Financial Highlights for

the First Quarter of Fiscal Year 2022

July 29, 2022

Outline of Financial Results for the 1Q of FY2022

  • Net income attributable to owners of parent: JPY33.9 bn
    • Down JPY0.3 bn, or 0.9%, YoY
    • Progress rate against the full year target*1: 22.6%
  • Actual net operating profit: JPY33.4 bn Down JPY11.7 bn, or 25.9%, YoY
    Core income [Net interest income from loans and deposits
    • Fee income + Operating expenses]: Up JPY4.7 bn, YoY
    • Gross operating profit: JPY135.7 bn Down JPY13.2 bn, or 8.9%, YoY
    • Net interest income from domestic loans and deposits: Down JPY1.6 bn, YoY
      Average loan balance: +1.82%, YoY
      Loans rate: down by 3bps, YoY
      [Excluding loans to the Japanese government and others] Average loan balance: +1.64%, YoY
      Loans rate: down by 3bps, YoY
      Both loans balance and loans rate were in line with the plan
    • Fee income: Up JPY4.6 bn, Fee income ratio: 40.7%
      Fee income increased 9.2%, YoY.
      Increased driven by growth in succession-related
    • Net gains on bonds (including futures): Down JPY17.9 bn, YoY
      Implemented to restore soundness of securities portfolio (Costs to restore securities portfolio soundness in
      1Q of FY2022: Approx. JPY24.0 bn)
    • Operating expenses: JPY102.2 bn (cost) Decreased by JPY1.6 bn, YoY
      Both personnel expenses and non-personnel expenses reduced
  • Credit related expenses: JPY5.6 bn (cost) Decreased by JPY1.5 bn, YoY
    Credit costs have posted 14.7% against the full year plan of JPY38.0 bn

FY2022

HD consolidated

YoY change

Progress rate

1Q

(JPY bn)

vs. Target*1

%

(a)

(b)

(c)

(d)

Net income attributable to

(1)

33.9

(0.3)

(0.9)%

22.6%

owners of parent

EPS (yen)

(2)

14.22

+0.34

+2.4%

BPS (yen)

(3)

1,005.99

(28.70)

(2.7)%

Gross operating profit

(4)

135.7

(13.2)

(8.9)%

Net interest income

(5)

102.3

(1.4)

NII from loans and deposits*2

(6)

83.1

(1.6)

Fee income

(7)

55.3

+4.6

Fee income ratio

(8)

40.7%

+6.7%

Trust fees

(9)

5.3

+0.3

Fees and commission

(10)

49.9

+4.2

income

Other operating income

(11)

(21.9)

(16.4)

Net gains on bonds

(12)

(26.1)

(17.9)

(including futures)

Operating expenses (excluding group

(13)

(102.2)

+1.6

+1.6%

banks' non-recurring items)

Cost income ratio (OHR)

(14)

75.3%

+5.5%

Actual net operating profit

(15)

33.4

(11.7)

(25.9)%

Net gains on stocks

(16)

18.1

+4.1

(including equity derivatives)

Credit related expenses, net

(17)

(5.6)

+1.5

Other gains, net

(18)

0.5

+3.3

Net income before income taxes

(19)

46.4

(2.6)

(5.3)%

and non-controlling interests

Income taxes and other

(20)

(12.3)

+2.4

Net income attributable to

(21)

(0.1)

(0.1)

non-controlling interests

*1.

Full year target of FY2022: JPY150.0 bn

1

*2.

