Earnings call: SBI Holdings reports record revenue, plans for growth

SBI Holdings, a major financial services conglomerate, has reported a significant increase in revenue and net profit for the fiscal year 2023. The company's revenue hit a record high of ¥1.2 trillion, marking the first time it has surpassed ¥1 trillion, with a 26.5% increase from the previous year.

Pretax income rose by 38.6% to ¥141 billion, and net profit soared by 58.5% to ¥113.616 billion. The return on equity (ROE) is on a recovery path, targeting 10%.

The earnings call also highlighted the company's successful crypto asset business, plans for an exchange-traded fund (ETF) incorporating crypto assets, and strategic growth initiatives across its diverse business ecosystem.

Key Takeaways

• Record-breaking revenue of ¥1.2 trillion for SBI Holdings in FY 2023, a 26.5% year-over-year increase.
• Pretax income and net profit rose to ¥141 billion and ¥113.616 billion, respectively.
• The company's crypto asset business surged in Q4, reaching JPY6.386 billion.
• Plans to set up a joint venture for a crypto asset ETF and to list SBI ALApromo by 2025.
• SBI Group aims for dramatic growth through business ecosystem expansion and strategic partnerships.

Company Outlook

• SBI Group is focused on achieving dramatic growth by expanding its business ecosystem, which includes financial services, securities, banking, insurance, and asset management.
• The company is also targeting organic growth and strategic acquisitions, particularly in high-growth countries in Southeast Asia and the Middle East.
• SBI Holdings plans to integrate domestic and overseas operations to expand its revenue base and aims to generate 20-30% of its consolidated profit from overseas businesses.

Bearish Highlights

• The company faces challenges in the leasing and next-generation business segments, with SBI ALApromo currently loss-making.
• The outcome of the Ripple and SEC litigation case is uncertain and may impact the industry.
• Criticisms were raised regarding the management's backward-looking approach and lack of creativity in the past.

Bullish Highlights

• SBI's crypto asset business experienced substantial growth in the fourth quarter, with significant revenue increases.
• The ZERO Revolution initiative by SBI Securities has led to increased revenue and trading revenues.
• The company has a strong IPO underwriting system and is expanding its venture debt and wealth management businesses.

Misses

• The share prices remained sluggish until the announcement of a takeover bid, which then increased profits to JPY 70 billion.

Q&A Highlights

• Discussions on the importance of the production line transition from 28-nano to 55-nano technology and its applications.
• The CEO commented on the potential impact of interest rate changes in the United States and the upcoming US presidential election.
• Plans to accelerate the timeline for foundry construction and the establishment of a new ecosystem beyond the existing one were discussed.

SBI Holdings (ticker: SBI), with its strategic focus on the Japanese market, particularly in individual stock options, is aiming to surpass Rakuten in the number of NISA accounts. The company's overall customer base has seen a compound annual growth rate of 13.5%, and its securities accounts have increased significantly.

SBI Group's success in FX and foreign bond sales, along with the establishment of SBI Simplex Solutions and migration to AWS cloud, has contributed to its ecosystem's growth. The company is also exploring opportunities in the semiconductor industry and plans to expand its corporate customer base in this sector.

SBI Holdings' CEO highlighted the company's intention to pursue growth through mergers and acquisitions, collaboration with regional financial institutions, and a focus on the semiconductor industry. The company has invested in a semiconductor wholesales trading company and is looking to build close relationships with semiconductor manufacturers.

SBI Holdings is also considering establishing an overseas business management division to consolidate all overseas businesses and has already established subsidiaries in various countries.

The company's plan to repay public funds and the proposed timeline for repayment discussions were also discussed. The earnings call concluded with an invitation for questions, emphasizing the company's openness to shareholder engagement.

Full transcript - None (SBHGF) Q4 2024:

