Ken Takamiya

Asked for the reasoning behind the JPY 400 billion share buyback and its implications for future capital policy, and why the full-year guidance was kept unchanged despite strong first-half performance.

Answer

The JPY 400 billion share buyback was decided based on the CET1 capital level and a more stable market environment compared to May. The capital management policy remains focused on a target range, with surplus capital allocated to growth or shareholder returns. The full-year guidance was maintained because Treasury profits were front-loaded in the first half, and the second half is expected to align with the initial plan. The positive impact from the weaker yen is being used to offset losses on foreign bonds to improve the balance sheet's profitability, and the JPY 1.3 trillion target is kept to ensure the 7.5% ROE goal is met.

Ken Takamiya of Nomura Securities inquired about the financial impact of recent system failures on performance and costs, and also asked for the rationale behind announcing a dividend increase at this specific time.

Answer

CFO Makoto Umemiya explained that a JPY 3 billion negative impact from system failures is factored into the revised plan, with related expenses potentially exceeding the initial JPY 18 billion budget due to further infrastructure needs. Regarding the dividend, he stated that management's increased confidence in achieving over JPY 500 billion in net income, despite market uncertainties, prompted the announcement in line with their 40% payout ratio policy.