SBI Holdings, Inc. (8473) Earnings Call Transcript & Summary

On January 31, excluding Shinsei, we already announced the financial results for SBI Holdings. This time, Shinsei is partially consolidated. Partially by that, I mean that balance sheet is consolidated. But in terms of PL, Shinsei is not included. Now I would like to begin. There is a negative goodwill and the gain on negative goodwill is included. I would like to start. As I mentioned just now, as of the end of December 2021, Shinsei Bank's balance sheet is now consolidated. As for profit and loss, Shinsei Bank becoming a consolidated subsidiary resulted in gain on negative goodwill, which was included in PL. And as for fiscal 2021, only January to March 2022, financial results on Shinsei Bank will be incorporated. And on a full year basis, incorporation of Shinsei Bank's results in consolidated PL will begin next fiscal year. On January 31, we announced results before consolidating Shinsei Bank. And today, we are announcing results partially including Shinsei Bank in our consolidation, balance sheet is included and gains on negative goodwill is also included. On a full year basis, March 16 is the deadline for filing the results of the third quarter. For the term ending March 2022, as I mentioned earlier, Shinsei Bank's results are partially consolidated. But since Shinsei Bank is reporting under J-GAAP business, we are reporting under IFRS adjustments were necessary [ in its ] time. As for major adjustments, valuation of assets and liabilities were carried out at fair value, and this is a provisional treatment, but close to final treatment. There were also adjustments for differences between J-GAAP and IFRS. Main items are as shown here. There were 2 main adjustments. As a result under IFRS -- after IFRS adjustment, Shinsei Bank's balance sheet is JPY 10.2 trillion -- JPY 10.286 trillion and liabilities and net assets are as shown here. Liabilities is [ JPY 9300.4 billion ]. And in comparison to the end of January 31, assets increased JPY 215.3 billion. As for assets and liabilities, total asset is [ JPY 175,592 ]. Asset have substantially increased. As for liabilities, total liabilities is JPY 17.5 trillion. But in case of banks, there are bonds and borrowings which account for a large portion and they account for large weight. On the other hand, this item, customer deposit is also very large. And SBI, [ JPY 11,633 ] is the amount for customer deposits for banking business under SBI. As for impact on PL, how much was the negative goodwill? As I mentioned earlier, JPY 982.8 billion was the net asset and the 47% of equity in SBI is multiplied, and that result in JPY 469.4 billion. And out of JPY 469.4 billion, how much is negative goodwill? The invested amount from SBI is JPY 199.2 billion, subtracting JPY 199.2 billion will be the negative goodwill amount. Furthermore, this JPY 270.2 billion is the amount for a negative goodwill. And IFRS allowance has to be provisioned for performing loans under IFRS basis. This is allowance for credit losses of JPY 68.2 billion. After adjusting for this, JPY 202 billion is the actual goodwill. In terms of P&L, basically, this JPY 202 billion is included. This is the number I explained on the previous page. Otherwise, results from Shinsei are not incorporated in P&L. Including those numbers, overall performance is shown on this page. In every respect, we achieved record high. And even before consolidating Shinsei, all of the numbers were record high. And naturally after consolidating Shinsei [ Bank ], numbers are record high. Profit before income tax expense, profit for the period. In terms of percentage, we are seeing very substantial growth. By business segment. On January 31, on previous occasions, I have discussed results from these business segments, and there has not been much change. This is the performance comparison with major securities group. Ranking is shown. In terms of net operating revenue, we are behind Nomura Holdings in the third quarter, but ordering income and net income because of the gains from the negative goodwill, we have a substantial gap between SBI and Nomura, Nomura being behind. And these are the cumulative number up to the third quarter with the full consolidation and net operating revenue, it should increase more. This is 3 quarters ago. And every year, about JPY 50 billion of profit was posted, and we expect a similar profit going forward. This is performance by segment. And basically, all segments are reporting record high performance or in case of biotechnology, those was substantially reduced. As new SBI Group, we are to achieve dramatic growth together with Shinsei Group as new SBI Group by thoroughly pursuing synergies with Shinsei Bank Group. Already, on the first of January, Mr. Kawashima, then Vice President of SBI Holdings; and Mr. Hatao, the then Executive Officer of SBI Holdings became advisers to Shinsei Bank. And since then, handover already started on February 8 at the Extraordinary Shareholders Meeting, directors elections were approved and as Chairman, Mr. Gomi was appointed, and Mr. Kawashima was appointed President and Representative Director; and Mr. Hatao was appointed Senior Managing Executive Officer. As for Shinsei Bank, we have been conducting a thorough analysis, and this has not been completed yet. But roughly speaking, in various aspects, we see significant room for improvement. And with improvement, we believe that there is expected a large improvement or enhancement in profitability. That is my impression thus far. These are the 5 factors stated in the Art of War by Sun Tzu, the famous 5 factors. The first, the moral law; the second, heaven; the third, earth; fourth, the commander; and the