Message from the Executive Vice President

Drawing on our track record as a non-bank grounded in retail operations, one missing piece is the ability to fulfill a banking function. In the finance sector in Japan, banks and non-banks are governed by the Banking Act and the Money Lending Business Act, respectively, each with different areas of expertise. Taking into consideration the convenience of customers, collaboration between banks and non-banks and the ability to provide timely, one-stop services is ideal. With this in mind, Credit Saison and Suruga Bank Ltd., both with strengths in the retail sector, entered into a capital and business alliance in May 2023. While it is common for domestic banks to invest in non-banks, the reverse, our investment as a non-bank in a bank, was a first in Japan. Before entering into this alliance, we carefully reviewed Suruga Bank’s governance structure and financial soundness as well as such factors as any past history of fraudulent loan practices. As a result, we determined that the bank’s finances were extremely robust and that the benefits that would accrue from securing banking functions far outweighed any reputational risks.
Another missing piece of considerable importance is the need to strengthen the Payment Business. Today, we are confronted by the structural issue of climbing funding costs attributable to the upswing in interest rates. This in turn is placing undue pressure on Payment Business earnings. Under these circumstances, and in an effort to ensure sustainable growth, it is imperative that we upgrade and expand revolving and installment payment services, thereby increasing profits through commission fees.
At the same time, we must put in place a structure that is capable of generating profits through not only debt (lending) but also equity (investment) to establish a revenue base that is less susceptible to economic fluctuations. Based on this understanding, we launched a joint fund business in collaboration with a domestic independent fund focusing mainly on small and medium-sized enterprises (SMEs). In a bid to address business revitalization and succession concerns, we are working to provide companies with support on a hands-on basis through the development of a revitalization fund business. This includes supporting companies burdened by excessive debt in their restructuring endeavors and addressing the business succession concerns of companies facing a lack of candidates.
Regardless of whether they are unsecured or secured, the likelihood that non-performing loans will occur increases as economic conditions deteriorate. With this in mind, we put in place a structure where secured and unsecured loans are handled by the servicer business of Saison Fundex Corporation and SAISON COLLECTION SERVICE, respectively, in preparation for a downturn in the economy.
The securities business is also an important piece of the puzzle. Engaging in the securities business allows us to expand the balance of assets under custody while creating fee and commission income opportunities through the application of customers’ assets. In addition to asset formation loans, we are focusing on the development and provision of a wide range of financial products that support members’ asset management.
Moreover, the independent financial advisor (IFA) business is crucial to our expansion endeavors going forward. In the United States, payments for asset management advice from independent financial planners (FPs) are well-entrenched. While still in a development phase, member surveys have confirmed growing demand for asset management advice in Japan. In light of this demand, Credit Saison entered into a business and capital alliance with Broad-minded Co., Ltd., which boasts a large network of independent FPs. Looking ahead, we will strengthen the activities of SAISON ASSET MANAGEMENT CO.,LTD. and work to increase future fee and commission income through Broad-minded.
Credit Saison is committed to entering other fields. By filling in the pieces one by one, we will realize our vision of becoming a “GLOBAL NEO FINANCE COMPANY.”