Sbi Holdings Inc Ord

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 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, Shisei Bank's balance sheet is now consolidated as for profit and loss. Shinsei Bank becoming 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 from Shinsei Bank will be incorporated. And on a four-year basis, incorporation of Shinsei Bank's results in consolidated PL will begin next fiscal year. On January 31st, 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 four-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, Shinseibank's results are partially consolidated, but since Shinseibank is reporting under JGAB and since we are reporting under IFRS, adjustments were necessary and it took 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 JGAP and IFRS. Main items are shown here. There were two main adjustments as a result. After IFRS adjustment, Shinsegae Bank's balance sheet is 10.2 trillion, 10.286 trillion, and liabilities and net assets are shown here. Liabilities is 9,300.4 billion, and in comparison to the end of January 31st, assets increased 215.3 billion. As for assets and liabilities... Total asset is 175,592. Assets have substantially increased. As for liabilities, total liabilities is 17.5 trillion. But in case of banks, there are bonds and borrowings which account for a large portion, and they account for a large weight. On the other hand, this item, customer deposit, is also very large. And SBI-11633 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, 982.8 billion was the net asset, and 47% of equity in SBI is multiplied, and that results in 469.4 billion yen. And out of 469.4 billion yen, how much is negative goodwill? The invested amount from SBI is 199.2 billion. Subtracting 199.2 billion will be the negative goodwill amount. Furthermore, this 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 68.2 billion yen. After adjusting for this, 202 billion is the actual In terms of P&L, basically, this 202 billion yen 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, the 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 31st, on previous occasion, 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, net operating revenue should increase more. This is three quarters ago, and every year about 50 billion yen 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, loss 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 1st of January, Mr. Kawashima, the then Vice President of SBI Holdings, and Mr. Hatao, the then Executive Officer of SBI Holdings, became advisors to Shinsei Bank. And since then, handover already started. On February the 8th, 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 Shinsaibank, 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. With improvement, we believe that there is expected a large improvement or enhancement in profitability. That is my impression thus far. These are the five factors stated in the Art of War by Sun Tzu, the famous five 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 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 cause. And my impression is that this was not the case at Chinse Bank. And some companies may go bankrupt and maybe purchase Tim Collins' Ripplewood purchased the Shinsei Bank, and Mr. Yashiro, formerly with Citi, became the top of Shinsei. And who took over after that? It was another known Japanese person, Terry Porte 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 change in the top management at Shinsaibank. 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 a moral cause, people are unified to achieve results. That is the best vision. organization. However, unfortunately, when it comes to unifying people, people's spirit under a vision, it seems that that was not the case at Shinsei Bank. It may have been the result of a series of change at the top management at Jinsei 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, missions, and vision are most important. Other functions basically can be outsourced. mission, values, mission, and vision, these three things cannot be outsourced. But I believe the lack of values, mission, and vision might have been the most serious problem at Jinsei. Now, as one group, what 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 Jinsei Bank to be proposed at the upcoming annual general shareholders meeting. And as a majority shareholder, we will be requesting name change. And name change for companies requires special resolution at the AGM and approval from the authority. But at least as a shareholder, you would like to make a declaration that we will be asking for a name change of Shinsei Bank. If there is an opposition to this, reasons for opposing should be clarified. That is because the name is very important and 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 a 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 business and acquired new business 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 350 billion yen 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, sensical. And globally universal. For example, basically one 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 two, 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. I was reading books on various complex sciences, and I became even more convinced of this. Basic few three, 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 basically for 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 and safe and reliable services. Etc. Seen from customers perspective, we are offering services and we have to thoroughly pursue such customer oriented services, and that is why at SPI Securities What we call basis has been brought down to the minimum possible range. Basis is brokerage commission divided by brokerage trading value. And as a result, we are able to gain absolute confidence from customers. And we are able to gain evaluation that SBI is number one. 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 deposit 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 We will be cooperating in intermediary business of financial instruments or bank agency business, a plus card accumulation, point investment, granting, sweep, account linkage, etc. And there are also other services. simultaneous account opening, other business collaborations such as structured bonds and IRECO. This is all based on our principle of customer-centric principle. I spoke with Mr. Kudo before and asked why Shinsei chose Monex rather than SBI. economic 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 saving service, which is popular among retail investors. We will pursue this thoroughly. When we look at investment trust saving services at SBI Securities, it is growing by leaps and bounds, especially after our partnership with Mitsui, Suzumi Tomomitsu Trust Card. We are seeing steep acceleration. or SBI Money Plaza, there 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 the 14 banks, are managing 22 shops jointly, and we have capital alliance with eight banks. It means that six 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 one, in The term ending March 2022, it is now 244.3. In March ending 2021, 310.6. And in the nine months of fiscal 2021, it is 244.3. 