fifth, method and discipline. And when the leader -- for leader, the first factor, the moral law is most important. As the leader goes into the battles. And the wise man or the leader gives careful consideration to the ideal image. And if he can present it in a precise image, the top and bottom will be unified and everyone will be unified together under the moral code. And my impression is that this was not the case at Shinsei Bank. And some companies may go bankrupt and may be purchased. Tim Collins, Ripplewood purchased Shinsei Bank and Mr. Yashiro formerly with Citi became the top of Shinsei. And who took over after that? It was another non-Japanese person, Thierry Porté from Morgan Stanley. As shareholders, there was a change from Tim Collins to Chris Flowers. And effectively, Chris Flowers was the majority shareholder. And then Mr. Toma took over. And then Mr. Kudo took over. There has been a series of changes in the top management at Shinsei Bank. And was there a unified vision, was there a constant, consistent philosophy and vision? It seems to me that there was a lack of such constant vision. For example, in our group, after I founded the group, up to today, under a constant, consistent philosophy and vision, the group has been managed. And this results in unified spirit from the top to bottom and under moral codes, people are unified to achieve results. That is the best organization. However, unfortunately, when it comes to unifying a people's spirit under a vision, it seems that, that was not the case at Shinsei Bank. And it may have been the result of a series of change at the top management at Shinsei Bank. And the importance of the vision is preached not only in the Eastern philosophy, the father of management, Peter Drucker said that for a company establishing values, mission and vision are most important. Other functions basically can be outsourced. Mission -- values, mission and vision, these 3 things cannot be outsourced. But I place that the lack of values, mission and vision might have been the most serious problem at Shinsei. Now as one group, but we have cultivated over the years. In terms of universal values in building businesses, will have to be shared by Shinsei Bank to realize what we desire to achieve. So because of that, since the name represents the substance, we are planning to change the name of the company at Shinsei Bank to be proposed at the upcoming Annual General Shareholders Meeting. And as a majority shareholder, we will be requesting name change. A name change for companies require special resolution at the AGM and approval from the authority. But our -- based as a shareholder, we would like to make a declaration that we will be asking for a name change of Shinsei Bank. And if there is an opposition to this, reasons for opposing should be clarified. That is because the name is very important. And a new wine should be put in a new wine bag. And for new wine, it is important that it be put in a new wine bag. And to change awareness, I believe it is necessary to change the name of the company at Shinsei Bank. The other day for the first time, I met with the executives of Shinsei Bank or including executives, I met with more than 1,000 employees of Shinsei Bank remotely to describe my philosophy of management and part of what I discussed today earlier and group as a one, synergy will be thoroughly pursued. Our group is about realizing synergy. Within our group, when we acquire a new company, the key is how to generate synergy between the existing part of the businesses and acquired new businesses and that is always how we developed our business. And therefore, it is essential that we thoroughly pursue synergy. We have to maximize synergy effect. And by doing so, we will be able to realize repayment of JPY 350 billion of public funds from Shinsei Bank, based on the moral law of this TOB. With the people of Shinsei Bank, I would like to share these universal basic values of business construction. I am fully convinced that these are universal views. What are listed here are quite common, sensible and globally, universal. For example, basic view 1. Adhere to the customer-centric principle. In 1999, when we started our business, we felt that we have to start by being customer-centric principle. We have always advocated customer-centric principle. And at one time, it might seem that there were temporary losses, but public interest ultimately leads to private interest. Basic view 2. Forming a corporate ecosystem and exhaustive pursuit of group synergies. In this day and age of IT and Internet, the concept of corporate ecosystem is more important. There's -- I was reading a book on various complex sciences and I became even more convinced of this. Basic view 3. Thorough devotion to innovative technology. Technology will be the most important key to bringing about change. For example, if we did not have vaccines today, how many casualties would the humanities have suffered? That is the fact. Messenger RNA was developed and used in vaccines. Such a very sophisticated medicine was realized and many things can be overcome. And this applies to anything. And basic view 4, formulate and implement strategies that anticipate the near future. Coming back to basic view 1, what does it mean to adhere to the customer-centric principle? Services with lower fees and more favorable interest rates, services offered in easy to compare fashion at a glance. There are so many financial products. And how can customers select product? Comparison is the only way. Services with transparent customer costs. If cost is not transparent, that is not good. In safe and reliable services, et cetera, seen from customers' perspective, we are offering