Yoshitaka Kitao: Despite your tight schedule. Thank you very much for this big turnout on the website, about 90 people are participating online what it is going to be a long meeting, two hours or so, so please give -- please do not give up on us and stay with us to the end. Now, FY 2023 results announcement as to numbers already announced. So, I'm not going into details. The revenue at ¥1.2 trillion. So, it exceeded the ¥1 trillion mark. This is the, I think, a very first time as full year and up 26.5%, pretax income, ¥141 billion, up 38.6%. The net profit, ¥113.616 billion, up 58.5% and the profit attributable to owners of the company, ¥87.243 billion, up 146.1%. ROE went down when we acquired Shinsei Bank, but now ROE is recovering, and we are targeting at 10% and it's just a question of time that we will reach that level. But this is the comparison with the major competitors, and please look at them later. This is by segment. So, for each segment, for all the other segments, revenue hit a record high as to dividend. As we said before, ¥160 full year basis, including the 25th anniversary on July 8th. And for that, we have ¥10 and including that full year basis is ¥160 or the total payout ratio of 50.6%. So, basically, dividend payout and the share buyback, that combination is the total shareholder return ratio. And for the time being, we are going to set around 30%, excluding the special factors such as sales gains of selling the subsidiary in the Financial Services business. For this time, dividend payout, 29% -- around 29% or around 30%, an appropriate level, I would say. And the shareholders' benefits, there are no major changes here. Our products and crypto asset XRP, these are the choices that we can make. And as to the shareholders' composition, we have a very high foreign investors, the ratio. And after the COVID in Nagoya and Osaka, we had information meetings in those locations to increase retail investors, retail shareholders. And 26.0%, that is individuals and 33.9% that is the overseas foreign and the domestic financial institutions, 23.1% and 10.3% for domestic business corporations. So it is very well balanced out. And more than 240,000 shareholders and as to the shareholders who hold one unit or more is 172,761. Business overview of each core business. Starting with Financial Services business. It is going very well. I myself in the context of revolution, the other securities business, what will happen to them and what will happen to the financial services, the business, and that is -- the most interesting part for myself. And the result is as we have expected. So for the securities business, Securities business is just fine. Securities can continue as they are doing. And now our focus is now moving on to the semiconductor business as well. And also the banking business. It is our course to pay back JPY 330 billion or so to the government. And by paying it down, that will put us on the jumping board to the next phase. So that is a must for us. And of course, the new development of the new products, financial products, that's one example of other factors. But my biggest interest is here. So let us look at the results for the SBI Securities, even after the revolution, both revenue and profit hit the record high. Of course, in the first half of the year, though there was no revolution and the impact of that revolution is from the second half of the year. And only in the second half alone, JPY 15.8 billion or so lost -- the profit. The revenue, the profit of operating revenue, there's almost no change in the fixed costs. So the levels are similar. And this is for the banking segment. For our bank entities, they are doing very well. SBI Shinsei Bank, targeting at JPY 70 billion, and they are moving ahead, and we could feel assured with their performance. And as to other banks, SBI Savings Bank in Korea alone is having halving the profit IFRS basis, but they hit -- already hit the bottom. The worst period is already gone, and they are going to be better. Real estate and construction developer business, I'm saying that we should not extend loans into these sectors. But the SBI Savings Bank absolutely wanted to lend loans, some loans to those sectors, and that turned out very bad. And my hunch and the situation in Korea, because when we bought the entity, the delinquency was 51%. And we did some analysis why they came up with such -- the situation. And I know what happened back then -- and so I told them what they should not do in the current economy in Korea, but they did it anyway to some extent. But the impact there was not so significant still compared to the other banks that SBI Savings Bank loan, so the holding of the other profit and SBI Bank and turning the block and the TPBank, it did access the other 10 -- or the JPY1 million. And here, this is savings bank, the NPL ratio, so as I mentioned earlier, 51.6% is the delinquency ratio. They were on the verge of going under and we invested JPY130 billion and people say that why such investment, but they turned around and contributing to our profit. And now delinquency is at 5.6%, and it is steady on that level. The Korean economy has already hit the bottom, we can say that, I think. And so this bank's profitability will be better. Moving on to insurance business, growing very steadily. All the items hit the record high and the number of the in-force policies is increasing steadily. So its stock business is expanding. It is very well-balanced, and we are going to grow the business, so that they are going to be the very steady sources of profit. Asset Management business, finally, the Japan as a whole is moving toward enhancing asset management business. The government is encouraging it and iDeCo and new NISA are the examples of touch focus. And one after another, we are taking various measures and the other revenue increased by 5.3%, pre-tax income has declined. Well, this is because of the one-off factor, the JPY8 billion, the proceeds of returning Morningstar brand in the previous year. And compared to that, the number looked much smaller. And the growth, SBI Global Asset Management gross net sales and ordinary income hit the record highs. So two days ago, actually, our AUM exceeded JPY6 trillion mark. So it's an extraordinary speed that the business is growing. This is the SBR HIFUMI and SB Okasan Asset Management. As to Okasan, we acquired it and the revenue and ordinary income are increasing. So this is an evidence that we can make changes. How? Well, it depends. We look at the symptoms and we need to give the good medication so that they can recover without any adversarial effects. So what we need to do is that we apply measures that suit each entity. So group asset management is now at JPY 9.8 trillion. So I think it's a matter of time before we achieve JPY 10 trillion for the investment business. This business is loss-making at the profit before income tax level. It has been recovering substantially, but SBI leasing JPY 4.4 billion positive is a result for the company on a standalone basis. However, due to currency losses, it is JPY 7.9 billion. And this is accounted for. So the way they hedge drastically, I have asked them to review the process or else I am in a position to sell off the business if it doesn't recover. But I haven't overseen the leasing business in detail up until now, but I have spoken to Takamura-san today, and I have asked them to scrutinize the business so that performance can improve. Because all of this is FX losses, and we do procure aircrafts from overseas. And, of course, they cannot be sold right away. And if currency rates fluctuate along the way, it is likely to lead to losses. Of course, sometimes it can lead to gains, but I do not like these businesses with such volatility. I think what needs to be hedged needs to be hedged. However, if it can be predicted, you don't have to hedge. However, these kinds of businesses need to be hedged because you don't know when you can sell them off. If it can be sold off in three months' time or two months' time, then there are ways to hedge. If it's unpredictable for the next 12 months, or if you're not able to sell going forward, it's a different world. So it's a challenging business from that standpoint. Other than that, the investment business is going well. So for March 25th, and the number of IPO and M&As, currently, we are accounting for 45. First, I was told 51. So I asked my people to scrutinize the deals one more time. And then they said, no, we're fine. We're fine, Kitao-san. The Executive Vice President in charge replied to me. So I believed in that. But we cut it down from 51 to 45. Now, of course, the environment regarding IPOs and the investees and its quality. We have been investing into quality companies. And the investees seem to be reaching the value that we have anticipated initially. So for March 25th, we are looking forward to what may come through. So private equity total is at JPY 801.8 billion. So we are in name, as well as in value, the biggest private equity capital company in Japan right now. So when you look at this, leasing services, JPY 494.4 billion is the ordinary income. But this is accounting for the losses, and this is something we need to change as practice for the cryptoasset business. For March 23, there were bankruptcies, and having sufficient collateral in place was not a practice that was in place. So we worked on it. And if it didn't go past me, I said no to the opportunities, and we were very conservative in our approach. And now the BT's, bitcoin ETF has been approved and bitcoin process – prices reached all-time highs. So we're in a good condition right now and even more B2C2 that we own for crypto assets, we are a market maker, and they are the world's greatest. So with trading volume increasing, we should be increasingly profitable. For example, the crypto asset business of SBIs Group for Q1, Q2, Q3 and Q4, you could see that you saw a surge in the business in Q4 at JPY6.386 billion. So bitcoin prices exceeded $10 million for the first time. When you look at the Monex Group's crypto asset business, like Coincheck and so forth, Q1, Q2 were loss-making. And in Q3, finally, they turned positive. And for Q4, they increased performance, but it's still at JPY2.8 billion. But we are far profitable compared to them. B2C2 is one of the largest crypto asset market makers, and it has been able to increase its revenue substantially. So this is revenue on a quarterly basis. The reason why is because major crypto asset exchanges, Bitcoin transaction volume has been increasing that makes this business profitable. So regarding the future, one catalyst may be Ripple and SEC litigation case and its outcome. The conclusion may be drawn at the end of June this year, meaning how much penalties are going to be paid. I don't think they're going to be able to avoid penalties, especially for the corporate side, and the retail side is winning, and that's why the issues became complicated. However, if the retail side or individual side wins, Ripple will probably