This is Masahiro Minami, President of Resona Holdings. Thank you very much for taking time out of your busy schedule to join our IR presentation. The IR briefing will be presented again with the online format. Let's get started with the presentation. Analyst call was conducted after the earnings announcement, so today I will focus more on strategy. Please turn to page four. This is a summary of our financial results. Net income attributable to owners of parent was JPY 82.6 billion, up by JPY 1.8 billion year-on-year, marking a 55.1% progress rate against the full-year target of JPY 150 billion. Quarter-on-quarter, the pace of progress has picked up from 22.6% in Q1 to 32.5% in Q2. In May, we explained that we had factored in a certain amount of cost for restoring the soundness of the securities portfolio in our financial targets for the current fiscal year.
Despite posting a loss of approximately JPY 37 billion in the first half as a cost to improve the soundness of the securities portfolio, mainly for the foreign bond exposure, we were able to absorb this loss and showcase that we are on track to meet our financial targets. We have completed our initiative to deal with the soundness of our foreign bond portfolio during the first half. Core income grew by JPY 4.8 billion year-on-year. This is the most important point I wanted to emphasize on the first half results, and I will provide more details on this point later. I will now go through the P&L statement item by item. Top line was down year-on-year by JPY 31.7 billion, mainly due to a loss of approximately JPY 37 billion in gains and losses on bond transactions as very large losses on the foreign bond exposure.
Net interest income from domestic loans and deposits decreased by JPY 2.2 billion year-on-year. Average loan balance was up by 2.13%, while loan rate was down by 3 basis points. Loan growth was stronger than the plan, while loan yield was in line with their expectation. Fee income was up by JPY 3.2 billion, and reached JPY 108.8 billion, renewing previous year's semi-annual historical high. Operating expenses improved by JPY 3.8 billion. With the overall headcounts coming down, the total personnel expenses improved by JPY 2.3 billion, despite improving the compensation per head. Owing to cost savings such as lower deposit insurance premium, non-personnel expenses also improved by JPY 1.1 billion, despite factors such as amortization costs incurred in connection with the launch of the new branch system. The cost income ratio, excluding the impact from the bond portfolio, was 61.7%, down 0.2% from the same period last year.
Net gains on stocks were JPY 36.3 billion, an increase of JPY 11.8 billion, mainly due to the progress made in reducing the strategically held stocks. I will elaborate on this point in credit costs later. We also unveiled a share buyback program of up to JPY 15 billion at the time of the financial results announcement. I will touch on this point using another slide. This is a review of the first half results.
I want to stress the fact that we were able to maintain an upward trend in core income, which is a sum of net interest income from domestic loans and deposits and fee income minus operating expenses. The loan balance at the end of September surpassed the JPY 40 trillion mark for the first time in Resona's history. Succession related fee income such as M&A service and real estate brokerage also grew by a significant 16%.
Group app downloads as well as fee income from fund wrap and debit card all achieved historical highs and have grown to be new earning streams. We are also making progress in our efforts to break free from the traditional banking model. At the bottom of the slide, we highlighted our initiatives on restoring the soundness of securities portfolio, reduction of policy-oriented stocks, and responding to credit risk, which I will explain in more details in the subsequent slides. Please turn to page 14. Resona Holdings consolidated credit costs were JPY 7.7 billion, and the aggregate of the group banks were JPY 7 billion. While we took action against a large borrower in Q4 last fiscal year, credit costs incurred in the first half were low, only consuming 20.3% of what we had budgeted for the full year.
In the current situation, while the impact of COVID is gradually moderating, there are signs indicating some repercussion from weaker yen, higher commodity prices. Therefore, we kept the original full year projection for credit costs unchanged. We will continue to further strengthen credit monitoring and customer support through dialogue with customers and promptly understanding the realities of our customers' status. This is your securities portfolio on the left. Since the fourth quarter of the previous fiscal year, we have taken the lead in improving the soundness of our foreign bond portfolio. Line item number nine or foreign bond balance declined by 40% compared to the end of December last year, but the yield increased by more than two times. The risk exposure was reduced by nearly 50%, from JPY -490 million to JPY -260 million.
After taking into account hedging measures through the use of bear funds, the risk exposure has been reduced to the JPY -140 million level. We aim to further improve the investment yield by rebuilding a portfolio through new purchases of high-yield bonds while keeping an eye on the market environment. On the right is a reduction of policy-oriented stocks. The reduction in the first half was JPY 13.8 billion on a cost of acquisition basis. The new reduction plan of JPY 80 billion over four years has started from the current year, and already in the first half, we have made approximately 70% progress against the average annual reduction pace of JPY 20 billion under the new plan. Gains on sales of securities amounted to JPY 33.1 billion, and as a result, the impact of measures taken to improve the soundness of the securities portfolio was compensated for.
