YMFG Business Situation
Summary of Business Results

In international operations, in May 2017 the three
Group banks formed business alliances with the Ho Chi

Performance

Minh City Development Joint Stock Commercial Bank,

During the fiscal year ended March 31, 2018, thewhich is headquartered in Ho Chi Minh City, in theJapanese economy was characterized by modest

Socialist Republic of Vietnam. In June 2017, Yamaguchi

recovery. With exports showing signs of a rebound,Bank entered a business tie-up with Japan Financeproduction activity and capital investment increased.

Corporation related to financing via a standby creditPersonal consumption also sustained a modest recovery,system. Furthermore, in July 2017, the three Groupamid ongoing improvements in the employment andbanks joined other banks in the same consortium (theincome environments.

Regional Bank Integrated System), Joyo Bank, Hyakujushi

In this environment, the regional economy was marked

Bank, Juroku Bank and Nanto Bank to jointly hold theby moderate ongoing recovery. Bolstered by growing

Indonesia Business Gathering in Jakarta 2017. Following

exports, production activity was generally firm, with thethis meeting, the YMFG Vietnam Seminar was held inautomotive and chemical sectors showing particularlyDecember 2017 and the YMFG Business Gathering inhigh levels of growth. Personal consumption was also

Thailand 2018 in February 2018.

strong, amid improvements in the employment andincome environments.
Against this backdrop, in line with their mission ofcontributing to regional economic development, regional

Regarding our overseas support system, we are steadily
reinforcing our Asian network. Going forward, we willcontinue to support customers’ efforts to develop theirbusinesses in Asia.

financial institutions face requests to deliver stronger
financial soundness and profitability, supply funding more
flexibly and further enhance their financial services.

Financial Results
YMFG’s consolidated operating performance for the year
ended March 31, 2018, is outlined below.

YMFG Performance
Amid these financial and economic conditions, supported¥162,072 million, due to a decrease in gains on the saleby its shareholders and business partners all YMFG’sof Japanese government bonds and the change from aofficers and employees were united in their efforts toreversal to a provision of the allowance for loan losses.

strengthen the Group’s management base, bolster

Total expenses declined ¥3,265 million, to ¥113,754

operating performance and contribute to the region.

million, mainly because of a decrease in operating

During the year, we pushed forward with measuresexpenses. As a result, income before income taxes rose

outlined in the YMFG Medium-Term Management Plan

¥1,519 million, to ¥48,318 million, and net income

2016, which launched in the fiscal year ended March 31,

attributable to owners of the parent increased ¥1,330

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

million, to ¥32,917 million.

rate competition” (establish a system for the thoroughDeposits expanded ¥126.0 billion, to ¥9,355.8 billion.

evaluation of business viability and provide solutions

This rise stemmed from our expansion of products andto potential management issues) and “escape from aservices to meet increasingly diverse customer needs,‘product-out’ mentality” (shift to an approach based on

as well as steady marketing efforts based on solid

the perspective of what customers want) and establishedcommunity relationships.

“consulting first” as a behavioral guideline.

21

Total income fell ¥1,746 million year on year, toYMFG Annual Report 2018

At the end of the fiscal year, the consolidated capital

Loans and bills discounted increased ¥406.5 billion,to ¥7,157.8 billion as of March 31, 2018, due to theadequacy ratio for the Yamaguchi Financial Group (uniformGroup’s efforts to fulfill its role as a regional financial

international standard) was 13.29%. Our consolidated

institution through its function as a financial intermediary

total Tier 1 capital adequacy ratio and consolidated

and aggressive efforts to meet demand from business

common equity Tier I capital adequacy ratio were 13.29%.

partners with whom the Group has developed trust-Net cash used in operating activities was ¥140.8 billion,¥330.9 billion less than was used in these activities in thebased relationships.
The Group’s holdings of securities came to ¥1,727.8

previous fiscal year, mainly due to the rise in deposits. Netbillion at year-end, down ¥172.4 billion, due to decreases

cash provided by investing activities was ¥163.9 billion,in Japanese bonds. This change reflected investment¥90.1 billion less than in the previous fiscal year, owing todecisions made in consideration of market fluctuations.

purchase of securities. Net cash used in financing activities

Total assets amounted to ¥10,366.5 billion at fiscal year-

came to ¥3.4 billion, ¥0.1 billion less than in the previousend, up ¥140.8 billion from one year earlier. This growthfiscal year. As a result of these cash flows, cash and cash

was the result of a rise in loans, against the backdrop ofequivalents at the end of the fiscal year came to ¥957.3

higher deposits.

billion, up ¥19.8 billion.

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

Millions of yen
2017

Millions of yen
2016

Millions of yen
2015

Thousands ofU.S. dollars*1
2018

Consolidated total income

162,072

163,818

166,858

161,437

1,525,527

Consolidated net income attributable to owners of
the parent

32,91731,58732,29630,523309,836

Consolidated comprehensive income

47,26937,676

7,840

75,211444,927

Consolidated total net assets

660,451

617,053

583,168

578,388

6,216,604

10,366,548

10,225,782

10,438,005

10,195,184

97,576,694

2,653.60
yen2,486.35
yen

2,357.89
yen2,346.56
yen

24.98
U.S. dollars

Current term net income per share

133.65yen

128.70yen

132.43yen

120.88yen

1.26
U.S. dollars

Current term net income per share (diluted)

111.22yen

106.64yen

109.39yen

108.24yen

1.05
U.S. dollars

Capital ratio*2

13.29%

13.91%

13.37%

13.43%

Earnings on equity - increase

5.20%

5.31%

5.62%

5.61%

9.63 times

9.37 times

7.72 times

11.44 times

Consolidated total assets
Net assets per share

Group price earnings ratio*1 US dollar amounts have been translated, for convenience only, at the rate of ¥106.24 = US$1.00 as of March 31, 2018.
*2 YMFG calculated its capital ratio according to the uniform international standard (Basel 3).

YMFG Annual Report 201822