see -- was talking about all these things out load. So I think that made the SEC angry. So that's the issue at stake. But this may turn out to be a catalyst Also, for the ETF -- there may be institutional investors. There has been an increase of institutional investors that have started to enter this space. And we will partner with an entity and set up a joint venture with a company that is setting up an ETF that incorporates crypto assets. It's a US company. And hopefully, that will lead to good results. But basically the backbone of virtual currencies is the blockchain. So for blockchain technology, I believe it still has tremendous potential for the financial business. Of course, in various ways, it will probably be incorporated into society as well in various ways. For SBI traceability, for example, by using blockchain technology, you're able to tell whether something is authentic or not, you're able to trace it. And with Japanese small-cap, this technology has been adopted. So for the next-generation business, this is about bio and other parts of the business. This is loss-making as well. However, it's not a big thing. For SBI ALApromo because we are preparing for listing, there are costs associated to that, and we're planning to go to market by 2025 and also raw materials. Our supplier has been asking for help -- and because of the prices are high not only have the suppliers come to us, but during the pandemic, people have started to say that ALA works, and it actually does work. It is able to suppress the pandemic, I believe in that. And there were some multiple numbers of papers that state so, so prices of our materials went up back then. However, the prices have come up too much. So I've asked my people to sort things out. For example, it says extraordinary losses of ¥1.8 billion was recognized. So those are the things we have done as part of our review. So next part is SBI Group's dramatic growth will be achieved through business operations that maximize the organizational advantages of its business ecosystem. The business ecosystem having the financial business based off this notion, I think, was a great success. So thinking of having an ecosystem was extremely fresh back then, and I was able to quickly incorporate this concept into our business. The reason why it wasn't accepted that much before was because of the conglomerate discount. People were talking a lot about that. And back in the 60s in the US acquiring many companies raising EPS and by raising EPS that will lead to higher corporate value. That was the mentality. But then in the 1980s, this mentality actually demised, and that is why people started to talk about a conglomerate discount. But I said no to that. If it's the same category of finance, synergies should be generated by creating a mechanism, and it should be a positive, not a discount. With that conviction in mind, I create an ecosystem in this business. So for the semiconductors business as well, we would like to manage it in the same way under the same concept. So for semi-related companies, the other day, I have traveled to South Korea, and I met with the President of several semiconductor companies. I had dinner with them. And in South Korea, there is Samsung (KS:005930), obviously, and Hynix as well. So there's many companies associated in the semis industry. There's a lot of young companies with great technology as well. And we are making investments into them and similar in Japan. But we basically would like to have this practice on a global basis. So going back, positive effects of Zero Revolution by SBI Securities is what I would like to speak about. In the second half, there was lost profits of ¥158.8 billion, and how were we able to offset the lost profit. You basically -- we basically needed to prepare. It's not something that you suddenly state and do. So I declare this from 2019, I was saying that we'll do the ZERO Revolution from back then. And then four years' time, we were going to do the zero revolution is what I would say. So it was the timing when it coincided with the start of the new NISA program. So we wanted that to be a good opportunity to start this initiative. So we did it. But what if we weren't able to offset the ¥15.8 billion worth of lost profit, I considered various options. However, I was sure that we will be able to offset that amount. Lowering prices, starting off with SBI ETRADE, SBI SECURITIES. We wanted to do thorough price destruction. So it's -- we wanted to pursue quantity, more than quality first, meaning the number of customers, then because there is a variety of customers, you need to have a wide assortment of products available. And because there's a diversity of customers, you need to ensure that you have good compliance in place. And because you have more customers, you need to reinforce your IT system. So in various ways, you are able to make quality improvements. So this is the rule of Hegel. So we wanted to incorporate that. It's not just Hegel. [indiscernible]. He also has a phrase that is under the same notion. So I strongly believe in that. Therefore, if you do the zero revolution, I believe that we will definitely see the number of customers rise. And in our ecosystem, we will have a ripple effect. And that overall, we should be able to generate a big positive. I strongly believe in this. And no matter who opposed I decided to go ahead with this initiative. So that's what we've been doing. So here it says ¥15.8 billion and how we were and a rough estimate of how this was derived, so ¥15.8 billion. If this wasn't in place, what would have happened? So operating revenue would have increased by 25% and operating income would have increased by 36%. If we didn't do this program, it should have been ¥84,580 million or even it should have been higher than that. And then when you do a like-for-like comparison, when you compare against Nomura and Daiwa and so forth, if you add ¥18.5 billion, we actually exceed Daiwa securities. So on an underlying basis, we are already at that level for sure. So if overseas goes well some other parts of the business doesn't go well. That was the case for Nomura. For Daiwa, they're quite stable in their performance. But what's important here is the number of customers. In our case, we have been able to see a steady increase of customers. So we were able to achieve increased revenue. It was up by 16.2%. And what increased? When you look at the details, you'll be able to see here what increased. So this is when we announced the zero revolution right here. So October, November, December, January through March, I was really interested in the March quarter, in particular, because in the December quarter, we didn't know what was likely to happen because we just started it. But when you look at the March quarter, you're able to tell the outcome. So what we were able to tell in the March quarter was, first, revenue. It was ¥51.664 billion. When you look at the past track record, starting from the fourth quarter of 2023 March, this is the highest ever revenue. So whether revenue increases or not was my utmost interest, and we were able to increase revenue. So what was the factor behind this increase? It was financial revenues. We were able to achieve ¥18.798 billion, which was unprecedented and also trading revenues. It stayed firm. For trading revenue, for the third and fourth quarters of March 2024, when you look at the total of the two, we were able to see a boost in trading revenue. So we should look at both. And for other commissions, especially for investment trusts, what's happening there was what we focused on. And TSUJI HONGO, we partner with them in order to reinforce M&As. And what happened to advisory fees is another area we looked at. And for the ¥823 million at the very bottom in Q3 it was ¥638 million. This is for foreign stocks commissions and so forth. And if we didn't do the zero revolution, it should have been as high as that that you see on the left. So now you could see the breakdown of what contributed. And for margin trading and open interest credit balance and financial revenue, actually, it achieved record highs. So in the fourth quarter, it grew by 41.9% year-on-year. And also, for financial revenues, it grew by 39% and also investment trust balance, both recorded record highs. And for the fees, it grew by 40.2% year-on-year. So the need for Sumito [ph] to NISA, in the trend from savings to investment, it has been expanding. And as of May 9, it has exceeded ¥211.1 billion. And in March 2025, we believe, on an annual basis, the buildup will exceed ¥2.5 trillion. For SBI Wrap, the discretionary service, AUM is ¥97.8 billion and 120,000 in application. For foreign stocks, it also reached a record high on a revenue basis. It is close to two times. For trading value of foreign stocks or US stocks, it has increased and reached record highs. Also for future and options and individual stock options, individual stock options can be a hedge, but it hasn't really penetrated the Japanese market. Actually, it's really high and popular in South Korea. It may be actually the biggest market for options. That's how much it has grown. So this is something I really want to grow. So I have been telling my security people to really work on this or else they're going to be fired. There's still more opportunity for growth. Futures and options are likely to grow steadily as well. So trading revenue, which is FX revenue and foreign bond sales, we are seeing record highs here. It went up by 9.2% year-on-year. This is the sales of foreign currency bonds. Again, there's volatility because of FX, but you can see there's a nice steady growth. And further increased revenue by acquiring new customer segment and offering new products and services. As we implemented ZERO Revolution, there's one number that is quite interesting. I found it to be interesting. So, larger customers with over JPY 100 million in assets under management, grew 90% in the year before and after the ZERO Revolution. And those with over JPY 500 million in the same period, grew by 75%. So the image is that, people think that people who use online brokers are only investing a small amount. It's -- the fact is very different from that. It's actually high net worth that are entering into this online brokerage, where there's zero fin chance. Even if you look at for open interest credit balance and a margin transaction, you see the ratio for large lot trades increasing. Even in domestic stocks, spot and margin ultra large lot above JPY 30 billion to medium JPY 0.1 billion trades have increased greatly around the ZERO Revolution. And now this trade accounts for approximately 75% of the monthly execution value for domestic stock trades. So Nomura and Daiwa Securities, they tried to sell the Wrap accounts and wealth management, but it is us that's actually increasing the number of customers in reality. So we have actually established wealth management business department, and we are operating in an integrated manner from sales to operational management for