
20
25
FY2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020
General Provision for Doubtful Accounts
Net provision Total provision
(100 million yen)
* Costs for FY2019 are calculated based on the actual costs, and costs for FY2020 are calculated based on consultation status on or before June 2 of the fiscal year. Doubtful accounts during 1Q 2020 are calculated based on reversal of allowance for FY2019, but the reversal is not included in the calculation for doubtful accounts after 2Q 2020.
263
850
300
100 50
850
1,150
1,250 1,300
0
200
400
600
800
1,000
1,200
1,400
1,600
FY2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020
(100 million yen)Changes in Credit Conditions
Total credit costs
Total credit costs after consultation requests are received to change credit
conditions: About 80 billion yen (as of June 2, 2020)
Net Income during the Period and Capital Adequacy Ratio in FY2020 Plan
40
23
3
19
1
0
10
20
30
40
Factors Increasing and Decreasing for Net Income during the Period
End Mar. ’21End Mar. ’20▲ 1.6 billion yen
28
Other decreases
Increased net credit costs
Increased profit from custom
er services
Net income is decreasing. The capital adequacy ratio is expected to remain nearly flat.
(100 million yen)
8.20
8.70
9.01 9.19
7.53
7.86
8.24 8.41
7.00
8.00
9.00
10.00
End Mar. ’17
End Mar. ’18
End Mar. ’19
End Mar. ’20
End Mar. ’21
(%)
Capital adequacy rate(fully implemented under BaseⅢ）
Consolidated capital adequacy rateNon-consolidated capital adequacy rate
FY 2020 (ending Mar. ’21) FY 2019(ended Mar. ’20)
ResultsForecast Year on Year
Ordinary income 600 ▲27 627Ordinary profit 50 ▲19 69Profit attributable toowners of the parent 30 ▲19 49
Forecast for FY 2020 (ending March 31, 2021)
29
FY 2020 (ending Mar. ’21) FY 2019(ended Mar. ’20)
ResultsForecast Year on Year
Ordinary income 395 ▲29 424
Ordinary profit 38 ▲15 53
Net income 23 ▲17 40
(100 million yen)Non-consolidated
Consolidated
Profit is expected to decline for both non-consolidated and consolidated financial results due to Covid-19.
* Year on year calculation is spreadsheet-based.
(100 million yen)
30
3Business StrategySINKA2020Period ：April 1, 2020 to March 31, 2023
Mid-Term Management Plan (Basic Strategy for SINKA 2020)
31
Direction of the Management Strategy based on the Awareness of the Current SituationUnderstanding of the Current Situation
Environmental Restrictions
Trend of Customers: Customers’ Needs/Various Contacts with Customers
Challenges We Face
Nationwide
Low growth
Potential downturn in tourism
Potential downturnin real estate
industry
Aging of society/ Reduction in population
Continued low interest rate/Easing
of regulations
Participation in FinTech from
different industries
AML/CFT
Cyber attacks
Okinawa Financial Environment Risk Management
Decreasing younger customers
Growing elderly customers
Non-face-to-face online completion
Face-to-face consultations
Emergence of millennials/
Widening of digital gap
IT investment
Active new investments
Reduction in existing costs
Profit from customer services Increased profit
from service charges Cost reduction
Capital adequacy ratio
Asset management Different types of
revenue sources
This Mid-Term Management Plan focuses on four basic strategies based on the understanding of the current situation.
Basic Strategies
Structural Reform Strengthen our bank’s finances in order to enter new fields
while responding to changes in the management environment.
Think and Act Reform Improve training systems and change the awareness of officers
and employees to ensure customer-oriented service operation.
IT Investment Strategy Support employees in the workplace as well as try to meet
increasingly diverse customer needs, by actively using digital technologies.
Work on reducing costs for existing systems and maintenance/repair to leverage active and passive investments in IT assets according to the situation.
