Thank you very much for attending here. There's about 40 and there's about over 100 participants online despite your busy schedules and very cold weather. Thank you very much. We have about 170 pages for just the material. So I would like to very quickly go through them. First of all, the financial results outlined for the six-month period ended September 30, 2024. The numbers have been already announced. So
you have seen the revenue, that's the sales, is JPY 676 billion and it is a 17.6% increase. Profit before tax is JPY 78.872 billion, 12.3% increase. Profit for the period is JPY 60 billion and increase of 24.4%. Profit attributable to owners of the parent is JPY 44.726 billion which is a 20.6% increase. Our financial service business was performing strongly and the revenue is JPY 621.683 billion, a 20% increase. The profit before tax is JPY 104.446 billion.
This is 40.3% increase. Asset management business JPY 17.051 billion. 21.4% increase. Profit before tax is JPY 3.209 billion. 49% increase. Up to now all of them are record high numbers. For the investment business is negative JPY 8.5-5 billion. That is because in the middle of the period if the market goes down, we have the mark-to-market valuation so it will go down. So what has slightly gone down is also included because we needed to evaluate downwards. And crypto-asset business it has hit the record high is JPY 1.4-5 billion. It is 111.4% increase. Profit before tax. Next generation business it was a negative JPY 9.256 billion. Within here there's all of the related pro forma items that are before. Being.
Disclosed and the digital area is having a negative impact because we consider it as an advanced investment and it will require some investment. For the interim dividend it is 30 JPY per share. We're not going to change the amount for the interim dividend that much. The second half depending on the situation, if it is performing well, we may increase it. This is the business overview of each business segment. Financial service business as I have mentioned before, it is as you see and if you look at our segment and within the financial service business, if you look at the other businesses in this segment, banking business in terms of the profit before tax has the largest weight by far. Last time when I talked to you, it was at the point where the interest rate was going to increase.
Therefore, we are going to allocate our management resources to the banking business, is what I have said. And within that situation, the banking business is steadily producing results and the securities business had quite an exceptional profit, JPY 18.8 billion. If we did not do the Zero Revolution, that would have been added. So strictly speaking, because we had the Zero Revolution, we had to increase in the
account numbers. And if we subtract all that, we won't be able to calculate. So roughly speaking, looking at the current number and we believe what will become a profit before tax, we believe there's about JPY 18.8 billion of incremental. I myself thought for a long time when we are going to implement Zero Revolution, we have to do it when the market is doing well. If we do it in a bad situation, then the various voices will come up.
I thought that it will be difficult, so I thought if we are going to do it when the market is performing well, we should do it. And in order to do that, we thought that there will be the exceptional profit that will be generated. And that's why we did that. At that timing, excuse me, there would have been a profit loss. But we did that at that time. And Trump, Mr. Trump was elected as the President and I believe moving forward it will be a strong market. And next is the insurance business. We are going to slightly gradually increase it and it has been growing. And regarding the banking business, currently the Sensei Bank Group and SBI Sumishin Net Bank, SBI ARUHI and SBI Savings Bank and the overseas banks are included in here.
As for the SBI Shinsei Bank consolidated performance, the gross profit operating profit increased by 4% and JPY 140.9 billion. Ordinary business profit is JPY 58 billion +8%. Profit before income tax is JPY 50.6 billion +64%. Profit attributable to owners of the parent is JPY 44.3 billion which is a 70% increase. The net profit attributable owners of the parent which is us is JPY 44.3 billion which is a 40. Excuse me. The
IFRS and SBI [ Uncertain] is JPY 48.4 billion which is 143% increase. The SBI Sumishin Net Bank. The OHR 34.19% were the same as Sumitomo Mitsui and the ordinary profit and the J-GAAP is JPY 18.983 billion which is 16.3% increase. The share profit investment accounted for using equity method IFRS is JPY 3.206 billion, 97.3% increase. As for the SBI Savings Bank, the South Korean economy has stabilized a bit.
It is not at sufficient level yet, but they have a December books closing. So looking at April through September, it is a 112.7% increase which is JPY 8.949 billion for profit before income taxes. And the delinquency rate for the receivables overall has improved from 5.6% to 4.7%. And also the rating for the credit rating we have received, which is a stable rating for three consecutive years. Many of the savings
banks in South Korea why they were impacted is because 2013, when we conducted the acquisitions the same situation they were lending to the developers. And I said they should never do that. And I strictly said that. And I thought that oh, we're going to lose against them and please let us do this. This is for sure the deals the people came to me like that were allowed.
But as I was predicting, that situation has happened. But compared to the competitors, our negative impact was quite minimal. And in Korea more than Japan, the real estate business is declining. And the economic conglomerates are supporting the economy. And the economic size is about the size of a Kyushu compared to us. It is a small economic size, though it is growing. We still have that small image.
