Daiwa Securities Group Inc. Daiwa Investment Conference ... · This presentation may contain...
Transcript of Daiwa Securities Group Inc. Daiwa Investment Conference ... · This presentation may contain...
This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other “forward-looking” information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Group’s actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group.
Daiwa Securities Group Inc.Daiwa Investment Conference Tokyo 2016Presented on Tuesday, March 1, 2016 at “The Prince Park Tower Tokyo”
Takashi Hibino, President and CEODaiwa Securities Group Inc.
2
Ⅰ - Business Environment ・・・・ 3
Ⅱ - Achievements in the Medium Term Management Plan ・・・・ 7
Ⅲ - Progress of Individual Strategies for Basic Policies ・・・・ 13
Ⅳ - Basic Group Strategies ・・・・ 23
Appendix ・・・・ 28
Contents
Daiwa Investment Conference Tokyo 2016
3
Ⅰ- Business Environment
Changes to the Economic Environment
4
Ⅰ- Business Environment
Real GDP (Jan. 2007 - Dec. 2015)
Note: Adjustment of consumption tax conducted by the Bank of Japan.
Source: Cabinet Office; compiled by DIR based on the Bank of Japan statistics
(YoY, %)
(QoQ, %)
Consumer Price Index (Jan. 2007 - Dec. 2015)
2015
-4.5
-3.0
-1.5
0.0
1.5
3.0
4.5
2007 2008 2009 2010 2011 2012 2013 2014 2015
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
2007 2008 2009 2010 2011 2012 2013 2014 2015
CPI (less fresh food)
CPI (less fresh food and energy)
-2.0
-1.0
0.0
1.0
2.0
Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct-Dec.
Imports
Exports
Publ. Demand
Priv.InventoriesPriv. Non-Resi.Invt.Priv. Resi. Invt.
Priv.ConsumptionReal GDP
Start of the second Abe administration
Jan. 2016: Introduction of
negative interest rates
Introduction of QQE
Consumption tax increase
Expansion of QQE
110
115
120
125
130
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16
Nikkei 225 (left)
JPY/USD Rate (right)
70
80
90
100
110
120
130
6,000
10,000
14,000
18,000
22,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Nikkei 225 (left) JPY/USD Rate (right)
Changes to the Market Environment
5
Nikkei 225 and JPY/USD Rate (Jan. 2007 – Feb. 2016)
Pre-Lehman Crisis From Post-Lehman Crisis to Start of the Second Abe Administration Second Abe Administration
(JPY/USD)Peak in 2015:20,952yen
Global stocks fall on China worries
Fed raises interest
rate
BOJ introduces negative interest
rates
(Yen)
Ⅰ- Business Environment
(Yen) (JPY/USD)
RecentPBR 1.07X
(Feb. 24, 2016)Post-Lehman low
PBR 0.81X (Oct. 27, 2008)
Start of the second Abe administrationPBR 1.02X (Dec. 26, 2012)
122.4 130.1
140.2 139.3 154.6
123.5 124.7
0
40
80
120
160
1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY2014 FY2015
39.7 44.2
51.0 49.5
63.1
35.4 37.9
0
20
40
60
80
1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY2014 FY2015
1416
17
0
5
10
15
20
Interim FY end Interim
FY2014 FY2015
34.3 37.0 38.5 38.5 44.8
24.3 26.3
0
20
40
60
80
1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY2014 FY2015
Net Operating Revenues (Y bil) Ordinary Income (Y bil) Profit Attributable to Owners of Parent Company (Y bil) Dividend (Y)
6
Consolidated net operating revenues: Y403 bil; Ordinary income: Y136.5 bil; Profit attributable to owners of parent company: Y95.5 bil for 1Q-3Q FY2015.
Consolidated net operating revenues: Y403 bil; Ordinary income: Y136.5 bil; Profit attributable to owners of parent company: Y95.5 bil for 1Q-3Q FY2015.