Group Brand Strategy Ensure that customers can access products and services of each
group company at any time, and strive to enhance the brand strength and corporate value of the Bank of The Ryukyus group.
※Mid-Term Management Plan (Individual Strategies for SINKA 2020)
32
1. Channel Strategy*
2. Cashless Strategy*
3. Retail Business Strategy*
4. Corporate Business Strategy*
5. Contributions to Okinawa
Reve
nue
Cate
gory
Structure IT Investment
IT Investment Brand
Man
agem
ent
Cate
gory
6. Intended Operation of Sales Offices*
7. Human Resource Strategy*
8. Business Management
9. Group Brand Strategy*
Structure Brand
Structure
IT Investment
Structure
BrandIT Investment
Structure
Think and Act
Think and Act
Think and Act
IT InvestmentThink and Act
Think and Act Brand
BrandThink and Act
BrandThink and Act
Structure IT Investment
Nine individual strategies have been created based on four basic strategies.
Structure
To be a true leading bank that contributes to community growth at all times, regardless of the situation.
Ideal State
4 Basic Strategies
* Major individual strategies written in red are explained in detail in the following pages.
368 372 373 361 356
200
300
400
2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Number of ATMs
Development of a mobile banking appReduction in the number of branch offices and ATMs
Promote “branch-in-branch” to replace less profitable branch offices; Expected to close about 10 branch offices during the mid-term management plan.
Reduce the number of ATMs, most of which are unprofitable with a low rate of operation, by using ATM connections to other banks.
Reducing fixed costs by promoting “branch-in-branch (multiple branches in one location)” and releasing a mobile banking app.
33
Channel Strategy (Promoting Non-Face-to-Face Services)
Newly joined TSUBASA Alliance on April 27, 2020. Aim to provide a mobile banking app that offers a full banking service by using the API
platform of TSUBASA Alliance.
(Number of ATMs)Results← →Forecast
API categoryMobile banking app
・・・・・・
Authentication
Stock price/exchange data
Locations of branch offices/ATMs
Inquiries about interest rates/fees
Real-time data on customer visits tobranch offices
Product/analysis data
CRM/EBM data
Point dataAmount of card payments
Account dataOutstanding borrowings
Account activity data
AML-related data
Appointments for visits to branch offices
Loan simulationAdvance applications for loan
Account openingVarious forms to be submitted
Applications for mutual funds
Purchase of insurance products
Transfer of funds (transfer)
Transfer of funds (account transfer)Transfer of funds (direct deposit)
Loan executionPartial payment/collection
・・・・・・
Offe
ring
a fu
ll ba
nkin
g se
rvice
thro
ugh
a ba
nkin
g ap
p
APIPhase 1
until March 2021
APIPhase 2
until March 2022
APIPhase 3
until March 2023
Integration
Transition
Completion
To b
e ex
ecut
ed in
ord
er o
f API
pha
se (r
ead
API t
o w
rite
API)
309 299 291
* “Branch-in-branch” was and will be counted as one branch office.
59 59 60 57 55
17 16 1414 15
76 75 7471 70
6764
61
40
50
60
70
80
2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Number of Branch Offices本店・支店
Headquarters/Branch officeLocal office (incl. Loan Center)
Results← →Forecast
(Number of branch offices)
▲ 250
▲ 200
▲ 150
▲ 100
▲ 50
0
50
100
150
200
2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Single fiscal year balance (incl. depreciationand amortization expenses)Single fiscal year balance (excl. depreciationand amortization expenses)
The balance turned to annual profit in March
2020.
Cashless Strategy (Ryugin Visa Debit Card)Offering new functional cards such as corporate cards and contactless cards, to expand the number of our card customers.
