I'm Minami of Resona Holdings. Thank you very much for taking time today to listen to our IR presentation. I will begin my explanation. First, I'd like to summarize the main points of today. There are six major points. The first is the performance for the fiscal 2023. While necessary upfront investment and allowance for downside risk to achieve further growth and profitability surpassing Mid-term Management Plan target have made a steady progress, the holdings consolidated bottom line landed above its fiscal year guidance. Secondly, our performance targets for the current fiscal year. The target for the final year of the Mid-term Plan is set at JPY 170 billion in holdings consolidated net income. But we aim to achieve it ahead of schedule, excluding one off cost associated with the integration of The Minato Bank. The third is core income.
We aim to overshoot the Mid-term Plan by JPY 7 billion by driving top line income with both net interest income and fee income. The fourth is capital utilization. When we announced our Mid-term Plan last year, we said that we had entered a phase of full fledged capital utilization in both organic and inorganic investments for growth are progressing. Last year, stockholders equity ROE was 7.2%, and their original target for this year is 7.3%. But in the event of further rate hikes, ROE also has the potential for upturn. The fifth is policy oriented stock holdings. In order to provide new value to our customers and to sustain our group growth and achieve the profitability surpassing Mid-term Plan target, we believe it is necessary to invest in further growth.
Specifically, we cut back on the book value base by two -thirds or more, and reduce their fair value -based ratio to consolidate net asset to the 10% level by the end of March 2030, and eventually generate JPY 300 billion in capital to be utilized. The sixth is the increase of shareholder returns. At the time of financial results release, we announced a JPY 20 billion share buyback program in addition to the JPY 1 per share dividend hike forecast. You can see the steady increase in the total amount returned in the lower part of the slide. Let me now proceed according to the table of contents. First of all, a review of the previous year and the outlook for the current year. Here is a summary of FY 2023 financial results.
The holdings consolidated basis profit and loss summary is shown on the right, and the key points are on the left. Item one, net income attributable to owners of the parent is JPY 158.9 billion. Although down 0.9% year-on-year, this represents progress of 105.9% towards the full year target of JPY 150 billion. Item 20, actual net operating profit was JPY 211.3 billion, an increase of JPY 15.6 billion. Item 21, core income excluding extraordinary factors was JPY 158.7 billion, down JPY 4.8 billion year-on-year. But this is also a progress of 105.8% toward the full year target. The first half was down JPY 7.9 billion year-on-year, but the second half was up JPY 3.1 billion, confirming that the performance momentum is rapidly improving. The main components of core income are item eight, net interest income from loans and deposits down JPY 2 billion.
Item nine, interest on JPY bonds, et cetera, up JPY 5.4 billion, and item 11, fee income up JPY 4.8 billion. As shown on the right, net interest income from loans and deposits turned positive in the second half as expected in the Mid-term Management Plan. In the second half also showed a clear trend of increase in fee income, and on a full year basis it increased for the fourth consecutive year and recorded a new high. Item 17, net gains on bonds are a loss of JPY 26.4 billion, but due to the measures taken last year to restore soundness, it improved by JPY 21.3 billion. Item 18, operating expenses were up by JPY 11.8 billion, but were within the plan. Personnel expenses increased by JPY 5 billion mainly due to investment in human resources including compensation upgrades.
Property and equipment expenses increased by JPY 6.6 billion mainly due to system related amortization from accelerated IT investments. Item 22, net gains on stocks were JPY 60.1 billion, up JPY 6.2 billion year-on-year. The reduction of policy oriented stock holdings is progressing faster than our plan. Item 23, credit costs were JPY 35.6 billion, 93% of the annual plan of JPY 38 billion. The merger between Resona Holdings and KMFG was complete on April 1st, thus the four commercial banks are now under the umbrella of Resona Holdings with a simple governance structure that links them in parallel. As for the progress status under the Mid-term Management Plan, we have organized measure KPIs. We are generally on track to achieve the plan but will make strenuous efforts. The following is a comparison of this year's earnings targets against the Mid-term Management Plan.
