Contributing to the creation of a prosperous future for the regional community, as a trusted Regional Comprehensive Services Group by closely offering thorough support to customers

Overview of Financial Results for

FY2021

- IR Presentation -

June 2022

Hirogin Holdings, Inc.

Table of Contents

1. Summary of Business Performance

Overview of Financial Results for FY2021

・・・

4

Results for major Group companies

・・・

5

Results of strengthening Group cooperation under a

・・・

6

holding company structure

Profits related to the consulting business

・・・

7

Financial soundness initiatives

・・・

8

Implementing provisions for reserves on a

precautionary basis and adjusting the portfolio of

・・・

9

foreign bonds held

Bank of Japan's system of special interest

・・・

10

Responding to the risk of rising interest rates

・・・

11

FY2022 performance and dividend forecasts

・・・

12

2. Toward sustained growth (progress on Mid-Term Plan and future outlook)

Progress toward management targets of Mid-Term

・・・

14

Plan 2020

Achieving the goals of Mid-Term Plan 2020

・・・

15

Strategy for corporate customers

・・・

16-21

Strategy for individual customers

・・・

22-26

Digital strategy/IT strategy

・・・

27-31

Regional vitalization and local revitalization

・・・

32

Securities strategy

・・・

33-34

Structural reforms

・・・

35

Toward sustained growth

・・・

36

3. Sustainability initiatives

Sustainability initiatives

・・・

38

Carbon neutral initiatives

・・・

39-42

Diversity and inclusion

・・・

43-44

4. Capital policy

Thinking on capital policy

・・・

46

Trend in capital adequacy ratio and capital allocation

・・・

47

Dividends

・・・

48

Appendix Overview of Financial Results for FY2021

・・・ 50-57

To achieve the Sustainable Development Goals (SDGs) adopted by the United Nations, the Hirogin Group will strive to help local communities address social and environmental issues and enjoy sustainable growth by providing high value added regional comprehensive services.

1

Key messages

FY2021 financial results and FY2022 financial targets

  • FY2021 financial results… Net income attributable to owners of the parent rose 1.4 billion yen year on year to 22.9 billion yen.

In addition to progress on Group contributions during this fiscal year- effectively the first fiscal year under the holding company structure-we undertook efforts in various areas, including adjustments in the portfolio of foreign bonds held and provisions for reserves on a precautionary basis to increase financial soundness in anticipation of future losses.

  • FY2022 financial targets… Net income attributable to owners of the parent is projected to rise 2.1 billion yen year on year to 25.0 billion yen.

In addition to further enhancement of the strategy for individual customers, to ensure permeation and practice of customer-centric management, we will make progress on solidifying the holding company structure through various means, including joint efforts among nonbanking Group companies, continuing improvements in business efficiency, and streamlining efforts centered on the holding company.

Sustainability

  • Carbon neutrality… Contributing to community decarbonization by setting our own CO2 emissions reduction and sustainable finance targets and enhancing customer consultations

Capital policy

  • Dividends… In light of projected business performance and based on the payout table, annual dividends per share in FY2022 are projected to rise by three yen year on year to 27 yen.

2

1. Summary of Business Performance

3

Overview of Financial Results for FY2021

  • Net income attributable to owners of the parent rose 1.4 billion yen year on year to 22.9 billion yen.

Summary of consolidated financial results

(Billion yen)

FY2021

YoY change

(% change)

vs.

Announced

Consolidated gross profit

92.0

- 3.2

(-3.4%)

(Excluding gain/loss related to treasuries and

1

99.2

7.2

other bonds)

Net interest income

69.5

2.7

Net fees and commissions income

21.1

1.6

Income from specific transactions and other

1.3

- 7.5

businesses

２

(including gain/loss related to treasuries

- 7.2

- 10.4

and other bonds)

Operating expenses

(-)

58.0

0.2

Credit costs

(-)

３

12.4

1.2

Gains/losses related to equities, etc.

5.0

0.5

Gains/losses from equity method

-

- 0.1

investments

Other

0.4

0.3

Ordinary profit

27.0

- 4.0

(-12.8%)

-6.5

Extraordinary gains/losses

5.8

5.9

(including gains on refunds of retirement

４

7.0

7.0

allowance trust)

(including impairment loss)

(-)

５

2.2

1.8

Total income tax, etc.

(-)

9.9

0.6

Net income attributable to non-

(-)

0

0

controlling interests

Net income attributable to owners of the

６

22.9

1.4

(6.2%)

-0.6

parent

(Ref.) Operating overhead ratio

58.5%

-4.3%

Key points of financial results for FY2021

1 Consolidated gross profit (excluding gain/loss related to treasuries and other bonds)

  • Significant contributions from increased earnings at the Hiroshima Bank, Hirogin Securities, and Shimanami Servicer and from Hirogin Lease becoming a wholly owned subsidiary
  • Gain/loss from treasuries and other bonds
    • We recorded losses on sales due to adjustments of the portfolio of foreign bonds held to improve returns, including sales of all low-yield US treasuries with interest rates of 1.5% or lower amid expectations of incremental US interest rate hikes.

3 Credit costs

  • We recorded reserves of 11.6 billion yen on a precautionary basis, including increases in reserves for certain customers, as well as revisions in the method for calculating the allowance for doubtful accounts (lengthening the calculation period for the anticipated loss rate and adoption of Group reserves).

４

Gains on refund of retirement allowance trust

Details on p. 8

    • Part of the retirement allowance trust established to prepare for future retirement benefits was refunded because pension assets greatly exceeded pension liabilities, a state of affairs expected to continue.
  • Impairment loss
    • We recorded impairment losses in connection with branches, attributed to decisions on future policies (e.g., consolidation, relocation) amid a comprehensive streamlining of branches and steady reductions in branch numbers.
  • Net income attributable to owners of the parent

255

242

(+14)

215

229

* Operating overhead ratio = operating expenses / (consolidated gross profit-gain/loss from

FY2018

FY2019

FY2020

FY2021

4

treasuries and other bonds)

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Hirogin Holdings Inc. published this content on 19 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 July 2022 04:13:02 UTC.