34
Number of Customers of Ryugin Visa Debit Card
Support for 3-D Secure beganImmediate card issuance over the bank counter beganIssuance of Ryugin Visa Business Debit Card forcorporate customers beganNumber of cards issued exceeded 130 thousand(total of retail customers and corporate customers)Visa Touch payment to become available
Issuance of Ryugin Visa Debit Card (Oct. 2015) (Number of cards)
Results← →Forecast
(Million yen)
(Number of cards)
Results← →Forecast
Revenue of Ryugin Visa Debit Card
Visa Touch Payment
Mar. 2018Jul. 2018Sep. 2018
Dec. 2019
Jul. 2020Business Debit Card for Corporations
0
2,000
4,000
6,000
0
50,000
100,000
150,000
200,000
250,000
2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Retail customersCorporate customers (right axis)
▲ 600
▲ 500
▲ 400
▲ 300
▲ 200
▲ 100
0
100
200
300
400
2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Card affiliate partnership: Revenue ForecastSingle fiscal year balance (incl. depreciation andamortization expenses/costs of purchasing terminals)Single fiscal year balance (excl. depreciation andamortization expenses/costs of purchasing terminals)
Influenced by advance purchase of terminals due
to the cashless and consumer return initiative
The balance is expectedto turn to annual profit
after March 2021.
Cashless Strategy (Card Affiliates)Speeding up the process of gaining card affiliates to realize “Cashless Islands.”
35
1,951 3,918
6,847 7,920
8,640 9,300
0
2,000
4,000
6,000
8,000
10,000
2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Number of Card Affiliates
Results← →Forecast
(Number of affiliates)
(Million yen)
Results← →Forecast
Existing Features (23 brands): Card (Credit/Debit/Prepaid) Electronic money QR code (Alipay/WeChat Pay)
New Features and Services(to be introduced): QR code (Domestic brands) Vending machine/Ticket machine EC payment
Acquiring: enabling all kinds of payment to be completed with one terminal
Over 30 brands will be accepted, the highest number in the industry.
Payment terminal
RPG-T
Efforts to Realize “Cashless Islands”
Various payment cycles according to needs of card affiliates Enable card affiliates to be paid every day for better financing by effectively
using the feature that our bank is engaged in card affiliate services.
Payment Schedule for Ryugin Card Affiliate Services
Payment Terminal
RPG-T
Establish a domestic gateway that allows Easy Cards to be used. Look for card affiliates as an acquirer in Okinawa prefecture
(payment is made by our RPG-T terminal). Enter into agency relationships with other financial institutions
outside the prefecture and seek to deploy the card nationwide.
Creation of a platform for accepting Easy Cards and domestic deployment of the cards
Allowing “Easy Cards,” which have the largest share in Taiwan, to be used in Japan and seeking to promote use of the card across the nation.
※Cashless Strategy (Easy Card)
36
What is Easy Card?It is a contactless transport IC card for using subways, buses, etc. in Taiwan. The card is also increasingly used for commercial purposes such as purchasing at convenience stores and eating at restaurants, and is the leading IC card in Taiwan. The number of cards issued is 78.9 millions (as of September 2019), which is over three times the population of Taiwan.Operating entity: 悠遊卡股份有限公司 (EASY CARD CORPORATION)** A large Taiwanese company, with 39.7% of shares owned by Taipei City
2020 Apr May Jun Jul Aug Sep Oct Nov
Development of the platform
Card affiliatesstart to receive applications
Cards becomeavailable for use
Deployment Schedule for Easy Cards
Source: Japan National Tourism Organization (JNTO)
505 652 813 917 858
3,903 4,203 4,669 4,818
4,390
0
1,000
2,000
3,000
4,000
5,000
6,000
2016/3 2017/3 2018/3 2019/3 2020/3
(Thousand people) Number of Taiwanese Visitors to JapanOkinawa Other regions
Actively installing new systems to reduce administrative workload for staff, and strengthening the sales capability by using resources.
