SURUGA bank, Ltd.
Financial Results for the nine months ended
December 31, 2019

February 14th, 20200■ Financial results for the nine months ended December 31, 2019.
・Core net operating profit for the 3Q was 9.2 billion yen and cumulative 29.0 billion yen for the 1Q – 3Q, which was slightly higher than the forecast.
(Previous forecast for the FY3/20 was 36.0 billion yen, and the achievement rate was 80%)
・With regard to actual credit costs, although the Bank reversed all 13.4 billion yen in provisions of allowance for loan losses in line with collection of loans from thefounder-affiliated companies, the Bank increased provision of allowance for loan losses due to the specific factor (*) regarding single building apartment loans to
1.4 billion yen for the 3Q and cumulative 7.8 billion yen for the 1Q – 3Q.
・Non-consolidated net income was 2.9 billion yen for the 3Q and cumulative 18.5 billion yen for the 1Q – 3Q.
・Consolidated net income was 3.4 billion yen for the 3Q and cumulative 19.4 billion yen for the 1Q – 3Q.
(Note) Specific factor: Among obligors who requested exemption for repayment of part of the principal amount of loans, the Bank lowered the classification of obligors
who requested moratorium on scheduled repayment under the policy of their attorneys-at-low after carefully examining the possibility of collection of loans.
（Billions of yen）

１Q

２Q

３Q

FY3/20
1Q – 3Q

Gross operating
profit

２１.５

２０.９

１９.８

６２.２

Expenses

１１.５

１０.９

１０.５

３２.９

Core net operating
profit

９.９

９.９

９.２

２９.０

Net operating profit

６.９

１１.４

６.３

２４.６

Ordinary profit

５.５

１３.８

８.１

２７.４

Net income３.４

１２.２

２.９

１８.５

Actual credit costs

６.４(0.１)

１.４

７.８

Profit attributable toowners of parent

３.８

１２.１

３.４

１９.４

© 2020SURUGA bank, Ltd. All rights reserved.

Factors of changes compared with the 2Q
Gross
operating
Profit・Decrease in net interest income(primarily decrease in interest on loans)Net
operatingprofit・There was reversal of provision for general allowance
for loan losses for the 2Q resulting from reviewing
the expected loss rate based on results.

Ordinary
profit・There was reversal of provision of individual
allowance for loan losses for the 2Q resulting
from upgrading the obligor classification.
・-0.1 billion yen was posted for the 2Q.
①Reviewing the expected loss rate based on results②Upgrading the obligor classification (improvement intheir earnings, relaxation of repayment conditions, etc.)

Actualcreditcosts

・1.4 billion yen was posted for the 3Q.
①In line with collection of loans from the founderaffiliated companies, the Bank reversed provisions forloan losses (-13.4 billion yen).
②The Bank increased provision for loan losses due tothe specific factor (* mentioned above) regarding singlebuilding apartment loans.

１■Earnings Forecast for the FY3/20
・With a view of the financial results for the 3Q, the forecast for the FY3/20 was revised upward.
・The forecast for ordinary income was increased by 1.0 billion yen to 104.0 billion yen due primarily to an increase in interest on loans compared withthe previous forecast for the FY3/20.
・The forecast for actual credit costs was decreased by 5.0 billion yen from 19.0 billion yen of the previous forecast to 14.0 billion yen with a view of theresult of 7.8 billion yen for the 3Q. For the 4Q, 6.2 billion yen is expected in a conservative estimate in consideration of the result of 6.4 billion yen for the 1Q.
・The forecast for net income (non-consolidated) was increased by 5.0 billion yen from the forecast before the revision to 20.0 billion yen due primarily to thedecrease in actual credit costs mentioned above.
・The forecast for net income (consolidated) was increased by 5.5 billion yen from the previous forecast to 21.0 billion yen.
（Billions of yen）

FY3/20
1Q – 3Q

Previous
forecast
FY3/20 (A)Current
forecast
FY3/20 (B)Change(B) - (A)Ordinary income

８１.１

１０３.０

１０４.０

＋１.０

Core net operating profit

２９.０

３６.０

３７.０

＋１.０

Net operating profit

２４.６

３３.０

３４.０＋１.０

Ordinary profit

２７.４

２２.０

２９.０

＋７.０

Net income

１８.５

１５.０

２０.０＋５.０

Actual credit costs

７.８

１９.０

１４.０

(５.０)

ROE (％)(Net income basis)

１１.４

６.７

８.６

＋１.９

Profit attributable toowners of parent

１９.４

１５.５

２１.０

+５.５

Earnings per share (yen)(Consolidated)

８３.９

６６.９

９０.６

＋２３.７

© 2020SURUGA bank, Ltd. All rights reserved.