Ⅰ- Business Environment
Consolidated Results of 3Q FY2015
FY2014 FY20151Q 2Q 3Q 1Q-3Q 1Q-3Q154,663 123,579 124,799 1.0% 392,903 403,042 2.6% 532,220
95,574 91,281 89,331 -2.1% 268,462 276,187 2.9% 361,380
63,113 35,456 37,950 7.0% 135,000 136,519 1.1% 184,578
44,836 24,347 26,354 8.2% 109,968 95,537 -13.1% 148,490
1,272,263 1,258,269 1,261,870 1,196,309 1,261,870 1,238,657
744.30 732.15 734.13 700.85 734.13 725.27
SG&A
Ordinary IncomeProfit (loss) attributable to owners of parent
Shareholders' Equity
BPS (Y)
FY2015 % Changevs
2Q/15
% Changevs
1Q-3Q/14FY2014
Net Operating Revenues
(Y mil)
7
Ⅱ- Achievements in the Medium Term Management Plan
8
Medium Term Management Plan (“Passion for the Best” 2017)
In response to the full-fledged start of an era of transition from savings to investment,attract customers with the industry’s top quality, and become their best partner
Provide investment services to lead the era of transition from savings to investmentBasic Policy 1: Pursue best quality Establish product and service platforms in response to the needs of a wide range of
investors Strengthen asset management abilities Expand the pool of talented personnel with advanced expertise
Basic Policy 2: Dramatically expand the customer base and revenue Strengthen approach to a wide range of investors by leveraging product and service
platforms Dramatically expand the customer base and revenue by responding to growing
investment needs
Basic Policy 3: Support the sustainable growth of companies and the development of new industries Identify and develop next-generation growth companies and help them to raise capital for growth Provide solutions in response to corporate globalization and M&A needs
Numerical targets
FY 2017FY 2016FY 2015
Provide solutions that contribute to the improvement in corporate value
1. ROE: 10% or more 2. Fixed cost coverage ratio :75% or more in the final fiscal year
Positive cycle of “transition from savings to
investment”
and “improvem
ent of corporate value”
Ⅱ- Achievements in the Medium Term Management Plan
6.3%
12.8%
9.7%10.2%
8.6%
17.0%
12.8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
FY2012 FY2013 FY2014 3Q FY2015
45%
56%
62%68%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
50
100
150
200
250
FY2012 FY2013 FY2014 3Q FY2015(Annualized)
Fixed Cost Coverage Ratio: 75% or more in the final fiscal year (FY2017)ROE: 10% or more
Ⅱ- Achievements in the Medium Term Management Plan
Progress of Medium Term Management Plan (Numerical Targets)
Fixed cost (Y bil)
Stable revenues (Y bil)
Fixed cost coverage ratio
Shareholders’ equity (Y bil) ROE
ROE(excl. effect of losses carried forward belonging to Daiwa Securities)
Profit attributable to owners of parent company (Y 100mil)
*Stable revenues consist of :AM Management fees(including investment advisory fees), agency fees, Daiwa Next Bank profit margins, Daiwa Office Investment net operating revenues, Daiwa Real Estate AM management fees, management fees on SMA/Fund Wrap, interest fees on margin, interest fees on LMS etc.
9
(Annualized)
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
10
20
30
40
50
60
70
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015
Fixed Cost (left) Stable Revenues (left) Fixed Cost Coverage Ratio (right)
Trend of Fixed Cost Coverage Ratio
10
Ⅱ- Achievements in the Medium Term Management Plan
Trend of Stable Revenues, Fixed Cost, and Fixed Cost Coverage Ratio
(Y bil)
The Group will aim to further strengthen its robust business structure through disciplinary cost control and steady expansion of stable revenues.
The Group will aim to further strengthen its robust business structure through disciplinary cost control and steady expansion of stable revenues.
Passion for the Best “2014” (FY2012-FY2014)
Passion for the Best “2017”
(FY2015-FY2017)
Expansion of Stable Revenues
11
Factors for Changes in 3Q FY2015 Stable Revenues (Annualized)
(Y bil)
+10%Stable Revenues
Wrap-related fees
Agency feesfor investment
trusts
Daiwa AM/Daiwa SB management fees
Daiwa Next Bank profit margins
Others(including real estate AM,
interest fees on margin, etc.)