So if we get involved in real estate in such an economic market, it will not be good for sure. And I was quite confident about that for a long time. As the banking business is getting smaller amounts of deposits and providing loans to the businesses that are necessary. And we should not do a real estate business or real estate investments. So it's been 10 years anniversary since we acquired the bank. So in November. I'm going to go over there. And.
Give them the congratulatory remarks, and they were about to go bankrupt with a default receivables of 51%. But they made a great turnaround, and even though with the negative economic situation that occurred in Korea, they were able to maintain the profitability. So securities business, as I have mentioned before. So the ordinary income and the profit attributable to owners of the company is negative. That is because we had to procure the subordinated non-bank . And that is why non-
operating expenses was as this. And also for the extraordinary losses it's recorded JPY 2.685 billion. That is because to a provision of reserve for financial instruments transaction liabilities. But we had JPY 82.1 billion of profit loss. But we have overcome that and became a 1.8% increase. So since the Zero Revolution I'm trying to do the overall summary of this business.
Later on Nomura, Mizuho, Daiwa and SBI, you see it all listed like this. And I have mentioned that 18.8 billion JPY. If we consider that if we include that, we will be second place after Nomura. It's about 25 years since we established this company. We just celebrated the anniversary just the day before. But every other securities company has a long history. But even with that, it will. It's just. We'll see in time we
will exceed Nomura Yoshihisa Tabuchi, the management person of Nomura that I respect very much. And today was the day exactly last year that he passed away. And within the words that Mr. Tabuchi taught me, what always remains in my mind. So business management is the function of time. Meaning that as the time passes by, the number of customers increase, the sales increase.
A business needs to be in that way or it is not good. So when you think about these words, the inheritance area, the number of customers who are over 70 years old, there is quite a portion of that. But human beings sometimes will pass away and then inheritance will be passed on to the son or daughter. The younger generation and the younger generation are familiar with the Internet. If they want to buy the
same shares at the same numbers compared to the service that charges you or fee zero, it's very clear. So it is going to be the function of the time. It's same for the bank. When the inheritance occurs and goes to daughters or sons, they will become our customers for sure. The interest is high, so it's quite decisive. It is going to be that way.
So please keep an eye on the situation. Just keep an eye on us. SBI Liquidity Market. This is FX-related. Operating revenue and operating profit are record high by far. And we are now capable of making money. The insurance business, as I have mentioned before, insurance if the sales force is strong and the more policies they acquire, people wanting to get ready for emergency situations, it has to be posted as
a cost. So insurance business cannot be helped. Meaning that that's why I started this business at the very last. But once it reaches a certain level, it will be stable and it will become a revenue source. SBI Insurance Group's performance is written here. This is the preliminary number. But basically it's not going to be that different. And there is the impact of the temporary reversal of policy reserves.
It is a decline of 2.5% but it is growing steadily. The total number of in-force contracts CAGR is 14.8% and it is showing a growth from 2016. In the asset management business first half the revenue and profit before income tax both are record high. This business as well is steadily growing. These are the companies that are included within this business. SBI Okasan Asset Management they have joined a group and their performance has changed and they are putting their full efforts into their business. If the companies come into our group like Asakura comes in there, of course everything will be good because it's cost reduction is what Mr. Asakura is. Next is the SBI Global Asset Management.
As you can see, the revenue in eight consecutive periods of record high, operating profit 13 consecutive periods of record high, and a profit after the owners of the parent 15 consecutive periods of increase and the 10th consecutive period of a record high. You don't see such a company around there. We have been giving interim dividends that increase for six consecutive periods. Coming this far, I hope that it
continues. I'm not putting that much weight on the interim dividend, but the investors are putting a certain amount of weight there. I'm asked that, can you allocate a bit more money to the interim dividend? I hear those types of investors' voices. However, I want to look at the final performance number because we don't know what's going to happen.
The US President is going to change and the Japan domestic political situation is unstable and probably the upper house and lower house elections will happen at the same time. So at that time who is going to be the new administration? If there will be no mystery if the current opposition party will become the
ruling party, the LDP. The current LDP is not good is very clear. So SBI Global Asset Management AUM is a 26.6% increase year on year a total of JPY 6.4 trillion. And Okasan Asset Management, which I mentioned before this as well, steadily is growing investment business. The reason why it is a negative number because there was a change a loss from changes in fair value. So the 31st or March 31st or September 30th what was the stock price at that point?
It goes ups and downs but essentially something that is a negative factor that is not the case. IPO, M&A, this is our company's prospects for IPO. We are steadily growing the number of companies and the semiconductor-related businesses or various fintechs or AI-related investments. We are actively making those investments and towards these companies in various ways we are involved in their business and wanting them to further increase their performance. This is AUM of the SBI Group Private Equity 819.2 billion yen.
