Daiwa Securities Group Inc.
4Q FY2023 Earnings Announcement
April 25, 2024
This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other "forward-looking" information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Group's actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group.
Table of Contents
Highlights | 3-4 |
Financial Summary | 5-7 |
B/S & Financial Management Summary | 8-9 |
P/L Summary | 10 |
Breakdown of SG&A | 11-12 |
Overseas Operations | 13 |
Segment Information | 14-21 |
Reference | 22-35 |
2
Highlights (4Q/FY2023, YoY)
Achieved revenue and profit growth in all divisions*. Ordinary income reached the highest level in 9 years.
Consolidated earnings results
Net operating revenues
Ordinary income
Profit attributable to owners of parent
FY2023 1Q-4Q
¥590.9 bn
¥174.5 bn
¥121.5 bn
FY2022 1Q-4Q
¥464.2 bn
¥86.9 bn
¥63.8 bn
- Changes vs FY2022
+27.3%
+100.8%
+90.3%
- Retail Division's ordinary income was ¥58.9 bn, due to the steady progress of shifting to wealth management business model (highest level in 8 years).
- 4Q's contract amount of wrap account service was at new record high (¥826.7 bn). Net inflow was the highest level in 9 years (¥487.9 bn). Contract AUM hit a record high of ¥4.1 tn**.
- Assets under Custody reached record high of ¥91.0 tn**.
- Wholesale Division secured ordinary income of ¥44.0 bn due to the recovery in both primary and secondary markets.
- Global Markets saw revenue and profit growth in both equity and FICC due to the increase in customer activities.
- Global Investment Banking's M&A related revenue (¥43.5 bn) reached new record high***.
- Asset Management Division reached new record highs in both net operating revenue (¥73.1 bn) and ordinary income (¥45.9 bn)***.
- Daiwa Asset Management reported a net inflow of ¥663.3 bn in publicly offered stock investment trusts (excluding ETFs), highest level in 9 years. AUM reached a record high (¥29.0 tn).
Annual dividend: 44 yen (Interim dividend: 19 yen, Year-end dividend: 25 yen)
- Annual dividend payout ratio: 51.8%, Total payout ratio: 80.1%
- Divisions as of end-Mar 2024 (Retail, Wholesale, Asset Management, Investment)
** | Includes Wholesale Division | 3 |
*** | Since disclosing division information in FY2010 | |
Summary (4Q/FY2023, QoQ)
Ordinary Income was ¥56.7 bn, highest level in 9 years.
Consolidated earnings results
Net operating revenues
Ordinary income
Profit attributable to owners of parent
FY2023 4Q
¥164.5 bn
¥56.7 bn
¥39.5 bn
- Changes vs 3Q/FY2023
+11.3%
+38.9%
+39.1%
- For Retail Division, both net operating revenues and ordinary income increased. Asset based revenues (¥24.9 bn) were record high due to increase in stock investment trust sales (¥470.0 bn) and high level of wrap account service's contract amount (¥217.9 bn).
- For Wholesale Division, Global Markets saw equity revenue growth due to increased customer flows. For Global Investment Banking, M&A related revenue hit new record high. Expenses related to strategic strengthening in M&A in US/Europe resulted to decline in profits.