As shown by the graph at bottom right, the balance of the policy-oriented stocks has fallen below JPY 300 billion for the first time. This is a reduction of JPY 1.1 trillion from the peak in March 2003, equating to approximately 80% reduction. Now I'd like to switch the topic and talk about our growth strategy. Please proceed to page 22. First and foremost, our aspiration is to realize the vision of retail number one. In this era of change, our starting point is to think through all of our businesses once again, starting from customers' issues and social challenges, and to do our utmost to resolve them. Through these efforts, the Resona Group will grow together with society and their customers, and we believe that number one retail banking will be realized in that process. In the previous mid-term management plan, we promoted three omni strategies.
In the current mid-term management plan, we have three pillars under the concept of establishment of Resona's model. The three pillars are further development of existing businesses, taking on the challenge to break free from the conventional banking model, and rebuilding our foundations. Another protracted low interest rate environment will promote mid to long term reforms of income and cost structure, and at the same time, will strive to become a company that contributes most to retail customer success by adapting ourselves to changes as quickly as possible. In the lower part of the slide, we have listed four capitals as our unique strength and differentiating factors. Starting at far left, we have the social capital, customer base, extensive network, strong relationship, and consulting capability as Japan's largest retail bank with a trust banking capacity are all backed by more than 100-year history of focusing on retail banking.
These are all Resona Group's proprietary strengths. The second is human capital. In times of change, the most important asset is human capital. We will further expand our investment in human talent so that we can transform our talent portfolio to focus on diversity and expertise as each employee develop their skills to serve as professional human capital. DX is an important buzzword for intellectual capital. Resona Group has been selected as a DX-oriented Stock name for two consecutive years, and we intend to leverage this trend in various aspects. Last but not least, the financial capital. We are finally approaching the phase of full-fledged capital utilization, having enhanced our capital qualitatively and quantitatively since the public fund injection in 2003 and the full repayment in 2015.
In order to make the most out of these core capital resources, we are currently in the process of doing a deep dive in our discussions as we prepare to formulate the next major management plan. This year is the final year under the current midterm management plan, and although we see it as just a passing point, we would like to show concrete results with the mid to long term income and cost structural reforms, specifically achieving three consecutive years of core income growth. In the first half, the core income achieved a steady growth of JPY 4.8 billion year on year. The two main drivers of our core income growth are the businesses that were developed further by leveraging the existing strength and opportunities that have grown into new earnings pillars owing to our efforts in planting the seeds of opportunities in the previous midterm plan.
As described in the middle section, we continue the cycle of sowing seeds, ensuring vast sprout, and securing profitability. Here are the specific initiatives. First, this page illustrates business that has become a new earnings pillar as a result of sowing the seed of business opportunity from the previous mid-term management plan . We aim to provide a variety of unprecedented value by connecting and integrating digital and face-to-face channel through data. With the full-scale push of the group app, the number of digitally connected customers is rapidly increasing, which I will explain on the next slide. We always believe in the power of face-to-face interaction, but the real channel can also evolve further by going digital with data.
The middle part of the slide shows that in the past, many people and items were involved in a single transaction at a bank branch, from the start to the completion of a transaction. The decomposition and rebuilding of this process by DX will pave the way to the next generation of banking services. Through these efforts, many employees who have supported complex administrative tasks will be freed up, leaving them with more time for dialogue and consulting with customers. Further data coordination between channels will make face-to-face contact point more attractive. Here is the digital side. The number of group app downloads has exceeded 5.8 million and is now the most accessed channel. The number of customers who use the app more than three times per month has also increased significantly.
On the right-hand side, we can see that as a natural consequence, the digital connection has become one of the drivers to enhance the breadth of transactions with the customers. We have already seen the advantages of the app. For those who are the frequent users of the app, gross operating profit per customer is 2.1x higher than for the other customers, and the average number of products in transaction is 1.6x higher. The increase in the number of customers connected via the app will not only change the customer experience but will also play a role in drastic cost structure reform by lowering the administrative burden at the branches. Further evolution of KMFG is essentially the expansion of group synergies. This fiscal year, we aim to realize synergies of JPY 25 billion compared to the fiscal year ended in March 2019.
Bottom left is a table of KMFG's net income trend, which shows a steady progress of 68.7% in the first half vis-a-vis the target of JPY 20 billion for the full year. Partially thanks to turning KMFG into a wholly owned subsidiary in April last year, the profit contribution to the consolidated book has increased significantly. This is a snapshot of our settlement business. As illustrated at the top, the size of the cashless market is expanding significantly. With the revision of laws such as the Electronic Bookkeeping Act and the Qualified Invoice System, needs for payment solutions will continue to expand significantly in both the B2B and B2C domains. In addition, we have started offering a new service called Resona One- Stop Payment to improve the efficiency of invoice payment operations for corporate customers, which is shown at the left-hand side.