FY 2024 target is JPY 165 billion, but as I mentioned at the beginning, we are aiming to achieve the Mid-term Management Plan target of JPY 170 billion a year ahead of schedule. The year two target was JPY 155 billion originally, so JPY 165 billion for this year means JPY 10 billion more than the target. Core income is JPY 7 billion higher than the level assumed for the second year, driven by interest income on JPY bonds and net interest income. Major variables are shown in the lower right-hand corner. The impact of exit from negative interest rate policy is assumed to be a positive JPY 10 billion. On the other hand, JPY 7 billion is assumed as ALM cost associated with rising interest rates, taking into account uncertainties regarding changes in customers' financial behavior, such as a shift from liquidity to time deposits.
We intend to review these variables flexibly by monitoring the magnitude of impact during the term. In addition, we plan to aim for upside for the Mid-term Management Plan. Possible upside and downside factors are also listed in the upper right corner. Among these, we believe that a further rise in interest rates could lead to a significant upside with the revision of the short-term prime rate. From here, I will focus on growth strategies as initiatives to improve corporate value. First, our long-term goal. We aim to create and maximize customer value by thinking about business from the issues which customers and the society are facing, and by combining the group's potential strength with innovation. Beyond that, we will realize our purpose of beyond finance for a brighter future. We believe that our long-term vision of retail's number one will come into view.
Meanwhile, the business surroundings have reached a historic turning point. Megatrends such as SX and DX, and major technological innovations such as generative AI are underway. As financial policies normalize, the problems that our customers and the local communities face are becoming increasingly diversified, sophisticated, and complex. Against this backdrop, it is essential for us to break away from conventional ideas and frameworks and quickly adapt to changes. This is why the current Mid-term Management Plan is based on the concept of corporate transformation or CX. Change always brings with it new opportunities and risks, but the key is how we can turn these into opportunities while leveraging our strengths. Resona Group's rich customer base, information consulting capabilities, products, services, and functions, integration of real digital channels, and external collaboration. These will eventually be the keys to, in combination, enhance the Group's profitability in the future.
This slide shows our financial and non-financial approaches to corporate value uplift, improving ROE, and reducing cost of capital. We believe that our efforts in these two leads to a better valuation over a PBR from the market. First, to improve ROE, the basics is to change the cost structure itself by speeding up the process reforms, as well as inverting and improving ROA through net interest income and fee income. In addition, we will continue to invest in growth, both organic and inorganic, during the phase of full-scale capital utilization. Furthermore, we will aim for sustainable growth in ROE by stabilizing a capital cycle to enhance corporate value. ROE based on stockholder equity last year was 7.2% and our initial target for the current year is 7.3%. In the event of further interest rate hike, a full-scale increase in ROE may come within our scope.
In terms of reducing the cost of capital, we believe it important to build a high quality, stable earnings structure that meets the expectations of market participants while appropriately managing risks in an era of more uncertainty. In addition, we will beef up ESG related initiatives and proactively work to enhance both financial and non-financial disclosures for a broader understanding of the Group's sustainability. Let me explain our specific initiatives. Normalization of monetary policy is a tailwind for our Group, as we are sensitive to interest rates. With the integration of face-to-face and digital channels, we have refined fee business. Together with the revival of the interest income business and the securities portfolio, we aim to further expand our top line.
In the previous year, net interest income, interest on JPY bonds, and fee income reverted and expanded from the first half to the second half, and we believe we can maintain and expand this positive trend in the current year. The ROE during the previous Mid-term Management Plan period eventually picked up in the final year, but the first half was marked by a significant aggravation, especially during COVID. The main reason was the increase in underutilized assets as the balance sheet expanded. In the current Mid-term Management Plan period, we will strive to improve ROA by actively taking risks while the monetary policy gets normalized. As shown on the left for the asset side last year, the shift from deposit with the Bank of Japan to loans and securities has already begun. We will continue to drive this trend in the current year.
In the future, in a world with interest rates, for the liability side, the strength over sticky retail deposits will become even more important. We will further solidify this strength from both face-to-face and digital channels. During the inflation phase, the trend from savings to investment will accelerate. In Japan, as the country becomes an asset management powerhouse and the public's awareness changes, the Resona Group will continue to fulfill its mission by providing more retail customers with the professional asset management services that we have developed over more than 60 years of corporate pension plan experience. This page shows the rate hike impact. Since there are many variables such as the timing, speed, and depth of monetary policy changes, the results of the impact estimates are subject to change greatly depending on the assumptions.
