Sbi Holdings Inc Ord

Please allow me to speak while seated. From around 6 o'clock, 70 millimeter rain is expected. But thank you very much for this big turnout. And also there are many participants online as well. Without further ado, we have 143 pages, so we are going to skip some pages, the pages of numbers. You can refer to them in details later. So the consolidated performance overview, the revenue and each profit line, all of them hit record highs, especially the pre-tax income. It was up 168.9%, and also profit attributable to owners of the company, up 270.7%. So we showed very strong growth. At the same time, in terms of ROE, analyzed ROE stands at 22.5%, quite high ROE. And now this is the comparison with major securities groups. Nomura already announced earnings, and the DAO is going to make an announcement on November the 4th. So this is the first half on the left-hand side. SMBC NICO and Mitsubishi Fujiya Securities Holdings. The numbers are shown here. Buy segment. As to crypto, except crypto asset business, numbers all hit record highs. The reasons will be detailed later on. SBI Crypt, a mining company. was taken over, if you like. In other words, there was an unauthorized outflow, 2.5 billion. But it did not provide any inconveniences to the other customers. We were going to liquidate the business anyway, and the profit was not so big, and the staff number was very low. But that is unauthorized. Outflow of assets happened. They were operating in old systems, so the monitoring and supervision was not good enough. The previous management was gone. We were going to liquidate the business. As to the share interim dividend, if the performance is good, then the dividend will be increased or vice versa. So for the end of second quarter, 40 yen. It's an overview of each business segment. Financial services business, both revenue and the pre-tax profit grew by around 13%. The numbers are record highs. The banking business, its weight, is dominant in our case with 73,596,000,000 so up 17.1% securities business, 34,092,000,000 yen even with zero fees. Well here it says negative number but without We booked 5 billion yen in losses related to compensation of fraudulent transactions. So that impacted the insurance business. We don't need to worry about this business anymore because year on year we can expect the steady growth. Banking business. It's not only about SBI since we have SBI savings in South Korea and Solaris in Germany, a credit bank included, and also other overseas banks. As you can see later on, we have invested a lot in banking business. The market, for example, U.S. market, is doing very well. But that doesn't guarantee the city growth next year. It's a question mark, I think. So... The banking business, maybe we should focus on banking business. It might be better. In Japan, Ueda-san is kind of struggling, but in the process of normalization, well, the process of normalization is absolutely necessary. Interest rate is going to go up. In the U.S., rates will come down at a very slow pace, I should say. But now it is coming down, finally. So globally, the macro economies are watched very closely to amend the business portfolio quickly. That's very important. So for the banking business... So we have the net profit attribute of the owners of the company, 69.3 billion due to increase in operating assets, mortgage and loan related fees and gains on sales of securities. So it's up 56% on IFAS basis, up 33% at 64.4 billion yen. Retail accounts, exceeding the 4 million as of the end of September, and the deposit amount, 16.3 trillion yen, also showing steady growth. The operating assets are the similar amount, 16.1 trillion yen, and the breakdown is shown here. So in December 2021, they joined the SBI group. Shinsaibank joined the SBI group. And then nobody imagined that it would be 16 trillion yen level, but their assets doubled. Now the securities business is not only about SBI securities, but also zero securities fees with that concept. We have been diversifying the contents of our business. So we have various constituent companies listed here for the SBI securities for each item. Numbers are record highs. So number one, number two at the bottom. The record non-operating income of about 2.7 billion related to real estate silent partnership in the first quarter and recorded about loss of 5 billion yen as compensation related to unauthorized access and about 3 billion for provision of reserve for financial instrument transaction liabilities. The Zero Revolution. We are expanding very steadily our revenue. even after zero revolution, especially financial revenues are now accounting for big weight. The number of securities accounts, the 14,752,000 as of the end of September, compound annual gross rate, 13.3%. So very steady growth from March 2009 to March 2025, and