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 security company has 8 million accounts. And together with Shinseibank, we have more than 40 million accounts. But excluding Shinseibank, we already had more than 30 million customers. And to these customers, various 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 a 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 1 trillion, or we have 17,738 customers who have more than 100 million deposited within our group. Private business, how can we offer business to these customers? Inheritance, business succession, related businesses will also be showing promising demand going forward. Basic view to form a corporate ecosystem in 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, a 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 themselves will become more strengthened. Thank you. 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 our group, apparently. And the Shinsui Bank just has to, not just have to pursue synergies with us, but there are others that you can pursue. Atlas or Lake can be changed, and you just leave the management to those entities. And within the bank itself, Annapolis, how you can make sure that there's synergy enjoyed there. And between the lake and Annapolis, 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 part 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? Why? because risk-staking 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. Therefore, investment yield is 0.56%. And within three years, there will be redemptions of bonds with high yields within the next three 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 bank's 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 products with the risk that is taken by customers, then that would be quite stupid and that is quite a farce. Now, the collaboration in market sales and treasury, especially on forex business, on our part, the forex trading, in forex trading we have quite competitive spread and we have been able to offer the foreign exchange opportunities because SBI liquidity market has a quite variety of liquidity. In 2020, the Forex trade value will exceed 10 trillion dollars and 31 major financial institutions in Europe, US and Japan are the counterparties. I don't know who are the counterparties 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 was the 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 are a certain amount of licenses that they hold. So you will be able to establish global offering system. I think that will be the least cost method. And in any case, London has a city, even though the presence is not as high as it used to be. And SBA Group and Shinsei Bank Group are actively pursuing domestic and overseas M&As in the non-banking sector in close collaboration with each other. What can be quite highly appreciated as a merger and acquisition is UDC Financial Limited in New Zealand, Auckland, New Zealand. They acquired this company. This is the largest non-bank in New Zealand with higher profitability. So these are the kind of companies that we have to acquire. With the interest spread being such low, you can actually enjoy more yield in non-bank. So non-bank 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, and this can be utilized by Shinsei Bank as much as possible. In Russia, there is SBI Bank with full license. The 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 or Cambodia. In those areas, the business is growing. And of course, Korean Savings Bank has renewed the record high profits every year. So this is the second largest profitable company of Korea. within the group following SBI securities. So in the non-bank areas included in Southeast Asia, we have been making a lot of achievements. And for Shinsei, for example, they can invest in major companies overseas with a referral from our SBI group. Or there could be some various types of loans that they can extend. And this is to expand Shinsaibank Services' business space 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 as for group management, with the integration with Shinsei, if we can save costs, then we have to do this as much as possible. And, for example, in the general affairs department, and also the professional sophisticated talent. Aside, for a general talent, personnel, both companies or groups can establish the HR-related companies, and we can take advantage of SVI, 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 and developed by each of the businesses 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 for us. There are many lawyers available, corporate lawyers 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 system. If there are systems that can be shared, you can co-develop the system or share the system so that we can reduce the cost of the systems. The third view, the 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. If we diffuse the technologies that we have invested in, then we can also enhanced investment target companies. So this has been the basic strategy for us so far. And through the investment funds, since inception, we have made investment in 1,053 companies, of which 180 companies, or 17.1%. have already exited through IPO or M&As. Seventeen point one percent 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 30 billion Yen, the fintech fund, was established in December 2015, and the regional banks that have invested in those funds count 29. And also, SBIA-NB fund, as we call it, or SBIA and blockchain fund, was established in In January 2018, with 60 billion yen and 56 original banks have made investments in this fund. And with both funds, together with the co-investments from SBI Holdings, 127 billion yen has been invested together. And you can see the tangible results out of these investments, as you can see. And also, 100 billion yen, which is the largest in Japan, is the fund of SBI 4 plus 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 institutional 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 and 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 three 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 since a as well because they are quite strong in project financing and the keystone partners that we have made have a one-third stake in has a wide variety of experiences in those areas. And what Shinsei has not been so active is the 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 Signum Bank in Switzerland is an example. This is the kind of things that we would like to establish in the future. We have made investments in Signum as well, so in various parts. of this business. We are considering 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 Asia 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 the finance. So digital space ecosystem, in other words. is something that we'd like to create together with Shinsei Bank. Now, in various areas, we are hoping to build next-generation platforms, and we have been already taking specific actions. For example, in SCO, we are hoping to provide integrated issuance, distribution, and custody functions, or security token offering, in other words. And in the metaverse, in NFT market, SPI NFT, which is a marketplace business, has been already taken up. And also in the SPI 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 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 Medda. 