services and we have to thoroughly pursue such customer-oriented services. And that is why at SBI Securities, what we call basis has been brought down to the minimum possible range. Basis is brokerage commission divided by brokerage creating value. And as a result, we were able -- we are able to gain absolute confidence from customers. And we are able to gain evaluation that SBI is #1, and we were able to achieve by far, a very large market share, 43.7% customer satisfaction results in these results -- these achievements. However, -- looking at retail account number, amount of deposits and ATM fees of Shinsei Bank, retail account number is stagnating and retail bank account balance from March 2017 to March 2021 CAGR is 0.06%, which means that this was basically flat. Why is that? Shinsei Bank's ATM fees have been revised and this has been deteriorating. No wonder why accounts or balances are not increasing. This is a style that we abhor. We have to change this. We have to apply customer-centric principle thoroughly. In the Securities business, we and Shinsei Bank will be co-operating in intermediary business of financial instruments. Our bank agency business APLUS Card accumulation, point investment/granting, sweep account linkage, et cetera. And there are also other services. Simultaneous account opening, other business collaborations such as structured bonds and iDeCo. This is all based on our principle of customer-centric principles. I spoke with Mr. Kudo before and asked why Shinsei chose Monex rather than SBI. Economical reasonableness, the lowest cost were cited as reasons. That is not how we choose. We always think about what is the best for customers. SBI SECURITIES is to become a bank agent and will collaborate in a seamless fashion with Shinsei Bank. And we will have such deposit mechanism to increase customer base and deposit volume. We will also acquire new credit card users and enhance settlement amount through credit card periodic Investment Trust Savings Services, which is popular among retail investors. We will pursue this thoroughly. When we look at Investment Trust Savings Services at SBI SECURITIES, it is growing by leaps and bounds, especially after our partnership with Sumitomo Mitsui Trust Card. We are seeing steep acceleration our SBI MONEY PLAZA, they will be co-managed shops in collaboration with Shinsei Bank. We have regional bank institutions with whom we have business and economic alliances, and the red letters indicate we have strategic capital and business alliance partnership. And 14 banks are managing 22 shops jointly, and we have capital alliance with 8 banks. It means that 6 banks are joining to do something different from before. As for revenue, in 2017, when we began the co-managed shops, when that year is won -- in the term ending March 2022, it is now JPY 244.3 million, in March ending 2021, JPY 310.6 million and in the 9 months of fiscal 2021, it is JPY 244.3 million. We are acquiring customer service know-how and competitive solutions, and we are establishing business opportunities focusing on high net worth customers. Where we do one thing that is not the end of the story, starting investment trust business, that is not the end of the story. For high net worth customers, what products should we offer? Always, we have to think about expanding businesses and diversifying products. In doing so, we can expand business. Loan lending opportunities will be increased to enhance revenue. Many customers -- we already have many customers, securities company has 8 million accounts. And together with Shinsei Bank, we have more than 40 million accounts. But excluding Shinsei Bank, we already had more than 30 million customers. And to these customers, there is different loan, lending -- loan opportunities can be offered, and we can increase opportunities. We have many customers. We have a very large base of customers, and this has a strong significance. To our customers, we are able to offer appropriate products in the way that is most needed by customers, at the time most needed by customers. We have to be a company that is able to deliver in such a way. SBI SECURITIES or MONEY PLAZA, leasing services, put these together. Total asset under management is more than JPY 1 trillion or we have on 17,738 customers who have more than JPY 100 million deposited within our group. So private business, how can we offer business to these customers? Inheritance, business succession, related businesses will also be showing a promising demand going forward, basically to form a corporate ecosystem in a exhaustive pursuit of group synergy. A corporate ecosystem is an economic community based on the interaction of organizations and individuals. This is my definition of corporate ecosystem. In a corporate ecosystem, the company is not just a member of one industry, but rather, it belongs to diverse industries. This relationship activates synergies and stimulates mutual growth. This is the definition of corporate ecosystem written in words. Focusing only on Securities business, focusing on single economic entity, that is no longer viable. We have a banking business, securities business, a very broad ranging business. And there is no way a company that is focused on single economic entity is able to compete effectively against a group such as ours. With the variety of members connected in the corporate ecosystem, we will be able to mutually evolve. For example, if I can list an example of synergies, our core businesses, securities, banking and insurance businesses. And if that's the case, between the core businesses, there is synergy that we can enjoy. And furthermore, within each of the core businesses, we have to make sure there is synergy as