towards September, further growth. Nomura with the 5,998,000 counts. And Yahoo or PayPay? included as shown here and 200,000 to 300,000 additional accounts if I remember correctly. Here, this is the trading share of individual stock trading value. The SBI is showing a dominant level with 57.9. And also for the trend in individual margin trading value, 60.8% for SBI. And the insurance, both life and non-life, and a small amount in the short-term period. And the Liho Cambodian companies are included in this area. Basically, We don't need to be worried about the insurance business. We have bigger customer bases. With the insurance business, we struggled. That's why we started with the securities and then banking and then finally insurance business. So the sales, the increase is translated into cost because of policy reserves. That's why insurance business is hard at the beginning. But when you reach a certain extent, unless there's a big natural disaster, it will grow very steadily. There are very detailed rules about earthquakes and so on, and if there are more insurable events, there could be the negative results, but basically we believe that the trend will be positive going forward. The number of in-force contracts from March 2016 to September 2025 CAGR 15.6%. Asset management business up 9.2% and up 7.8% both for revenue and pre-tax income. And global asset management consolidated basis as you can see numbers are record highs and quite good growth. So for the first half period, 14th consecutive period revenue increase. And for ordinary profit, it's for 16 consecutive period. And the profit attribute of the owners of the company increased to 16th consecutive period. Asakura-san did a very good work. And also the 7th consecutive period increase for interim dividends. It's very hard to do this continuously. The other asset, AUM. The 20 trillion yen toward 2027, that's our target that we declared. And for that, in the group, we have reorganized our group. And this is SIBI Group's AUM. It's over 12 trillion yen. And within 2027 fiscal year, we target at 20 trillion yen. The PE investment business, private equity. investment business, the public, the investment, and we should be always on alert for public investment as well. So we have public and private.

For ripple energy distribution, we are seeing fluctuation. However, from 23, 24, 25 trillion is the market cap for XRP circulated in the market. For actuals, it's at 4.97 billion XRP and 35 billion in escrow. So this is still left. So if this becomes open, and how this translates into per unit in the case of ripple they started to issue stable coins from june the 30th it's been expanding substantially and also for acquisitions to chris larson i've been communicating to him that we are going to create an ecosystem and they also have acquired hidden road and close the deal as of October 24th and they agreed to acquire rail which I believe is a good stable based stable coin based payment platform because they have overwhelming strength and agreed to acquire G Treasury as well and we put money into it as well so they also acquired a management company so steadily Ripple has been building out their ecosystem and they will probably go to market when they complete building the ecosystem regarding IPOs and M&A results for the full year expectations our prospects are 25 for Circle They listed as of June the 5th on the NYSE. At the same time, we became a cornerstone investor type of investor into Circle Internet Group. So it is basically a strategic investor type investment. Recording assets under management of the SBI group, private equity, unless the stocks, we are already exceeding $1 trillion. The other day, when the President came to Japan, I was seated at the first table, together with Akio Toyoda, as well as Masayoshi Son, and the President. And a defense-related, ever-growing company, which was called Andreet. Well, anyway, the president of that company was there, and I was there as well. And opposite to Mr. Trump was the ambassador and his wife. So I was able to speak with him. And Aso-san was seated at a different table for some reason. All the other people were from the business circle, but he's not. But I was impressed. So because he was there, I talked about Fukuoka and Osaka and connecting the two to create an international financial city. And I talked about the proposals I was making. And I've been talking about this to Katayama-san from long ago and to Governor Yoshimura. I've been approaching him to do it together, and he also gave me feedback that he was interested. And Aso-san is the last key person that needs to take action. And Kyushu Electric Power Company, having dinner with the president is important as well because they play a key role. And the Kyushu Exchange, currently it's the association structure, but