Hello to all. This is Minami from Resona Holdings. Thank you very much for participating in the investor relations meeting today despite your busy schedule. Without further ado, I will now begin the presentation. First, these are the five key points we'd like to communicate today. The first point is about our solid performance. The consolidated bottom line for the holdings stood at JPY 114.2 billion, which suggests 69.2% progress against the initial full-year guidance. Based on this, we have revised earnings targets for this fiscal year upward to JPY 175 billion. Excluding the one-off expenses related to the planned integration of operations systems of Minato Bank in the second half, we're targeting JPY 190 billion level in the actual terms. The second point is that we will continue to improve corporate value, accelerating our efforts to realize both higher ROE and lower cost of capital.
Following the revision, we are now guiding for ROE of 7.7%, which is equivalent to ROE of 6.3% based on Tokyo Stock Exchange standards. The third point is that in a world with interest rates, we will continue to expand top-line income via two income sources of net interest income and fee income. We have just begun this journey, but through proactive balance sheet management, ROA has turned around and is improving. The fourth point is cost control. While expanding investments in human resources and IT, we continue to strive for structural reforms and curbing base costs. The cost-income ratio improved to 63.9% due to the expansion of the top-line income, finally entering the low 60% range we target in the medium-term management plan. The fifth point is the enhancement of shareholder returns.
Following the first half, we announced a maximum of JPY 20 billion share buyback for the second half. With this, a total shareholder return ratio is now expected to be 53.3% for this fiscal year. Let me proceed according to the table of contents. First, let me review the first half and forecast for this fiscal year. On the right side, we have summarized the holdings' consolidated income statement. On the left-hand side, we have outlined the key points. As we have conducted an analyst call after the financial results announcement, I will briefly touch on these. Parenthesis one, net income attributable to owners of parent was JPY 114.2 billion, which is an increase of JPY 31.7 billion, or 38.4% year on year. Parenthesis 19, core net operating profit was JPY 130.2 billion, an increase of JPY 13.2 billion.
(6) Gross operating profit was JPY 345.1 billion, up JPY 32 billion, or 10.2%. (16) Operating expenses increased by JPY 14.9 billion, but this was within our planned range. (21) Net gains on stocks, including equity derivatives, increased by JPY 24 billion. The reduction of policy stock holdings is progressing smoothly. (22) Credit costs were JPY 6.8 billion, 17% against the full-year budget of JPY 40 billion. Based on these results, we have revised our full-year targets upward, and I will briefly explain the rationale behind this upward revision. The revised target of JPY 175 billion represents a JPY 10 billion increase from the initial target of JPY 165 billion and JPY 20 billion higher than the JPY 155 billion target set for the second year of medium-term management plan.
Excluding expenses of Minato Bank's operations and systems integration planned for Q4 of this year, the actual target is now set at JPY 190 billion, exceeding the target of JPY 170 billion set for the final year of medium-term plan by JPY 20 billion, one year ahead of schedule. When compared to the initial target, from the left, net interest income is up by JPY 23 billion, and fee income is up by JPY 2 billion. Net gains on stocks are set for an increase of JPY 12.5 billion, taking into account the progress in sale of policy stock holdings. On the downside, we have factored in JPY 24.5 billion. This mainly consists of scrutinized expenses related to the integration of Minato Bank's operations and systems and other initiatives that will contribute to our P&L in the next fiscal year and beyond.
We're aiming for further growth in the next fiscal year and beyond. Moving on, these are our efforts towards improving corporate value. This is a slide from our IR briefing in May. The slide summarizes our financial and non-financial approaches to improve corporate value: higher ROE and lower cost of capital. We believe that efforts towards both will drive improvements in price-book value ratio, which is a market evaluation of our business. First, to achieve higher ROE, we will expand the top-line income by driving net interest income and fee income to improve ROA. We will also accelerate process reforms and internal digital transformation, aiming to transform the cost structure itself. In the phase of capital utilization, we will accelerate capital circulation to achieve sustainable growth of ROE.
To achieve lower cost of capital in a time of increasing uncertainty, we believe it is crucial to manage risks appropriately while building a high-quality and stable profit structure that meets market expectations. While strengthening our efforts on ESG, we will proactively work to enhance the disclosure of both financial and non-financial information to gain extensive understanding of our group's sustainability. From here on, I will explain specific initiatives. As we return to a world with interest rates, I have shared our intent to expand the top-line income with two growth engines: net interest income through enhanced lending and securities operation, and fee income, which has been refined through profit structure reforms. We feel confident in this approach. In the top left, net interest income is on an upward trend due to both volume expansion and interest rate hikes.
