Financial Strategy
Message from the CFO

As a non-bank, what we absolutely cannot compromise on is the stability of our funding and not increasing our funding costs. Maintaining and improving our credit rating is extremely important in our financial policy, and we aim to maintain or improve our A rating. After implementing financial measures with the primary objective of maintaining or improving our credit rating, we will make the growth investments necessary to generate profits and maintain a solid financial position while also being mindful of asset efficiency. Our policy is to flexibly acquire treasury shares if we observe a slight buffer at the appropriate level of capital scale.
　In the coming phase of rising interest rates, it is inevitable that financial costs will increase. We view financial soundness and stability as essential to firmly support our growth opportunities from a financial perspective. As a result of our efforts to obtain long-term funding at fixed interest rates under the zero interest rate policy until recently, approximately 75% of our funds are long term, and the fixed interest rate ratio is 70%. Therefore, in the short term, even in the current phase of rising interest rates, our structure will not be significantly affected. In addition, even when looking at the gap between floating-rate liabilities and assets, floating-rate assets are currently slightly higher at this point in time, and even in a rising interest rate situation, this is having a positive effect on revenue. We recognize that it will be increasingly important to obtain funding while being mindful of costs. However, even considering our current financial situation, we believe that if we can firmly build up our earning power over the medium to long term, we will be able to achieve sustainable growth.

With regard to shareholder returns, for FY2023, in light of consolidated performance, we have set the dividend at ¥105 per share, which is ¥5 higher than the most recent dividend forecast. Although we will not change our basic policy of implementing stable and continuous dividends, in the New Medium-term Management Plan we have set a payout ratio target of 30% or more to give our stakeholders a clearer indication of the level of dividends we will pay as we grow in earning power. In addition, to optimize the amount of shareholders’ equity, we plan to flexibly implement the purchase of treasury shares worth ¥70.0 billion over a three-year period, and we intend to implement ¥50.0 billion of this in FY2024, the first year of the Medium-term Management Plan.

Dialogue with investors

Before assuming the role of CFO, I built my career in business divisions, so I might be seen as somewhat unusual in that I have no experience in finance or accounting. However, I see my ability to apply my experience in the business divisions as one of my strengths, and I look at that positively. With regard to IR activities, we see them as a means by which the corporate division can contribute to enhancing corporate value. In particular, as the components of management, including intangible assets, become more complex, we are actively and positively focusing on this with the awareness that it is important to integrate the process of value creation and turn it into a story.
　Also, what the IR team and I are always aware of is approaching dialogue on the premise that there is always a gap in awareness between the Company and our investors. We then strive to accurately grasp the thinking of the other party and to bridge the gap between the Company and our investors. Because we are not disclosing all of our ideas, it is only natural that a gap will arise. In that sense, we believe that, in IR activities, it is also effective for executives, including officers, to interact with investors themselves, and for the person in charge of each business to have the opportunity to explain their business as speakers. Until recently, we have held briefings dedicated to digital strategy and global business strategy. However, in FY2024, we plan to conduct IR for institutional investors, including those overseas, together with COO Mizuno. With regard to our business in India, which is driving the growth of Credit Saison, we are confident that we will see growth overall. However, we anticipate some bumps along the way, so we would like to increase the number of shareholders who can understand and support the Company’s leap into a different dimension stage of growth from a long-term perspective.