Investor Presentaiton
External environment
To be your Bank of choice
Business Environment Facing Regional Banks
Declining birthrate in Japan is leading to a smaller and aging population. As a consequence, Japan's domestic market is expected to
contract and change. At the same time, earnings are under pressure from monetary easing and from a war of attrition caused by excessive
competition.
To achieve sustainable growth, regional banks need management strategies that anticipate projected future changes.
Contraction of domestic market due to a decreasing population and an aging society with a declining birthrate
Macroeconomic
environment
Shift in population by age group
1.4
[2010 =1]
1.2
1
0.8
Working-age
population is
0.6
already declining
0.4
2010
2020
2030
Elderly population
will also decline in
long term
65+
(Elderly population)
Total population
15-64
(Working-age population)
0-14
(Juvenile population)
2040
2050
2060
(Source: National Institute of Population and Social Security Research (IPSS))
Increase in loans is nearing limit
Increase in deposits will continue, and the
deposit-loan gap will widen
Deposits will also turn downward in long term
Competitive
environment
Interest rate competition (war of attrition) due to excessive competition and quantitative expansion
Shift in the number of financial institutions and the number of municipalities
1.20
[1991 = 1]
1.00
0.80
City banks
0.60
First-tier regional banks
0.40
--Shinkin banks
0.20
- Credit unions
0.00
1991
1996
Second-tier regional banks
✓ Number of municipalities
Number of first-tier regional banks has remained level
A
A
0
A A A
A
A
A
A
0 ☐
2001
2006
2011
►Another underlying factor is the narrowing of the spread
between short-term and long-term rates attributable to
the monetary easing policy
Decrease in interest rate on loans, and
reduction in net interest margin
Reductions in net interest income and core
business profit
Currently, performance is being propped up by
the low level of credit cost
FFG Fukuoka Financial Group
7View entire presentation