Starting from the new year, we will see increased income from the mortgage loan portfolio. Net interest income from domestic loans and deposits increased JPY 6.5 billion. Under negative interest rates, this had previously resulted in a cumulative decrease of JPY 75 billion, but it has turned around since the second half of the prior year, and the increase expanded in the first half of this year. Corporate lending is leading the way, and I will provide additional details on this in the later slide. Other net interest income has also turned around on a full-year basis compared to the prior year, with significant uptick in the first half. Interest from yen-denominated bonds and Bank of Japan deposits has increased by JPY 3.6 billion and JPY 7.7 billion year on year, respectively, with both showing expanded growth from Q1 to Q2.
In the top right, fee income is also strong, up by JPY 6.4 billion, 6% year on year. AUM, settlements, and corporate solutions, and other diverse categories see increases, leading to a record high interim profits for the second consecutive year. The business development driven by two income sources is supported by a strong deposit base consisting of retail customers, to whom we aim to provide compelling convenience through both face-to-face and digital channels to further solidify this strength. This slide shows the balance sheet as of the end of September, the composition of loan portfolio by interest rate type, and the trends in ratio of loans and securities to deposits and ROA. In the lower section, amid unprecedented monetary easing, the ratio of loans and securities to deposits, which had fallen to 77% at the end of March 2022, has recovered to 85% recently.
In the lower right, ROA has also turned around, but is still in the process of recovery, leaving considerable room for growth. As monetary policy normalization progresses, we will strive for further improvement in ROA through proactive risk-taking. This slide represents the possible impact of policy interest rate hikes. Since we received many questions about this topic, I would like to address it here. Please consider this as a reference. We have summarized the impact of interest rate changes on pre-tax profits without considering changes in balances. For this fiscal year, we're assuming the removal of negative interest rates and an interest rate hike of up to 0.25% in July. We anticipate a positive impact of JPY 11 billion for the first half and JPY 26 billion for the full year.
Initially, we expected the impact of negative interest rate removal to be around JPY 10 billion for the full year, but this has now been revised to JPY 14 billion. The difference is due to our view on the deposit beta. Specifically, while the follow-through on ordinary deposit rates has aligned with our expectations, there has not been a shift towards longer-term time deposits, resulting in a slower-than-expected follow-through on the time deposit rates. Furthermore, as the impact of a 25 basis point increase in the policy interest rate, if the net interest income after the revision can be enjoyed on a full-year basis, we expect an accumulative increase of JPY 44 billion in the top-line income from the next fiscal year onwards. Initially, we estimated this to be around JPY 28 billion, indicating an expected upside of JPY 16 billion.
Additionally, if the rate rises to 50 basis points, the cumulative increase in top-line income is expected to reach JPY 100 billion. Based on the current capital levels, we believe that ROE could be in the range of 9%-10% and 8% based on the Tokyo Stock Exchange Standards. Since this provisional calculation does not account for changes in balances, further upside is highly possible in our view. On the other hand, we have not included increases in expenses and credit costs due to inflation, as I believe these are controllable. In any case, we are reassessing our previous ideas, structures, mechanisms, and actions while adapting effectively to the changes of the times to work towards further improving corporate value. The expansion in net interest income from domestic loans and deposits is driven by both volume and rate aspects of the corporate lending business.
The rate on corporate loans in the first half was 0.83%, up from 0.74% in the same period last year. We expect further improvement to 0.93% in the second half. Next, the volume. The growth rate of the average loan balance is accelerating from 1.5% growth in the first half of FY2022 to 3% in the first half of FY2023 to 7.8% in the first half of this year. As we enter the phase of capital utilization, we are supporting clients' diverse funding needs as part of the core organic business. In addition to increasing demand for working capital in the wake of gradual inflation, CapEx needs are also expanding as structural changes such as CX, SX, GX, and shortage of labor continue to challenge clients in a more diverse and complicated way. CapEx-related loan balance increased 7.8% year on year, and growth was observed across different industries.
Another pillar of our two key businesses is the fee business. The upper half of the page illustrates how we are starting to enjoy the fruits of the meticulous initiatives implemented to date, including our digital efforts. The accumulation of a wide range of recurring fee income is supporting the record high fee income. Bottom half are some examples, such as robust AUM and settlement-related income. The foundation for a stable source of earnings for the future is steadily expanding. Bottom left is the fund wrap balance, which grew by 2.2 times in five years, and investment trust balance increased by 1.3 times. The number of customers buying investment trust, fund wrap, and insurance products has exceeded one million.
Bottom right, the number of debit cards issued increased by 2.1 times in five years, and the number of app downloads, which was less than one million five years ago, exceeded 10 million. These are real changes. The number of partner banks using our financial digital platform is also increasing steadily. Next, the deposit base that supports the two businesses. The core element of the next generation retail banking is having 100% digital connection with all customers while providing special in-person moments based on in-depth consulting. By leveraging this framework, we will continue to further strengthen our sticky deposit base. The value of our deposit base will further increase in a world with interest rates. As such, we believe that our deposit costs are reasonably well controlled. Next, I would like to explain our cost management efforts.