The Group’s stable revenues for 3Q FY2015 (annualized) have increased approximately 10% from FY2014, mainly due to expansion of AUM for wrap accounts.
The Group will continue to focus on expanding stable revenues centered on wrap accounts and asset management business, while also enhancing the foreign currency deposit business at Daiwa Next Bank.
The Group’s stable revenues for 3Q FY2015 (annualized) have increased approximately 10% from FY2014, mainly due to expansion of AUM for wrap accounts.
The Group will continue to focus on expanding stable revenues centered on wrap accounts and asset management business, while also enhancing the foreign currency deposit business at Daiwa Next Bank.
Ⅱ- Achievements in the Medium Term Management Plan
0
12
Business Opportunities and Basic Policies
Business opportunities expected over the medium term: full-fledged start of an era of transition from savings to investment
Expected demandIncrease in securities investment needs among all citizens
and householdsIncrease in funding demand among growing companiesIncrease in corporate activities including M&As aimed
at improving ROE
Basic policies aimed at achieving the positive cycle of “the transition from savings to investment” and “the improvement in corporate value”
Provide investment services that lead the era of transition from savings to investment
Provide solutions that contribute to the improvement in corporate value
Move away from deflation Spread of successful investment experiences
Government support on policies and systems
Enhancement of companies’ earnings power
Dramatically expand the customer base and revenue
Identify and develop next generation growthcompanies and help them raise capital to growPursue best quality
Basic Group Strategies
Finance and Risk management Finance and Risk management Human resourcesHuman resources ITIT
Establish product and service platformsin response to the needs
of a wide range of investors
Strengthen asset management abilities
Identify and develop next generation growth companies and help them
raise capital to grow
Provide solutions in response to corporate globalization and M&A needs
Promote alliance strategy actively, mainly in Asia
Basic
policiesK
ey Themes
Ⅱ- Achievements in the Medium Term Management Plan
13
Ⅲ- Progress of Individual Strategies for Basic Policies
0
20
40
60
80
100
120
140
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1H 2H 1H 2H 1H 2H 3Q
FY2012 FY2013 FY2014 FY2015
Contract AUM (left) Number of Contract (right)
Expansion of Fee-based Products and Services (Wrap Account Services)
14
Future of Daiwa’s Wrap Account ServicesChange in AUM of Wrap Accounts
AUM for wrap account services (SMA and fund wraps) at Daiwa Securities were Y1.5 tri. (as at the end of Dec. 2015). Respond to a wide range of customer needs through various product line-up and by expanding sales channels. AUM for wrap account services (SMA and fund wraps) at Daiwa Securities were Y1.5 tri. (as at the end of Dec. 2015). Respond to a wide range of customer needs through various product line-up and by expanding sales channels.
Value Added
Minim
um investm
ent
Advancedfund wraps
Wrap services for asset forming generation
Large
SmallLow High
Existing service
New service
Low-cost wrap services using
the Internet
SMA
Fund wraps
Wrap account market
U.S.≈ Y581 tri.
Individual financial assets
JapanY5.1 tri.
※ U.S. figures are calculated at $1=119.88 yen (end of Sept. 2015)* Japan and U.S. assets are as of the end of Sept. 2015
93xU.S.
≈ Y8,260 tri.
4.9x
Ⅲ- Progress of Individual Strategies
Y1.5 tri.
Wrap services for the wealthy
Wrap services for wealthy individuals, with wealth planning
services added
Increase value of existing fund
wraps
Establish product and service platforms in response to the needs of a wide range of investors
(Y bil)(thousands)
Highly customizablefund wraps for wealthy
individuals and corporate clients
JapanY1,684 tri.
Respond to the Expanding Inheritance Business
15
Responding to the Shift of Assets through Inheritance
By placing inheritance consultants and increasing the number of application for “Inheritance Total Service”, we prepare to respond to the shift of assets through inheritance.