corporate and affluent customers. Just the other day, I was speaking with the President of One Foundation, and he said, Kitao-san, your company is just incredible. Let me hear your story. We have -- because of the relationships in the past, we have been using this one particular brokerage firm, but we're planning to change it. That's why he said. And if that changes, then I think the environment will change quite significantly in Japan, whether it be religious corporations or school corporations, we need to truly capture them. And I have just made that instruction. And we are actually growing IFA business steadily as well. If you look at the number of new accounts opened for Q4 2023 was record high. And we are strengthening the consistent IPO underwriting system by utilizing functions within group. The venture debt needs to be expanded. It's -- and we need to combine the bank and the securities, because we're able to engage in new business. We have SBI Investment, and we have nearly more than 1,200 investees in the portfolio companies in SBI Investment. And SBI Securities have undertaken 132 IPOs. This is an incredible number. So if you look at the underwriting share, looking from April 23 to March 2024, there's 99 companies that were listed during this period. We're underwriting share is 19.9%. So we're either a lead underwriter or sub or co-underwriters, but you can see 99.9% is an overwhelming share. SBI Securities underwrote 21 companies, a lead manager, which is record high during this period. It's not just IPOs. We have also done POs and we're growing our business. We underwrote 19 POs year-to-date. And we have also underwrote corporate bonds for example for Tokyo Electric Power Company many are asking us to underwrite and we have actually underwrote 45 corporate bonds so without our power our strength you know their products are difficult to sell. So we have the sales capabilities which exceed others. And this is quite significant. And the fact that Nomura Securities is really losing the glory of the past is because they're losing out on their sales capabilities. So maybe they're not really reducing the number of customers, but they're certainly not increasing. And, of course, the customers are aging. And that's the issue. This is the M&A business targeting SMBs. You know, of course, if we did M&A business with a larger company, it's much more efficient. When I was in Nomura, I was engaged in a lot of M&A business. Of course, the efficiency is good. It's the same amount of work, and yet the fees are completely different. But, of course, there's a lot of needs among the SMEs as well including business succession and these are diversifying and trying to meet all of these even smaller needs and diversified needs is important for the economy of Japan, so we are trying to leverage the strength of Hongo Tsuji M&A. Now we have SBI Cross. It's a spot trading matching service for domestic stocks. So we want to provide customers with much more beneficial execution abilities. We have the PTS, and then we've got JMARK, XMarket, and we have now established a dark pool called SBI Cross, and we're able to reduce the transaction cost. We want to create a world where there's no need for back office anymore. So zero evolution has positive effects, which is rippling through the financial ecosystem in terms of expanded customer base, increased market share. So this is SBI Group's customer base, which is expanding at a rapid pace. If you look at just the CAGR, 12,452 accounts. In fact, we have exceeded 1,300 today, and the CAGR is 13.5% from the end of March 2009 to end of March 2023. Nomura is 1.4, so that means that they have hardly increased. SMBC Nikko is 3.2, and because they had an acquisition, the group companies integrated, so that's why it's higher. And this is really important. The fact that the SBI Group's number of securities accounts are increasing an accelerated pace. So it took eight months to go from ¥8 million to ¥9 million from ¥9 million to ¥10 million with six months from -- and then ¥10 million to ¥11 million is six months -- oh, sorry --seven months and then ¥11 billion to ¥12 million is four months. So that is why one media came intervened me and said, how long do you think it will take to reach ¥20 million -- and this I told him, this is how fast we are growing. The number of new accounts are opened is one step higher, after the ZERO Revolution. Now it's 766,000, which is record high. And during this time, it's not just an announcement of our revolution on August 31st, 2023, but we have also launched Part 2. And then we also launched Part 3 in September 2022 and then November 30, respectively. And finally, we have come to this level. SBI Group's share of trading value has increased rapidly by the start of ZERO Revolution. So we started in September 30, 2023. And if you look at the trend in share of individual stock trading value, it's 52.1%. And if you look at of which trend in share of individual margin trading value, it's 55.2%. So it's not just about number of shares increasing, but we're also expanding our market share. And there are various alliances that we have formed. We have formed alliances with the financial institutions, regional banks and also Shinsei Bank, SBI Sumishin Net Bank, there are alliances there. So we have rolled out different types of alliances. But since the announcement and started the ZERO Revolution, you can see that in these different forms of alliances, it's -- the fact is manifested, same with the line with SMBC Group as well. So in March 2024, we have achieved plus 15% month-on-month. And with all if -- we are actually increasing very steadily. The accounts are brokered by SMBC. It's approximately 180,000 now and month accumulated amount through SMBC is approximately ¥73.3 billion. So the mega banks cards, especially SMBC's card. When someone comes into a company as a new worker or new recruit, they all issue cards. They're all write-up cards. So that's why we have this multi-card strategy. I always tell them, that we need to be throughly multi-strategy, whether it be, cards. So for example, we had Sumitomo Mitsui (NYSE:SMFG) Card, Takashimaya Card, TokyuCard, APLUS, UCS Card, JFR Card and Orico its SBI SECURITIES allows accumulation-type fund investment with this total of seven credit cards. It's much better than one card. And here is we talk about Rakuten's Ecosystem. It's quite a bit of a financial ecosystem, but you can see that we have adopted a multipoint strategy. And there's an integration of V Point and T Point on 24th of April. And then Ponta is joining forces and you have all of these other different points, and we are now establishing a multi-point ecosystem. And SBI Securities seeks to the top position in a number of NISA accounts with ZERO Revolution Part Two. And I have been saying this persistently -- in the executive committee, I heard that we are behind Rakuten. So, we instructed them to implement strategies against Rakuten, and they were giving me all these silly strategies. So I have added pressure to them, and they have finally come up with different measures to deal with Rakuten. But the real winning point is to actually increase the overall number. And it's really a matter of time. So, Nomura and Daiwa, this is their situation. Number of newly opened NISA accounts and NISA account transfers from other security companies are rising as well. Year-on-year, it's plus 161.1%, this is above 800,000 and this is a quarterly trend of the number of NISA account transfers from other security companies. So, by the end of the year, there was quite an increase and then there's a big fall as a result of that, but you can see that on a year-on-year basis, it's plus 188.7%. Even in January-March period, it's 24.3%. So, a quarter has actually transferred to our account. And this is very clear. Rakuten only published information like this on a quarterly basis, so we tracked it. So, you can see January-June 2022, we were behind. We always look at it on the entirety. So, we don't really -- we're paying attention to the details of NISA accounts, for example. But I've been saying that this is a strategically important product for us, NISA are and as well as [Indiscernible] accounts. And my voltage really went up was the start of new NISA. I said we need to thoroughly work on this, and we were able to exceed Rakuten in July when we exceeded significantly in January, in June, and they worked hard to catch up. And you can see July and December, they came very close. But then again, in January and March 2024, we were quite a bit ahead of them. Maybe they run out of bullets. I'm sure they did the best. But we started early on building a system structure that can withstand the expected increase in the customer base, systems are the most important in order to implement a strategy like this. SBI Simplex Solutions has been established. It was February 28th, 2023. Approximately 600 IT engineers operate as a group of practical IT engineers. Furthermore, we are migrating to AWS cloud. It has to be cloud going forward. Why cloud? Why did not Japan implement cloud earlier? Bank's core bank system, what we're developing right now is all based on cloud. We're using AWS. We can really benefit from agility and resilience if we went -- go cloud, we will be absolutely stronger, we can see transaction stability. And there are fees, costs associated with it. But this is for the customers. We want to -- don't want to be thrifty if it benefits the customers. So expansion SBI Securities customer base contributes to the SBI Group as a whole. And I've been saying this persistently -- before we start, I said this will be the picture. This is our ecosystem, and we want to add positive impact on all the companies in our ecosystem. And that is exactly what happened. This is one example. In the FX business, the operating revenue before distribution, operating profit and after distribution in all items, big increases and the SBI Liquidity Market, the CAGR of 14.7%, that is how operating revenue of the entity increased. The market-wise, the trading value though was decreased year-on-year. Despite that, they could hit the record high operating revenue. I'm really impressed. This person called Ozaki-san with us, and he is heading SBI Liquidity Market, Ozaki-san and his team and their technology is really great. They have never betrayed my expectations. That's how they are. The number of accounts, five major FX trading companies surpassed 2.2 million. And we are showing GMO Group and others as well. And on the right-hand side, we have customer margin deposits of FX trading related companies. GMO with some acquisition showed some increase, but we surpassed them, and we are dominant in this area as well. And please look at this. It's very clear that the customer base for the whole group has expanded with this revolution. Finally, group-wise, it exceeded 50 million and the growth rate compared to March 22, March 23, 8.4% plus. But plus 10.6% year-on-year from March 2023, March 2024, in other words, with zero