- Annualized ROE: 10.6%
Net Operating Revenues
200 (¥ Billions)
164.5
150 | 125.7 134.1 | 144.3 147.8 | ||||
121.4 | ||||||
111.7 | 106.1 110.9 | |||||
100 | ||||||
50 | ||||||
0
4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q |
FY21 | FY2022 | FY2023 |
Ordinary Income
(¥ Billions) | |||
60 | 56.7 | ||
40 | 40.8 | 40.8 | |
36.0 | |||
30.8 |
23.323.1
20 18.0 14.8
0
4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q |
FY21 | FY2022 | FY2023 |
60
40
20
0
Profit Attributable to
Owners of Parent
(¥ Billions)
39.5 | ||||
29.7 | 28.4 | |||
19.5 | 23.7 | |||
17.9 | 17.1 | |||
11.8 | 15.2 | |||
4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |
FY21 | FY2022 | FY2023 | 4 | ||||||
Consolidated
Financial Summary
FY2022 | FY2023 | % Change | % Change | % Change | |||||||
(¥ Millions) | vs | vs | FY2022 | FY2023 | vs | ||||||
4Q | 1Q | 2Q | 3Q | 4Q | |||||||
3Q/FY23 | 4Q/FY22 | FY22 | |||||||||
Operating revenues | 293,860 | 266,259 | 303,827 | 335,378 | 372,016 | 10.9% | 26.6% | 866,090 | 1,277,482 | 47.5% | |
Net operating revenues | 125,737 | 134,110 | 144,321 | 147,894 | 164,583 | 11.3% | 30.9% | 464,226 | 590,910 | 27.3% | |
SG&A | 101,822 | 103,377 | 106,492 | 109,834 | 117,500 | 7.0% | 15.4% | 397,952 | 437,205 | 9.9% | |
Ordinary income | 30,818 | 36,096 | 40,835 | 40,876 | 56,778 | 38.9% | 84.2% | 86,930 | 174,587 | 100.8% | |
Profit (loss) attributable to | 17,124 | 23,712 | 29,793 | 28,457 | 39,594 | 39.1% | 131.2% | 63,875 | 121,557 | 90.3% | |
owners of parent | |||||||||||
Total assets | 26,413,248 | 31,501,328 | 33,424,666 | 31,734,346 | 32,027,299 | 26,413,248 | 32,027,299 | ||||
Net assets | 1,675,489 | 1,736,856 | 1,773,266 | 1,728,706 | 1,788,658 | 1,675,489 | 1,788,658 | ||||
Shareholders' equity* | 1,407,840 | 1,468,713 | 1,504,956 | 1,459,671 | 1,522,186 | 1,407,840 | 1,522,186 | ||||
EPS (¥) | 11.79 | 16.32 | 20.60 | 20.02 | 28.22 | 43.53 | 84.94 | 95.1% | |||
BPS (¥) | 968.93 | 1,010.78 | 1,046.95 | 1,031.99 | 1,086.20 | 968.93 | 1,086.20 | ||||
ROE (Annualized) | 4.9% | 6.6% | 8.0% | 7.7% | 10.6% | 4.6% | 8.3% | ||||
* Shareholders' equity = Owners' equity + Accumulated other comprehensive income
FY2023 Dividends
44 yen
(including 19 yen interim dividend)
5
Consolidated
Segment Summary
(¥ Millions)
Net operating revenues | FY2022 | FY2023 | % Change | % Change | FY2022 | FY2023 | % Change | |||
vs | vs | vs | ||||||||
4Q | 1Q | 2Q | 3Q | 4Q | ||||||
3Q/FY23 | 4Q/FY22 | FY22 | ||||||||
Retail | 40,550 | 49,845 | 49,387 | 49,886 | 59,262 | 18.8% | 46.1% | 164,336 | 208,380 | 26.8% |
Wholesale | 43,344 | 51,627 | 54,990 | 51,840 | 62,021 | 19.6% | 43.1% | 160,891 | 220,479 | 37.0% |
Global Markets | 25,155 | 36,848 | 36,921 | 33,758 | 41,866 | 24.0% | 66.4% | 102,850 | 149,394 | 45.3% |
Global Investment Banking | 18,188 | 14,778 | 18,069 | 18,081 | 20,155 | 11.5% | 10.8% | 58,041 | 71,084 | 22.5% |
Asset Management | 17,569 | 17,309 | 18,031 | 18,620 | 19,221 | 3.2% | 9.4% | 70,394 | 73,182 | 4.0% |
Securities Asset Management | 10,346 | 10,862 | 11,653 | 11,886 | 12,776 | 7.5% | 23.5% | 42,882 | 47,179 | 10.0% |
Real Estate Asset Management | 7,222 | 6,447 | 6,377 | 6,733 | 6,444 | -4.3% | -10.8% | 27,512 | 26,003 | -5.5% |
Investments | 7,046 | 1,838 | 4,534 | 8,303 | 8,233 | -0.8% | 16.8% | 16,446 | 22,910 | 39.3% |
Other/Adjustments | 17,226 | 13,489 | 17,377 | 19,244 | 15,845 | - | - | 52,157 | 65,956 | - |
Consolidated total | 125,737 | 134,110 | 144,321 | 147,894 | 164,583 | 11.3% | 30.9% | 464,226 | 590,910 | 27.3% |
Ordinary income | FY2022 | FY2023 | % Change | % Change | FY2022 | FY2023 | % Change | |||