Retail Business Strategy (Streamlining Sales of Assets in Custody)
37
Staff confirms customer’s intentions
and explains our products via a tablet
Print and issue a prospectus
HQ staff confirms the customer’s
understanding of the details by Skype
Customer makes an application via a tablet (electronic
signature)
Storing documents submitted by
customers electronically
Installing a negotiation recording system (that allows third-party staff to confirm the details before an agreement is made) (Oct. 2016)
Installing a system that manages and issues prospectuses (Aug. 2018)
Installing an archive system “Azukari” (May. 2015)
43.1 43.2
36.738.6
54.5
20
40
60
2016/3 2017/3 2018/3 2019/3 2020/3
Visiting Hours of Individual Sales Agents
664 717 820 839 550
635 595 747
489
483
1 14
16 13 1,300 1,312
1,569
1,343
1,064 850
0
500
1,000
1,500
2,000
2016/3 2017/3 2018/3 2019/3 2020/3 2021/3
(Million yen)Profit from Service Charges related to Assets in CustodyLife and non-life insuranceMutual fundsSecurities brokerageInheritance-related profit Results← →Forecast
Installing a compliance system at a bank counter (Jan. 2015)
Applications for investment in mutual funds are to be made in paperless form (scheduled in Aug. 2020)
(Hours/month)
1
31
37
15
141 260
0
100
200
300
0
20
40
2019/3 2020/3 2021/3
PSS-related Fees/Number of Contracts手数料 件数（右目盛）Fees Number of contracts (right axis)
Approaching new/unexplored customers through inheritance consulting services for high-net-worth individuals, and testamentary-trust services, and inheritance procedure support services.Started property inheritance consulting services for high-net-worth individuals (Jun. 2018) Entered the property inheritance consulting business and started a
fee-based service that prepares a Personal Support Sheet (PSS), a summary of assets and liabilities.
Committed ourselves to providing a variety of solutions created by planning, thereby offering a one-stop service that is highly convenient for customers.
38
Retail Business Strategy (Inheritance Support Services)
Started providing support to create a testamentary trust and perform inheritance procedures (Oct. 2019) Started a testamentary-trust and inheritance procedure service, the first bank to
do so among all financial institutions with head offices in Okinawa. To differentiate our bank services from those of other banks, improve Customer
Services (CS) through comprehensive proposals based on the following: 1. entry into unexplored markets in Okinawa; 2. strengthening relationships between heirs and their family members (generation after generation of heirs); and 3. understanding all properties and assets.
Expected to increase profit through the inheritance business by actively using data entered in the PSS.
Results← →Forecast
(Number of contracts)
(Million yen) Will Preparation:Step 1 Summarization of current status: Summarize the family structure and
property details of a testatorStep 2 Preparation of will: Prepare a formal will with a witness presentStep 3 Custody of will: Keep custody of the formal will
When Inheritance Occurs:Step 4 Sharing the contents of will: Tell each heir the details of the willStep 5 Execution of will: Handle inheritance procedures on behalf of heirs*
* If no will is prepared, the handling of inheritance procedures (preparing an inventory of assets, and supporting discussions about the division of the estate) is called “Property Liquidation.”
Providing new products that accurately meet potential needs of customers to broaden their options.
39
Retail Business Strategy (Development of Attractive Products)
Reverse Mortgages (Apr. 2015) Loans for elderly aged 60 and older with no upper age limit Available even if an applicant lives together with family members Possible to add the amount of real estate other than the applicant’s own
house to the evaluation amount
19 44 142 116
317 2 4
11 10
33
60
0
20
40
60
0
200
400
600
2016/3 2017/3 2018/3 2019/3 2020/3 2021/3
Number of Contracts for Reverse MortgagesAmount of contractsNumber of contracts (right axis)
(Number of contracts)(Million yen)
Ryugin ECO Passbook (Feb. 2019) “Ryugin ECO Passbook” involves an online application for a saving account
for which no passbook is issued. The holder of the saving account can check the account balance and
transaction details via a smartphone app.