Total of non-consolidated domestic banking accounts of group banks, deposits include NCDs

Review of the 1Q of FY2022

  • Steady progress in income and cost structure reforms
    Core income [Net interest income from loans and deposits + Fee income + Operating expenses] remained on an increasing trend
  • Progress rate against the earnings targets for FY2022 (total of group banks basis): 25.6%
  • Increased driven by growth in fee income (up JPY4.6 bn, or 9.2%, YoY)

[Core income]

+14.9%,

(JPY bn)

YoY

31.5

36.2

24.9

FY2020

FY2021

FY2022

1Q

1Q

1Q

  • Implemented to restore soundness of securities portfolio
    • Costs to restore securities portfolio soundness in 1Q of FY2022: Approx. JPY24.0 bn
    • Improving the yield of foreign bonds and ensuring future flexibility in the management by reduction of risk volume were realized via a series of measures to restore the soundness of our securities portfolio from FY2021

'21/3

'22/6

BPV (foreign bonds)： (5.1)

⇒ (2.6)

  • Progress of the reduction of policy-oriented stocks
    • Balance of listed stocks disposed in 1Q of FY2022*1: JPY5.3 bn (Down 0.3%, YoY)
      Net gain on sale in 1Q of FY2022: JPY17.7 bn (Up 61.3%, YoY)

Expansion consulting business based on F2F

Further

Development

Succession-related income: 4.6 bn (+45.7%, YoY)

Asset formation support business income: 10.3 bn (+2.7%, YoY)

Focused business has grown to "earnings pillar" New Earnings

Pillars

  • # of App DL: 5.41 million (+34.9%, YoY), and external group 0.81 million
  • Fund wrap income: JPY2.2 bn (+25.2%, YoY)
    Balance of fund wrap*2: JPY751.0 bn (+23.4%, YoY).

Of which, external group JPY45.3 bn

  • Debit card income: JPY1.0 bn (+15.9%, YoY)
    # of debit card issued: 3.09 million (+18.6%, YoY)

Breaking free of the bank model /

New Seeds

Initiatives for next growth

for Growth

Progress of financial digital platform

Roll out fund wrap to regional financial institutions

DX

• Keiyo bank (Jun. '22~), The 77 Bank (Collaborative

research started in May '22)

Help make bill-paying more efficient

Resona One-Stop Payment (RB, Jul. '22~)

SX

Simplified CO2 emissions calculation service (Apr. '22~)

New

Regional revitalization via "Education" × "Agriculture"

business "Loco Door Co., Ltd." (Established in Jul. '22）

*1. Total of group banks, acquisition cost basis *2. Including corporation and external group

2

Breakdown of Financial Results

Resona Holdings

Total of group banks

Difference

(JPY bn)

(Consolidated)

Saitama

Total of

Resona

group

Resona

YoY

YoY

Bank

YoY

Bank

YoY

banks under

YoY

KMFG

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(a)-(c)

Gross operating profit

(1)

135.7

(13.2)

122.1

(12.5)

63.4

(8.3)

24.7

(4.0)

33.8

(0.1)

13.5

Net interest income

(2)

102.3

(1.4)

101.1

(0.8)

53.9

(0.8)

20.2

(1.0)

26.8

+0.9

1.2

NII from domestic loans and deposits

(3)

83.1

(1.6)

42.9

(0.7)

16.8

(0.5)

23.4

(0.3)

Net gains on cancellation of investment trusts *1

(4)

0.0

(0.0)

0.1

+0.0

0.0

+0.0

－

(0.0)

0.1

+0.0

(0.1)

Fee income

(5)

55.3

+4.6

43.2

+4.7

27.4

+3.5

9.2

+1.3

6.5

(0.2)

12.0

Fee income ratio

(6)

40.7%

+6.7%

35.3%

+6.8%

43.1%

+10.0%

37.4%

+10.1%

19.2%

(0.6)%

Trust fees

(7)

5.3

+0.3

5.3

+0.3

5.3

+0.3

0.0

+0.0

－

－

(0.0)

Fees and commission income

(8)

49.9

+4.2

37.8

+4.3

22.0

+3.1

9.2

+1.3

6.5

(0.2)

12.1

Other operating income

(9)

(21.9)

(16.4)

(22.2)

(16.4)

(17.9)

(11.1)

(4.7)

(4.4)

0.4

(0.9)

0.2

Net gains on bonds (including futures) *1

(10)

(26.1)

(17.9)

(26.1)

(17.8)

(20.8)

(12.2)

(5.0)

(4.5)