Moving on to crypto asset business the up 111.4%, that's the profit, the Bitcoin the people said that only one day they earned JPY 100 million or so after the election in the USA but we will never know. So this is as much as we are going to invest in this area, the B2C2 there are voices from the UK that the B2C2 will be very profitable so please pay more capital. But I want I am taking very prudent approach but for certainty under the Trump administration this area is going to grow greatly. Currently with FSA we have filed with FSA Cboe joint venture in Japan.
There will be a very strong potential for some aspects in this crypto asset business and in the context of Ripple, the other chairman of SBI, the real CEO though will be replaced with somebody else and I have some expectation there. Now the crypto asset business performance basically it is upward trend all the time. The overall system is still not established yet so those companies which are operating in a very
party way and that they could go under and they might have some negative impact on us as well but the ones of our system is well established such things will not happen again. Next-gen business setting aside the biotechnology and health care they are doing fine but the problem is the digital asset Web3 which yet to create positive earnings.
We will wait and see for a while, and if there is no improvement, we need to replace people. Whatever the business is, it's about people. If you change people, the results will change abruptly. I have experienced observed many many experiences like that. There are 700 companies, so who should be replaced, right? People in the right place. That is what we need to do now. Going into the core of this
presentation, at the conclusion of the primary actions, we have focused on initiatives for further growth in the future. For a certain period of time, there should be summary for anything. That's my thought. So we did Zero Revolution in one year. What is the summary? What is the wrap up or the acquisition of SBI Shinsei Bank? I thought that in three years time we will be able to pay back the money to the government and with that we did TOB but the three. Years.
have almost passed. So to pay back to the government, I think now we have a good foundation. I will touch upon that later in details. So about these two things because these things will lead us to the further growth in the future. Those two big events should be successful. And as to semiconductor, I'm hearing many voices. But we invest only 100 million JPY in the semiconductor business. So there's no pain there. We would like to bring in the more good players, better players, and there are many other candidates in the pipeline. The other day with Mr. Son, Mr. Son treated me. He said the following. Why do you want to buy the global number six or number eight company? It's not good. And I think that for this thing, Mr. Son is right.
In the technology area, especially in the manufacturing area, I don't have experience because in the financial world you don't need such a big CapEx for, but when it comes to semiconductor, TSMC 28 nano or the other 25 nano, these things already need more than JPY 1 trillion of capital. And part of it could come from the government. One third actually. But can you survive with that? What the other
started with number six, now it's number eight and the other quarter-on-quarter basis, it is on the downward trend. And the P5 latest, the product it is before depreciation. And when the depreciation comes in, that will be the larger negative number. But to be honest with you, I just wanted to discontinue what they had started. I wrote about this on the blog.
The governor of the Miyagi Prefecture and people in Miyagi supported greatly that initiative, initiative of semiconductor. The other politicians and the bureaucrats, especially the other Economy Ministry, Ministry of Economy, they were very cooperating, so I wanted to meet their expectation, especially the manufacturing sector, especially semiconductor sector, it's the rise for the industry, and without
semiconductor, Japan will not really flourish, except foundry. Whether that the front end and the back end processes are there. We are strong in chemical wafer. We are strong those raw materials area Japanese companies are strong, and also the lithography, whether it is Canon or Nikon, they are catching up with companies from the Netherlands, for example, so despite conflict in the semiconductor will be intensifying because the ChatGPT is one example this huge demand for data center, so Nvidia, the smartphone companies were the major customers.
But now they account for, say, less than 20%. And their major clients are data centers. Four data centers in the U.S. are buying most of the Nvidia products. Like Google, Microsoft, Amazon, those companies and Apple are buying Nvidia's products. Are they capable of developing GPU on their own? Yes, they are. Because so expensive. They are paying so much to TSMC, they don't want to do that. So they do
their own R&D and those companies will develop their own GPU. And when that happens, Nvidia will not have any orders anymore. Maybe TSMC will remain strong. But the biggest problem for TSMC is that they are located in Taiwan. Because there's always blackouts in Taiwan and earthquakes happen. And TSMC seemed to be impacted about 20% of the production. And for TSMC they have established a very strong factories.
But they are faced with geopolitical risks. The US [is facing them because they are moving into the production in Arizona or in Japan because of the geopolitical risks. In Taiwan there is shortage of water as well. In India there's no infrastructure there. Japan is the very limited number of examples of good infrastructure. In the 1980s we had more than 50% in market share for memory. Now all you need is
foundry in this country. Not the old kind of foundry, HBM. Foundry. HBM is embedded in other GPU with logic and that is not sufficient. Cooling system is very important as well. But it generates the 1000 kW the heat for cooling. Everyone is buying out power. All the companies are buying power everywhere. In that Miyagi Prefecture, the nuclear reactor will be online again. The water is good.
And in Kumamoto, it will be more difficult because you have to pump up underground water. So if you do it, the principle is that we do not want to go too far, too deep in terms of CapEx. Because when it comes to semiconductor, it advances so quickly, the situation changes so abruptly. So it's so different from financial industry. But for Japan, it's something that we need. So we'd like to partner with the best one.