3,698 4,471
2,000
3,000
4,000
5,000
2019/9 2020/3
Number of New Applications for ECO Passbook
(Number of new applications)
Ryugin Application Website (May 2018)Online Contract Conclusion for Personal Loans (Oct. 2019) Ryugin Application Website: Serves as a platform for applications for: 1. opening
saving accounts; 2. issuing Visa debit cards; 3. internet banking; 4. using point services, etc.
Online Contract Conclusion for Personal Loans: Offer individuals loan contracts that can be completed without visiting a branch office.
957 947
291 293
74 76 1,352
1,322
2,668
0
500
1,000
1,500
2,000
2,500
3,000
2019/9 2020/3
Number of Online Applications/Contracts Concluded
Internet bankingVisa debit cardsSaving accountsOnline contract conclusion
(Number)
* September includes the results of the first half, and March includes the second half of the fiscal year.
* September includes the results of the first half, and March includes the second half of the fiscal year.
Results← →Forecast
Divided the tasks of business potential sales agents into sales activities in sales offices and administrative tasks of preparing loan application documents and conducting customer due diligence at corporate headquarters, thus establishing a system that improves the productivity of both sales offices and headquarters.
Intensive OJT at headquarters to promote faster skill development of young bankers.
Started a pilot scheme in Oct. 2018 and implemented it in all branch offices from Oct. 2019.
Hours of customer visits per staff approximately doubled, and thus the number of business potential loan recipients increased steadily.
Focus on customer visits to increase proposals
Improve proposal skills
Expedite loan application process Intensive OJT for young bankers
to be ready for work early in their careers (standardized training)
Reviewing the preparedness for business potential evaluation and sales (Deployed in all offices in Oct. 2019)
Sales offices focus on customer visits due to centralization of the work of preparing loan application documents in headquarters, providing the best solutions to customers.
Specializing in customer visits and sales activities
Officer or bank staff
Management
Sales OfficeLoan Application Preparation
Department
Reviewer/Advisor
Corporate Business Division
※
PurposesPurposes
Bank staff
Corporate Business Strategy(Reviewing the preparedness for business potential evaluation and sales)
40
10,004 9,934 10,334 10,814 11,239
8,000
10,000
12,000
2016/3 2017/3 2018/3 2019/3 2020/3
Number of Business Potential Loan Recipients(Number of loan recipients)
21.0 16.4 16.5
25.4
45.5
0
20
40
60
2016/3 2017/3 2018/3 2019/3 2020/3
Hours of Visits by Business Potential Sales Agents(Hours/month)
A pilot began to review the preparedness of business potential evaluation and
sales.
All branch offices are subject to review of the
preparedness of business potential
evaluation and sales.
5 73 76 180
86 79
76 20 28
65 4 8
22
5 36
69
6 25
190 229
414
650
750
1,000
0
200
400
600
800
1,000
2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
(Million yen)Service Fees
for Corporate Customers
Structured FinanceM&ABusiness SuccessionBusiness MatchingOthers
Making effective use of customer data received from sales offices, and increasing income revenue from fees by accepting more requests for consultation.
※Corporate Business Strategy (Strengthening Solution Sales Capabilities)
41
Established the Corporate Business Division (Apr. 2017) Integrated consulting services for corporate customers. A clear fee structure to produce steady income from fees by fostering
professionalism among bank staff and providing customer-centric services. A wide variety of professionals have been appointed, including CPAs, SME
management consultants, and experienced staff from other banks and industries. 23 staff members as of March 31, 2020.
Targeting customers considering handing over treasury shares and/or business assets, our seasoned staff and certified tax accountants offer advice such as future directions for the company and how to avoid disputes.
Service Details
Business Succession
Targeting customers who have no successors within their family or business, we offer advice on the M&A process and address concerns and questions. Using our networks inside and outside Okinawa prefecture, we introduce potential businesses that may take over the business and assist in the process to completion.
Mergers and Acquisitions
Using our networks, we introduce our business partners and clients to customers and provide support to solve management issues.