(0.3)

(1.1)

0.0

Operating expenses

(11)

(102.2)

+1.6

(95.1)

+2.1

(51.8)

+0.6

(18.7)

+0.4

*2

(24.5)

+1.0

(7.0)

(excluding group banks' non-recurring items)

Cost income ratio (OHR)

(12)

75.3%

+5.5%

77.9%

+5.6%

81.7%

+8.6%

75.5%

+9.2%

72.6%

(2.8)%

Actual net operating profit

(13)

33.4

(11.7)

26.8

(10.4)

11.5

(7.7)

6.0

(3.6)

9.2

+0.9

6.5

Core net operating profit *3

(14)

52.5

+8.5

32.3

+5.6

10.7

+0.8

9.4

+2.0

(excluding gains on cancellation of investment trusts)

Net gains on stocks (including equity derivatives)

(15)

18.1

+4.1

17.9

+4.2

16.5

+5.4

0.8

(1.4)

0.5

+0.2

0.1

Credit related expenses, net

(16)

(5.6)

+1.5

(5.9)

+0.8

(4.7)

+1.4

(0.3)

(0.6)

(0.7)

+0.0

0.3

Other gains, net

(17)

0.5

+3.3

0.4

+2.9

1.2

+2.6

(0.1)

+0.2

(0.7)

+0.0

0.1

Net income before income taxes

(18)

46.4

(2.6)

39.3

(2.3)

24.6

+1.9

6.4

(5.5)

8.2

+1.2

7.1

Income taxes and other

(19)

(12.3)

+2.4

(10.2)

+2.0

(6.3)

+0.3

(1.8)

+1.6

(2.1)

+0.0

Net income attributable to non-controlling interests

(20)

(0.1)

(0.1)

Net income

(21)

33.9

(0.3)

29.0

(0.3)

18.2

+2.2

4.6

(3.8)

6.1

+1.3

(attributable to owners of parent)

*1. Losses on cancellation of investment trusts are posted in the net gains on bonds since net of the losses and dividends from investment trusts become negative

1Q of FY'21(RB): Losses on cancellation of investment trusts: JPY(5.9) bn, dividends from investment trusts: + JPY0.6 bn →

net amount: JPY(5.3) bn

1Q of FY'22(SR/MB): Losses on cancellation of investment trusts: JPY(1.2) bn, dividends from investment trusts: + JPY0.1 bn

→

net amount: JPY(1.1) bn

*2. Exclude goodwill amortization by KMB, JPY(0.1) bn, related to acquisition of former Biwako Bank

3

*3. Actual net operating profit - Gains on cancellation of investment trusts - Net gains on bonds

Factors for the Changes in Net Income Attributable to

HD

Owners of Parent (YoY Comparison)

Consolidated

（JPY bn）

Actual net operating profit (11.7)

Gross operating profit (13.2)

NII from

Fees and

domestic loans

commission

and deposits Other NII

income

(1.6)

+0.1

+4.6

Volume factor

+1.4

Other GOP,

Rate factor

(3.1)

net

(16.4)

Insurance

+0.8

Fund wrap

+0.4

34.2

Corporate solution

+0.4

Real estate

+0.5

Settlement-related

+0.5

Of which,

KMFG

Net gains on bonds

(17.9)

6.4

(including futures)

Yen bonds

+1.7

Foreign bonds

(19.6)

(0.3),

Credit-

Other

YoY

Net gains

related

items,

net

on stocks

expenses,

+5.5

(including

net

equity

＋1.5

33.9

Operating

derivatives)

expenses

＋4.1

+1.6

Of which,

KMFG

Act.

(7.1)

6.8

'21/6

'22/6

(5.6)

Personnel

ETFs and other

(2.3)

expenses

+1.0

Policy-oriented stocks

+6.6

Non-personnel

(Act.)

expenses

+0.9

'21/6

11.2

'22/6

17.9

FY2021

FY2022

1Q

1Q

4

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Resona Holdings Inc. published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 07:24:08 UTC.