YMFG Business Situation
Summary of Business Results

the regions where it operates, pulling together as a uniﬁed

Performance

Yamaguchi Bank, Momiji Bank and Kitakyushu Bank—andﬁnancial group, “One YMFG,” comprising three banks—

During the ﬁscal year ended March 31, 2014, theleveraging its comprehensive strengths. YMFG will also put

Japanese economy remained in a state of gradual recovery.

forth every eﬀort toward developing mutually beneﬁcial

Manufacturing activity continued to pick up, thanks to therelationships with local communities and customers, aimingcorrection to the high yen exchange rate, which bolsteredto provide ﬁnancial services that invigorate our region.

exports, and robust internal demand. Stock prices beneﬁted

Banking operations, which are the core of YMFG’sfrom improved consumer sentiment, corporate earnings

business, are conducted through the eﬀorts of its banks torecovered, personal consumption turned upward—due inmeet the varied ﬁnancial needs of customers in the regions

part to a spike in demand prior to the consumption tax hike,where they conduct business via a wide range of ﬁnancialhousing investment rose, and capital expenditure showed

products through their deposit and loan operations.

signs of an upturn.

In line with the introduction of a government measure

Against this backdrop, the regional economy also enjoyed athat exempts lump-sum donations toward education from

gradual recovery. Overall production activity was solid, withgift tax, Yamaguchi Bank, Momiji Bank and Kitakyushu

robust performance in the mainstay automotive and chemicals

Bank set up and began oﬀering the Kimi no Mirai-e (“forsectors. Public-sector construction grew substantially year onyour future”) ordinary deposit accounts for the lump-sumyear; employment and income conditions trended positively,

provision of educational funds.

with the ratio of jobs to applicants rebounding to a level

We also introduced Kasumin Teiki term deposits, which

exceeding one-to-one; and personal consumption levels

provide customers a sense of closeness with YMFG’s brandwere upbeat.

ambassador, the table tennis player Kasumi Ishikawa.

Meanwhile, the ﬁnancial industry faces the issue ofYMFG has begun employing an environmental rating

conforming to substantial changes in the rules and regulations

ﬁnance system for providing ﬁnancial support to clients’that govern it, including new capital adequacy requirements

eﬀorts toward environmentally friendly management.

and the adoption of international accounting standards.

As part of our international operations to provide

Under these circumstances, in line with their mission of

support for clients making business inroads overseas,

contributing to regional economic development, regional

in July 2013 we entered into an aﬃliate relationshipﬁnancial institutions face vigorous requests to deliver strongerwith the Metropolitan Bank and Trust Company ofﬁnancial soundness and proﬁtability, supply funding more

the Philippines. This move added the Philippines to theﬂexibly and further enhance their ﬁnancial services.

Yamaguchi Financial Group’s Asian network, which
also includes relationships with banks in China, SouthYMFG Performance
Amid these ﬁnancial and economic conditions, supported

2013, we issued $300 million in US-dollar-denominatedby its shareholders and business partners all YMFG’sconvertible bonds to meet the dollar funding needs ofoﬃcers and employees were united in their eﬀorts toclients conducting business overseas. We plan to continue

strengthen the Group’s management base and bolster

striving to become recognized for having strong operations

operating performance.

in Asia by providing overseas business opportunities to ourBased on the YMFG Medium-Term Management Plan
2013, which commenced during the year under review, theGroup worked to deepen its community involvement in22

Korea, India, Thailand and Indonesia. In December

customers and strengthening our funding support and otherconsulting functions.

at year-end, down ¥72.4 billion, due to decreases in Japanese

Financial Results
YMFG’s consolidated operating performance for the year

bonds. This change reﬂected investment decisions made inended March 31, 2014, is outlined below.

consideration of market ﬂuctuations.