By placing inheritance consultants and increasing the number of application for “Inheritance Total Service”, we prepare to respond to the shift of assets through inheritance.
Placement of Inheritance Consultants
(Dec. 2014 - )
Inheritance Total Service*(Jan. 2012 - )
Expansion of inheritance market(Approx. Y50 tri./yr.,
increasing trend)
Increase in inheritance tax rate (Jan. 2015 - )
Shift of assets through inheritance
Enhance capability to tailor to the needs of customers
Prevent cash out(Bring in new assets)
Ⅲ- Progress of Individual Strategies Establish product and service platforms in response to the needs of a wide range of investors
Number of Staff Involved in Inheritance Business*
Application for Inheritance Total Service*
* Mar. 2013 is indexed as 100
※Placed at 40 branches (Dec. 2015)
* Mar. 2013 is indexed as 100
* Provide one-stop service from before to after inheritance (including connecting customers to outside specialists).
100
198
Mar. 2013 Dec. 2015
Number of Staff at Wealth Management Dept.
Number of Inheritance Consultants
100
303
Mar. 2013 Dec. 2015
Total Number of Application forInheritance Total Service
16
Further develop the securities-banking business model to serve as a gateway from savings to investments and as a platform for comprehensive financial services.
Further develop the securities-banking business model to serve as a gateway from savings to investments and as a platform for comprehensive financial services.
Daiwa Next Bank: Deposit Balance and Number of Accounts
Y3.3 tri.
(Y bil) (thousands)
Cross-selling Ratio and Purchased Products (Total)
Fund wraps
Stock investment trusts
Equity
Foreign bonds
Domestic bonds
Overseas ATM
Shopping
Expansion of Foreign Currency Deposits~Introduction of Tie-up Prepaid Card~
Daiwa Next Bank Money Partners
【Card holder account】
Foreign currency deposits
Top up(foreign
currency)
Repayment(foreign
currency)
Overseas prepaid card
Launch event to be held on Mar. 23, 2016【Foreign currency
deposit account】
Ⅲ- Progress of Individual Strategies Establish product and service platforms in response to the needs of a wide range of investors
Further Develop the Combined Securities-Banking Business Model
0
200
400
600
800
1,000
1,200
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Mar. 2013 Mar. 2014 Mar. 2015 Dec. 2015
Foreign Currency Deposit (left)
Yen Deposit (left)
Number of Accounts (right)
Newly-opened time deposits: yen denominated time deposits that have been placed within three months of opening time deposit accounts * Cross-selling ratio: accumulated total accounts of cross-selling / accumulated total accounts of newly-opened time deposits
Improve Consulting Services in Quality and Quantity - Increase Interaction with Clients -
17
Ⅲ- Progress of Individual Strategies Establish product and service platforms in response to the needs of a wide range of investors
Aim to enhance the quality and quantity of proposals to customers by continuing to expand our domestic branch network, and increasing capacity and staff at Contact Centers.
Aim to enhance the quality and quantity of proposals to customers by continuing to expand our domestic branch network, and increasing capacity and staff at Contact Centers.
Monthly Average of Proposals Made by Sales Reps
※ Monthly average proposals for FY2013 are indexed as 100.
Domestic Branch Network Number of Seats at Contact Centers
100 106
110
FY2013Monthly Average
FY2014Monthly Average
Apr. 2015 - Jan. 2016Monthly Average
480 510620
Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016
5 14 22 26123132
140 144
2013.3 2014.3 2015.3 2016.1
Sales OfficeBranch
25
100
0
40
80
120
2Q FY2014 3Q FY2015
No. of Registered NISA Incremental Account
Acquired 9.6%
Expand New Client Base Centered on Inbound-Type Clients
18
Continue making multidimensional efforts in order to expand new client base. Continue making multidimensional efforts in order to expand new client base.
Number of NISA Accounts with Accumulative Services Business Collaboration with GMO Click Holdings
Number of NISA accounts with accumulative services was 100,000, total amount purchased was Y16.1 bil, expanding significantly compared to 2Q FY2014
Currently discussing the specifics for business collaboration agreement.