revolution. So the zero revolution significantly contributed to the expanding, the customer base for the group, the results of synergy between SBI Shinsei Bank and SBI Group So we acquired it, and as Ozaki san [ph] is not heading it. Since then, number of accounts and the deposit balance are significantly increasing. It started with JPY 6.3 trillion. It has been on that level for a long time, and then it is coming to the doubled level. The number of accounts customers. It was not increasing. Actually, it was declining slightly, but now it is on this level. The stronger tie-ups examples are here, but please read them later. And this is the collaboration with SBI Securities and the financial products, intermediately business and banking agency business has contributed significantly to the increase in the number of retail accounts and deposits of Shinsei, SBI Shinsei Bank. So when we look at the December 2023, for the very first time, the number of accounts exceeded 40,000, in which 70% came from SBI Securities. So this tied up all the other cooperation is important. And it should be seamless, connected seamlessly and that boost the number of customers. In 2007, the Net Bank was established. And for a short period of time, it grew, and that was because of SBI Securities. And that experience that was my experience, [Indiscernible] in 2000, I did make one example to be the number one branch, and I also successfully increased the number of customers greatly. And the business pattern also, I think was taken, and that is about seamless connection. Well, when it comes to business patent, I do not complain if others are using the patent, because I want the core country to get better. The way of thinking in this country is pretty much behind the rest of the world. We need to make advancements. We need to believe more in technology. In the wholesale business, the corporate deposits, it was JPY1.6 trillion in March 2022; in March 2024, JPY5.6 trillion plus 240% new business partners, plus 231% from 35 to 116. So the Shinsei Bank, they became Shinsei Bank, the Board and the management, what they did is just to put the old customers to the corner and Italy policy. And Chris [ph], what they did was buy non-banking entities one after another to get profit from their business. It's not about bank business itself. They forgot about it, and now, [Indiscernible] the successfully opened the gate of the Shinsei Bank and the result is these numbers, significant expansion of project finance and cooperation with SBI Securities. 43 cases, JPY63.9 billion to 75 cases and JPY 236.9 billion, the synergies have been created incessantly. When it comes to structured finance or project finance, where the Shinsei Bank had the people, professionals in that area. But you need customers. Without customers, you cannot use your expertise. And we evaluated their expertise, and what kind of customers would fit the project finance approaches. And always, what we do is to see in what way there will be a good matching between the technology or expertise and business. And since Nomura era, ASP, that is sales. In other words, analysis. S, and the strategy. After analysis, you set up a strategy. And the P is to make actions. Because if you don't make actions, you cannot make any money. Generating mutual synergy among the expanding business ecosystem, introducing new products, services, and a way of marketing. SBI Money Plaza, what expands its business scale by strengthening its co-managed store strategy and developing a sales strategy in line with current trend. Mr. Izuchi, who died at 57 years of age, he was the president of SBI Securities. And Mr. Izuchi was developing this business so hard. And now, they are up and running and becoming really profitable. With this business, for example, the SBI Shinsei Bank or the regional financial institutions are benefiting. There are 14 banks and 22 other stores. And the Sanjusan Bank, for example, we do not have any capital relationship. But now, we already have second such a store. This is co-managed store with SBI Money Plaza. It's very effective. And with first-tier regional banks, this type of business is expanding. There is no capital relationship. I'm saying that it has nothing to do with capital relationship. With all the regional financial institutions, those who want to work with us or to have capital from us, such banks and financial institutions are increasing. Now, we have nine co-managed stores with SBI Shinsei Bank. And now, they're reaching JPY 413.2 billion yen of AUM. At co-managed stores, it's not just about equity or not just about a fixed asset. For example, there are real estate-related products, or ST, I mean security token. The market will get much bigger, and we will do it more. The regional financial institutions, even with securities on, they are not capable of doing that kind of business right now. But they should be able to, so that customers' needs in regions can be satisfied. The trend of total sales of real estate, small-lot beneficiary interest at SBI Money Plaza, up 76.1% year-on-year. And in 2024, SBI Shinsei Bank is going to have co-managed stores at the 22 branches. And by the end of September 2024, they are going to be set up seven stores. And ever expanding customer with positioning iDeCo as the SBI Group's new strategic product, you have to do good work for the iDeCo. And if the government, the focus is only on new NISA, that is only halfway through for the Japanese people to build their assets, iDeCo is very important. It's 401(k). DC, Defined Contribution. Since 2017, from May 19, we made it completely free of charge. In 2001, we established SBI Benefit Systems, and they are running in the red. But I'm sure that this is something that the Japan needs sometime down the road. That was my conviction. And actually, under SEGA [ph] administration that it was introduced as new program, NISA as well. Balance of the investment trust for 401(k) distributed by SBI SECURITIES. The CAGR is 49.3%, compound annual growth, ended March 2016 to end of March 2024. So there is a big potential of growth here. In the DC area, the year number one in terms of number of other customers. Here, we surpassed Tokio Marine & Fire. And since then, we have been under dominant constantly. We are number one constantly. Our provide products to customers within an outside SBI Group that capture social trends and needs in the asset management business. The society is changing. It's not the area where you can choose between equity and fixed assets. There are many new areas to satisfy needs. That's why we need to do. And for that, we are going to offer new products, for example, SBI iShares India Equity Index Fund with the industry's lowest trust fee rate. We need to work for customers because that way, you can sell most. SBI Japan, high dividend equity fund. It has been selling so enthusiastically only in a short period of time, reached the JPY 71,570 million SBI Asset Management, there are 10 out of four quarterly distribution, India 10 quarterly distribution-type investment trusts. Of course, the trading equity and fixed asset will be most profitable. But rather than that, this is the way that we should pursue. I would be most rich if I focus only on equity or bonds trading. But what I would like to do is to the work for the people for the society. In the US and Europe, for example, in Europe, we have very, very good names, very well known. For example, the brand names in Europe, everyone knows them. And those -- the brand names are included and the dividend is quite good. So yield is good. Is that true [indiscernible], what is the level. Yield is around 6%. So that's what it is. And alternative, we provide investors with new investment opportunities such as alternative investments. So [indiscernible] products. It's a last, we need to do that. And I have been saying that for a long time. In Japan, in Japan only, that's not good enough. We need to tie up with the global leading companies. So the Man Group in the UK and KKR the US with 2 entities, we are going to set up joint ventures. We have agreed on that. And the Man Group is strong at alternative strategies and KKR and good at the private equity, debt, real estate in other was alternative assets is their strength area. And on both sides, we are going to set up joint ventures. Also, private equity incorporated publicly offered investment funds from an early stage, I was saying out loud that we should create such a fund that includes almost the securities pad, but the FSA had been saying no. And from the year 2000, so that we can gain approval, we created 3 funds that are Luxembourg funds. And we have one with PICTET right now that's a Cayman fund. So it's legally available because we were trying to question in Japan, why aren't we able to have this in Japan? Why is FSA against this kind of product? Finally, the society has changed. Now domestic stocks can be included up to 15% in investment trusts. So it will enhance the liquidity of unlisted stocks. It will not only increase funding opportunities for venture companies, but also provide individual investors with the option to invest in growing companies even before their IPO. This is good for the unlisted companies and good for investors as well. I have been talking about this since the [indiscernible] the year 2000. And like Kobayashi says, if you look 100 steps ahead, people will think that you were crazy. But you will be left behind. If you just look at what's right in front of you. So what's great is to look 10 steps in front of you. In Japanese society, I am always looking ahead by 100 steps. But unfortunately, things do not work out well when you're looking out to ahead. But in the case of the US, it's different. People will start to become interested in what you're saying. Japanese people are so conservative. This mentality really needs to change or we're going to be left behind. And that's why we're in this kind of economic circumstance where personal income is declining per capita. So what the heck are we going to do? And also, we are seeing progression in an aging society. And by 2030, we're going to have 5 million plus people who have dementia. So what is Japan going to do? Well, I'm not going to live that long going forward. But for the young people who are here in this room, what is going to happen to you. You need to seriously think about yourselves. You have to vote, seriously. You have to think about yourself and think is this all right? Have your livelihoods become better? The weekend ongoing, is that good? Goods -- prices of goods continue to increase. And real wages continue to decline. It has been happening for the past several of years, and people are talking about wage increases, but more than that, inflation is stronger. So real wages, obviously, is declining. So is this kind of politics acceptable? I'm not saying I'm in favor of the opposition party, but I want to be supportive of decent people. So that's all on you. So next page, without achieving ¥20 trillion of AUM by fiscal 2027, this is