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- Business Information
Financial Business in Japan
Financial Business in Japan consists of three businesses : (1) Guarantees for products financed by financial institutions (2) Collections of accounts receivable and (3) Installment credit business.
Since 2008 we have actively been advancing M&A, thereby combining considerable amounts of human resources and expertise. As a result, the scope of our product development and breadth of knowledge about receivables management have expanded, allowing us to answer to a wide variety of financial needs. Currently the main pillars of Financial Business in Japan are Nihon Hoshou, which performs credit guarantees, Partir Servicer, which collects receivables, and J Trust Card, which operates an installment credit business.
As it becomes more difficult to secure a spread due to the continuation of super-low interest rates, consumer loans and condominium loans which had been growing continually have peaked out and the business environment for banking is becoming increasingly worse. Under these circumstances, we plan to expand our guarantee business and diversify services by providing banks with new business opportunities. We are currently expanding the scope of our business through partnerships in which we guarantee yen-denominated loans when customers purchase a property in U.S. states such as Hawaii, Texas, Nevada or California in addition to partnering with real estate companies affiliated with electric railways and with regional banks and executing guarantees for reverse mortgage loans. Going forward, we will continue to diversify our services. As for receivables collection business, we are purchasing receivables from banks and nonbanks which do not have a servicer subsidiary.
Financial Business in South Korea and Mongolia
In Mongolia, providing loans for used automobiles.
Korea
In South Korea, the J Trust Group provides financial services through three configurations. These three configurations are our savings banks, which execute personal and business loans, a nonbank for housing and automobile loans, and a servicer company which collects accounts receivables. The group consists of our savings banks, JT Chinae Savings Bank and JT Saving Bank, our nonbank JT Capital, and a servicer company called TA Asset Management.
Mongolia
Landlocked between Russia to the north and China to the South, Mongolia is mostly known for its resource mining industry, its nomadic people, and its vast landscapes.
At the J Trust Group, J Trust Credit NBFI offers speedy loans, primarily automobile loans, to Mongolian customers at reasonable interest rates. Mongolia's financial history is brief, beginning in the 90's when the country transitioned from a socialist economy to a market-based economy and commercial banks were established. Around the year 2000, life and non-life insurance companies as well as non-bank financial institutions (NBFI) dealing in small loans were established, so further development is expected in this country.
In South Korea, regulations on personal loans are continually being enhanced. We are developing a business strategy to stay one step ahead of the changes by looking to the prior regulatory enhancements in Japan as a point of reference. In addition to owning the patent for a smartphone app that allows customers to open a bank account or make transactions without having to visit a store location, we are also upgrading services through Information Technology by introducing a chatbot at our savings banks. We are not only striving for upgraded services but also for efficiency of management by, for instance, reducing the number of branch locations.
As part of the regulatory enhancements, the loan loss coverage ratio for unsecured consumer loans with interest rates over 20% is being raised and the burden of non-cash accounting profit on financial institutions is increasing. Cases of loan assets being sold in the market are expected to increase in the future, so we are making preparations to ensure that we do not pass up an opportunity to expand our receivables collection business. Also, in Mongolia we are currently offering speedy finance services with reasonable interest rates mainly for automobile loans, but plan to expand even further into retail finance.
Financial Business in Southeast Asia
Indonesia is comprised of over 13,000 islands big and small and is home to 260 million people. The J Trust Group operates three financial businesses based in the capital city of Jakarta, which has a population of more than 10 million. J Trust Bank performs commercial banking activities. At J Trust Investments Indonesia, we conduct servicer business for receivables ceded by J Trust Bank and at JTRUST OLYMPINDO MULTI FINANCE, we conduct financing business such as loans for used automobiles and farm equipment.
Financial Business in Southeast Asia is currently based in Indonesia, where it is literally taking shape as a three-tiered operation. While working to rebuild a nationalized bank that we had purchased, we processed all non-performing loans in FY03/2019 so that we would not have to deal with their bitter legacy from the FY03/2020 and established a framework to aim for growth. Our group will expand financing through customers using automobile loans and farm equipment loans orginated by JTRUST OLYMPINDO with a central focus on our specialty of retail finance. J Trust Bank will bear the cost of funds in the form of syndicate loans, mainly for this type of retail loan. Non-performing loans will be dealt with collectively at our servicer company, J Trust Investments Indonesia. At the nonbank, we will actively increase customers and reduce funding costs while the bank cuts back on managing expenses. As Indonesia's population continues to increase, it seems like a big opportunity for retail finance in a business field where major financial institutions are still scarce.
