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Earnings Presentation for the 3rd Quarter of FY 2017
Schedule Promoter Venue
February 14 , 2017 The Securities Analysts
Association of Japan
Seminar Room, 6F
Tokyo Stock Exchange
Watch Video with English Voiceover Download Slides

Presenter

Representative Director & Senior Managing Executive Officer Nobuiku Chiba
Managing Director & Executive Officer Shigeyoshi Asano
Director & Executive Officer Taiji Hitachi
General Manager, PR & IR Division, Corporate Planning Department Hidehiko Honbu

Results of the third quarter of fiscal 2017 (summary)

In the third quarter of fiscal 2017, operating revenue increased by 7.3 billion yen (year-on-year) to 65.2 billion yen due to a large contribution from Investment Business. Meanwhile, operating profit rose by 5.4 billion yen to 3.3 billion yen. Major profit drivers included unrealized gain on Group Lease’s convertible bonds in Investment Business, despite the impact of allowance for doubtful accounts of 4.6 billion yen Financial Business in Southeast Asia booked in the previous quarter.

Operating profit by segment
Full-Year target 1Q-3Q
FY2017 results
Domestic Financial Business 4.2 billion yen 3.5 billion yen
Financial Business in South Korea 3.1 billion yen 1.1 billion yen
Financial Business in Southeast Asia (6.5) billion yen (6.5) billion yen
Investment Business 5.5 billion yen 7.7 billion yen
Non-financial Business 0.4 billion yen 0 billion yen
Head office expenses/Other (2.5) billion yen (2.5) billion yen
Consolidated Operating profit 4.2 billion yen 3.3 billion yen
Domestic Financial Business

Operating profit grew by 0.6 billion yen (year-on-year) to 3.5 billion yen. In credit guarantee business, the size of credit guarantee accumulated steadily by focusing on credit guarantee for Apartment Loan. Receivable collection business enjoyed successful purchase of NPLs. Both businesses performed well accordingly.

Financial Business in South Korea

Operating profit totaled 1.1 billion yen, an increase of 1.1 billion yen (year-on-year), despite the impact of allowance for doubtful accounts mainly due to seasonal factors. So far, we had aggressively expanded new loan disbursement. However, we strategically changed policies to expanding prime loan with medium and low interest rates, considering the balance with the worsening South Korean economy and profit levels.

Financial Business in Southeast Asia

We reported operating loss of 6.5 billion yen, a deterioration of 0.8 billion yen (year-on-year). The segment, however, is on the way to recovery excluding the impact of allowance for doubtful accounts of 4.6 billion yen recorded in the previous quarter. Net interest income showed solid growth with the successful expansion of operating assets by focusing on commercial loan*. *Commercial loan refers to a medium-sized (0.1-0.5 billion yen) loan.

Investment Business

We earned operating revenue of 1.4 billion yen by selling the shares of Bank Mayapada in the first quarter. Operating profit rose by 5.2 billion yen (year-on-year) to 7.7 billion yen. Unrealized gain on the derivatives component of Group Lease’s convertible bonds contributed substantially to operating profit, supported by the higher stock price.

Non-financial Business

ADORES Group delivered steady performance with consolidated operating profit of 0.6 billion yen. Due to development expenses at Highlights Entertainment, however, operating profit declined by 0.2 billion yen (year-on-year) to 0 billion yen. The launch of a new game machine by Highlights Entertainment in January 2017 is expected to contribute to segment earnings toward the end of fiscal 2017.

Summary of Q&A session
Summary of Q&A session at Earnings Presentation for the Third Quarter of FY 2017(HTML)
(Please click the text above. Details are displayed below.)
Q1 I heard J Trust suspended Bitcoin exchange service “J-Bits.” Is it true? If so, is there any impact?
A1 The market condition has seen a significant change since we opened a Bitcoin exchange. For example, the amended Payment Services Act is to be enforced in April 2017.
We have decided to suspend our J-Bit service because making the business profitable requires considerable time due to the changing market condition.
Since investment returns are among our key management issues, we will allocate our management resources to more profitable segments. Meanwhile, we have been and will be working on FinTech development as a bank operator. With the involvement in the field, we have understood the block-chain structure, etc. Please note that the impact on our business results is insignificant.
Q2 Why are automobile loan and motorbike loan growing at Bank JTrust Indonesia, though they are decreasing in the Indonesian market?
A2 It is commercial loan that is increasing at Bank JTrust Indonesia. In contrast, major non-Indonesian banks tend to reduce it along with changing their portfolio mix. Since the Indonesian economy is growing as a whole, we believe that we can grow there by focusing on commercial loan.
For multi finance, our target is agricultural-related equipment, not motorbikes.
Q3 Please explain potential business environment risk.
A3 The domestic housing market is likely to shrink, considering that Japan is an aging society with fewer children. We will perform our credit screening for real estate-secured loan guaranteed by us more conservatively.
Other risk factors are country risk, political issues and economic problems. For Southeast Asia, we entered the market after contemplating such factors.
With regard to South Korea, public agency services could be suspended as a result of the presidential election every four years.
We avert such country risk by expanding business with risk diversification across several countries.
Q4 You mentioned that Indonesian business would be the main pillar for J Trust. I wonder if this will be achieved ahead of schedule.
A4 Indonesian business could have turned profitable earlier. In the second quarter, however, we eliminated all the assumed liabilities. Also, new loan assets are growing. We will make efforts to achieve profits in a shorter period of time.

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Back Number
Earnings Presentation for FY2017
  Schedule Promoter Venue Materials

First Half

November 14 , 2016 The Securities Analysts
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Bellesalle Tokyo Nihombashi Video video
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PDF(5,463KB)

1Q

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Video video
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3Q

February 15, 2016 J Trust Co., Ltd. Bellesalle Tokyo Nihombashi Video video
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First Half

November 16, 2015 The Securities Analysts
Association of Japan
Seminar Room, 6F
Tokyo Stock Exchange
Video video
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1Q August 13, 2015 J Trust Co., Ltd. Bellesalle Tokyo Nihombashi Video video
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Earnings Presentation for FY2015
  Schedule Promoter Venue Materials
Fiscal year ended May 26, 2015 The Securities Analysts
Association of Japan
Seminar Room, 6F
Tokyo Stock Exchange
Video video
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Association of Japan
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Earnings Presentation for FY2014
  Schedule Promoter Venue Materials
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Tokyo Stock Exchange
Video video
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First Half November 26, 2013 The Securities Analysts
Association of Japan
First Seminar Room, 6F
Tokyo Stock Exchange
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Earnings Presentation for FY2013
  Schedule Promoter Venue
Fiscal year ended May 28, 2013 The Securities Analysts
Association of Japan
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Tokyo Stock Exchange
First Half November 19, 2012 The Securities Analysts
Association of Japan
First Seminar Room, 6F
Tokyo Stock Exchange
Earnings Presentation for FY2012
  Schedule Promoter Venue
Fiscal year ended May 21, 2012 The Securities Analysts
Associations of Japan
Kabuto-cho Heiwa Building 3F
Seminar Room #3

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