We will continue to aim for one-stop DX support for our customers. On the right is a trend of the debit card business, which continues to grow steadily. Transaction volume is up 27% year-on-year, revenue is up 17%, and the number of cards issued is up 16%. From this page, I would like to present the business areas for further development starting with the asset formation support business. As illustrated at the top, in an era of 100 year life expectancy, it is the responsibility of financial institutions to create a major shift from savings to asset formation. By combining our strengths such as investment capabilities cultivated through more than 50 years of pension fund management, DX, and human capital, we hope to make a difference in how the customers approach the asset formation process.
Sales of fund wrap option on the left have been somewhat sluggish due to the current market environment, but the AUM has increased by more than 10% over the past year to the JPY 750 billion level. Related income has also maintained a strong growth rate of 19.8%. While there are a variety of fund wrap products available in the market, Resona Group's fund wrap products are designed to be highly suitable with bank customers, which is a key point of differentiation. We are also making steady progress in extending our services to regional financial institutions, and we believe that there is still much room for growth. At bottom right, we made some notes about Resona Academy. This is a human capital development program that aims to strengthen comprehensive consulting and communication skills that go beyond the simple sales of financial products.
Once the six term course, which will start in December this year, is completed, roughly 330 employees would have taken and completed this program.
This is the asset and business succession ratio of business owners without successors remains high, but recently there's been some changes. The data shows where the aging of the population means that were previously latent are gradually surfacing. The Resona Group strength lie in its ability to provide one stop support for asset and business succession including in depth consulting capabilities in real estate and trust and networking capabilities centered around Tokyo metropolitan and Kansai areas. Middle right you can see strong growth in M&A and real estate revenues is continuing and we continue to invest management resources in this area which we all believe will continue to drive the fee business in the future. Business of SMEs trends from left to right inbound consumption scale of event industry.
This area dipped significantly due to the pandemic but we believe that it will gradually revitalize in the process of economic recovery although we have not yet reached a stage where the overall demand for funds will expand significantly. We indicated on the left that various changes will be bringing new demands and needs for solutions. For example FX income including derivatives increasing about JPY 2 billion in the first half of this year during significant FX fluctuations. We will continue to stay close to our customers and firmly capture business opportunities through the provision of various solutions housing loans at the top. Continuing firm home acquisition needs are pushing customers' needs toward fixed rate house loans with relatively high yields. The group has the largest balance of housing loans in the country, and we will continue to make serious efforts in this area.
Right side of the slide summarizes the advantages of housing loans as a starting point for multifaceted transactions. A customer with a housing loan on average has 4.9 products in transactions, which is 1.7 times higher than those without, and the top-line income is 44 times higher. Another advantage is low risk weighting. In other words, small capital charge. Subrogation payment ratio is shown in the bottom right, and it is currently at 0.01%. Even during the global financial crisis, it was low at 0.20%, making it a very high quality portfolio. From here I will explain the business for which we are planting seeds for the next growth, with a view for the next midterm plan. Starting with our financial digital platform.
We aim to provide an open platform through Open APIs and other means that can be used by a wide range of companies without being bounded by conventional frameworks. We aim to build and expand a win-win ecosystem with all platform participants while developing it into a new source of income. The number of companies and services providing functions and users are expected to increase, and the number of transactions is expected to grow, generating recurring high-quality fees. In addition to the benefits of user companies and function providers, the Group can also enjoy the benefits of being a platform operator. To give an example, our fund wrap balance is JPY 745.1 billion with an income of JPY 4.6 billion in the first half, including JPY 49 billion for customers of The Bank of Yokohama and Keiyo Bank .
As the number of customers further expands and the balance increases, it will become a new type of income-generating opportunity. Here you will find examples of our initiatives. To accelerate the financial digital platform concept, in April, we launched FinBASE, a new joint venture with NTT Data and IBM Japan to develop platform participants, gather information, and conduct market research. We intend to further accelerate collaboration with different industries and regional financial institutions while also utilizing the new company. We aim to create new businesses that transcend the traditional banking framework starting from social issues. Top right is a recent example, and we are taking various challenges through the establishment of new companies and the capital and business alliances.
As an example, Resona Digital Hub, bottom left, is an advanced banking service company which aims to provide one stop DX support to small and medium sized corporate customers, an area with great potential. On the day of the previous earnings call announcement regarding a capital and business alliance with Digital Garage was also released. By combining the strength of both companies, including infrastructure and networks, we hope to provide new payment solutions to a wide range of customers starting with non face-to-face payments. Rebuilding our foundations. This is a reform of sales style, business process, channel network in pursuit of both increased customer convenience and reduced costs for the bank. The group tablet system, which is location free and aims to integrate consultation and procedures, top right, is still somewhere to go but has already been introduced in all RB and its sub branches.