And if possible, we'd like to use this, the location in Miyagi Prefecture. We would like to please people in Miyagi. I don't know if we can do it or not. But so far when I want to do something, I always do it successfully. So I will do it again. So JPY 20 trillion OB asset. And so overseas business. Overseas business account for about 12% of the revenue.
I would like to increase it to 20% or 30% in three years' time. The first time in 47 years I went to Riyadh in Saudi Arabia. Here I am vice governor. His Excellency visited me. It was a very strong invitation. The other day they came to. He came to Tokyo and he liked me so much. And he invited me to Saudi Arabia. And also I have met many people, visitors from Saudi Arabia, including Princess. Princess, the prince
who is number one in the gaming area. His Excellency, not the Crown Prince, but the Prince in Saudi Arabia. In order to expand our business, it is indispensable. That's why I visited Saudi Arabia first time for 47 years. There is no direct flight from Tokyo. So I had to wait at the other Dubai airport for 4 hours 45 minutes.
It was so cold because of the air conditioning. I wonder why they have to waste power so much there. So there's another invitation to visit there in three or four months period. And so next time Riyadh Air will yet to come to the other Japan several years. So I'm probably use private jet so that I can go to Riyadh directly. I'm 73 years old. It is so tiresome. And there will be the bigger airport in Saudi Arabia in the future. I think a long time ago it was Kuwait when there was the biggest airport. And Kenzo Tange they designed that airport, I think. And it was the era of oil. A lot of capital went into the Middle East and I visited the region every three months. It was so, so hot.
I really didn't want to go to Saudi Arabia, but I did to expand business. And I'd like to delegate this mission to other people. We want to hire the new people. Now we have the short list of two candidates and in June that they are going to join us probably to be in charge of the overseas business. So the 20% stake of Mynavi will be obtained by the end of November. Currently it stands at 19.7%. This is going to reach 20% and they are going to be the equity mix of the company so that both entities can grow of course the existing businesses on a long-term basis for financial management. So Mynavi, because Mynavi is deeply engaged. In the.
Employment, the finding job. And so that's going to be the good combination. So do we would like to increase the revenue profit? The current level is not so bad either. It might not be as big as the Recruit but we would like to make it as big enough to make lots of challenges. So the summary of SBI Securities after one year of the Zero Revolution. JPY 18.8 billion of the profits lost that was recovered by the increase in financial revenue trading revenues and other commissions including advisory fee, bank agency fees. As a result, the profit is on the upward trend in the U.S. Such upward trend.
But it was Robinhood Markets which did first the zero revolution. For them it was easy because as long as revenue from payment for order flow PFOF so meaning that we have many clients and there are many order flows. Then you can get the fees from market makers. So it was easy for them. So Charles Schwab did the same E*TRADE and everything. But in Japan, there's no PFOF. It is not allowed to do. And I find it
wrong. The system should change. So in everything we are behind the countries. That is about the financial administration. With TSE at the top that the New York Stock Exchange was operating poorly. But with NASDAQ coming on and something like PTS or ECN as they call it, things changed. And that spirit? What is that spirit? That is protection of investors.
And also the profit of investors. Secure profit for investors, not for securities firms. That is the spirit. In the US for example, the president of BATS or the president of Cboe visits me and they say the same thing. We go to the FSA all the time to make our own arguments. It should be 10% at least. And that's this 10% rule. Where did it come from? It's ridiculous, unreasonable. The story is there always in Japan. So
the first we need to see changes in politics. We need to renovate financial administration. So on a quarterly basis, revenue is expanding very smoothly since the start of Zero Revolution. Quarterly revenue year on year basis, 15.6% growth with Zero Revolution. The biggest benefit, as I'm going to touch upon later on, is the expansion of customer base. Customer base expansion.
In what way stable system is to be established. That's the most difficult one because the number of customer increases significantly, and 18.8 billion JPY of profit lost. How to cover it? We have been working on that for the past five years, and we're still doing it. Ultimately PFOF to be established in this market, then the customer flow will have strong impact on the results. In one year, the employees of SBI
Securities increased only by 8%. But the volume of services and products increased significantly. As you can see, the number of SBI Securities margin trading accounts have increased sharply after the start of the Zero Revolution. It was 16.3% increase before the revolution. But after the revolution 44.5%. On August 31, 2023, we announced Zero Revolution. Open interest credit balance fluctuates depending on market conditions.
But the baseline has steadily increased due to the expansion of the customer base. The trend of open interest credit balance and financial revenue is record high, up 33.9% year on year, and at the start of the Zero Revolution plus 3.8%. That is for open interest credit balance and investment trust balance. Investment trust fees, the expansion of customers and the start of the new NISA combined. The timing
was good when we started the revolution. That was the timing of the start of new NISA that was very important as well. From the start of the revolution 69.2% plus year on year basis. While only 21.6% increase for the investment trust industry. Investment trust fees record high plus 43.9%; the employees increased only by 8%. Especially.