well. Then that way, core businesses can grow, so will become more strengthened. And also between different businesses, for example, asset management and securities business, those core businesses, there should be some synergies that we can pursue. And so we are pursuing synergy within the group thoroughly. And Shinsei Bank, just there has to -- not just have to pursue synergies with us, but there are others that you can pursue, APLUS or LAKE can be changed and you just leave the management to those entities. And within the bank itself and APLUS, how you can make sure that the synergy enjoyed there. Between LAKE and APLUS, how you can make sure that there will be synergy produced. None of those were considered at all. So we will give thorough thoughts to that. Within the Shinsei Bank Group, there should be synergies between different businesses and also synergies between the Shinsei and our business should be pursued as well. And that way, with the management resources of Shinsei that we have obtained, this time, there has been a complementary point between the different businesses, and you can actually organically couple them and then make more competitive and more scaled, comprehensive financial business group that you can establish. So between SBI Group and Shinsei Banking Group, you can actually achieve synergies in the following areas, and the efforts have been started as well, and those include market investment businesses. For example, the investment return of Shinsei Bank has been quite low. Why? Because risk-taking was quite minimal, especially after the global financial crisis. They suffered a lot and they don't want to repeat the same mistake and they have been avoiding the risk for quite some time. And so equity holding is quite low, and they are not taking the risk that therefore, investment yield is 0.56%. And within 3 years, there will be redemptions of bonds with high yields within the next 3 years, like shown here. And with the redemption of these bonds, then the investment yield will further deteriorate. And the investment yield of Shinsei as compared to the regional banks' average, as you can see, this risk allocation is quite low, 2.2% only as opposed to 3% of the average for regional banks. So they have been suppressing risks quite a lot. Risk taking -- I'm not recommending risk taking per se, but you have to be rational. And within the range that you can take reasonably, you have to take risks within that range. So those who are in the financial businesses, if you are not taking any risks at all, and then you sell the products and recommend the products with the risk that is taken by customers, then that will be quite stupid and that is quite a farce. Now the collaboration in market sales and treasury, especially in ForEx business. On our part, the ForEx trading -- in ForEx trading, we have a quite competitive spread, and we have been able to offer the foreign exchange opportunities. Because SBI liquidity market is -- has quite a variety of liquidity. In 2020, the ForEx trade value will exceed USD 10 trillion and 31 major financial institutions in Europe, U.S. and Japan are the counterparties. I don't know who are the counterparties in -- for Shinsei, but there is going to be a much higher rate that you can enjoy with us. And overseas business. Of course, Shinsei Bank has been quite active in overseas. And to us, what has been quite valuable with Shinsei International Limited, located in London. After Brexit, which locations that you have to choose in Europe, that's what we have been giving quite a thought to. And there is a certain amount of licenses that they hold. So you have -- you will be able to establish a global offering system. I think that will be the least cost method. And in any case, London, is -- as a city, even though their presence is not as high as it used to be. And SBI Group and Shinsei Bank Group are actively pursuing domestic and overseas M&As in the nonbanking sector, includes collaboration with each other. What is -- can be quite highly appreciated as a merger and acquisition? Is UDC Finance Limited in New Zealand -- Auckland, New Zealand. They acquired this company. This is the largest loan bank in New Zealand with a higher profitability. So this is -- these are the kind of companies that we have to acquire. With the interest spread being such a low, you can actually enjoy more yield in nonbank. So nonbank area is one of the targets for us. And we have been also considering thoughts to this area. And so this part of Shinsei Bank Group has been highly rated. And for our regional revitalization strategy, there is some linkage from there. And as a comprehensive financial company in order to enhance profitability, this would be a positive factor. That's what we thought. And you can actually utilize network of SBI to enhance business infrastructure of Shinsei Bank. We have established a very high-quality network. This can be utilized by Shinsei Bank as much as possible. And in Russia, there is this SBI Bank with full license, a commercial bank in Russia is what we have. But this is a very small bank. So it has not been affected by the situation that we are seeing currently. It's very minor impact that we have seen. And other than that, there are some investments that we had made but they were quite minimal. Not much, very little impact. And in Southeast Asia, we have been making investments in Vietnam and Cambodia. In those areas, the business is growing. And of course, Korea Savings Bank has renewed the record high profits every year. So this is the second largest profitable company within the group following SBI SECURITIES. So in the nonbank areas included in Southeast Asia, we have been making a lot of