Daiwa Securities
Group
GMOClick HDGroup
Capability to provide products and information globally
System development capabilityYoung customer base
(thousand)
≈ 16x≈ 4x
Ⅲ- Progress of Individual Strategies Establish product and service platforms in response to the needs of a wide range of investors
(Y bil)
Funds Dedicated to Direct Course Service
Set up no-load index funds, which are popular with a wide range of investors, including those with modest experience in investing.
Dec. 2015: Started sale of “Daiwa No-Load Nikkei 225 Fund” and “Daiwa No-Load J-REIT Fund”
Mar. 2016: Plan to expand product line-up
1
16.1
0
5
10
15
20
2Q FY2014 3Q FY2015
Amount Purchased through NISA Incremental Account
19
Total AUM of stock investment trusts (excluding ETFs) for the two asset management companies (Daiwa Asset Management and Daiwa SB Investments) have maintained the largest share in the industry.
Daiwa Asset Management, together with Mirae Asset Global Investments in Korea, has launched a new equity fund. Fund with the same scheme is also being distributed in Korea (distributed by Mirae Asset Securities, etc.).
Total AUM of stock investment trusts (excluding ETFs) for the two asset management companies (Daiwa Asset Management and Daiwa SB Investments) have maintained the largest share in the industry.
Daiwa Asset Management, together with Mirae Asset Global Investments in Korea, has launched a new equity fund. Fund with the same scheme is also being distributed in Korea (distributed by Mirae Asset Securities, etc.).
Daiwa AM +Daiwa SB
Company A
Daiwa AM
Company B
Company C
Daiwa SB
Apr. 2005 to Jan. 2016AUM of Investment Trusts (excluding ETF)
(Y tri)
Strengthen asset management abilities
New Fund Launched by Mirae Asset* and Daiwa Asset Management~Diversifying Asset Management and Distribution Channels~
Daiwa /Mirae Asset Asia Equity Fund
At monthly fund committee which consists of 「Mirae Asset Global Investments」 and 「Daiwa Asset Management」, the allocation between Asia/Oceania and Japan equity is discussed and determined through both quantitative and qualitative analysis (launched on Jan. 21, 2016).
Candidate stocks
Potential stocks
Quantitative analysis
Qualitative Analysis
Asia / Oceania equity
≈ 40 stocks
Candidate stocks
Potential stocks
Quantitative analysis
Qualitative Analysis
Japan equity
≈ 40 stocks
Image of model portfolio
* Established in 1997, Mirae Asset Global Investments Group is one of the largest asset management companies in Korea. It manages an AUM of 77.6 billion USD (approx. Y9.4 tri.) globally and is strong in emerging markets.
Ⅲ- Progress of Individual Strategies
Strengthen Asset Management Abilities(Investment Trusts)
0
2
4
6
8
10
12
1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H Jan.
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Expansion of Asset Management Business- Real Estate and Infrastructure -
20
Since the asset management company of Japan Rental Housing Investments, Mi-Casa Asset Management, has been made a consolidated subsidiary, assets under management for the 4 real estate investment trusts have exceeded Y760 bil.
In light of negative interest rates, demand for products with stable returns, such as J-REITs and infrastructure funds, is expected to increase. Made IDI infrastructures Inc., a fund management company specializing in infrastructure, a subsidiary.
Since the asset management company of Japan Rental Housing Investments, Mi-Casa Asset Management, has been made a consolidated subsidiary, assets under management for the 4 real estate investment trusts have exceeded Y760 bil.
In light of negative interest rates, demand for products with stable returns, such as J-REITs and infrastructure funds, is expected to increase. Made IDI infrastructures Inc., a fund management company specializing in infrastructure, a subsidiary.
(Y bil)
AUM of Real Estate Asset Management
J-REIT Market Size
Current (Jan. 2016)
Market Cap Y10.7 tri. (3.7x)Asset Size Y14.1 tri. (1.8x)
Daiwa’s entry into real estate AM business (Jul 2009)
Market Cap Y2.9 tri.Asset Size Y7.7 tri.