As of the end of September. The quote unquote comparison. You might say that why the other personnel cost increased so much? Well, because of bonuses, new graduates, the first salary. I think we are the number one of the best or the best level among the financial companies. We raised it this year as well. We promote them their career depending on the ability, quality, regardless of gender. From savings
to investment, in 1974 I joined Nomura Securities. I have been saying this all the time and this time only there is a shift from savings to investment with NISA and iDeCo. New NISA, new iDeCo, they're important elements. Also it was a very important factor that we did Zero Revolution accumulation amount and number of accounts with set accumulation. Then abrupt increase from here after the Zero Revolution.
SBI Wrap, this is an automated discretionary investment service [that] topped JPY 220 billion in AUM in just two and a half years. It is increasing very smoothly. Commission from foreign stock trading, it's not zero. So the commission revenue is increasing +76.7% in the first half [for] spot trading and for margin trading compared to first half before the start of this revolution, 3.5 times. So here we are gaining
commission and it should grow more and more. Trading revenue year-on-year basis +20.9%. The revenue from FX trading [and] foreign bond sales both grew. This pink area, i.e., crypto asset trading, and it is now categorized in separately, differently. Probably we shouldn't have [it] on a consolidated basis for SBI Securities, but we thought that the crypto is too risky.
Negative impact for the Zero Revolution SBI Liquidity Market which operates FX business in SBI Group the profitability that outstrips that of its competitors up 38% on year. The liquid top customer basis increase and other players are not growing really. Trading of gold, silver and platinum has increased due to rise of geopolitical risk and weakening of the yen. We got the license and we are doing this business
as well as it's says the there are precious metals market the business which is still small, we need to grow it as well. Zero Revolution has greatly accelerated the expansion of SBI Securities customer base. As of the end of September the 13.2315 million accounts as of September 24th from 2009 on a CAGR basis of 13.5%. In the case of Nomura, 5.888 million accounts CAGR only 1.8% while we grew 13.5%. Daiwa stopped the announcement, and here SMBC Nikko Securities was acquired. So this is the result AUM of the SBI Securities JPY 42.7 trillion. At.
the start of the revolution, it stood at JPY 31.5 trillion. So the increase of more than JPY 10 trillion plus 35.6%, the quarterly stock trading value share of SBI Securities and three major face-to-face securities companies. So the numerous securities that they are taking institutional investors so they are managing the customers' money without thinking about the trading cost. And I would say that is against the
fiduciary duty because there is a company which is doing the same thing with no commission. So that should be changed. There are so many things that should be changed and we have to do semiconductor and others. So I'm overwhelmed with lots of works but we need the personnel relationships to work on them. So I need to do whatever I can do. If we do all of these things, we will be well.
Already we are very highly evaluated globally and reputation will be even better. Share trading value has increased rapidly following the start of the revolution. Individual stock trading value 57.2%, of which SBI individual margin trading value 60.7%. Transfers of assets between other companies at SBI Securities has continued to be in excess of inflows since the Zero Revolution. It's always excess inflow through the revolution. Number of NISA accounts that we see the top position. First Rakuten that beat us well, first
SBI beat Rakuten and then Rakuten the economic zone, the credit card that worked very nicely and then Rakuten [ Uncertain] . But the customers of Rakuten and all their economic zone are almost saturated. It's not about points like Rakuten points. SBI provides multi points so wherever you go well, Rakuten is not included though multi points are the wisest way because there will be no saturation.
That's the ABC of business management. So it's just a question of time. It's a function of time that we will beat Rakuten. Expansion of customer base through Zero Revolution benefits not only SBI Securities but also the entire SBI Group. I think so. The Zero Revolution impacted so big for all the group entities. And that is the other that is making very strong link among the entities, the mutual trust over 25 years of history. So that will have rippling effects.
It has been rippling out, for example on a group-wide basis. And look at the pace of customer base growth. This is when Shinsei Bank joined the group. This is when we announced Zero Revolution. This is the start of it. And this is at the time when the Zero Revolution started. You could see that each milestone or customer base has increased. We have 51-point-something million customers. That is the base of the
SBI Group. So Shinsei Bank's retail accounts or deposit accounts have been accelerating in growth out of new account openings since the Zero Revolution. More than 70% of new accounts opened due to referrals or customers being sent over from SBI Securities. This is the power of our ecosystem. 25 years ago I proposed this idea and we have been working on it ever since.
This ecosystem is something I want to make around semiconductors as well. So that is why we've been talking about it. And if we're going to make a semiconductor ecosystem, we would like to invest into venture companies or startups and create an ecosystem made of companies of high quality. So for accounts we saw 10.6% growth compared to September 23rd. And for deposits it has increased by 9.1%
since the start of the Zero Revolution. This is FX accounts. The GMO group made an acquisition here and this is how they look like. But hereafter the growth rates aren't that high. But we are. Growth rates are higher as you can see here. So it has a positive impact on the asset management business as well. For each of the funds you could see the number here, but it's overlapping. So I hope you can change this later on.