Business Matching
Targeting corporate customers who wish to ensure long-term stable funds, we offer advice on placing private bonds and assist with arranging syndicated loans.
Structured Finance
Results← →Forecast
Provide support to develop business overseas, and contribute to community growth in collaboration with BOR venture funds, OKINAWA Startup Program, local government and other organizations.
Work on solving issues facing the community, for example, by introducing foreign workers to resolve the shortage of human resources.
Local Revitalization
441 427 433 359 320 280 240
1,779 1,751 1,677 1,570 1,530 1,490
0
500
1,000
1,500
2,000
2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Bank Counter Staff(Number of employees)
Greatly reducing the administrative workload, and striking a balance between reducing labor costs and strengthening communication with customers.
42
Visions of Sales Offices (FTB Project/Flat Cash Counter System)
Use tablet devices, taking the initiative in significantly reducing the workload of bank counters and the number of tellers.
Eliminate the use of paper, seals, and operations.
FTB (Flexible & Traditional Bank) Project(Expected to carry out the pilot in Oct. 2019)
Screenshot of FTB Tablet
Establish a system by which all staff members working at bank counters (incl. asset management consulting) acquire the same skills in terms of counter tasks (multi-skilling).
1. Enhance profitability at the bank counter, 2. Improve the readiness of business potential sales agents replaced by counter staff, and 3. Establish a structure that does not require a substitute for a counter position from another department.
Review the placement of management positions to reduce the number of tellers.
Establishing a flat cash counter system(developing multi-skilling of staff) (Oct. 2018)
Workforce Planning
* Excl. externally transferred staff and employees on leave.
Working toward reducing staff Reducing the labor force and costs by limiting the hiring of new
graduates and temporary workers to fill positions, and promoting external transfers, in addition to reducing the number of tellers.
(100 million yen)
Results← →Forecast
1,586
Total
105 106 107 106 106 103
100
90
100
110
2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3
Forecast of Labor CostsResults← →Forecast
Revitalizing our bank organization by providing employees with opportunities to discover career paths that enhance their expertise and promoting diversification.
43
Human Resource Strategy (Reviewing the Personnel System)
1 3 49
14 14
0
5
10
15
2015/3 2016/3 2017/3 2018/3 2019/3 2020/3
Number of Temp-to-hire Bank Clerks
Bank clerk temp-to-hire interviews take place twice a year since FY2017.
Promoting the hiring of temporary workers (Jul. 2017) Expanded the opportunity for bank clerk temp-to-hire interviews from once to
twice a year. Clearly laid out promotion qualifications (certification, etc.) and eliminated the
limit of years of service.
(Number of employees)
01 1
96 6
84
02468
10
2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3
Number of Hiring Experienced Workers(Number of employees)
Deploying the employee training system by field (Apr. 2019) Eliminated the hiring categories of future management positions and clerical positions, and
changed the employee training program into two career fields: corporate and retail banking. Restructured the employee training period from the previous first five years only to
throughout the employment life cycle for all levels, including management. Employees in both fields can be promoted to managerial positions (branch manager level or higher positions).
In addition to required years of service for each requirement, maternity and childcare leaves are now factored in, increasing promotion opportunities for female employees with children.
Revising promotion requirements (Apr. 2018)
Abolishing the policy limiting the age of management positions (Apr. 2018) Changed to policy that does not lower the salary of employees aged 55 or older
and allows promotions and raising of their salary.
Diversification
38 42 51 54 52 50 63 727 119 9 13 15
3641
22 1 3 5 4
1012
0
20
40
60
80
100
120
140
2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3
(Number of employees)
Female Management Positions支店長クラス 副支店長クラス 副長クラス Branch Manager level Assistant Branch Manager level VP Level
4755 61 66 70 69
109125
Promoting employees’ health to improve revitalization and productivity in our bank.