vs | vs | vs | ||||||||
4Q | 1Q | 2Q | 3Q | 4Q | ||||||
3Q/FY23 | 4Q/FY22 | FY22 | ||||||||
Retail | 6,272 | 13,542 | 12,024 | 12,575 | 20,780 | 65.2% | 231.3% | 25,886 | 58,924 | 127.6% |
Wholesale | 3,608 | 11,041 | 12,766 | 6,823 | 13,405 | 96.5% | 271.5% | 2,822 | 44,037 | 15x |
Global Markets | 196 | 9,783 | 9,157 | 5,093 | 13,613 | 167.3% | 69x | -3,130 | 37,648 | - |
Global Investment Banking | 3,235 | 886 | 3,206 | 1,059 | -642 | - | - | 4,738 | 4,510 | -4.8% |
Asset Management | 11,998 | 9,022 | 11,551 | 11,646 | 13,720 | 17.8% | 14.3% | 44,526 | 45,940 | 3.2% |
Securities Asset Management | 3,978 | 4,403 | 5,196 | 5,303 | 6,056 | 14.2% | 52.2% | 18,076 | 20,959 | 15.9% |
Real Estate Asset Management | 8,020 | 4,619 | 6,355 | 6,342 | 7,664 | 20.8% | -4.4% | 26,450 | 24,981 | -5.6% |
Investments | 6,563 | 2,975 | 4,702 | 5,304 | 6,686 | 26.1% | 1.9% | 13,068 | 19,669 | 50.5% |
Other/Adjustments | 2,375 | -486 | -209 | 4,526 | 2,185 | - | - | 626 | 6,015 | - |
Consolidated total | 30,818 | 36,096 | 40,835 | 40,876 | 56,778 | 38.9% | 84.2% | 86,930 | 174,587 | 100.8% |
- Figures calculated based on managerial accounting of each Group companies. Equity in earnings of affiliates is included in each respective segment.
※ Reporting segments as of the end of March 2024. For reporting segments after April 2024, please refer to the press release "Notice of Changes in | 6 |
Reporting Segments" (https://ssl4.eir-parts.net/doc/8601/tdnet/2404863/00.pdf). | |
Consolidated
Segment Summary
Net operating revenues | Ordinary income | |
Retail Division
(¥ Billions)
Wholesale Division
(¥ Billions)
Global Investment Banking (Net operating revenues)
59.2
49.8 49.3 49.8
42.0 | 40.3 | 41.1 | 42.2 | 40.5 |
20.7
13.5 12.0 12.5
6.7 6.2 6.1 7.1 6.2
Global Markets (Net operating revenues)
51.6 | 54.9 | ||
44.9 | 42.7 | 43.3 | |
GIB | 38.8 | ||
35.9 | |||
GM | |||
10.4 | 11.0 | 12.7 | |
2.4 3.6
-2.6-0.5
62.0
51.8
13.4
6.8
4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q |
FY2021 | FY2022 | FY2023 | ||||||
Asset Management Division
(¥ Billions)
Real Estate AM (Net operating revenues)
Securities AM (Net operating revenues) | 18.6 | 19.2 | ||||||
17.7 | 18.6 | 16.9 | 17.2 | 17.5 | 17.3 | 18.0 | ||
11.2 | 11.1 | 10.7 | 10.5 | 11.9 | 9.0 | 11.5 | 11.6 | 13.7 |
4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q |
FY2021 | FY2022 | FY2023 |
4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q |
FY2021 | FY2022 | FY2023 | ||||||
Investment Division
(¥ Billions)
7.0 | 8.3 | 8.2 | ||||||
4.5 | ||||||||
4.1 | 3.6 | 1.9 | 3.7 | 6.5 | 1.8 | 6.6 | ||
4.4 | 5.3 | |||||||
4.1 | 4.7 | |||||||
2.9 | ||||||||
0.7 | 1.2 | |||||||
4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q |
FY2021 | FY2022 | FY2023 |
7
Consolidated
B/S Summary
Consolidated Balance Sheet (March 31, 2024)
(¥ Billions)
Current assets | 30,439 | (5,566) | Current liabilities | 26,797 | (5,216) |
Cash and deposits | 4,398 | (531) | Trading products | 5,863 | (421) |
Short-term investment securities | 1,410 | (279) | Trading securities and other | 3,368 | (-82) |
Trading products | 7,534 | (-90) | Stocks, Convertible bonds | 206 | (101) |
Trading securities and other | 4,870 | (-554) | Bonds | 3,074 | (-224) |
Stocks, Convertible bonds | 196 | (-52) | Other | 87 | (39) |
Bonds | 3,398 | (-1,051) | Derivatives transactions | 2,495 | (504) |
Beneficiary certificates | 43 | (-9) | Loans payable secured by securities | 11,698 | (3,769) |
Other | 1,231 | (559) | Deposits for banking business | 4,511 | (578) |