We have received many questions around here, so please refer to the impact estimates as a reference figure of simplified calculation method. The upside is summarized in the following table assuming assets and liabilities as of the end of the previous fiscal year. The impact of exit from the negative interest rate policy is factored in as positive JPY 10 billion in our guidance for this year. If the policy rate rises to 25 basis points, a cumulative top line increase is expected to be JPY 28 billion, assuming that the interest income after the rate revision benefits on a four-year basis. If the rate rises to 50 basis points, the cumulative top line will increase by JPY 84 billion, and based on the current level of capital, we estimate that ROE will rise to the level of 9%-10%.
Based on the premise of moderate inflation, we will revisit what used to be our ideas, values, and actions of the past and adapt firmly to a world with interest rates.
Another pillar of the two business is the fee business. The upper part is illustrative, but we will accumulate a wide range of recurring fee income by introducing new businesses without interruption. The lower part is an example. Fund wrap income has increased 4.5x in six years, and we are eyeing a JPY 10 billion business. Debit card income has also quadrupled over the past six years from JPY 1.5 billion- JPY 5.9 billion and will continue on a growth trajectory. The group's apps are approaching 10 million downloads and will continue to change the business structure itself. Next is our inorganic strategy. The starting point is always what value can we provide to our customers. Based on this idea, we will utilize capital to enhance our customer base, management resources, and functions.
In the first year of the Medium-term Management Plan, we completed the two projects shown in the lower part of this slide. Both of these projects will contribute to improving ROE over the mid to long term. We will continue to identify quality projects based on customers' problems and needs. From here, I would like to talk about structural reforms and infrastructure reinforcement. The upper part shows our vision of the world that we want to realize. This is indispensable for the next generation of retail finance, in which we connect with all customers digitally and then provide face-to-face service for special occasions based on in-depth consulting. In both the retail and corporate sectors, there is a natural shift to digital and data for the day-to-day financial services. On the other hand, challenging financial needs will continue to exist.
That is where in-depth face-to-face solutions are essential, and this is the final pillar of differentiation. To this end, we will accelerate our investment in human and intellectual capital. As you can see on the lower left, in terms of developing and securing professionals, for example, the ratio of specialists and career hires rose to nearly half of our overall hires in the last fiscal year. In the lower right, we will also accelerate the exhaustive overhauling of business processes. The volume of clerical work has been reduced to a quarter of the 2005 level, but we still have some way to go. In the future, we will overhaul the business process itself, including the full use of AI and other technologies. I would like to add a few words about upfront investment in human capital and intellectual capital. First, human capital.
On the upper left, this shows we have been improving productivity through continuous structural reforms. During the three years of the previous Mid-term Management Plan, we have already reduced the total number of group employees by 3,400 while shifting personnel to strategic areas. This is the level before the KMFG integration. In the current Mid-term Management Plan, we are aiming to raise the level of organizational capabilities for the next generation by allocating the management strength gained through this process to reinvest. I will explain the six-year period from fiscal year ended March 2020 when the previous Mid-term Management Plan started to the fiscal year ending March 2026, the final year of the current Mid-term Management Plan. On the left side, total personal expenses are expected to increase by 2.6%, while total group personal numbers will decrease by 12.7%.
On the right, while personal expenses per employee are expected to rise 17.6% during the period, core income per employee is expected to increase by 42.6%. Going forward, we believe it will be important to strike a balance between a significant increase in productivity through the exhaustive overhauling of the business processes and expansion of investment in human resources. This section discusses intellectual capital and IT investments. As shown in the figure on the left, we plan to increase strategic investment by about JPY 40 billion during the Mid-term Management Plan period compared to the previous Mid-term Management Plan. The breakdown is JPY 33 billion for challenge areas and JPY 20 billion for Multi-Bank system integration. The right-hand side shows the key measures and their expected effects, all of which will be allocated to CX and top-line enhancement to support the next generation.