something that we definitely would like to do. Group companies that make up the digital ecosystem are actively developing new services and products to promote rapid growth in digital asset domains. In our case, for crypto assets, we have SBI VC Trade and BITPoint. We have two exchanges. And each carries 20 types and 22 types. There's a diverse range of types of products and also staking services. You might not be familiar to this. It adopts a proof-of-stake mechanism in the blockchain. And in accordance with the amount of crypto assets held in the blockchain, you were able to participate in the generation approval of blocks and support the operation of the blockchain network and earn rewards in this process. So at the two exchanges we are seeing more of the staking balance and the staking revenue at SBI VC Trade and the revenue as a percentage of net sales is very high. It is showing good performance. So because it was high in the past it's presumed to be high in the future. But in the world of investments, that is not something that's guaranteed. You need to have eye as well as knowledge as well as intuition. In any case, customer satisfaction has been increasing because of staking. So far, things have been working out well and the stacking rewards have been at high levels. Crypto asset customers have increased by 2.5 times in two years. It is now at 800,000-plus accounts and also for VC trade and BITPoint AUM has been exceeding ¥100 billion, respectively. SBI Group promotes stable coin related initiatives with high-growth potential as well. So stable coin is aggressively going to be adopted around the world. So crypto, it's a type of crypto asset that is linked to the price of a specific legal tender. And it can be used in the virtual world as well as the real world. So, there's various scenarios that can be anticipated. And because of the revised Payment Services Act, in Japan, a collateralized stablecoin is defined that are backed by legal tender. In our case, within Japan, we are trying to circulate stablecoins within Japan. And the number of the company in the US called Circle that has a market cap of ¥5.2 trillion, we are partnering with them. They have a stablecoin called USDC. It's US dollar denominated. So it is backed up by US dollars. Number one is Tessla. Number two is USDC. So in earnest, we are currently under a process of registering as an electronic payment instrument service provider. And in addition, as PIVC trade is playing a central role in the system integration between Circle and SBI and State Bank for the handling of USDC. And also for security tokens, ODX or Osaka Digital Exchange has established a committee called START in order to grow this business even more. So this is another topic that has newly come out. It's an entity called Chiliz, which is the world's largest sports Fan Token platform. We have signed a basic agreement in establishing JV. For those people who are interested, it is a very interesting initiative. Many famous sports teams like Arsenal, AC Milan, FC Barcelona, Inter Milan and so forth. These types of famous teams leverage Chiliz to issue Fan Tokens. And this is a space we are going to enter. It has recorded a record volume of over $300 million in just 24 hours, and we believe this is something that will prove to be popular amongst the young population. So from here on, this is the part that I wanted to talk about the most today. It's our strategy. Like I've been saying from earlier, semis, semiconductors is one of our -- we recognize it as one of the most important businesses right now. And together with that, we would like to reestablish our business portfolio, at the same time, because of changes in economic circumstances in Japan and abroad. First, the SBI Group has been promoting thoroughly reinforcing its profitability through allocating business resources to the banking business in anticipation of rising interest rates in Japan. And of course, already, in the Financial Services business segment, when you look at the breakdown, for March 2024 in the securities business, it accounted for 42%. But the banking business accounted for 53.8% of the business. The banking business is contributing more already. In 2023, the savings bank was doing better. It was around reaching ¥30 billion or so, so it was at 62.6%. So, if they recover again, and Shinsei is likely to grow even more in the future. And for the listed SBI Sumishin Net Bank, they actually announced their results this morning, but they are also seeing better performance. For the insurance business, it's a steady buildup of businesses, basically. So with that as a backdrop, regarding the outlook of the banking business, when interest rates start to go up, what is likely to happen? So the impact of rising rates, policy interest rates to have on SBI Shinsei Bank is shown here. For fiscal 2024, on a stand-alone basis, a positive effect of JPY 6.7 billion centered on loans and asset management of securities paired with a negative effect of plus effect of JPY 4.8 billion from higher interest rates will result in increased revenues of about JPY 2 billion is what we're expecting. And also for retail and corporate businesses, costs are expected to increase for bond procurement. But on the lending side, we expect increased income centered on corporate loans and housing loans businesses for a positive effect overall. And for corporate lending, it's pretty sticky. We have sticky retail deposits. So we believe that we'll be able to see this come through. So we should expect a positive impact, but we need to be prudent with our efforts. So for Net Bank, the same thing applies, we should see positive impact come through. So the annual impact in a year is expected to be about plus JPY 5.5 billion. So, strengthening the banking business by the strategy to create further synergies between the SBI Group and SBI Shinsei Bank Group. So how are we going to expand the customer basis of both entities? So it's going to be under the Fourth Megabank concept and promoting this concept thoroughly. Som the Fourth Megabank concept. If we haven't done it yet, we shouldn't say it that much. For example, we had a passion to acquire Shinsei Bank. And in the Fourth Megabank concept, we needed to turn it into a core part of our group, but I didn't state that before. However, in my head, it was already there. Going forward, for the bank and its asset side, of course, we will pursue organic growth, but we would like to grow it even further through M&A and acquiring assets. And also, we would like to grow it internally and externally. So what I mean by that is it applies to banking and securities, but we would like to ensure we have more integration between internal and external. What kind of resources are we going to give out externally? We need to think about this seriously. And I think we are in those times. But I would like to talk about this in detail later on. And we would like to also have wide area regional platforms with the SBI Shinsei Bank as its core by pursuing the benefits of improvements in efficiency and the expansion of our business scope through wide-ranging collaboration, because with over 100 regional financial institutions, we have various alliances in place already. And for SBI Shinsei Bank, corporate lending is its strength. And the cooperation with other regional financial institutions is expanding steadily. So doing these initiatives is extremely important to expand the customer base. And also in the semiconductor area, in expanding the corporate customer base, it's very critical. For example, the other day I visited Taiwan and P5. I went to the opening of the most advanced factory, and at the ceremony I was getting explanation about the clean room and so forth. But for semiconductor materials, 70% of it comes from Japan. And for the 60% of production equipment comes from Japan, is what I heard. So we're right in the middle. We're in Japan. And we're trying to engage in the semiconductor's business now. So Japan makes all of these things. So together with the semiconductor manufacturers, we would like to have a close relationship. This will be a very big thing. It will be a big positive as we seek to expand our corporate customer base. So we don't want a situation where the bank thinks that the semiconductor industry is irrelevant. Same thing applies for the securities business. For regional financial institutions, when we announced that we were going to be in the semiconductors business, the 31 local governments started to call upon us that they want to attract us to their region. Next time, I have decided on Miyagi ultimately, they are going to be -- we're going to gather multiple regional financial institutions so that I could have a lecture there. Kawashima-san is working on it, but in order to do good funding in a large way and also to have transactions, we're going to have this kind of relationship because they have the money, but they have no one to lend to. And that's a big issue. However, the semiconductors arena is likely to grow going forward, and if we get the borrowings, that would serve as a positive for the financial institutions and also for business corporations. Mr. Takamura is working on various alliances right now, and together with the PSMC people, he is working on it. And I think we made an announcement today about Rester [ph], and that we paid 3 billion to own their shares. And for Rester, they are a major semiconductor wholesales trading company. So also for distribution, once you make the semiconductors, you need to deliver them. And from two companies right now, within the site of the factory, they're asking if they can establish a center so all the products can be concentrated and then can be delivered by trucks. So for the factory, we would like to automate it as much as possible. According to Mr. [indiscernible], he's been saying, you could use AI. You don't have to hire people. Everything can be automated. Of course, I don't know if we can go that far. However, as a partner from Taiwan or through a joint venture in China, all the people are Taiwanese, but about 250 people are going to be here who are well versed in P5, in the Semiconductor world. So this is going to be our strongest weapon in conducting this business. And also, at the executive level, we are going to do exchange, personal exchange. Before it was about raising hands, we were asking around at SBI or at Shinsei Bank and asking if people were interested to engage in personal exchange. But now at the executive level, we would like to do this kind of road exchange. For example, a person -- a Senior Managing Director and a Managing Executive Officer in charge of Financial Corporate Sales and Corporate sales as SBI Shinsei Bank was appointed to become the Senior Managing Director at SBI Securities. She is a very powerful person. And she's originally from Goldman Sachs (NYSE:GS) and was -- she is basically a born Salesperson. So those are the types of people that we would like to allocate. And also in Singapore, just having people from