2

■ Actual credit costs, share house loans ＜Non-consolidated＞
・Based on the repayment agreement concluded with the founder-affiliated companies (announced on October 25, 2019), the Bank proceeded with collecting loans
from them, reducing the loan balance to 1.8 billion yen as of December 31, 2019 (-41.4 billion yen compared with September 30, 2019). As the balance is 100%
secured with collateral, the Bank reversed all the provisions of 13.4 billion yen for their allowance for loan losses.
・For investment property loans, actual credit costs of 15.7 billion yen were posted for the 3Q due mainly to the specific factor (*).
・For share house loans, actual credit costs were reduced by 1.9 billion yen for the 3Q due mainly to elimination of delinquency resulting from continued relaxationof repayment conditions from the previous quarter as well as upgrading the obligor classification for improvement in their earnings.
(Note) Specific factor: Among obligors who requested exemption for repayment of part of the principal amount of loans, the Bank lowered the classification of obligors
who requested moratorium on scheduled repayment under the policy of their attorneys-at-low after carefully examining the possibility of collection of loans.

・Actual credit costs and Allowance for loan losses（Billions of yen）

Actual credit costs

Item

FY3/20 1Q – 3Q

allowance

３Q

Share house-related loans

(４.８)

(１.９)

１３３.１

Investment property loans

２３.９

１５.７

６１.２

Housing loans

１.０

0.６

２.５

Unsecured loans

0.４

0.２

１.０

Loans to founder-affiliated companies(１３.４)(１３.４)ーBusiness financing other than loans toFounder-affiliated companies, etc.

0.７

0.２

３.９

Total

７.８

１.４

２０２.０

(Note) Investment property loans: Studio apartment loans, Single building apartment loans, Other secured loans

・Share house loans (Status of coverage)
Total
A

Share house claims

Collateral orguarantees, etc.
B

UnsecuredportionCAllowance
D（Billions of yen）
Coverage ratio(B＋D)／AMar. 31, 2019
２５０.３
２０１.９
９１.４
１５８.８
１３９.３
９２.２０％
Sep. 30, 2019
２４６.１
１９９.３
９０.６
１５５.５
１３５.１
９１.７４％
Dec. 31, 2019
２４４.４
１９８.４
９１.１１５３.２
１３３.１
９１.７９％(Note) Based on obligors of share house loans(Note) Covered amount: Estimated amount, calculated by multiplying the covered amount including collateral, etc. with a certain ratio.
(Note) Total credit balance, share house loan receivables: Loans and bills discounted, suspense payments equivalent to loans and bills discounted,
and accrued interest on loans and bills discounted.
© 2020SURUGA bank, Ltd. All rights reserved.

3

■ Outstanding balance, yield, delinquency rate by loan category ＜Non-consolidated＞
・The increase in the delinquency rate of consumer loans (up 0.83% compared with September 30, 2019) was due mainly to an increase in the delinquency rate ofsingle building apartment loans which account for about 50% of all the consumer loans.
・The increase in the delinquency rate of single building apartment loans (up 1.08% compared with September 30, 2019) was mainly because, among loans to
obligors who requested exemption for repayment of part of the principal amount of loans, loans to obligors who also requested moratorium on scheduled
repayment became overdue. (Specific factor on P1)
・The delinquency rate was raised partly because delinquent obligors of share house loans were also delinquent on other loans.
・The Bank launched corporate loans for property investment and asset finance published in the mid-term management plan. (Balance of 4.2 billion yen as ofDecember 31, 2019)

Loan category

Period-end
balance
２,１８６.９

Secured loans

Dec. 31, 2019

（Billions of yen）

３.１４％

Delinquency
rate
５.９１％

Period-end
balance
２,２３１.５

Yield

Sep. 30, 2019

３.１７％

Delinquency
rate
５.０３％

Yield

Housing loans

５６７.０

２.８７％

０.６６％

５８２.０

２.８８％

０.４６％

Studio apartment loans

２０３.７

３.４１％

１.５０％

２１３.０

３.４２％

１.３２％

１,１７５.２

３.３８％

３.４６％

１,１９３.０

３.４１％

２.３８％

Share house loans

１９８.３

１.８０％

４２.５７％

１９９.２

１.８３％

４０.６６％

Other secured loans

４２.５

４.８９％

０.９９％

４４.３

４.８９％

０.９１％

Unsecured loans

２１４.９

１０.１８％

２.００％

２２３.８

１０.１６％

１.６９％

Card loans

１４２.０

１１.４７％

０.７３％

１４７.６

１１.４５％

０.６９％

７２.９７.６７％

４.４９％

７６.２

７.６６％

３.６３％

２,４０１.９

３.７６％

５.５７％

２,４５５.４

３.７９％

４.７４％

４.２

２.0６％

－－－－

Single building apartment loans

Unsecured certificate loans
Consumer loans
Corporate loans for property
Investment and asset finance(Note) Delinquency rate = Loans past due 3 months or more / Loans(Note) Yield: Yield for customers (excluding guarantee fee, accrued interest), period-end balance basis(Note) Yield of studio apartment loans, secured loans and consumer loans are calculated based on originals claims before securitization.
(Note) As the balance is aggregated by loan type, if obligors of share house loans default on scheduled repayment, the delinquency rate ofother types of loans will be affected.
© 2020SURUGA bank, Ltd. All rights reserved.

