YMFG Business Situation
Summary of Business Results

In international operations, we signed a memorandumof business collaboration and cooperation with theThe Regional Economy

Chugoku and Kyushu international centers of the Japan

In the fiscal year ended March 31, 2019, the JapaneseInternational Cooperation Agency (JICA). With thiseconomy was on a path of modest recovery despite flat

memorandum, through our three Group banks we aim

exports, with sustained increases in production activity

to support efforts by our corporate business partners

and capital investment. Personal consumption andto expand their operations overseas, further invigorate

employment also showed signs of recovery, prompting an

our region and alleviate issues faced by developing

economic rally.

countries. We are the first regional multiple financial

Although our region was affected by flooding acrossgroup to sign such an agreement with multiple JICA

western Japan in July 2018, the economy enjoyed aoffices in Japan. In August 2018, Yamaguchi Bank andmodest recovery. Bolstered by robust domestic and

the Japan Finance Corporation held a joint seminar inoverseas demand, production activity was generally

Dalian, China. Also in China, in September the Group’sfirm. Capital investment increased, centered on thethree banks collaborated with the Japan External Trade

manufacturing sector, as major chemical manufacturers

Organization (JETRO), the Department of Commerce

invested to boost production capacity. Personalof Liaoning Province and other parties for the “2018consumption was also strong, providing a firm foundation

Liaoning Province China–Japan Business Meeting” infor the overall economy.

the city of Shenyang. In February 2019, YMFG’s threeAgainst this backdrop, from the perspective of regionalbanks signed a memorandum of international businessinvigoration and in line with their mission of contributing

collaboration and cooperation with the Shoko Chukin

to regional economic development, regional financial

Bank, Ltd., making us the first regional bank to enter

institutions face requests to deliver stronger financial

such an agreement with Shoko Chukin Bank.

soundness and profitability, supply funding more flexibly
and further enhance their financial services.

Financial Results
On a consolidated basis, total income rose ¥521 million

YMFG Performance

19year on year, to ¥162,593 million, due to higher gains

Amid these financial and economic conditions, supported

on the sale of Japanese government bonds and interestby its shareholders and business partners all YMFG’son loans. Total expenses expanded ¥15,522 million,

officers and employees were united in their efforts

to ¥129,276 million, mainly because of losses on theto strengthen the Group’s management base, bolster

redemption of Japanese government bonds and higher

operating performance and contribute to the region.

credit costs. As a result, income before income taxes fell

During the year, we pushed forward with measures¥15,001 million, to ¥33,317 million, and net income

outlined in the YMFG Medium-Term Management Plan

attributable to owners of the parent decreased ¥9,768

2016, which launched in the fiscal year ended March 31,million, to ¥23,149 million.

2017. This plan set core objectives to “escape from interest

Deposits fell ¥125.0 billion, to ¥9,230.8 billion.

rate competition” (establish a system for the thoroughLoans and bills discounted increased ¥250.6 billion,

evaluation of business viability and provide solutionsto ¥7,408.4 billion as of March 31, 2019, due to theto potential management issues) and “escape from aGroup’s efforts to fulfill its role as a regional financial‘product-out’ mentality” (shift to an approach based on

institution through its function as a financial intermediary

the perspective of what customers want).

and aggressive efforts to meet demand from business

YMFG Annual Report 2019

partners with whom the Group has developed trust-consolidated common equity Tier I capital adequacy ratio

based relationships.

was 13.55%.
Net cash used in operating activities was ¥247.9 billion,

The Group’s holdings of securities came to ¥1,398.0
billion at year-end, down ¥329.8 billion, due to decreases¥107.1 billion more than was used in these activities inin Japanese bonds. This change reflected investment

the previous fiscal year, mainly due to the rise in deposits.

decisions made in consideration of market fluctuations.

Net cash provided by investing activities was ¥339.7

Total assets amounted to ¥10,304.1 billion at fiscalbillion, ¥175.8 billion more than in the previous fiscal year,year-end, down ¥62.4 billion from one year earlier. This

owing to proceeds from sales of securities. Net cash useddecrease was the result of the redemption of bonds within financing activities came to ¥33.7 billion, ¥30.3 billion

stock acquisition rights and reduced holdings of securities.

more than in the previous fiscal year, due to purchases ofAt the end of the fiscal year, the consolidated capitaltreasury stock and the redemption of bonds with stockadequacy ratio for the Yamaguchi Financial Group (uniformacquisition rights. As a result of these cash flows, cash

international standard) was 13.62%. Our consolidated

and cash equivalents at the end of the fiscal year came tototal Tier 1 capital adequacy ratio was 13.58% and our¥1,015.6 billion, up ¥58.2 billion.

Yamaguchi Financial Group, Inc., Management Indices (Consolidated)
Millions of yen
2019Millions of yen
2018

Millions of yen
2017

Millions of yen
2016

Thousands ofU.S. dollars*1
2019

Consolidated total income

162,593

162,072

163,818

166,858

1,464,934

Consolidated net income attributable to owners ofthe parent

23,14932,91731,58732,296

208,568652

47,26937,676

7,840

5,874

Consolidated comprehensive income
Consolidated total net assets

660,958

660,451

617,053

583,168

5,955,113

10,304,140

10,366,548

10,225,782

10,438,005

92,838,454

2,580.74
yen2,653.60
yen2,486.35
yen

2,357.89
yen

23.25
U.S. dollars

Current term net income per share

94.65
yen

133.65yen

128.70yen

132.43yen

0.85
U.S. dollars

Current term net income per share (diluted)

83.27
yen

111.22yen

106.64yen

109.39yen

0.75
U.S. dollars

13.62%

13.29%

13.91%

13.37%

Consolidated total assets
Net assets per share

Capital ratio*2Earnings on equity - increase
Group price earnings ratio

3.53%

5.20%

5.31%

5.62%

9.91 times

9.63 times

9.37 times

7.72 times*1 US dollar amounts have been translated, for convenience only, at the rate of ¥110.99 = US$1.00 as of March 31, 2019.
*2 YMFG calculated its capital ratio according to the uniform international standard (Basel 3).

YMFG Annual Report 201920