this needs to become an incorporated structure. So that is the plan we have right now. Like Doujinma, we would like to have a stake if we are able to realize it and connect it together. And what I really felt was the role of Kansai International Airport and its location. I really felt its significance. With the expo underway, there were so many people who came there, and now with the integrated resort being developed, many people will continue to arrive there. And also, music circus that you saw a video on in Osaka, Fukuoka. they were able to attract 350,000 people in total. And you saw many young people in the video, right? So basically, we would like to capture the youth into the SBI group. That's why we have started off in this initiative of Music Circus. And in the Web 3 area, for those people who are interested in this area, in order to capture them, An event called WebEx was underway, which is the greatest in its scale in Japan, and we will have a majority stake. I will talk about this later, but that's where we are. So we call it Umedia. But it's not like traditional media. And by the way, Mr. Trump said that the media only reports fake news and they're not credible. And I told him, I agree. So we should avoid reporting fake news. For news, you should only report news that you have conviction of. So the crypto asset business is next. Like mentioned earlier, SBI Crypto, we recognize a loss worth 2.5 billion. However, revenue grew by 8.9%. Regarding the number of customers, it's close to 1.8 million now. And VC Trade, that point together, deposit balance is now 880 billion. Kager, as of end of September, comparing it against 2022, grew by 44.5% from 2022 end of September through 2025 end of September. Because of the big revolution around stable coins, I do believe we can attract a considerable number of customers. Also, One of the companies that comprise the ecosystem is B2C2. We bought them at an early stage, and we have 90% of a holding or shareholding ratio. It's a very interesting company, I believe. Of course, there is some fluctuation. It is an exchange for global crypto assets. and basically they fluctuate that's the characteristic but b2c2 is a market maker but market makers are able to get a spread so they should not generate huge losses as long as you well control the business so we would like to control the business and It seemed that we were approached the other day that people were interested to buy the business out for $100 billion, but I said that's not enough. So we have no intention of selling this business. next-gen business. So Gumi and MyNavi are here. Gumi used to generate losses, but now it has turned profitable for MyNavi. Fortunately, the equity pickup contribution is $3.7 billion. For example, if they're out of business, they still are generating, using up expenses. Apart from what's going to be listed, that's going to be profitable. But when it comes to pharmaceutical manufacturers, the R&D cost is quite high. So it's hard to generate good profitability out of these businesses. But we do need to have these businesses. for brain cancer to bladder and for other parts. We are trying to get the approval as a diagnosis compound. It's growing in the U.S. and we can have its application in Europe. For March 26th, and our view on the second half of the year, This is by quarter or by half, first half and second half. And consolidating a profit before income tax expense, it was $212.1 billion, and you could see the breakdown. And extraordinary factors are listed here as well. Excluding extraordinary factors, this is the number we would get. Therefore, in the first half, to 16.1 billion is profit before tax exclusive of extraordinary factors. But we do recognize true $12.1 billion as well. And if you add on the second half, you are able to get the full year expectation. So things that are locked in for the second half. First will be the affiliate sales gains of SBI Sumishin NetBank, which is worth $141.6 billion. Also, the gain on negative goodwill expected to be recognized from the acquisition of the shares of Kyobo Life Insurance. it depends on net assets but we expect that it's going to be around 30 billion this is not officially authorized yet but this will not go away although it may take time because due to the financial regulators in South Korea that are scrutinizing this. But basically, it's not going to go away. And we will have 20% of Kyobo life. So if you add these together, we will derive $383.7 billion. Therefore, roughly speaking, for the financial services business alone, I think 100 billion is sure, which means it's 483.7. So in the medium-term vision, we have set a target of 500 billion for March 29. We believe that we will be able to achieve this already. But what's important here is we are going to recognize gain on sales, but that's not