In the Japanese version you could see that fund balance has been going up by X amount of times. And we've been seeing inflow of funds into this business as well. So now upon summarizing the year, what are we going to be doing next for SBI Securities? Here we show our challenges or what we're working on. You may have realized on TV that we've been featuring Mana Ashida, the actress, in a new TV
commercial. We haven't had commercials before, but it's highly regarded. And Mana Ashida was popular in the non-life insurance business and her father works for SMBC apparently. So the leadership of SMBC was asking us to let them feature her instead, but I declined. So she's a very smart person and how should I put it? She's a likable and friendly person. She goes beyond generations and has a high acceptance.
The theme is Zero Revolution and the theme is creating the future of investment from zero. We have also established a financial education promotion office. As we see new customers come in, we deem that we need to have something like this. There are more than 650 organizations from inception until October 17th, to which we conducted training. This is what we're working on, branding as well as education. For
the corporate business, we used to be focusing on the retail business. We're now also focusing on the corporate business. We would like to grow the corporate business. The first step, like I've been mentioning from before, is focusing on IPO underwriting. We have SBI Investment. For the companies we invest into, the exit strategy would be an IPO. Then the securities arm of our group can do the underwriting.
Because we have this kind of mechanism, out of the 34 companies that went to market, we were able to be engaged with 32 of the company. That our underwriting share is 94.1%. When these companies go to market, their market cap may be low at the time of IPO. However, they will entrust us with their assets and that will increase. Matsushita or Inamori-san, Kyocera are those companies. They went to Nomura
before. However something happened so they never went to Nomura again. The same thing for Matsushita. They used to work together with Yamaichi. There might be companies of this nature. We're basically investing into companies, especially because we make global investments. This will come in handy as the global markets develop.
These days, energy companies or railway companies and their bond issuances are areas where they're asking us to become involved and underwrite because we had dominance in the retail market. So whether it be for utilities or for the railway companies, because consumers use their services, so obviously it's natural that they come to us. It's not just IPOs, but we are getting more engagement in PTS
as well. Next is M&A for the M&A business. I used to do a lot of M&A at Wasserstein Perella when I used to work for Nomura. But this was quite complicated because whether they are small deals or large deals, the procedures are pretty much the same. So for the big brokers, they go after the bigger deals because the commissions are larger.
But for medium-sized and below, SMEs is an area where people are not focused on. Of course there are some people who do debt deals. But in our case we have a good relationship with Tsuji Hongo. So together with them we have set up a joint venture where we have 51% ownership in Tsuji Hongo has 49% ownership. And this business has been growing substantially because there is a need for M&A solutions for the smaller comp
anies and for accounting and tax accountants. They need them as well. So our relationship with these entities becomes stronger. Next is option trading. I've been saying over and over again that we should pursue this field because the size of the market has been growing larger overseas and the more uncertain the market is, people go to options.
For example, South Korea is a market where option trading is increasing, but not. It's not the case in Japan. Financial education is not that great here, and it took a long time for approvals to come through for the individual option trading, but in the financial business, when I was at Nomura, New York, there was a test to become an options administrator as well as an options manager. All kinds of tests were conducted, and the tests are pretty difficult, but in the case of Japan, there needs to be more things of this nature. We need to have our pupils
study more, so for futures and options we are focused on expanding the services. It says here comparing against fiscal 2023 second half, we've been seeing it expand by 6.6 times compared to the second half of fiscal 2022.
Mini Options Futures Minis have been increasing, so we're currently at JPY 60.6 trillion and 459,000 accounts. But this is a very small number compared to the total number of accounts. So we have to grow this business even more. So we have to talk about how we can risk hedge and talk about its benefits thoroughly and teach our customers. And I think that's a mission that a broker has. iDeCo is next. This is
the next NISA. So we've been ahead from early on. From 2001 we set up SBI Benefit Systems and following 401(k) in the U.S. we have set this entity up and it took a long time to become profitable. But we steadily focused on this business and we were able to turn positive and we made it free as well. From 2017, May. So it's individual type defined contribution. Plan.
That's how iDeCo is officially called, although we call it iDeCo for short. Going forward, it's not just new NISA, but iDeCo will become increasingly important as well. From 2016 to 2024, CAGR has been 47.8%. The growth rate has accelerated. So in the future, when you think about your livelihoods, will you be able to protect your life? I think when I was watching TV the other day, for those people who are pensioners
and what they're doing in their livelihoods, I think we are in a desperate situation. When you also look at the U.S., are they in a good situation? Whether you look at L.A. or New York, we have been seeing a surge of homeless people because of inflation. It has become more dangerous and there has been illegal immigrants coming into the country.