(Source)Association for Real Estate Securitization, Bloomberg
Ⅲ- Progress of Individual Strategies
Increasing Business Opportunities
Introduction of negative interest ratesIntroduction of negative interest rates
Expansion of investor basefor J-REITs
Infrastructure Fund Management Company as a Subsidiary
Increased difficulties in money managementMore need for investment into products with stable returns
Increased difficulties in money managementMore need for investment into products with stable returns
Infrastructure funds, as they areless susceptible to economic
fluctuations become more appealing
Power retailers
Infrastructure Funds
Environment, etc.
Management
Investment
Subsidiary
Thermal power plants
Renewable energy plants
Strengthen asset management abilities
355 418
477
761
0
100
200
300
400
500
600
700
800
900
Mar. 2013 Mar. 2014 Mar. 2015 Dec. 2015
Japan Rental Housing Inv (residential)
Nippon Healthcare Investment Corp (healthcare facilities)
Daiwa Residential Private Investment Corp (residential)
Daiwa Office Investment Corp (offices)
21
Selected Cross-border Deals (FY2015 1Q-3Q)Global M&A Quadri-Polar Structure
Amount/Number of M&As Involved by Japanese Companies
Europe (DCA)
Japan
U.S. (Sagent Advisors)
Asia / Oceania(DCM & alliance partners)
Share acquisition of DeLclima (Italy) by Mitsubishi Electric Corporation
Acquisition of TGE Marine AG (Germany) by Mitsui Engineering & Shipbuilding Co. Ltd.
Acquisition of MIMS Group (Singapore) by SMS Co., Ltd. and Mitsui & Co., Ltd.
Acquisition of VTN Beteiligungsgesellschaft mbH(Germany) by IHI Corporation
(Y tri)
Promote support for providing cross border M&A solutions utilizing a quadri-polar structure spanning Japan, Asia, Europe (Daiwa Corporate Advisory) and the U.S. (Sagent Advisors).
Promote support for providing cross border M&A solutions utilizing a quadri-polar structure spanning Japan, Asia, Europe (Daiwa Corporate Advisory) and the U.S. (Sagent Advisors).
(Source)Compiled by Daiwa Securities based on Recof M&A database. Amount is calculated based on available figures.
Provide solutions in response to corporate globalization and M&A needsⅢ- Progress of Individual Strategies
Provide Solutions to M&A Needs with Quadri-Polar Structure
0
500
1,000
1,500
2,000
2,500
3,000
0
2
4
6
8
10
12
14
16
18
2009 2010 2011 2012 2013 2014 2015
OUT-ININ-OUTIN-INNumber of Deals (right)
Enhance business network in Asia through expanding alliance network with leading Asian financial institutions. Enhance business network in Asia through expanding alliance network with leading Asian financial institutions.
Bahana Securities
Sept. 2013, business alliance(Indonesian equity research / IB)
Proactive Promotion of Alliance Strategy with a Focus on Asia
22
Ⅲ- Progress of Individual Strategies
AustraliaNew Zealand
Indonesia
Malaysia
Thailand
Vietnam
Philippines
Australia and New ZealandBanking Group
Feb. 2014, business alliance(M&A covering Australia, NZ)
China Securities
Nov. 2014, business alliance(IB/GM covering China)
Saigon Securities
Jun. 2008, business alliance(comprehensive business covering Vietnam)
Thanachart Securities
Feb. 2013, business alliance(Thai equity research)
Affin Hwang Investment Bank
Dec. 2013, business alliance(Malaysia equity research)
Development Bank of Philippines
Mar. 1995, joint venture
China
Proactive promotion of alliance with a focus on Asia
Nov. 2015 business alliance(IB covering the Philippines)
Increase stake in 2016Plans to become equity method affiliateFeb. 2016: Application for minority stake
Plans to become equity method affiliate
* Application already submitted to Bank Negara Malaysia
23
Ⅳ- Basic Group Strategies
24
Capital Policy Aimed at the Sustainable Improvement of Corporate Value
Secure capital and liquidity capable of responding to tighter international financial regulations
Establish a financial base for maintaining and improving credit rating
Secure financial flexibility that enables agile investments for growth under any environment
Continue strict risk control
Maintenance of FinancialSoundness
Strengthen Shareholder Returns
Improvement of Capital Efficiency
Invest management resources appropriately in business areas with high growth and profit potential in Japan and overseas with a focus on capital efficiency (ROE)
Aim to reduce capital cost by diversifying risks through expansion of the business portfolio
Aim for stable dividend growth by continuously improving earning power
Feasibility of share buyback will be reviewed by taking a comprehensive look at factors including the business environment, financial conditions, regulatory requirements, and level of stock price
Accumulate profits
FY2014 FY2015onwards
Improve Daiwa’s sustainable corporate value
Image of Capital
Strengthen shareholder returns
Invest in growth areas
Ⅳ - Basic Group Strategies
Strive for an optimum balance between “maintenance of financial soundness”, “improvement of capital efficiency” and “strengthening of shareholder returns”, and ultimately aim for sustainable corporate value.