securities or just having people from investments were going there. But now Bank Person is going to go there. And we believe that at Singapore, we might be able to open up new opportunities. So we have appointed a person from the bank, so that the person can be Joint Head in Singapore. So we have people now from Securities and the bank in Singapore, so that they can work to expand their respective areas. So if we going to Universal Banking, this is the way you should proceed. In Japan, because of the law, Banking and Securities was being divided. And they don't have that kind of thinking. But I wanted to do it. And now the circumstances allow this to happen. Furthermore, Repayment of public funds by SBI Shinsei Bank, at the time -- from the time of acquisition, this is the great cause of SBI to repay the public funds. And they haven't paid back their public funds for 20 years. And I've been saying that, that's like a theft. And I've been saying that out loud. And I think people agreed to what I've been saying. And repaying the loans in full will enable us to flourish dramatically. It is what I have on my mind. So this is where we are right now. So we did a ¥2,800 per share at TOB on February 9th, 2024. And we also acquired ¥19.3 billion of fractional shares, arising from the DIC that was treated as a repayment of public funds. So it was for the first time in 18 years that, we made a repayment. So there's about ¥330 billion remaining. And S-Grant Corporation is now here and now seven shares and the voting rights share, we have 64.81%, the DIC and the RCC has 11.11% each and S-Grant Corporation has 12.96%. And people were questioning the ownership of S-Grant Corporation, but I welcome it. I would like Murakami-san's expertise to be leveraged for this great calls because he used to originally work for Medi. So, it's for the sake of Japan. And there was poor management in place before and activist -- Murakami-san turn into an activist because he had his passion, not to allow this from happening. So, he is striving to have better management in place. So, I don't think he is in a position to oppose. That's the right way I think. Early stage, he came to me, and he was asking me to make an investment in its fund. I really agree to his passion. However, I said that we personally make funds, and we don't do GPs. We don't do LPs, we do GPs, but not LPs. And that is the principle of our business. So, I -- the client is offer back then. However, -- but having this presence of scratch might be good. So, -- because -- there are -- there is a so-called SNS activist lately. I'm not going to name the person, but I regard this person highly. For Mercari, GMO and having an AGM just online is something that this person was angry about. Of course, it might have been good during the pandemic days, but many shareholders should be addressed and the company should listen to what shareholders have to say in person. Therefore, in our case, we have about 2,000 people worth of retail investors come to our Information Meeting and even at our Shareholders Meeting, at most, we have about 800 people at highest. And even after that, we still get about 400 to 500 people who attend and I really want them to come and listen and give us feedback. And if it's a positive piece of feedback, we would like to put it -- apply it to our business. And if there is anything that's misleading, we would like to correct what's being misunderstood. I'm spending two hours' of time talking about thoroughly to analysts and to the people who attend. I don't think there's any other company like that. The Head of the company will talk in brief only. I have everything in my mind about the company. I'm 73 year's old. I'm not comparing against other companies, but at least a manager needs to be able to do this much or else, they can't be called a manager. So, as I track a little bit, but this is a schedule and direction for the future. So, the basic is to make sure that the business performance improved. So, the target, €70 billion, Kawashima-san will steadily make progress to achieve this target and the achievability is quite high, I think. And even already, he has been able to deliver considerable results in the short term. So by March 2025, specific mechanism for the payment of the public funds will be proposed to DIC and RCC. And then we will faithfully discuss and honestly discussed on a specific mechanism for repayment and reach agreement by June 2025. And SBI Shinsei Bank's results. This is where I want you to pay attention to is ordinary business profits. For the first time in 13 years has exceeded JPY 100 billion. And I said believe that it's fully possible to achieve a consolidated net profit of JPY 70 billion. So here, you see this growth already from 2022 to 2023 by 35.6%. And then the interest rates will go up as well, like I said earlier. And during that time, they need to continue to increase the deposit base. It's about double, so I'm sure it will increase furthermore. Aside from that, the customer base is changing dramatically. If the securities customer base changes, then if the bank and the securities are seamlessly linked then the bank's customer base will continue to expand. And I have tried to look at when we went public, Shinsei -- excuse me, SBI Securities Bank, how much was the pricing -- this is 2003, 664 and then 674 in 2004. So 674 in 2004 and IPO price was JPY 8,720 on February 2004, JPY 8,720 in 2006, April 10, the highest price was JPY 8,880. And there was Lehman Brothers collapse, and it went down and there wasn't any new creative ideas and management, and it was all very backward-looking. The management like that continued on. That was the case and share prices continue to remain sluggish. And on the day of TOB announcement was JPY 1,440. You can see this is the profit level and this dramatically increased to JPY 70 billion. And if you look at the market, this is a market at that time. You can see it has exceeded significantly -- now it's above JPY 40,000 has been steadily increasing now as a market. So I certainly thought how much would it be if we went public? And this is just playing with analogy, but in thinking of different things, I think analogies are important. So that's why I study history. So repayment of public funds can be carried out in different ways looking at the past examples. So for example, they can do a special dividend every time or converting common stock to preferred stocks. And if you take reference Aozora Bank's case and then also Resona Holdings then they went public again. So this is different ways to do it. So as I have said earlier that we will follow the schedule by the end of June, and we will hopefully be able to agree on specific repayment mechanism and come to some sort of a conclusion. If I said I will payback, I will do so. I don't want to be just words-only. I'm not like others who only say, but not act. That's why we have been able to establish this company of JPY1.2 trillion in just a couple of decades, because I do what I say, and I do not put relentless efforts and wisdom into this, and that's my style. In the Financial Services Business, we will promote integration of domestic and overseas operations by directing management resources more boldly than before toward countries with high-growth prospects, pursue further expansion of the revenue base by strengthening the bank securities linking overseas operations. Southeast Asia has also been impacted, especially negative impact because of the high interest rates in the United States. Even in the US, they're in a situation where there's uncertainties about them being able to do soft landing. I still think that there's a higher probability of soft landing. But if you look at the circumstances, stock inflation possibility is starting to rise, so the timing going forward. When do they change the rates, and how many times? I think this is critical, and we're coming to that critical stage, and because so many parties are affected by that. And of course, with Trump in or not, this is -- will also have a big impact. I have a feeling that maybe he will win the election as I look at different data. But I do not see that enthusiasm in Mr. Biden, I mean he's old, but I don't see that energy level. And do you want to really entrust the government to someone without energy level? And if he's assigning a Vice Presidency to someone like Ms. Harris, then it really -- I mean, of course, they can invite someone that is much better as a Vice President, there's a lot more certainties. But as a leader of the nation, he must have that energy enthusiasm. As Niche [ph] says, greatness is about giving directions. So you have to be able to set out clear directions. So for example Mr. Kishida was saying -- talking about ability to listen. This is not something a leader would say. Of course, I don't say don't listen, but it's inevitable. Of course, you have to listen. But it's not just about listen, it's not -- after listening, you need to turn a certain way to a certain direction. And this is not good for him. So now, the steering of our company, I think we're entering -- there's a possibility of entering into one of the most challenging era in my management for example, who the President will be, what will be the investment in semiconductors will be. But we have -- I would have just decided with a certain analysis, and once I decide, I will just need to make sure that I carry it out. But in order to carry it out, I need to have a strategy as well. And as I thought through this, I thought the arbitrage is the essence of finance. So the money flows from low to high, from low growth to high growth. That's where the money flows, all over the world. And that's the essence. That's the nature. So we need to go back to that basics and look at Southeast Asia, or where there's -- where cash is collected, accumulated and overflowing, which is Middle East, and also Africa, where there's potential. And when I say Southeast Asia, I'm also thinking southern India as well. So this is why I want to invest management resources overseas. Otherwise, it would be very challenging for this company. So we will accelerate investment of management resources to increase involvement in the cash-rich middle region, and we will establish overseas business headquarters. So this is Southeast Asia. We have actually already planted seeds. So for example, we have a bank in Cambodia with 70% in stake. This is already growing. Growth rate is high in Cambodia, but there's a question about stability of politics. So this is an area which we need to monitor. Vietnam, they restrict their foreign ownership to 20%. So this is problematic. So we have finally reached 20%, but the business performance is already public, and it's now become an equity method company. And as an investment income from equity method, we have already booked JPY 5.7 billion in 2023, or 2024 March, and SBA holding expects to receive approximately JPY 1.3 billion in cash dividends in June 2024 as profit distribution. So in Ho Chi Minh, this bank has gone