The introduction of a teleconference terminal in which specialist staff provide remote support for high level consultation is expected to be completed in all RB and their sub branches by the end of fiscal year. The bottom section shows the status of channel optimization. The break even point will be lowered while also implementing backyard reforms and downsizing of branches in line with the business process reforms through DX. In addition, the number of branches is on a downward trend through the conversion to shared branches. The current medium term plan calls for a reduction in the number of the group locations by less than 20% or about 135 over the three-year period. By September, we have already reduced it to 121. System structure reform.
We call it Resona Next within the organization, and it is a medium to long-term reform based on the keywords generalization, open and streamlining. Specifically, we are accelerating the shift away from the dedicated financial terminals, open platform using APIs and agile development and the streamlining of existing systems. Top right. The number of IT passport holders has increased tenfold to 4,300 in two and a half years as we have strengthened our training system by promoting IT brain enhancement program, which aimed to instilling a digital mindset in all of our employees. The bottom right shows the composition of system investment. We are accelerating investment in strategic areas, which increased to 46% last year, and we think it increases to 50% in the current fiscal year. Cost structure reform.
Since 2003, we have established low-cost operations through operational reforms and achieved a cost reduction of approximately 30% by March 2018 before KMFG integration. After the integration, we will transfer Resona's knowhow on operational reforms to KMFG and further reduce costs through the use of DX and other measures. We plan to reduce both personnel and property costs in the current fiscal year and have made steady progress after the first half of this year. Personnel costs are also on a downward trend through controlling the total workforce while steadily improving the income level of each employee. As you can see, we are streamlining human resources on a group-wide basis and reallocating them to priority areas.
While promoting processes and channel reforms through DX and shifting personnel to strategic areas, the total headcount is expected to be reduced to below 29,000 at the end of this fiscal year to the level before the KMFG merger. Next, we are also accelerating our efforts to invest in human capital. In April last year, we introduced a double-track personnel system for professionals, and we are putting in place a total career support system to encourage the independent development of each and every employee. Capital management. The top part shows the direction of our capital management, which we have been presenting for some time. There is no change in our approach of aiming to further increase the shareholder returns while maintaining a balance among financial soundness, profitability, and shareholder returns.
While maintaining a stable dividend, we aim to achieve a total return ratio in the mid-40% range over the medium term. Based on this approach, a share buyback with a cap of JPY 15 billion has been set. Return is based on the current situation described at the bottom of the slide. First of all, there are no major problems in terms of earnings situation or the financial soundness of the company. We want to show you a solid path towards achieving the already announced target for the total return ratio. In addition, we recognize that given the current share price level, this is a highly rational way to utilize capital. We also hope that you will understand that this also reflects our perspective on the current share price. We have prepared several slides on ESG initiatives, and I would like to comment on some of them.
This is our long-term sustainability targets, which we announced in June last year. We have set quantitative targets in the three areas for the period up to 2030 including retail transition finance, carbon neutrality, and empowerment and promotion of women. In retail transition finance, the target is set to handle investments on loans of JPY 10 trillion by 2030. In the first half of the year, this figure had already risen to JPY 1.2585 trillion.
The perception of SX by SMEs still varied, and there are still many challenges to overcome, but we rate the initial progress of our efforts as being solid. We believe it is our responsibility to continue to support our customers' effects in a compassionate manner while maintaining in-depth dialogue with retail customers at various stages of their initiatives. Carbon neutrality. This year, we are progressively introducing renewable electricity mainly at sites with large electricity usage.
In addition, we will accelerate specific initiatives for Scope 3 in the future. This is an initiative to promote the empowerment of women. The ratio of female line managers already exceeds 30%, which is one of our strengths. We are convinced that diversity will lead to greater flexibility and resilience of the company, and we will further refine this strength. Here we show the initiatives and progress we have made in the current fiscal year. Top left shows the percentage of female directors. We are a member of a 30% Club, and we have achieved 30% in June this year. The right side shows our efforts to encourage male employees to participate in childcare. We have taken advantage of the October amendment of the law to establish a new childcare leave at birth and are stepping up efforts to encourage employees to take this leave. This is our governance system.
Since 2003, we had a committee-based corporate governance structure. The Board of Directors consists of a majority, 70% of outside directors, and the chairpersons of the three committees are also outside directors. In addition, the proportion of female directors is 30%. The chairperson of the Board of Directors has also been outsider director since June last year. We continue to have a governance system that ensures high levels of transparency and fairness with external perspectives fully utilized in our company management. That concludes my explanation. Thank you very much for your kind attention.