Derivatives transactions | 2,664 | (463) | Short-term loans payable | 1,272 | (-19) |
Operational investment securities | 138 | (11) | Current portion of bonds | 159 | (-325) |
(after allowance for possible investment losses) | |||||
Loans secured by securities | 12,368 | (4,026) | |||
Non-current assets | 1,587 | (47) | Long-term liabilities | 3,435 | (283) |
Property, plant and equipment | 921 | (4) | Bonds payable | 1,276 | (-28) |
Intangible assets | 127 | (2) | Long-term loans payable | 2,020 | (313) |
Investments and other assets | 539 | (41) | Total liabilities | 30,238 | (5,500) |
Listed stocks | 130 | (16) | Net assets | 1,788 | (113) |
Unlisted stocks | 21 | (-4) | Owners' equity | 1,318 | (25) |
Affliated company stocks, etc. | 179 | (9) | Accumulated other comprehensive income | 203 | (88) |
Other | 207 | (19) | Non-controlling interests | 259 | (0) |
Total Assets | 32,027 | (5,614) | Total liabilities and net assets | 32,027 | (5,614) |
- Figures in parentheses indicate changes from March 31, 2023
Total assets: | ¥32.02 tn |
Net assets: | ¥1.78 tn |
Shareholders' equity**: | ¥1.52 tn |
- 80.3% of total assets have high liquidity*.
- Cash and deposits + Short-term investment securities + Trading products + Loans secured by securities
- Shareholders' equity** increased by ¥114.3 bn from March 31, 2023.
-
Shareholders' equity = Owners' equity +
Accumulated other comprehensive income
-
Shareholders' equity = Owners' equity +
8
Consolidated
Financial Management (Regulatory Capital & Regulatory Liquidity)
Consolidated Capital Adequacy Ratio
Total qualifying capital (¥ billions) | Common equity tier 1 (¥ billions) | ||
Consolidated total capital ratio | Consolidated common equity tier 1 capital ratio | ||
1,437 | 1,444 | 1,449 | 1,439 | 1,495 | 1,502 | 1,498 | ||
1,337 | 1,360 | 1,308 | 1,299 | |||||
1,246 | 1,258 | 1,250 | 1,240 | 1,305 | ||||
1,189 | ||||||||
1,166 | ||||||||
19.67% | 19.77% | 20.43% | 20.66% | 21.28% | 21.13% | 21.57% | 22.12% | 22.40% |
17.15% | 17.29% | 17.72% | 17.99% | 18.36% | 18.22% | 18.83% | 19.26% | 19.42% |
3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q |
FY2021 | FY2022 | FY2023 |
【Regulatory Capital (Basel III)】 (As at December 31, 2023)
- Consolidated Total Capital Ratio : 22.40%
- Consolidated Tier 1 Capital Ratio : 22.26%
- Consolidated Common Equity Tier 1
Capital Ratio : | 19.42% | |
◼ | Consolidated Leverage Ratio : | 6.09% |
- Figures are as at the end of each quarter.
Consolidated Leverage Ratio
Consolidated Liquidity Coverage Ratio
【Regulatory Liquidity (Basel III)】
Total exposures (¥ billions)
Tier 1 capital (¥ billions)
Consolidated levarage ratio
25,76926,077
22,721 | 21,947 | 22,195 |
19,588 20,641
6.82% 6.59% 6.30% 5.60% 6.56% 6.44% 5.72%
27,268
24,439
5.48% 6.09%
High-quality liquid assets (¥ billions)
Net cash outflows (¥ billions)
Consolidated liquidity coverage ratio
145.4%149.0% 141.1% 143.8%139.6% 135.9% 131.3% 130.7% 131.4% 135.2%
2,902 | 2,933 | 2,930 | ||||||
2,642 | ||||||||
2,593 | 2,757 | 2,729 | 2,886 | |||||
2,615 | 2,447 | |||||||
2,242 | 2,229 | 2,134 | ||||||
2,135 | ||||||||
1,974 | 2,077 | |||||||
1,797 | 1,772 | 1,733 | 1,802 |
(Daily average Jan. - Mar. 2024)
- Consolidated Liquidity Coverage Ratio : 135.2%
1,337 | 1,360 | 1,431 | 1,444 | 1,440 | 1,429 | 1,491 | 1,495 | 1,489 |
3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q |
FY2021 | FY2022 | FY2023 |
3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q |
FY2021 | FY2022 | FY2023 |
9
Consolidated
P/L Summary
※The following shows the percentage change from the previous quarter.