44
Human Resource Strategy (Efforts for Health Management)
Certified as Health and Productivity Management Organization Recognition Program (Mar. 2020)
Our bank was recognized in the category of “2020 Certified Health and Productivity Management Organization Recognition Program”* sponsored jointly by Japan's Ministry of Economy, Trade and Industry (METI) and Nippon Kenko Kaigi.
Creating a Health Management Declaration (Oct. 2019) Created a Health Management Declaration that provides active
organizational engagement in managing and maintaining the health of employees.
Providing rental wearable devices and holding health events (Oct. 2019) Assist officers and employees in improving their lifestyle
habits by enabling them to monitor and manage the amount of activity and sleeping conditions by providing rental wearable devices to all employees.
Hold walking events for all officers and employees to compete with each other by using wearable devices, which encourages them to make a habit of exercising.
Support for Quitting Smoking/Efforts to Prohibit Employees from Smoking during Working Hours(Oct. 2019)
Provide support for quitting smoking and prohibit employees from smoking during working hours (MO! SWAN Day) to prevent health problems caused by smoking and passive smoking.
Provide money to cover out-of-pocket spending for counseling and incentives for quitting smoking.
Gradually increase the number of non-smoking days, and aim to prohibit smoking during working hours in October 2020.
* The Certified Health and Productivity Management Organization Recognition Program honors organizations that perform especially excellent health management, based on efforts in response to local issues and health promotion activities by Nippon Kenko Kaigi.
Consolidating our group’s headquarters functions with a comprehensive strength. Receiving payments for rental charges, resulting in reducing a certain degree of operation costs.
Group Brand Strategy (New Headquarters Project)
Rebuilding of our headquarters building (to be completed in January 2025) As the current headquarters building deteriorated, we decided to rebuild the
building. The headquarters and main sales office are to be moved to a temporary
location in November 2020, and will be back to the newly constructed building in April 2025.
Consolidation of headquarters functions The new headquarters building has offices of five subsidiaries, strengthening
collaboration with each group corporation.
Reduction in construction costs with rental charges received The upper floors of our new headquarters building are to be used as a hotel.
The purpose is to make effective use of extra space and create new profitable opportunities as the area is within high-level use districts.
Enter into a basic agreement with Mitsubishi Estate Co., Ltd. which serves as a hotel operator. The Royal Park Hotels operated by the Mitsubishi Estate Group is opening shops in the new hotel.
Receive floor rental charges for hotel space with a prospect of reduction in construction costs.
0
20
40
60
80
100
120
140億円
Gross Profit from Floor Rentals
<Hotel Revenue>Repair/Maintenance Costs
Depreciation and Amortization Expenses
Floor Rental Charges
<Hotel Expenses>
Reduced Construction Costs
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Enhancement of earthquake protection and fire prevention functions Apply a mid-story seismic isolation system to the building for the first time in
Okinawa Prefecture to enhance earthquake protection. Install an emergency power generator and water receiving tank on the upper
floor, strengthening the BCP.
46
We appreciate your continued support for our bank.
46
Contact information for questions about this document:General Planning Department, Bank of the Ryukyus, Limited
47
The information in this presentation is on a non-consolidated basis unless otherwise specified.
Information is based on guidelines of published data, and some totals presented in this documentmay not add up due to rounding. In addition, because calculations may involve the use of our uniquedefinitions for illustration and comparison purposes, the numbers presented in this document maynot match the published figures.
This material contains information about the future (forward-looking information) such as forecasts,outlooks, objectives and plans concerning the Bank. The forward-looking information was createdbased on information available as of June 8, 2020 and does not represent a guarantee of futureperformance. Certain assumptions and hypotheses are used for the description of forward-lookinginformation, but these assumptions and hypotheses could be inaccurate from an objectiveperspective and may not materialize in the future. Forward-looking information involves risks anduncertainties, and we ask readers to refer to earnings briefs and annual reports of the Bank for moredetails. The Bank will not update the forward-looking information contained in this material.
About This Presentation
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