Investor Presentaiton
What is not decreasing is the number of elderly people. 28.4% of Japan's population is older
Sitting on a fortune
Japan's financial assets held by generation (in percent)
Up to 34
35-44
45-54
In 2020, 72% of assets will be held
by those 55 and older
55-65
...
65-75
rising to 79% in 2040
100
80
60
40
20
0
2015
'20
'25
'30
'35
'40
Numbers do not add up to 100 due to rounding; 2020-'40 are estimates
Source: Keio University Financial Gerontology Research Center
than 65 years, in the countryside this figure is
remarkably higher: in Shimane it is nearly 33%. In
| 75+ Japan 'aged' often relates to 'well-off'. Japan's
personal financial assets are estimated at USD 17
trillion and when you link the two equations, you
see that by far the biggest part of this USD 17
trillion is owned by elderly people. That creates
another challenge: the Financial Services Agency
predicts that by 2030 USD no less than USD 2
trillion in personal financial assets, or over 10% of
the nation's total, will be in the hands of people
with dementia. Financial fraud targeting the elderly
has become so widespread that banks are increasingly nervous in dealing with older clients.
For some executives at several major financial institutions the risk to their reputations and
the cost and complexity of preventing problems far outweighs the value of elderly customers
to the bottom line.
"Aging Japan: banks turn to technology to tackle looming demographic crisis", headed
the Nikkei in its January 1, 2020 paper. "A population that is both shrinking and aging -
particularly in rural areas - has led to dwindling demand for bank loans, mortgages and
brokerage services. The Bank of Japan's attempts to keep growth rates up through
accommodative monetary policy has depressed margins. This has been particularly acute for
regional banks, whose interest income is falling faster than they can cut costs, according to
Moody's Investors Service." Some regional banks come up with different earning models, like
the Kyoto Shinkin Bank that offers its aged clients custom-fit programs, including courses in
flower arranging, knitting and storytelling. As many as 70% of the bank's customers are 65 or
older, and the bank has invested in making its branches and staff welcoming for senior
clients. All of the reception desk counters have been lowered so that customers can sit for
their consultations, and all 1,700 of its managers and clerks are expected to go through
extensive training programs to familiarize them with signs of dementia. "We want to be the
platform for people's journey across their life, including childbirth, home and car purchase,
planning for your children and planning for your legacy," said Toshiyuki Masuda, the bank's
chairman. "Our rivals compete in cheap interest rates. We don't engage in price wars. We
focus on creating value with customers because we believe people will ultimately choose a
bank that serves them best in the long term."
Some areas are trying to reverse the depopulation-trend by spending more money on child-
rearing support. As a result, in Shimane Prefecture the number of children has increased in
nine of some 20 municipalities.
From a macro-perspective: Japan's population is ageing faster than its neighbors -
Japan's senior surge
Share of population aged 65 years or older (in percent)
30
20
20
10
0
1960 '70 '80
Source: World Bank
'90
2000 '10
'18
Japan
South Korea
Singapore
China
East Asia
and Pacific
World
which changes the balance of economies in East-
Asia. A shrinking population and as a result: a smaller
economy will make Japan's debt burden even harder
to manage. At about 237%, the government's debt-
to-GDP ratio is the highest in the world. As this debt
is mainly held by Japanese banks and Japanese
individuals the debt-per-capita is growing
considerably; the cost of servicing Japan's public
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