It's pretty much a matter of course that Trump won the election. I don't look at news on CNN or other major media channels because they're lying. I knew 100% that Trump was going to win and I projected that from an early stage. Major university professors in Japan, what they're saying is nonsense. I really question why these people are serving as professors. Because Trump won and at that moment they
were still saying, we don't know, we don't know yet if he's going to win. No, we did know he was going to become the president 100%. Really their education levels are really low. I was really surprised to see what was happening. When you think about it, who thinks Kamala Harris is going to win? If you are a decent person, you probably wouldn't have thought so.
When you line up what four media outlets are saying, the location may have been different, but what she was saying was the same. Maybe she was basically reading from script, so that kind of person will not be a president. In Japan as well, there were some people who abided to certain wise words from the past, but I question those people. People need to speak in their own words. If you want to become president,
you need to have the skill to think with your own brains, on your own feet, absorb knowledge, have a big picture in your head. If you don't have that, you don't have the certification to become a president because you are going to be held responsible, so ad co growth, we have been by far number one in growth, so in October 2018, this was Tokyo Marine actually.
But we exceeded them back then and we have been growing ever since. So this is something we would like to focus on even more. This is for the sake of the Japanese people. Under a zero interest rate environment. We used to be in a negative interest rate environment and 54% if it's still held in deposits,
that's nonsense. And during that time the US market was rising and for 30 years, real wage hasn't went up by a cent. We need to question this. The people of Japan needs to question this and change the leadership of Japan. So improving prices through use of PTS and dark pools we need to constantly fight with the TSE. This is basically an alternative trading system and for dark pools as well.
We need to grow this even more and the U.S. it is continue to increase in share and within SBI Securities the PTS ratio we need to do more. This needs to go up to about 40%-50%. That's what I'm telling my people. It needs to continue to go up. And so our smart order routing. How can you get the best quotes in your execution? You need to have this happen automatically. That will reduce the transaction costs
and it directly connects to fiduciary duty. I would like to tell the institutional investors that it will be a crime if they don't pursue this kind of path. SBICROSS this is a spot trade matching service for domestic stocks. By having this service you'll cover four markets more TSE J-Market X-Market which are PTSs as well as another ODX Osaka Digital Exchange.
And on top of that, SBICROSS, you'll be able to execute orders with the best terms for the customers from four markets and SBICROSS and payment for order flow. At an early stage, we are poised to implement this and I will be working against politicians as well. Recently, my voice is being heard amongst the politician base Hagiuda-san. I was supporting him during the election and he actually
thanked me after the elections and he also said that he will come and thank me in person in the near future. I think for the LDP he is a necessary person to rehabilitate the LDP and that is why I mentioned him by name in my blog to show my support. We have 1,500 investees and there's many management among the 1,500 companies that we invest into.
There are companies that are residing in Hachioji, his voting base. We had our people count how many employees lived there. There were about 200-300 people. I didn't directly say to them to vote for Mr. Hagiuda, but I just wanted to know how many people are in that region. So I had the HR people count. We have 19,000 people in total. So the 1,500 companies and our scale is quite different. However, they
were supportive. Mr. Kondo from Nexyz really worked hard to show his support. Even before me, before I wrote my blog, he also was working on many things in order to support Mr. Hagiuda. They have a passion leader meeting and he heads the SMEs that is comprised of 3,000 companies and he had a meeting. We need a person like Mr.
Hagiuda or else I am apprehensive about the future of Japan. We can't continue to have generation based politics administration. The Minister of METI, Mr. Saito from the past was a very confident person. Those are the type of people who should be at the top, and Ms. Takaichi, she's a little tilted in her philosophy but I had dinner with her several times and she is a very competent person, and she was also
in the technology space in the past, so she is very knowledgeable and I think she's a hard worker and she studies a lot, so people who are knowledgeable and people who have a ideology. Ideology, as long as it doesn't contradict. I think that's very important. Since the acquisition of Shinsei Bank, we've been concentrating our resources to Shinsei Bank.
We announced that in May 2022, and SBI Securities used to be our focus. But since then, we decided to concentrate our resources into the banking area, and we actually changed the order of how we report. Banking is now first. It's not that we're neglecting the securities business, but from here on, as interest rates are going up, we believe our focus should be banking, so this slide, our total assets are shown here.
We have banks across the world. We're at JPY 32,588,000,000,000. So this grew by 48.4% compared to when I made that announcement in March 2022, so SBI Shinsei, when we bring the people over to Singapore to lead the business, people who are originally from securities, investment and banking, what we're doing right now is we are reallocating people. For example, in Vietnam, our ownership is 20%.