achievements. And for Shinsei, for example, they can invest in major companies in overseas with the referral from our SBI Group or there could be some various types of loans that they can extend. And this is to expand Shinsei Bank's overseas business base. In Switzerland or Germany or Israel or India, Malaysia, Indonesia, Taiwan, in various countries and regions, there has been information network established. And you can capture the profitability opportunities vividly, and we have been able to travel around from one place to another. And that's the group management with the integration with Shinsei, if we can save cost, then we have to do this as much as possible. And for example, in the general affairs department, and also the professional, sophisticated turned aside for general talent, personnel, the -- both companies can -- or groups can establish the HR-related companies and as we can take advantage of SBI Graduate School University. And so there are various things that we can pursue together. And the professional talent can be developed and selected and hired [ until its end ] developed by each of the businesses when -- as they see the most appropriate. And legal compliance system and risk management system, if there are any things that we can share, then we will have to do so. And of course, there are many lawyers available, corporate layers available and also compliance management system has been established. So both are financial institutions. So we have been giving priority to those areas, of course. But if we can work together, then we have to do so. And the same goes for risk management system. And as for accounting and finance, especially, as soon as possible, you have to make sure that they will be familiarized with the IFRS, so that they can respond immediately. So the integrity of the group has to be established in this area. And the same goes for IT and systems. If there are systems that can be shared, you [ can co-evolve ] the system or share the system so that we can reduce the cost of the systems. The third view, a thorough devotion to innovative technologies. So we have been making investments in the promising startup companies with quality technologies. And also, if we can introduce those technologies, then we have been doing so, so that technologies would diffuse within the industry. The technology, if we defuse the technologies that we have invested in, then we can also enhance our investment companies. So this has been the basic strategy for us, so far. And through the investment funds, since the inception, we have made investment in 1,053 companies, of which 180 companies or 17.1% have already exited through IPOs or M&As. 17.1% is a fairly good number. And we are at the forefront of the financial technologies, and we have been gathering those financial technologies at the forefront with JPY 30 billion, the FinTech Fund was established in December 2015, and the regional banks that have invested in those funds count 29. And also SBI A&B Fund, as we call it, or SBI AI & Blockchain Fund, was established in January 2018 with JPY 60 billion and the 56 regional banks have made investments in this fund. And with both funds, together with the co-investments from SBI Holdings, JPY 127 billion has been invested in together. And you can see the tangible results out of these investments, as you can see. And also JPY 100 billion, which is the largest in Japan, is the fund of SBI 4+5 Fund, that has been established. And this is targeted at Society 5.0 and Industry 4.0, various companies in these areas and Metaverse and Web 3.0. The areas that match the trend of the times are targeted. And more than 50, 5-0 regional financial institutions have been participating including the institution investors leading financial institutions and leading operating companies, more than 200 such companies have become the investors. And these are the companies that have made investments, and those that are circled in red have been already going public. And SBI Group and Shinsei Bank Group will mutually collaborate on investment opportunities, promote network expansion and strengthen full hands-on venture company support system. And investment information will be shared as much as possible, so that both can co-invest in promising companies or one of us -- if one of us cannot afford to make investments then the other can, so that we can make sure that there will be no case where none of us will invest in promising companies. And Shinsei is not just targeted at venture company investment, but they have been doing quite a lot in buyout in real estate businesses. And as for the sharing of business expenses, debt financing is going to become more important in the future. The government guarantee will expire in 3 years. And so what has been done in pandemic could go [ bust ]. And then we can take advantage of debt financing. And this can be done by Shinsei as well because they are quite strong in project financing and the keystone partners that we have made have a 1/3 stake in has a wide variety of experiences in those areas. And what Shinsei has not been so active is a digital space business. They have been doing very little in this business, but I really hope that Shinsei, in this digital space business, will be more active in various ways, especially digital asset banking is something that I hope they can work together with us in. And this is Digital Asset Banking, the new business format model. The Sygnum Bank in Switzerland is an example. And this is the kind of things that we would love to establish in the future. We have made investments in Sygnum as well. So in various parts of this business, we are desiring to do a lot of different businesses, and we are