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 a connection with R3 in the US or joint venture in Japan through those entities. or SBI Financial Economy Institute. Through those entities, we are hoping to make contributions to establishing the system. And as for STOs, in equity or bonds or asset-backed or real estate-backed STOs, issuance has been experimented And for us, in order to create the secondary distribution market, we have been taking actions to produce PTS. And fortunately, SMBC and Nomura are also participating in market makers. Major entities in the world are now participating, as they say. And SD Research Consortium has been established by Mitsubishi UFJ Trust and Banking Corporation. And the proposal on digital securities, BDS, 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'll be agile and flexible. And if there is something else that is more promising, then we have to make sure that that can be used as well. NSPI, Financial and Economic Research Institute, has been started up gradually, and the new quality researchers are held in this institute. Now basic view for 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 I am coming up with the group-wide effort while keeping an eye on the changing times. and make decisions on the overall searches, and then, based on that, each subsidiary will come up with individual searches so that they can be aligned in the same direction. And in Shinsei Bank, Through the implementing the specific individual strategies, I hope that it will strive to achieve sustainable growth. Group individual strategies of the business units can be established based on the overall strategies and it will create efficient synergies and strengthen the sense of unity among them. And So. You will proactively contribute to regional privatization through value co-creation with major economic entities and local communities. It has been pursued since more than three years ago, and each business unit has been coming up with individual strategies and implementing them. So since a 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 five 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 a regional financial institution support platform between us group and Shinsegae Bank. So we will build this platform and offer these different services, financial products, and lending and investment opportunities. So the two companies. we'll 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 then they will also receive returns into fees and commissions. So they benefit and we benefit from So the three parties will all benefit together. So it's good for all three parties. And it so happens that there's been a lot of deregulation And non-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 structure. So this is the trend. But there are 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, Alpha Servicer, Second Sight Analytica. This is an investing company. So the credit guarantee can be offered on a full lineup basis. And in fact, the balance is now... $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 we're suggesting that expand 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 Asa 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 mail 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 run 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 App Plus. 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, maybe to have more users. So this is a boss model, banking as a service model. And the bank can become a hub for the regional financial institutions. So Aplus 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 structure finances. And they have also done real estate related securitization, businesses, or object 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 in terms of their balance of operating assets, they have most in real estate corporate loans, and then they have project finance next. And in Japan recently, we have seen solar energy or wind power, so green project financing. And overseas... There's public-private partnerships. So these are infrastructure project financing, PPP for short. They have a substantial percentage here, a third, 34%. In any case, They have non-recourse loans and in different areas they do have a great 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 farmlands. But if it's farming of beans, for example, they don't have to have the sunlight all day long. So you can tilt the panels, and as long as there's sunlight from the 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 costs. And Wind Smile, an investing company, they do 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 three examples, and we believe that since its 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 Bonibari. 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 producers and accommodation facilities with a participational local company. And with this development, we have been able to revitalize the entire region. So this is 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, non-recourse loans or structuring of real estate funds, private funds, private REITs, small-lot securitization of individual investors or offering, you know, this sort of information to retail customers, you know, selling these real estate 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. I think they probably purchased about the same amount as the others during the days of Terry Porte. But we were not doing general leasing. We were – Oryx is an area – this is an area where Oryx 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. Meanwhile, as for the high net worth customers of Showa Lease or Showa, For clients who are considering tax-saving measures like the regional companies, they can offer SBA 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 seller's credibility, this supply chain finance will 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 R3 in the United States to do this blockchain technology leverage business so we can implement technology here. And there's also a called RootAnt in Singapore, which we invested in. And also there's a company at the local subsidiary of Hong Kong called 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 Tokyo Point and Deep Point to expand its multi-point 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're 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. So their profitability is deteriorating. So this is, if you look at the major changes in the redemption rules of the point, you can see it's been frequently revised. And you can see customers are churning. And currently, Rakuten Security has a one-month waiting list. Normally, it should be one week, but there's one-month waiting list to process the transfer of 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 Security's changes in point-of-award system is perceived to be a negative change by the companies. And the 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. And in light of that, you see this transfer of the investment trust. So we will not go with that methodology. We will not do the self-containing point income system. We actually abolished SBA point, our in-house point system. And we are now collaborating with T-Point, V-Point, Ponta Point, newly Tokyo Point and D-Point through partnerships. we will develop and expand multi-point ecosystem because that is more strategically, more competitive. So I have been saying maybe a year and a half 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 and If they have a very competitive edge and sales network or a channel, then we will widely collaborate with those partners. So our multi-point ecosystem is becoming quite large. And I wouldn't mind having Rakuten Point join our league. In fact, I welcome them. Because, like I've been saying from before, it should be customer's choice. Our job is to give as many options as possible to customers because that would be most beneficial for them. Now, SBA Sumishi NetBank. 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 Neobank. And they will become an equity method affiliate of SBI Group. Our holding will 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 began 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.