25
Raised dividendpay-out ratio
Raised dividendpay-out ratio
In order to strengthen shareholder returns, we raised our dividend pay-out ratio from 30% to 40% beginning this fiscal year.
Aim to maintain an upward trend of dividends by continuously improving our earnings power.
In order to strengthen shareholder returns, we raised our dividend pay-out ratio from 30% to 40% beginning this fiscal year.
Aim to maintain an upward trend of dividends by continuously improving our earnings power.
Share repurchaseprogram
Share repurchaseprogram
Aim to strengthen shareholder returns through increased capital efficiency. Date of resolution: Jan. 28, 2016 Total numbers of shares to be repurchased:up to 27 mil shares, 1.57% of total shares
outstanding (excluding treasury stock). Total amount to be paid for repurchase: up to Y20 bil
Aim to strengthen shareholder returns through increased capital efficiency. Date of resolution: Jan. 28, 2016 Total numbers of shares to be repurchased:up to 27 mil shares, 1.57% of total shares
outstanding (excluding treasury stock). Total amount to be paid for repurchase: up to Y20 bil
Ⅳ- Basic Group Strategies
12
17 1714 16
50.5%
32.4% 31.1%37.8%
33.4% 35.5%
42.1%
3
17
FY2012 FY2013 FY2014
Interim Year-endFY2015InterimInterim Year-endInterim Year-end
Passion for the Best “2014” (FY2012-FY2014)
Passion for the Best “2017”Passion for the Best “2017”(FY2015-FY2017)
Dividend per share(JPY)
Pay-out ratio(Actual)(%)
Pay-out ratio(%)
40%
30%
Strengthen Shareholder Returns
Maintenance of Financial Soundness
26
Financial SoundnessFinancial Soundness Consolidated total capital ratio was 21.8% (provisional) at the end of December 2015, but we
aim to secure sufficient level of capital and liquidity to give leeway in case of extreme market downturn and to respond to the tightening global financial regulations.
Consolidated total capital ratio was 21.8% (provisional) at the end of December 2015, but we aim to secure sufficient level of capital and liquidity to give leeway in case of extreme market downturn and to respond to the tightening global financial regulations.
Consolidated Total Capital RatioConsolidated Total Capital Ratio
Capital
Risk Asset
D-SIBs buffer
Capital conservationbuffer
+0.5%
+2.5%
Countercyclicalbuffer
Up to+2.5%
Review of the CVArisk framework
Fundamental review of the trading book
Upwardfactor
Upwardfactor
Increase of risk asset at times of stress
Upwardfactor
Required level of capital 8.0%
Damage to capital at times of stress
Downward factor
≪Factors to Increase Qualifying Capital ≫
≪Factors to DecreaseCapital Adequacy Ratio≫
Ⅳ- Basic Group Strategies
3
21
0
20
40
2005.03 2015.12
HR Strategy
27
In order to become the “customers’ first choice” securities group, employees are the most valuable asset for the Group. By strategic placement of human resources and planned training, we aim to strengthen organizational capabilities.