The bottom part shows the image of long-term IT costs. While we will continue to expand strategic investment, we will generate funds for strategic investment by restructuring business processes and reducing base costs. Credit cost. As further increase of interest rate is assumed, we have received many questions from investors about the trend of credit costs, so we have included a slide explaining the trend. Although it is impossible to accurately predict future changes in the economic environment, we believe that risk control is feasible given the credit portfolio is dispersed and made up of small units, even assuming a moderate rise in interest rates. We have been asked the question: what is the level of credit cost under normal circumstances? The upper graph shows a long-term trend of the credit cost ratio.
The average of the ratio is 11.5 basis points, including the figures during the Lehman Shock, a major financial and economic crisis. I think this can be used as a reference. Below shows the data on the composition of internal credit ratings of our customers and the changes in stability indicators for small and medium-sized enterprises. You can see that the risk tolerance of companies is improving significantly. The lower part shows the net loss ratio of housing loans, which has remained extremely low. Housing loans are long-term and backed by collateral and are screened using interest rates that are subject to substantial stress. We believe this is a high-quality portfolio, even in the face of rising interest rates. Capital management. The top row shows the direction of capital management in the current Mid-term Management Plan. Growth investments, both organic and inorganic, have remained strong.
Against this backdrop, the CET1 ratio was 9.9% at the end of March 2024, which is flat against the Mid-term Management Plan. The lower part shows return to shareholders. In the current fiscal year, we will continue our efforts to achieve the target of total return ratio of approximately 50% set forth in the Mid-term Management Plan while demonstrating improvement in our business performance. This is an image of capital allocation utilization in the Mid-term Management Plan. The lower part shows actual results for the previous year plus planned results for the current year. While earnings exceed the plan, we will expand investment and growth at a pace exceeding the plan mainly in the organic business. In particular, business loans are strong and the volume of corporate loans has progressed 9% in two years against the three-year Mid-term Management Plan. Policy oriented stock holdings.
I would like to explain the new reduction plan we have announced. The starting point of this plan is to secure the management resources needed to provide new value to our customers and to achieve sustainable growth. On the left side, in terms of book value, we will reduce the current book value balance by more than two thirds over a six-year period. This is based on the plan to reduce the book value by 94% by 2030 from the starting point of Resona inception in March 2003. In terms of fair value, the ratio of fair value to consolidated net assets will be reduced to about 10% by 2030. The 20% level can be reached and passed in three years at the earliest, although it will be a passing point. However, we believe it is highly likely that the annual reduction will not be at an even pace.
In addition, we expect the fair value to fluctuate up and down in both directions. Therefore, we have assumed that the gain on sales in the current fiscal year included in the P&L plan will take such uncertainties into account. If things go smoothly, there is a possibility that gains on the sales of these holdings can exceed our expectations. We believe that through this plan, we will be able to secure management resources of JPY 300 billion in terms of capital, and we will accelerate both organic and inorganic growth investments. We will also work to sustainably increase shareholder returns using the upside in earnings generated by the positive cycle of capital flows as a source. This section describes our ESG initiatives as aiming to be the company that contributes most to our retail customers' SX.
We define SX sustainability transformation as anticipating changes in the world towards a sustainable society and changing corporate business models and individual lifestyles by ourselves. We are committed to ESG activities to support our customer's SX activities by learning widely and adapting to changes as quickly as possible. This is a long-term sustainability indicator. This is a set of targets to be achieved by fiscal 2030 from various perspectives, including value for customers, environmental value, social value, and value for employees. We believe that we are making steady progress toward each of these goals, although we shouldn't put too much emphasis about the figures for a single year, as it is always essential to take a customer first, then long-term perspective. For example, on the very top, the value creation capability indicator, which indicates the number of solutions provided to customers increased from 10.5 million a year ago to 11.8 million.
The second retail transition financing target doubled from JPY 1.8 trillion a year ago to JPY 3.7 trillion. The well-being indicator, which indicates the ratio of positive responses to the employee survey on work and life satisfaction, also increased from 69.3%- 70%. The slides for E, S, and G are shown individually in the following pages. The number of slides has been increased, so please refer to them later. This is all for my presentation. Thank you very much for your attention.