now gathering insights. Now when you say FinTech, it represents financial technologies, but we have to go beyond that. And there will be more accelerated digitalization in all areas of society, and various businesses will materialize in this area, and the age of Web 3.0 will get started. And so FinTech 2.0 is about digital financial ecosystem. But from there, we will transition to Web 3.0. So finance will be the core, but we have to become the business formats that will transcend finance. So digital space ecosystem, in other words, is something that we work to create together with Shinsei Bank. Now in various areas, then we are hoping to build next-generation platforms, and we have been already taking specific actions. For example, STO in this year, we are hoping to provide integrated issuance, distribution and custody functions, the Security Token Offering. In other words, and in the Metaverse in NFT market, SBINFT, which is a marketplace business has been already taken up. And also in the SBI Art Auction in digital technologies has been making presence. And in Metaverse -- so in the past, there used to be what was called Second Life, which has attracted popularity at one time. But back then, AR or VR was not grown enough. And what was fatal was that in -- the blockchain was not introduced in this virtual space. But now in the virtual space, crypto assets have been making inroads. And we can anticipate at least that kind of era will come. So there are -- there is a company that has changed its name to Meta, even, a major company in the U.S. So you have to get ahead of the curve. And so they have changed this familiar name to Meta. So U.S. companies have something different in that sense, I believe, especially those companies that have made a leapfrog growth, is different in nature. And CBDC or Central Bank Digital Currency, in the Beijing Olympics in China, they made some attempts but they were not that successful because it was not that used. But in this area, we have connection with RC in the U.S. or joint venture in Japan through those entities or SBI financial economy risk issued through those entities, we are hoping to make contributions to establishing the system. And as for STO, in equity or bonds or asset-backed or real estate backed STOs, issuance has been experimented. And for us, in order to create the distribution, secondary distribution market, we want -- we have been taking actions to produce PTS. And possibly, SMBC and Nomura are also participating in market-makers, major entities in the world are now participating and what -- as they say. And ST Research Consortium has been established by Mitsubishi UFJ Trust and Banking Corporation. And the Proposal on Digital Securities PTS has been -- is going to be made. And we have been using Progmat and what we are doing with Nomura can be used as well. So we will be agile and flexible. And if there is something else that is more promising, then we have to make sure that they can be used as well. And SBI Financial and Economic Research Institute has been started up gradually. And the new quality researchers are held in this institute. Now basic view 4. Formulate and implement strategies that anticipate the near future. We have overall strategies and individual strategies in SBI Group. We have always had these strategies. For the overall strategies, mainly I'm looking at social issues and national goals. And we -- I am coming up with a group-wide effort that while keeping an eye on the changing times and make decisions on the overall strategies. And then based on that, each subsidiary will come up with individual strategies, so that they can be aligned in the same direction. And the Shinsei Bank, through the implementing of specific individual strategies. So I hope that it will start to achieve sustainable growth. Group individual strategies of the business units can be established based on the overall strategies and this will create efficient synergies and strengthen the sense of unity among them. And so you will proactively contribute to regional revitalization through value co-creation with major economic entities and local communities. It has been pursued more than -- since more than 3 years ago. And each business unit has been coming up with individual strategies and implementing them. So Shinsei Bank can utilize their resources, so that they can endeavor towards expanding the profitability of regional financial institutions. Well, then what sort of businesses will be helpful for improving the profitability of regional financial institutions? And so I have given 5 examples. So first of all, is credit guarantee business. So even up until now, Shinsei Bank has done this business. We want to make this more, want to expand this more. And in order to do that, there are various things that could be very useful. So we want to first of all build the Regional Financial Institution Support Platform between us [ SBI ] Group and Shinsei Bank. So we will build this platform and offer these different services, financial products and lending and investment opportunities. So the 2 companies will offer it to regional financial institutions one after another, and the return for that is the fees and commissions income. And the regional financial institutions will then offer that to local companies, regional financial institutions and local municipalities and they will also receive returns in fees and commissions. So they benefit and we benefit, so the 3 parties will all benefit together. So it's the good for all 3 parties. And it so happens that there's been a lot of deregulation and loan bank domain is now becoming a new revenue source for the regional financial institutions. And so this trend is coming. So