Supporting the Success of“Young Employees”
Improve internal education system to nurture professionals with high loyalty and to retain young employees.
Improve “Daiwa Basic Program”(Basic education for the first two
years)
Supporting the Engagement of “Veteran Employees”
『Advanced Skill-building Program(ASP)』
Expanded programs for improving skills to continue succeeding as professionals.
Establish “License Certification System”
Established an incentive system to create a corporate culture in which employees are eager to continue developing as professionals regardless of age.
Promoting Health Management
Supporting the Success of “Female Employees”
Selected as “Health and Productivity Companies”, “Nadeshiko Brand”
40 companies selected25 companies selected
Increase in number of female branch managers andmanagers (Daiwa Securities)
Appointment of CHO(Chief Health Officer)
Branch managers
Managers
(14 companies have been selected for two consecutive years)
60
239
0
100
200
300
2005.03 2015.12
Organizational structure to carry out health management
“Health Management Promotion Meetings” are being held regularly, and “Health Management Promotion Section” was established within HR Dept.
Establish an incentive system for employees
Points will be given to employees that participate in health promotion related events and training programs.
Ⅳ- Basic Group Strategies
Expand Education and Training Program
Significantly expanded our education and training program by implementing new e-learning programs including online universities, sending employees to overseas business schools, and providing support to obtain certifications.
28
Appendix
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
07/1 07/7 08/1 08/7 09/1 09/7 10/1 10/7 11/1 11/7 12/1 12/7 13/1 13/7 14/1 14/7 15/1 15/7 16/1 年/月
PBR(東証1部上場企業)
0102030405060708090
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
%
PBR1倍割れ企業比率(東証1部上場企業)
PBR and % of Companies with PBR Below 1x for TSE 1st Listed Companies
29
Total no. of TSE 1 listed companies: 1,935Of which no. of companies with PBR below 1x: 1,079
pre-Lehman high2.04 (2007/2/26)
Peak after start of Abenomics1.44 (2015/6/24)
post-Lehman low0.81 (2008/10/27)
start of the second Abe administration1.02 (2012/12/26) Recent
1.07 (2016/2/24)
日次データ
月次データstart of the second Abe administration
64.8% (2012/12)post-Lehman high77.6%(2009/2)
Lowest ratio after start of Abenomics40.7% (2015/5)pre-Lehman low
24.5% (2007/1)
PBR level of 1.0x
50%
Most recent55.8% (2016/2/24)
Appendix
PBR (TSE1 Listed Companies) daily data
% of Companies with PBR Below 1x (TSE1 Listed Companies) monthly data
(Source) Compiled by Daiwa Securities based on Factset and Quick data
30
Appendix
Corporate Earnings (Daiwa 200*)
Estimated FY2015 Dividend Yield for TSE 1 Listed Companies and 10-year JGB Yield
Corporate Earnings, Estimated Dividend Yield for TSE 1st Listed Companies and 10-year JGB Yield
2.19%
-0.055%
※As of Feb. 24, 2016 (Source) Compiled by Daiwa Securities based on Factset data
* Earnings estimation by Daiwa Securities consists of 199 major listed companies, excluding financials institutions.
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
0
5
10
15
20
25
30
35
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015E FY2016E FY2017E
Ordinary Income of Daiwa 200 Companies (left) % Change in Ordinary Income (right)(Y tri)
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Dividend Yield-10-year JGB Yield Dividend Yield 10-year JGB Yield
2.14%
31
Management Vision for 2020
“Be the First Choice”Lead the development of capital markets in Japan and Asia,
and be the customer’s first choice securities group
Management Vision
Basic Management Policy
Achieve sustainable growth by linking Japan
to the growth of Asia
Leverage the industry's top quality and dramatically expand our customer base
Contribute to the development of society and economy through financial and capital markets
Appendix
32
Daiwa Securities Group Inc.Investors Relations
TEL: +81-3-5555-1300 FAX: +81-3-5555-0661E-mail: [email protected]
URL: http://www.daiwa-grp.jp/ir/english