Expenses have been rising recently as we make upfront investment in human capital and IT for the future phase. On the other hand, as shown in the middle, we established a low-cost operation in the process of Resona reform and have continued the rigorous cost management to this day. One thing to note is that under the deflationary environment, there was a certain rationale in compensating the drastic reduction in investment with manpower. Yet, in a world with moderate inflation and a declining working population, we believe that productivity gain through process reforms, DX, and other measures is essential for exerting competitiveness as a next-generation retail bank. Such reforms will take a considerable amount of time, but in the meantime, we will rigorously control the cost-to-income ratio with top-line growth, which will far exceed the increase in expenses.
As a result, we believe the OHR in the 50% range will be achievable in the near future, considering the changes in the external environment as well. Next, I'd like to elaborate on the upfront investment in human capital and IT system to be executed during the midterm plan. First, on human capital. To date, we have been improving productivity through continuous structural reforms. As shown at top left, in the three years under the previous midterm plan, we had reduced the total group headcount by 3,400 people, reaching pre-KMFG integration level. This was achieved while redeploying personnel to strategic businesses. In the current midterm plan, we aim to raise the level of organizational capability for the next phase by allocating the management resources gained through this process to reinvestment.
Upper right, personnel cost per head will increase by 16.3% from the starting point of the previous midterm plan to the end of this fiscal year, but as indicated at bottom right, current operating profit per employee is expected to increase by 35.6%, exceeding the cost increase. Next, investment in intellectual capital and IT. As the left graph indicates, we plan to increase the strategic investment by roughly JPY 40 billion during the current midterm plan compared to the previous one. The integration of Minato Bank's back office operations and systems is scheduled for this year, and as we assumed at the time of the midterm plan, the investment is expected to be roughly JPY 20 billion. Through this project, the group's back office operations will be integrated, and a single platform will be completed.
Minato Bank will finally be able to fully capitalize on all of Resona Group's products, functions, and services, which will support the future earnings growth. Furthermore, system integration costs will be amortized in a lump sum in Q4, which will help to significantly reduce amortization expenses from next fiscal year onward. Next, on capital management. This summarizes the direction of capital management in the current midterm plan, under which we shift from the qualitative and quantitative expansion of capital to the utilization of capital phase. As shown on top left, the financial soundness KPI under the midterm plan, namely CET1 ratio on a full enforcement of finalized Basel III basis, excluding net unrealized gains on available-for-sale securities, was 10.15% at the end of the first half. Upper right, growth investment for this fiscal year is progressing, mainly for organic growth.
As shareholder returns shown at the bottom, while continuing the steady dividend, we will pursue roughly 50% total shareholder return rate. This time, we have announced a share buyback of JPY 20 billion as well. The graph illustrates the steady growth of the total return amount. We decided on the latest action in order to show our path toward achieving the total return target, as our business performance and the financial soundness have both remained solid. As a result of this action, the total return ratio against the new four-year guidance is expected to be 53.3%. This slide illustrates the capital allocation and usage of capital under the midterm plan. The bottom half of the page shows actual results for the previous year and the plan for the current year. We expect continued strong growth in loans, especially to corporate customers.
The CET1 ratio is expected to be roughly at the level of last fiscal year end, with enhanced basic earnings power and utilizing capital generated through the sale of strategic equity holdings. We believe we will be able to show a pathway of sustainable growth by maintaining a high level of soundness and promoting capital utilization for organic and inorganic opportunities. Next, plan for the policy-oriented stock holdings. In May this year, we announced a new reduction plan. The purpose of accelerating the pace of reduction is to deliver new value to our customers and to ensure the sustainable growth of Resona Group. Specifically, we will reduce the balance based on book value by more than two-thirds in six years. This is a 94% reduction on a book value basis by 2030, compared against March 2003, the founding year of Resona.
On a fair value basis, this ratio will be cut down to roughly 10% of the consolidated net assets by 2030. We believe that the 20% level can be reached in three years at the earliest, and we will progress further. Under this framework, we started strong this year, divesting the stocks by 21 billion JPY on book value basis in the first half. Net gain on sales has also exceeded our initial expectations. We will continue to reduce the strategic stock holdings so that we can accelerate the investment for both organic and inorganic growth. We will also actively consider shareholder return by capitalizing on the earnings upside stemming from the positive capital recycling flows. From this page, we have prepared slides on ESG initiatives as we aim to be the company that contributes most to sustainable transformation or SX of retail customers.
We've allocated more slides for the ESG section, so please refer to them later at your convenient time. This concludes my presentation. Thank you for your attention.