the important piece. We want to ensure that we are able to achieve these targets. So, we'll see. But I think we will be able to steadily grow our business as a group. And the group's customer base, we would like to increase it to 100 million. Right now we're at 54 million, 420,000. We would like to increase this to 100 million. What's most difficult in this is the share of overseas businesses and consolidated profit before income tax expenses. This was approximately 17% in fiscal 24, which we would like to increase to 30% in fiscal 28, because this part is increasing. So this is quite a challenge. In order to make this happen, we will need to conduct M&As, which is a quick way to achieve this. Regarding ROE, 22.5%, it already exceeds 15%. There aren't that many financial institutions in Japan that have an ROE higher than 20%. So for the customer base for overseas financial service businesses customer base, it's around $30 million. And on an aggregated basis, we would like to reach $100 million inclusive of our overseas customer base. So right now it's about $30 million. If you add everything together, both Japan and abroad, we are at 78,362,000 as of end of September. So regarding the target of 100 million, we believe we can reach that target. That's how I feel. So towards these targets, we would like to ensure that we pursue sustainability through these measures. First, in addition to further evolving the corporate ecosystem built by the SBI group, we would like to create innovative and highly profitable services by promoting the convergence of ecosystems across the business sector and maximizing synergistic effects. And I have one through four, which is the breakdown of this. So this is conceptual. We have the financial services ecosystem, asset management PE, regional revitalization ecosystems exist underneath, and they can generate synergies, converge together, and evolve together to a higher level. And then on a group-wide basis, the ecosystem can elevate to a higher level. Accelerating the evolution of the business ecosystem centered on financial services is next. So one thing is the bank securities collaboration, which is broken down into three parts. First... The collaboration between SBI Shinsaibank and SBI Securities, referrals from 2020 to October through September 2025, which is about three years, it has been 634,972 customers who have been referred from securities to Shinsaibank. This is a fact. Also, So what connected the two together was this, the sweep account, which we call SBI hyper-yokin or hyper-deposit, which can go this way and that way, that way to this way, so that funds can flow freely between the two. So we have created this mechanism So it's basically convenient from the customer's point of view, I believe. So you don't have to manually do the deposits and withdrawals anymore. And for hyper-yoki... The rates that are applied is twice as much compared to an ordinary deposit. It's at 0.42%. This was a big factor as well. We would like to offer these incentives so that we could create an overwhelming situation. And fees for fund transfers are lower as well. For SBI Shinsaibank and Money Plaza, we have joint branches. Shinsaibank, at all of their branches, the 22 retail branches, Money Plaza has become a part of it. So SBI Shinsaibank Wealth Management is now established. which is at 625 billion yen right now, AUM-wise. SBI securities agency, who unfortunately passed away, proposed this, actually. And then he created this, but then he unfortunately passed away. At regional banks, this is functioning well as well. So what we're doing to increase the contribution from overseas businesses, we would like to work on this on a group-wide basis to reach overseas operations account for 30% of consolidated pre-tax profit. So this is where we are right now regarding our overseas businesses before COVID. I was talking about conquering Southeast Asia thoroughly. So Australia, New Zealand used to be owned by Shinsei originally. The other parts mostly were areas where I personally went to develop the business to create personal ties. In other words, what are we doing now? Because I am not going on business trips as much as before because there was COVID. So I was actually complaining the other day, but we need to do more with respect to our business overseas. When you think about the growth prospects of APAC or Southeast Asia, we don't want just costs to continue to fall out. We need to attempt to do something new. Here are some strategic investees in the banking sector, Solaris, Signum, Germany, Switzerland, and Indonesia for these two. Our exposure is still low, our stake is low, but they are strategic investees in the area of digital banks. So we are intending on making more investments of this nature. If it goes well, we would like to acquire these entities.