(¥ Millions)
Operating revenues Commission received
Net trading income
Net gain (loss) on private equity
Financial revenue Other operating revenue Financial expenses Other operating expenses Net operating revenues SG&A Operating income Non-operating income Ordinary income/loss Extraordinary income/loss Income before income taxes
Total income taxes
Profit (loss) attributable to owners of parent
FY2022 4Q 293,860 72,890 13,891 937 120,218 85,922 101,427 66,696 125,737 101,822 23,915 6,903 30,818 -2,45228,365 8,617 17,124
FY2023 | % Change % Change | FY2022 | FY2023 | % Change | ||||
1Q | 2Q | 3Q | 4Q | vs | vs | vs | ||
3Q/FY23 | 4Q/FY22 | FY22 | ||||||
266,259 | 303,827 | 335,378 | 372,016 | 10.9% | 26.6% | 866,090 | 1,277,482 | 47.5% |
82,381 | 86,124 | 86,254 | 103,771 | 20.3% | 42.4% | 279,991 | 358,532 | 28.1% |
20,480 | 24,186 | 26,580 | 26,913 | 1.3% | 93.7% | 70,253 | 98,160 | 39.7% |
186 | 3,272 | 2,968 | 7,954 | 168.0% | 748.9% | 3,692 | 14,381 | 289.4% |
134,340 | 154,436 | 161,866 | 156,945 | -3.0% | 30.6% | 332,548 | 607,590 | 82.7% |
28,869 | 35,807 | 57,707 | 76,431 | 32.4% | -11.0% | 179,604 | 198,816 | 10.7% |
113,701 | 130,846 | 141,751 | 139,554 | -1.5% | 37.6% | 268,498 | 525,853 | 95.8% |
18,447 | 28,659 | 45,733 | 67,878 | 48.4% | 1.8% | 133,365 | 160,718 | 20.5% |
134,110 | 144,321 | 147,894 | 164,583 | 11.3% | 30.9% | 464,226 | 590,910 | 27.3% |
103,377 | 106,492 | 109,834 | 117,500 | 7.0% | 15.4% | 397,952 | 437,205 | 9.9% |
30,733 | 37,828 | 38,060 | 47,083 | 23.7% | 96.9% | 66,273 | 153,705 | 131.9% |
5,363 | 3,007 | 2,816 | 9,695 | 244.2% | 40.5% | 20,657 | 20,882 | 1.1% |
36,096 | 40,835 | 40,876 | 56,778 | 38.9% | 84.2% | 86,930 | 174,587 | 100.8% |
747 | 1,865 | 1,130 | 1,666 | 47.4% | - | 9,835 | 5,409 | -45.0% |
36,844 | 42,701 | 42,007 | 58,444 | 39.1% | 106.0% | 96,766 | 179,997 | 86.0% |
10,886 | 10,694 | 11,296 | 16,682 | 47.7% | 93.6% | 23,082 | 49,561 | 114.7% |
23,712 | 29,793 | 28,457 | 39,594 | 39.1% | 131.2% | 63,875 | 121,557 | 90.3% |
- Commission received increased (+20.3%).
- Brokerage commission* was ¥29.4 bn (+45.2%).
- Underwriting and secondary offering commissions* were ¥8.5 bn (-8.0%).
- Distribution commission* was ¥6.5 bn (+56.2%).
- M&A related commission* was
¥13.3 bn (+14.2%).
- Breakdown of total commission received (See p.23)
- Net gain on private equity increased due to revenues from energy/infrastructure investments increased (+168.0%).
- Non-operatingincome increased due to increase in equity method investment income.
10
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Daiwa Securities Group Inc. published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 07:14:25 UTC.