4

Reference materials

■ Actual Results for the nine months ended December 31, 2019 year-on-year
Factors that increase or decrease profit(year-on-year basis)（Billions of yen）
9 months
ended
Dec.31, 2018
(A)

9 months
ended
Dec.31, 2019
(B)

Year-on-year
Change(B) – (A)

７８.２

６２.２(１６.０)

３５.４

３２.９(２.４)

Core net operating profit

４２.３２９.０(１３.２)

Net operating profit

１３.１２４.６＋１１.４

Ordinary profit(７７.４)

２７.４＋１０４.８Net income(９４.０)

１８.５

Actual credit costs

１２８.１

７.８

＜Non-consolidated＞

Gross operating profit
Expenses

Main factors
Net interest income

・Decrease in interest on loans(due to a decrease in the average loan balance: -9.9 billion yen, anddue to a decrease in yield: -3.0 billion yen)・Decrease in interest and dividends on securities (-3.0 billion yen)

Net fees and commissions

・Fees related to securitization

Net other operating income

・Profit on sales of securitized accounts receivable

Expenses・Decrease in personnel expenses (for overtime work, bonus etc.)
・Decrease in non-personnel expenses(drop in costs of business improvement, including expenses forinvestigation of all cases)＋１１２.６

Gains (losses) on stocks

・Decrease in gain on sales of cross-held stocks after elimination ofsuch stocks (-2.0 billion yen)

(１２０.３)

Actual credit costs

・Decrease in provision of allowance for loan losses(Main factor for
the increase in the previous term: share house loans)（Billions of yen）

ROE (％)(net income basis)(３９.２)

１１.４

＋５０.６

Profit attributable toowners of parent(９６.１)

１９.４＋１１５.６＋120.3２０.０

1０.０

Actualresults
27.4

Previousyear
results(77.4)＋104.8０

Earnings per share (yen)(consolidated)(４１５)

８３＋４９８▲7０.０(15.7)(1.9)＋1.6＋2.4(2.0)

Net fees andcommissions

Net otherOperatingincomeExpenses

Gains(losses)
on stocks▲１００.０Ordinary profit
Net（9 months ended interest
incomeDec. 31, 2018）© 2020SURUGA bank, Ltd. All rights reserved.

ActualCredit
costs

Ordinary profit（9 months endedDec.31, 2019）１

■Yield / Margins ＜Non-consolidated＞
Interest margins (Non-consolidated)

Loans (Average balance / Yield)
Loans (Average balance) (Billions of yen)

Loan-deposit margin (overall)

Yield on loans and bills discounted

Loan-deposit margin (after deduction of expenses, overall)
Net interest margin (overall)

3.43% 3.50% 3.51%

2.28% 2.32% 2.34%

1.42% 1.50%

1.68%

2,984.83.54%

3.30%

1.99%

1.49%

3,120.6

2,700.7

3.61% 3.60%

16/12

17/12

18/12

3.35% 3.20%

3.16%

15/12 16/12 17/12 18/12 19/12

1.74%

Deposits (Average balance / Yield)
Deposits (Average balance) (Billions of yen)
Yield on deposits

3,994.5

1.19%

4,048.9
4,048.5
3,613.4
3,086.7

0.11% 0.10%

15/12

3,228.7
3,093.7

0.09%

0.05%

0.04%

19/12
15/12 16/12 17/12 18/12 19/12© 2020SURUGA bank, Ltd. All rights reserved.

2

■Capital Levels Expenses and OHR
Own capital ＜Non-consolidated＞

Expenses and OHR ＜Non-consolidated＞

Capital adequacy ratio

Gross operating profit

Own capital

12.16%

277.8

12.76% 13.35%

307.6

16/12

Non-personnel expenses

Taxes

OHR

（Billions of yen）

9.83%

339.1

79.3

83.4

（Billions of yen）

87.2

78.2

9.05%
223.6

15/12

Personnel expenses

17/12

18/12

62.2

234.2

19/12

© 2020SURUGA bank, Ltd. All rights reserved.

34.7

36.1

35.5

35.4

32.9

13.7

13.8

13.4

12.1

11.1

45.2%

53.0%

43.7%
18.1

43.2%
19.1

40.7%
18.9

20.3

19.0

2.73.03.1

2.9

2.8

15/12

16/12

17/12

18/12

19/12

3

〈 Inquiries 〉
IR Office, SURUGA bank, Ltd.
Tel : +81-3-3279-5536
e-mail : ir.koho@surugabank.co.jp

The foregoing material contains statements regarding future business performance. These statements are notIntended as guarantees of any specific future performance, which is subject to a variety of risks and uncertainties.
Actual future business results may differ from the targets contained in the present material, due to change in
The external business environment.

© 2020SURUGA bank, Ltd. All rights reserved.