Now, this is SSBI, a savings bank where we own 90% and it is growing, and 32% of year-to-year growth, and during the first half, 8.9 billion IFARs level of efforts have been made. When you look back, when we acquired this company, well, the delinquency rate was 51.6% in 2013, and that was actually dropped significantly, and it is only 4.4%. There's no problem in total assets. is maintained quite well and the performing loans are maintained quite well and therefore the business is performing quite well and when we acquired this company well factoring is one thing and it was not really a desirable and we were criticized that we've acquired a garbage but this is the current situation When you talk about the banking businesses, if you don't challenge on a difficult challenge, then what I did in the past is that real estate developers and construction companies, they were assuming investment. That was a promise to generate profits, but real estate market collapsed tremendously. And that was the situation back then. Ultimately, the bubble bursted, and everyone... went under afterwards and this particular bank was struggling in the same way however we then prohibited that we should not get involved in the property market and well they begged so much so therefore we were very strictly selected in regard to real estate development and constructions And we minimize the investment in this area as much as possible, and therefore, we've not suffered from much of a risk. And Vietnam TP Bank will, if it has exceeded 1%, and then we will infringe with the law. And therefore, we only allowed to earn maximum 20%. We actually got the approval from the government to be able to own up to 20% and equity with the company where we converted into. And then we had suffered from large losses they had incurred, but now it's 280 billion yen. Well, recently, the company has exceeded $300 billion, however, currently $280 billion or so, and 20% of those is our stake. And in Ho Chi Minh security market, the company is becoming public, and it is adopted as the main index, the VN30. And there is a 15.5 million account. And there's a 100 million population in this company. There was so much energy of the youth. And there were so many vital people. So SBILY, our bank. is that currently we have raised our ownership to 100%. It was a middle-level microfinance company in Cambodia that we have acquired and we upgraded to the commercial bank. In Russia, SBI Bank, we have over 90% of ownership where business performance is really robust. Our interest rate is really high. U.S.-Russia relationship goes well, and then the interest rates will go down, and therefore our business performance will be pushed down. But what is beneficial is that once the Japanese companies withdraw from Russia, all these companies may go back to the Russian market, which we can expect to happen. So we will We've been doing a banking business in Russia, though most of the other players are already withdrawn from this market. So we are surviving in this market at this moment. So 3.5 billion before a tax profit. And for securities, SBI Royal Securities is where we have 65.29% of ownership. And this is the only Japanese full-fledged security companies in Cambodia. profits are fairly well well there's a minor typo here so it looks a bit weird but apologies for that now um sbi thai online securities we own 100 and this year we had profits but in the previous term there was a mismanagement and they clear that I'm going to fire the senior management if they repeat the mistake. So it was really stupid, and they promised that they're not going to do that again, so we just kept that senior management. Now, in Indonesia, there's BNI Securitas, and this is $18.7 million. It is really small. At the end of the last fiscal year, with the inauguration of the new president, the political basis is becoming really unstable, and therefore profit margin has declined tremendously. And the markets where the political uncertainty arises and there's a type of risks that we need to face. And the FPT securities where we have 23.3% of ownership. This company has been generating relatively well profits, yet a Trump tariff would negatively affect this particular company. And, in fact, they were 940 million before tax profits, but now in this fiscal year, this is the current forecast. So this is the UDC Finance Limited, where Shinsei used to own, and this is a really good company. This is the largest non-banking company in New Zealand. and it is generating very good profits. And during the first half of March 2026, $4.9 billion of before-tax profits, and during the first half, this is the profit level. And in Australia, Latitude Group Holdings Limited, and this is already traded in the market, and $116 billion of market cap, and installment payment, credit card business, an auto loan where they are doing businesses. So Liho SBY Insurance. For the first time in Cambodia, Liho Group has opened up the casualty insurance business, but this is the size that they have achieved, and it is marginal, but it is a part of the group, and it is generating profits. So 40% of ownership that we have, and we will carefully monitor the situation, and we may start to increase our ownership. So this is the analysis with South Korean competitors and there's this full year basis of 70% of the share has decreased to 12.5% because the total market size has increased so nothing we could do about it but Even if the total power have increased yet, we'd like to occupy still 30%. So banking business where the organic growth is pursued and M&A will be used to grow going forward. So this is an M&A strategy where we'd like to pursue. So for example, when we use shares and engage in M&A, for instance, Well, we are going to finance ourselves and use that cash to acquire the businesses. It's no longer a viable method all the time. And therefore, we'd like to do an equity swap and stock for stock so that we are able to engage in M&A with a certain