powerful regional banks are now becoming -- transforming into a holding company structures. So this is the trend. But there is some regional financial institutions who do not have much capability to do that. What do we do with them? Well, then we offer our platform for them to use. So first is the credit guarantee business. So Shinsei Bank has Shinsei Financial Service, SecondXight analytica, this is an investee company. So the credit guarantee can be offered on a full lineup basis. And in fact, the balance is now JPY 226.8 billion in terms of guarantee balance. And as you can see, there are 12 financial institutions where credit guarantee services are provided. So if we -- we're suggesting that expands this business furthermore. And there are regional financial institutions, which we have good relationship. We can refer Shinsei Bank to them and they can expand the credit guarantee business. For unsecured loans, Lake ALSA is actually performing well. They have a high growth rate. So again, we can refer our customers and our network to Shinsei Bank for them to leverage. Next is the Neo-bank platform called BANKIT. This is a very good platform that was built by APLUS at quite an early stage. I heard that they built this mechanism. But like I said earlier, BANKIT from -- by APLUS behind it. They do not have any banking entity in it. So this itself, alone is not sufficient. This is just offering a banking app. That is why they are not able to have many more -- are not able to increase the number of users, and that's what was happening with us APLUS. But now SBI Group is now offering different banking apps to regional banks. So if we can build it into our system, then we will have the ability to have more users. So this is a BaaS model, Banking as a Service model. And BANKIT can become a hub for the regional financial institutions. So APLUS as has created a very nice service at a very early stage. But Shinsei Bank really needed to be behind it and generate more synergies. And had they done that, maybe BANKIT would have been different, but they were not able to do that. But we think we can grow this business. Next is structured finance business. Shinsei Bank is known to be strong in structured bank business. They have done project financing and different types of structured finances. And they have also done real estate-related securitization businesses, or project finance. So these are the areas of business they have engaged in. And I think if you look at this breakdown, if you look at it in terms of the balance of operating assets, they have most in real estate corporate loans. And then they have project finance next. And in Japan recently, have seen solar energy or wind power, so green project financing. And overseas, this public-private partnerships, so these are infrastructure project financing, PPP for short. They have a substantial percentage here, 1/3, 34%. In any case, they have nonrecourse loans. And in different areas, they do have a great -- a substantial expertise in structured finance business. That is why they need to strengthen this more. They are strong already, so they need to even strengthen that furthermore. So as they focus on the partnership with regional financial institutions for creating value together, Shinsei Bank can effectively utilize our network. And we have been investing in green projects as well. So they can do project finance of those companies or they can do syndicated loan for regional financial institutions, and they can become arrangers for providing different fundings or advisories, so they can offer different types of financial solutions. In the renewable energy sector, we have a company called SBI Energy. This is a farm-based solar power generation. Farm-based generation is a case where they install solar panels on top of the farm plants. But if it's farming of beans, for example, they don't have to have the sunlight all day long. So if they can -- you can tilt the panels and as long as there's some light from a tilted angle, the crops can still grow. So if the solar power generation can be done on those farms, then the farmers can also earn from power generation and selling electricity. And WIND-SMILE, an investing company, they do have a variety of power source development projects like solar power, small wind power. And then there's Eco Research Institute. This is a very interesting company. So there's municipal waste, and they can create biomass fuel from municipal waste. They have a proprietary technology to do that. And we are planning to establish a joint venture with Eco Research Institute, and we are considering business development in cooperation with local financial institutions and local municipalities. They are the ones that treat municipal waste. So with this new technology, they can develop this business. So there's different ways of using this, even for the private companies as well. So we will announce this more in recent days. So in renewable energy space, there's a substantial demand for financing, and we have opportunities just with these 3 examples. And we believe that Shinsei's expertise can be fully utilized. Also it's not just about enhancing the earnings capability of regional financial institutions, but we are looking for things to really stimulate the community, the regional community. And we are now collaborating with a company called Balnibarbi. This is an example from Awajishima Island. So it was nothing. It was a completely vacant land, but -- this is a restaurant that uses local produces and accommodation facilities with a participation of a local company. And with this development, we have been able to revitalize the entire region. So this is the sort of the project that we could