YMFG Business Situation
Summary of Business Results

together to leverage our comprehensive Group strengths
as “One YMFG.”

Performance

YMFG will also put forth every effort toward developing

During the fiscal year ended March 31, 2015, despite

mutually beneficial relationships with local communities

some signs of weakness the Japanese economy remainedand customers, aiming to provide a variety of financial

in a state of gradual recovery. Manufacturing activity

services that invigorate our region.

was lackluster in some areas, affected by a backlash in

Banking operations, which are the core of YMFG’s

demand following the consumption tax hike, but began

business, are conducted through the efforts of its banks toto rebound in the second half of the year thanks to themeet the varied financial needs of customers in the regions

impact of overseas economic recovery, particularly in thewhere they conduct business via a wide range of financial

United States. The employment situation also continued toproducts through their deposit and loan operations.

improve steadily, leading to firm personal consumption.

In deposits, we ran an integrated three-bank campaign

Meanwhile, the region continued to enjoy a modest

under the name of “YMFG Thanksgiving,” stressing ourrecovery. Overall production activity was solid, with strong
performance centering on the automotive sector, andappreciation for customer support of our operations to date.
In June 2014, we set up the Information Strategy Group

employment and income conditions improved. Affected bywithin YMFG’s Business Strategy Planning Department andthe consumption tax hike, however, personal consumption

established Solution Operating Departments at each of ourwas sluggish, as demonstrated by home electronics sales

three Group banks. These organizations are designed toand unit sales of new passenger cars.

share and make use of information throughout the Group

Under these circumstances, in line with their mission ofin order to offer the best possible solutions to the issues

contributing to regional economic development, regionalcustomers face. These departments will step up efforts tofinancial institutions face vigorous requests to deliver stronger

provide information in a timely manner and support thefinancial soundness and profitability, supply funding more

expansion of our networks.

flexibly and further enhance their financial services.

In May 2014, we set up a regional invigoration fundthrough the collaboration of our three banks, Nishi-YMFG Performance

19

Chugoku Shinkin Bank, Daiwa Securities Group’s

Amid these financial and economic conditions, supported

headquarters, Yamaguchi Capital and REVIC Capital,

by its shareholders and business partners all YMFG’sa fund-operating subsidiary of the Regional Economy

officers and employees were united in their efforts toVitalization Corporation of Japan (REVIC). By supporting ourstrengthen the Group’s management base, bolster

business partners, this fund is intended to have economic

operating performance and contribute to the region.

effects for the entire region and help increase employment.

Based on the “YMFG Medium-Term Management

In international operations, in March 2015 we signed aPlan 2013,” which commenced in the fiscal year ended

memorandum of understanding involving a business tie-up

March 31, 2014, as a financial Group with three banks—with Vietcombank, a leading bank in Vietnam. This move

Yamaguchi Bank, Momiji Bank and Kitakyushu Bank—

was aimed at strengthening our Asian network.

we worked to strengthen ties with the banks’ regions.

In March 2015, we issued $300 million in US dollar-Furthermore, in collaboration with YM Securities, YM

denominated convertible bonds to meet the dollar funding

Consulting and other Group companies, we are working

needs of clients conducting business overseas.

YMFG Annual Report 2015

bonds. This change reflected investment decisions made in

Financial Results
YMFG’s consolidated operating performance for the year

consideration of market fluctuations.
Total assets amounted to ¥10,195 billion at fiscal year-ended March 31, 2015, is outlined below.
Total income amounted to ¥161,437 million, up ¥257

end, up ¥560 billion from one year earlier. This rise wasmillion from the preceding fiscal year. The main reasons for

attributable to growth in loans and bills discounted, based

this increase were higher interest and dividends on securities.

on the increase in deposits, including NCDs.

Total expenses, meanwhile, rose ¥533 million, toAt the end of the fiscal year, the consolidated capital¥112,122 million, due to such factors as an increase inadequacy ratio for the Yamaguchi Financial Group (uniform

other operating expenses. As a result, income before

international standard) was 13.43%. Our consolidated

income taxes decreased ¥276 million, to ¥49,315 million,

total Tier 1 capital adequacy ratio was 11.73%, and ourand net income fell ¥719 million, to ¥30,523 million.

consolidated common equity Tier I capital adequacy ratio

Although interest rates remained low, due to theexpansion of products and services to meet increasingly

was 11.73%.
Net cash provided by operating activities was ¥227

diverse customer needs and steady marketing efforts basedbillion, ¥299 billion lower than in the preceding fiscal year,

on solid community relationships, the Group succeeded

mainly due to the net change in loans and bills discounted.

in boosting deposits ¥444 billion year on year, to ¥9,209

Net cash used in investing activities was ¥177 billion, abillion, including negotiable certificates of deposit (NCDs).

¥232 billion change from cash provided by these activities

Loans and bills discounted increased ¥264 billion,in the previous year, principally because of increased

to ¥6,228 billion as of March 31, 2015, due to thepurchases of securities. Net cash provided by financing

Group’s efforts to fulfill its role as a regional financial

activities amounted to ¥19 billion, a change of ¥39 billion

institution through its function as a financial intermediaryfrom the cash used in these activities in the fiscal year

and aggressive efforts to meet demand from businessended March 31, 2014. The main changes were in thepartners with whom the Group has developed trust-categories of subordinated bonds payable and purchases

based relationships.

of treasury stock. As a result of these cash flows, cash andThe Group’s holdings of securities came to ¥2,324 billion
at year-end, up ¥252 billion, due to increases in Japanese

cash equivalents at the end of the fiscal year came to ¥943billion, up ¥69 billion.

Yamaguchi Financial Group, Inc., Management Indices (Consolidated)

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

Millions of yen
2015

Millions of yen
2014

Millions of yen
2013

Millions of yen
2012

161,437
30,52375,211
578,388
10,195,184
2,346.56
yen
120.88yen
108.24yen
13.43%
5.61%
11.44 times

161,180
31,242
34,322
521,470
9,635,044
2,040.02
yen
120.68yen
116.57yen
12.69%
6.04%
7.70 times

158,452
27,23351,743
521,423
9,327,236
1,901.30
yen
102.48yen
102.18yen
13.34%
5.52%
9.28 times156,095
17,91929,120472,405
9,115,427
1,720.56
yen
66.99
yen
66.88
yen
11.75%
3.92%
11.22 times

Thousands ofU.S. dollars*1
2015

1,343,405
253,999625,872
4,813,081
84,839,677
19.53
U.S. dollars
1.01
U.S. dollars
0.90
U.S. dollars*1 US dollar amounts have been translated, for convenience only, at the rate of ¥120.17 = US$1.00 as of March 31, 2015.
*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 theuniform international standard (Basel 3).

YMFG Annual Report 201520