liquidity or cash invested as well. And we will take more active stance position in M&A. So 30%. will be achieved through the operational portfolio and business portfolio revision and so forth. So we have convened the overseas branch manager meeting, inviting from all around the world. So from the 16 countries and regions around the world, we invited 23 heads of the sites, and we have convened the managers meeting. we will facilitate the network and coordination among the overseas offices and we will further enhance the relationship between domestic and overseas business and particularly we'd like to enhance the vertical connections for example in the banking businesses and security businesses there are multiple sub-series and businesses sharing know-how sharing ideas By doing so, we'd like to further enhance the vertical connection. And we will promote the convergence of digital asset ecosystem and financial ecosystem, anticipating the advent of the token economy era. As I always insist, less than 10 years, all of the asset is going to be tokenized in some way or another. Therefore, my kind word is that we'd like to change from online on the web to on-chain on the blockchain. So this is the off-chain based on Web3. So record transaction results on the blockchain. And there's a smaller contract that will be tapped into. As such, the whole transaction will be automatically processed over the blockchain. And that is the change from online on the web to the on-chain on the blockchain. So already, We have formulated the ecosystem for security banks and so forth and financial services. And we've been making a digital space ecosystem. We should not waste what we already have on the left-hand side. We need to match toward the right-hand side, and we tried to integrate between the two. And that is a key to pretty simply SBI securities customers for that until August 2025. the CFD of crypto assets has launched and also in the banking business, the deposit token and stable coins related businesses now under consideration and in the asset management businesses started to launch the crypto asset ADF or crypto asset covered funds and so forth. It is still discussed. We actually have a sufficient level of discussion. If we are ready, we can start right away. So in each country around the world, the digital assets system as well as the regulation is put in place. And Scott Vincent with him, Treasury Secretary, that we have discussed a lot. And genius law, genius act is now approved, signed into law by President Trump. And therefore, this is quite a great law when we pursue the digital assets in the United States. And there are protection of consumers and also regulatory authorities function need to be enhanced in this area going forward. and also how to prevent the money laundering and how to secure international competitiveness of U.S. dollars and be positioned as a reference currency. Number five is really critical for the United States, and that's why we are trying to support. Well, I said the other day that there is something that we can contribute to. Of course, manufacturers were signing on many agreements, how much they were going to invest in the United States and what activities that they're going to do in the United States that will help the United States a lot in manufacturing. increasing the employment but we in financial services is to bring liquidity or finances available in Japan to the United States so two thousand three hundred trillion yen of a Japanese a consumer's assets will be delivered to the United States and joint venture strategy that we've been exploring has been explored through the major players so far and that is one way of trying to support the United States and also how much SBI transactions where the US market is making and that is also an important factor as well so it is not just Japan manufacturing where Japan should contribute and I said to the United States the other day, Scott, that it should not be just money fashioning, but it should be the financing service as well. And Scott truly understood because he's run the financing industry and that they are highly evaluating the stable coin. And among others that I talked about, Ripple Lab, 9%. is owned by us and he said that that is huge so we are the large shareholder and that is a great factor and as for the circle we are giving the cornerstone investment for technical development and gradually where ripple is going to establish so to the billion group where we've invested There's something that we have approved right before this meeting, but I should not disclose that information at this moment. So we are taking a great leadership and taking action at Japan. and uh 55.95 percent as considered at miscellaneous income um and that is a tax structure for the crypto asset a capital gain and that's outrageous and also the crypto asset agf is not approved yet in Japan. But as long as the U.S. is approving, Japan should approve. And the rest is just a risk management. Of course, the investor protection has to be put in place. Yet, pursuant to the laws and regulations... Well, crypto asset transaction is approved of, which means that crypto asset ADF shall be approved in Japan as well, and also leverage restrictions of as much as two times. Well, maximum 25 times was allowed until 2019, and there were some incidents, and it was restricted to two times. And when such a regulation is put in place, global competitiveness has to be fully considered. Otherwise, Japan will not flourish. We have to put in place a system where we can compete well all around the world. Of course, the tax discrepancy needs to be eliminated and subject of separate taxation. and also the crypto asset ETF is essential and the limits of a 1 million transfer limit and holding restriction apply to overseas issued stable coin doesn't make sense institutional investor limited to 1 million is nonsense and of course if we explore the trust bank scheme and I believe that all of the crypto asset