public. Mr. Dodge, who is managing this bank, is actually an incredible man. And Thailand and Cambodia online securities, SBI Thai online securities, we established in October 2014 because of the market situation. They dropped in their profits, but they have always been booking profits. And here is SBI Royal Securities in Cambodia. We have 65.3% in stake, established February 2010. This is the only Japanese-affiliated comprehensive securities firm in Cambodia, so we have most of the large company deals. And Russia, like I've been saying, it's profitable, and there were people worrying about Russia. So everyone is exiting from Russia, so the ones that remain will win. Many of the Japanese companies are there. And they have nowhere else to depend on except for SBI. That's what they say. I'm very grateful for that. It's already profitable., already recording JPY828 million. And then this is an SBI insurance joint venture. We have 40% in stake. And we know that there will be auto insurance demand in Cambodia. So this is a business they want to do. And we also want to do this in Vietnam as well. And then this time, there are three that are invested by SBI Shinsei Bank. So it's not about Shinsei. And we will look at the overseas business altogether because whether it be Vietnam, there are different financial institutions, and we have an information network, and we need to share this information. Otherwise, it's quite foolish not to do so. So -- and we will do all of that. So New Zealand, Australia, we have not really invested in those nations. New Zealand, this bank is 100% subsidiary of SBI Shinsei Bank. But if you look at the personnel staffing, where we could only do it with three people, they have like 10 people. So we need to really consider how we utilize the overseas subsidiaries. And like I have been saying earlier, we will the -- we will have the bank part and also the securities part, but they will be managed jointly. So we want to be creative here. London, the main London will be coming to visit me. And the other day, CEO of London Stock Exchange come and visited. So there's a lot of activities and discussions with London. London in a sense, because of Brexit, a city has been damaged severely and they are eager to do something about it. So that is why the -- depending on Japan and they want to come and meet me. And it just happens that Shinsei Bank has a company called Shinsei International Limited, and we had combined our securities business here. And maybe they can go to Middle East together or they can have build network in connection with others, and they can maybe issue debt products here. So we are thinking of doing different things with this subsidiary. Africa is also an important region. Novastar, this is a UK-based venture capital, and we have formed a strategic capital alliance with them. And we also work with Standard Chartered (OTC:SCBFF) Bank in different ways. And in the last four months or so, I believe, I have been receiving many visitors from Saudi Arabia, and we have had so many different types of discussions, including private and public sector. Saudi Arabian top personnel have come and talked about offer to do collaborations with us including electricity as well. And so we had the top management for us come and we had time for discussions. And I think we have been able to really come closer to Saudi Arabia. And even on [indiscernible] that, people from, for example, Aramco (TADAWUL:2222) have come and we have been able to build our personnel network. And in just this February, we have decided to establish SBI Middle East, where we can begin to engage in full-scale business, and we can also change our license. It's going to be costly a little bit, but we will be able to do more business in Saudi, and we're hiring about 5 people from Saudi and we're also sending people from Japan as well. So, it does -- it doesn't matter what nation you're from, whether in Japanese or outside. It's about that person about that capabilities and we will continue to hire people from the outside. I think that's the way it will be. Otherwise, we will not be able to overcome globalization. China, there's no one from Japan. So for example, in Beijing, Shanghai, Dalian, Nanjing, Wuxi in those cities, we have business bases and we have business activities there, but it's all run by Chinese. And we have no problems -- and we have Chinese who speak Japanese, many of them do. So in principle that would be the case, and that's how we do our China business. And we don't need to really invest from Japan. The money that we have invested is actually circulating and they are able to earn and then reinvest that money. So it runs well within the country, and we want to do the same in India. And I believe India is much more difficult than China. At a very early stage, I went to India. But to be honest, I was not very successful there. At the very beginning, we did SBI there with the State Bank of India. It was a joint venture, the largest bank in India, and we have decided to do PE firm. And we're expecting more information from them, but hardly none. And even the little information we got was hardly useful. And the number of public companies in India is probably the largest among the world -- all the nations in the world, much larger than Japan. They -- going public is so easy in India. So there's hardly any information on private companies. So that just changed my strategy and we decided to invest in public companies instead, especially the younger ones that we have recently gone public. That way, we will have more accurate information. So India was very challenging, but situation has changed. And that is why I have decided to work with Standard Chartered Bank. But we have not really been able to come up with a crystal clear result yet. Also, UAE, our promoting expansion of business alliances major companies. Saudi Arabia, we have reached a basic agreement with Aramco on the world's largest integrated energy and chemical company and so we will support the company's Japan-based start-ups starting to expand its business in Saudi Arabia. And we also will do a national research in city in Saudi Arabia to do a business airlines so that we can also collaborate in the areas of semiconductor, digtal, fintech, biotech. And the NTG. This is a large Saudi Arabian ICT giant. We want to also collaborate with us -- with UAE, we will collaborate with the SC Ventures. It's a Defi tokenization joint venture fund, which will be established. And then TradeFinex Tech. This is already established. We have 60% TradeFinex has 40%. It's a joint venture that has already been established. And then I want to make sure we complete this in with six months, but we are establishing overseas business management division. So this is all of the businesses of overseas businesses of our group from securities banking, insurance, investment business, and all the businesses will be consolidated here. One of the contradictions that I feel is that, for example, we have investment business, and we invest in the FinTech-related German bank. And the director there doesn't know the banking business. I think that's strange. It should be someone from Shinsei that would be sitting on the board there. So for this reason, this idea came up to my mind, I decided to just put it in this form. So that we can flexibly send people where we have popular people and we can send people from there. And as a target, we want to aim for profit before income tax expense from us suppressions that account for 20% to 30% of the group's consolidated profit. This will be our two year to three year target. Also for semiconductor, I have talked about it a number of times. So I will be -- this will be the last section. And there's a lot of information here. So I don't have much to say about it. So I will skip these slides. These are all old slides I have already talked about. I just want to mention about what's important in our production line and coming from 28-nano to 55-nano. So what is 55 used on, so it could be automotive or power management I see or for wireless transmitter, receivers, telecommunications, 40-nano is here. And then after that, 28 wafer on wafers. These are the new technologies. So we want to go with this combination of the production lines, and that's what we will build. And this is the progress on the foundry construction. You know the location. What we are very grateful for is that the government -- governor, excuse me, was very passionate. And it's fair to see a governor so quick to act like that. He will, together with us visit P5. He had visited with us visited P5 foundry in Taiwan. There's -- a journalist was also there and was asking me to speak. So I took that interview. P5 Foundry was different the Japan's foundry. So P5 is earthquake resistant, but this is earthquake proof, of course. That's the big difference. And their P5, garages in the underground, if you do this, it takes more time. Here in Japan, we're not going to build a garage or underground. We can do this open space, because we have a lot of land. I said this earlier, but 70% of semiconductor materials come from Japan, 60% of the semiconductor equipment come from Japan and the sourcing speed is much different because we're spying from Japan. And they would have to import it. So those would be the difference between Taiwan and Japan. And we are basically going to use a design that's already been used in P5 Taiwan. So, the time for design will be much shorter. So we think we should be able to shorten the time to operation. We're looking at Phase 1 2027, but we want to accelerate that to 2026. I know that media was talking about one year. I have never said that it will be one-year acceleration. I just said it will be accelerated and it will be within 2026. So that's the plan. And for different reasons, we think we can do this quickly. And if you look at RapiDAST, it's quite fast, but the problem is they can't go through the tunnel, because these are all related to regulations and legal issues. And if you look at Kumamoto, they're using water from the well. So there's a lot of land issues as well. So Miyagi, so far as I have heard, there's no issues other regions are expressing. So this is the ecosystem that we want to build, as I have been saying. For Vietnam as well, when the Prime Minister came, they -- it was working with API, and they're really asking for foundry business in their country. So I hope they can be involved in this in one way or another. And this is, as I have been saying earlier, this is a new ecosystem that goes beyond the existing ecosystem. And this will bring about synergies. Restar, Prestar, as I have just announced today. They will be a new capital business alliance. Takamurasan and I visited together and so we have many opportunities like that. So I think I have just talked about two hours, just two minutes before 6 O’clock. So, if you have questions, I will be at the back, so please stay on if you wish to ask a question.

End of Q&A:

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