work with Shinsei Bank. So this is for the revitalization of the region. Next is real estate. Development of high-quality real estate. So for example, nonrecourse loans or structuring of real estate funds, private funds, private REITs, small-lot securization of individual investors or offering this sort of information to retail customers selling these real estate [ domestic ] investment products by the SBI Group. So this is another area of collaboration. This is Lease business. So Shinsei Bank has a subsidiary called Showa Lease (sic) [ Leasing ]. I think they probably purchased about the same amount as the others during the [ data reported ]. But we were not doing general leasing. We were -- ORIX is an area -- this is an area where ORIX has been a longtime player. But leveraging the database of our corporate customers, we can, together with the regional financial institutions, we can refer clients to Showa Lease (sic) [ Leasing ]. Meanwhile, as for the high net worth customers of Showa Lease (sic) [ Leasing ] or for clients who are considering tax saving measures like the regional companies, they can offer SBI Leasing service, which we operate. So we can cross-sell, we can introduce -- refer customers to each other. And the fifth point is supply chain finance business. This is targeting local SMEs, how to improve their cash flows, cash positions and also improve the accuracy of data. So by using blockchain technology, we can do supply chain financing. So for example, taking into account the sellers of credibility, this supply chain finance was -- support the early funding of seller companies by purchasing their accounts receivable. And also, we can support the cash flow SMEs by incorporating reverse factoring service into the supply chain. We have built a joint venture with our 3 in the United States to do this blockchain technology leverage business, so we can implement technology here. And there's also one called RootAnt in Singapore, which we invested in. And also, there's a company at the local subsidiary of Hong Kong. And we together will develop joint business to launch SBI Banco Platform. It's a supply chain finance platform that utilizes Corda's blockchain technology, and we will begin implementing this with domestic companies. So now these are the major topics after the announcement of financial results before the consolidation of Shinsei Bank. One is on the new partnership with Tokyu Point and d Point expand its multipoint economy. This is looking at Rakuten's ecosystem. They have been issuing Rakuten point and continue to issue after another to expand this ecosystem. But what's happening is that they are actually decreasing, deteriorating in operating profit ratio. Actually, this is ordinary profit ratio here. But the point here is increasing cost. And so it becomes difficult and difficult, it becomes a downward pressure on the profit. We do not take those methodologies at Rakuten, so their profitability is deteriorating. So this is -- if you look at the major changes in the redemption rules of the points, you can see it's been frequently revised. And you can see customers are turning. And currently, Rakuten Securities has a 1-month waiting list. Normally, it should be 1 week, but there's 1 month waiting list to process the transfer mutual funds to other security companies. And there are many clients, customers who are transferring to SBI Holdings. Why is that? Because I think Rakuten Securities' changes in point award system is perceived to be a negative change by the companies. And in Rakuten's parent entity, they're really falling apart because of the telecom business, and they're generating a large amount of losses. Now maybe if this business was strong and solid, maybe they would have been able to support Rakuten's point award system, but they are not able to do so. So -- and in light of that, you see this transfer of the investment trusts. So we will not go with that methodology. We will not do the self-containing point ecosystem. We actually abolished SBI Point, our in-house point system. And we are now collaborating with T Point, V point, Ponta Point, newly Tokyu Point and d POINT. Through partnerships, we will develop and expand multi-point ecosystem because that is more strategically more competitive. So our -- I have been saying maybe 1.5 years or so that open alliance is our main strategy. So it's not just partnering one party or one partner exclusively. We want to be open if they have a very competitive edge and sales network or a channel, then we will widely collaborate with those partners. So our multipoint ecosystem is becoming quite large. And I couldn't mind having [ Dockdem Point ] join our League. In fact, I welcome them because like I've been saying from before, it should be customers' choice. Our job is to give as many options as possible to customers because that would be most beneficial for them. Now Sumishin -- SBI Sumishin Net Bank, we have decided to have them go public and the listing is scheduled for March 24, 2022. And we will be able to accelerate the rollout of Neo-bank. And they will become an equity method affiliate of SBI Group. Our holding will be -- become about 27.86%. So this is just the plan but down from 50% to 27.86%. And they will select to be listed in prime market. And now bio business, this has really been dragging our performance for a long time, but this is now over. We have now begun considering liquidation. And we have finished selling all our shares. So this has been completed. So that is all from me. That is the end of my presentation, and I would like to invite questions from the floor. [Statements in English on this transcript were spoken by an interpreter present on the live call.]