Total income amounted to ¥161,082 million, up ¥2,630

Total assets amounted to ¥9,635.0 billion at ﬁscal year-million from the preceding ﬁscal year. The main reasons for thisend, up ¥307.8 billion from one year earlier. This rise wasincrease were higher fees and commissions and a reversal of bad

attributable to growth in loans and bills discounted, based on

debt reserves. Total expenses, meanwhile fell ¥2,995 million,

the increase in deposits, including NCDs.

to ¥111,497 million, mainly as a result of lower operating

At the end of the ﬁscal year, the consolidated capital

expenses and amortization of shares. As a result, income before

adequacy ratio for the Yamaguchi Financial Group (uniform

income taxes grew ¥5,625 million, to ¥49,585 million, and net

international standard) was 12.69%. Our consolidated total

income rose ¥4,003 million, to ¥31,236 million.

Tier 1 capital adequacy ratio was 11.10%, and our consolidated

Although interest rates remained low, due to the expansion

common equity Tier I capital adequacy ratio was 11.10%.

of products and services to meet increasingly diverse customer

Net cash provided by operating activities was ¥526.1

needs and steady sales eﬀorts based on solid communitybillion, ¥403.2 billion higher than in the preceding year, due

relationships, the Group succeeded in boosting deposits

mainly to the net change in call loans and bills purchased. Net¥311.9 billion year on year, to ¥8,765.0 billion as of March

cash provided by investing activities came to ¥54.9 billion,

31, 2014, including negotiable certiﬁcates of deposit (NCDs).

a ¥71.6 billion change from the ¥16.7 billion used in these

Loans and bills discounted increased ¥152.2 billion, toactivities in the previous term. Changes in the amounts of¥5,964.1 billion as of March 31, 2014, due to the Group’spurchases of securities and proceeds from sales of securities

eﬀorts to fulﬁll its role as a regional ﬁnancial institution

were the primary factors. Net cash used in ﬁnancing activities

through its function as a ﬁnancial intermediary and aggressive

amounted to ¥20.0 billion, up ¥17.1 billion, due chieﬂy toeﬀorts to meet demand from business partners with whom thepurchases of treasury stock. As a result of these cash ﬂows,

Group has developed trust-based relationships.

cash and cash equivalents at the end of the year came to

The Group’s holdings of securities came to ¥2,072.0 billion¥874.2 billion, up ¥561.0 billion.

Yamaguchi Financial Group, Inc., Management Indices (Consolidated)
Millions of yen
2014

Millions of yen
2013

Millions of yen
2012

Millions of yen
2011

Consolidated total income
Consolidated net income
Consolidated comprehensive income
Consolidated total net assets
Consolidated total assets
Net assets per share

161,082
31,23634,316
521,562
9,635,044
2,040.39 yen

158,452
27,23351,743
521,423
9,327,236
1,901.30 yen

156,095
17,91929,120472,405
9,115,427
1,720.56 yen

164,323
19,156
7,752
446,2908,758,187
1,624.33 yen

Current term net income per share(current term net loss per share)
Current term net income per share after
stock adjustment
Capital ratio*2
Earnings on equity - increase
Group price earnings ratio

120.66 yen

102.48 yen

66.99 yen

71.18 yen

116.55 yen

102.18 yen

66.88 yen

71.15 yen

12.69%
6.04%
7.70 times

13.34%
5.52%
9.28 times

11.75%
3.92%
11.22 times

11.36%
4.23%
10.81 times

Thousands of
U.S. dollars*1
2014

1,565,119
303,498
333,424
5,067,645
93,616,829
19.83
U.S. dollars
1.17
U.S. dollars
1.13
U.S. dollars*1 US dollar amounts have been translated, for convenience only, at the rate of ¥102.92 = US$1.00 as of March 31, 2014.
*2 YMFG calculated its capital ratio according to the ﬁrst standard through the ﬁscal year ended March 31, 2012. From the ﬁscal year ended March 31, 2013, this ratio is calculated according to the uniform
international standard (Basel 3).

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