However, it has a value of more than JPY 50 billion because it is listed. You probably are not aware of this. There was all kinds of lies in this really bad magazine about the fourth megabank concept. All wrong. Those magazines. I really hope you don't believe what they say. The only thing you should believe is my words. Three-year summary of SBI Shinsei Bank is shown here. First, at the time of the acquisition,
we announced the midterm management plan in May 2022. The financial targets are broadly achieved in three years' time for public funds. I mentioned that we would like to prepare to start returning funds. Mr. Kawashima became the president of SBI Shinsei Bank and he only took another person; the rest of the people were originally SBI or Shinsei Bank employees. Executive officers, executive leadership.
I talked with them over and over. Mr. Kawashima personally engaged, taught his people how to engage in sales, and he's a person that I have trained for more than 30 years, so truly I think he really worked hard, and Shinsei Bank is working on integrating with SBI Securities or SBI Group. And as it pursues that,
it has changed dramatically, not just Shinsei but Shimane Bank as well. Before we made contributions in the second tier banks, it was at the very bottom of the ranks, but now it has went up the ranks. It's about mindset change. Have a strong determination. Yes, Dr. Yasuoka word is what I have been communicating. I think there is two books and sending over those books and Sontoku Ninomiya's. Movie.
Sending over copies of the DVD is what I've been doing in order to promote mindset change among the management. So that is what I've been doing for the past 25 years. And that is why I've been able to establish a group comprised of 50,000 people. And I think what I've been doing over the years has been right by just sending two people from our group and centered around SBI Securities. As we promoted
integration with the SBI Group, SBI Shinsei Bank changed dramatically. However, there's still much to do for the medium term management plan. When we made the announcements for March 25, we set the target of reaching JPY 70 billion. We're currently at JPY 44.3 billion. But if you doubled, it's exceeding JPY 80 billion already. So we are sure that this JPY 70 billion can be reached on a consolidated profit basis.
Also regarding synergies with the SBI Group, our target was JPY 15 billion but we're already at JPY 12 billion at the half term of the year. There is some reference material about the details. I hope you can take a look later. Look at the number of accounts and deposits. For retail accounts, we're currently already at 3.8 million. The 3.8 million was the target, but we're already at 3.66 million. As of the end of September
we were at 3.66 million. Before it joined the SBI Group, the accounts were not really growing. Ever since it joined the group it has gone up substantially. Look at the amount of deposits. It used to be 6.5 trillion, 6.3 trillion. Under the former administration it was only. It was lackluster. But now as of the end of September, we reached 12.5 trillion.
This is the fact. And I threw away the magazine that was telling all these lies. And I told them, never subscribe to that magazine again because it was nonsense. It was bad for my eyes. And mentally it just made me really mad and angry. So I decided not to read it ever again so that I could feel peaceful and calm. At 73 years old, however, I am ever so motivated when I see those things because I'm a fighter. I
have a fighting spirit. So Shinsei Bank's operating asset balance at JPY 12.7 trillion. Before it joined the group it was at JPY 8 trillion. It was hovering around that level. But it continued to grow and we're here right now. The balance sheet in just three years we've been seeing an expansion substantially. JPY 12.5 trillion is deposits and its balance between individual and corporate deposits.
Individual deposits increased by JPY 1.3 trillion compared to March 2022. For corporate deposits increased by JPY 4.8 trillion compared to March 2022. So I often say to my young people, when you're looking at companies, you shouldn't just look at their income statements, their P and L. You should look at their cash flow statement as well as their balance sheets. That is how you should assess companies
from every angle. For SBI Shinsei they have been making great strides in improving themselves. So this is the trends of cash flow. So they joined the SBI Group and this is how they look like right now. So this is the integration strategy we've. Been progressing this and SBI and SBI Wealth Management called Uncertain it is called that name. By doing that together with SBI Money Plaza and the AUM is drastically increasing.
This is AUM and SBI Shinsei Wealth Management and at the it's up to 18, but we're aiming for 22 stores excluding the sub branches. We are going to have this co-managed stores and the product lineup is extremely important.
From fund wraps to real estate security tokens and alternative funds various new things. In addition to the bonds and securities they have many products they handled and they will have to be able to provide insurance. Money Plaza actually handles insurance as well and also the real estate type of products as well.
But such product should change its DNA, and I would like to promote that actively promotes various measures to apply expanding the retail base implementation of benefits program in ordinary yen deposit accounts to holders of SBI Securities accounts. This is the true integration of bank and securities, and the preferential interest rate of 0.30% per year and 0.239% year after taxes, and we will have the preferential mortgage rate to users receiving a mortgage check, home loan comparison analysis Aruhi Shinsei. They do have the housing loan balance that. Is.
Equivalent to the mega banks. But however, there are still things that we need to do. Reading the reports, first of all, there's spirit needs to be revisited, is what I think recently. So at a very early stage, I would like to work on that as well. Doing everything is impossible, so I'm going to ask Mr. Takamura to take the lead. Diamond Asset Finance, it took about JPY 200 billion. We acquired them, made them a wholly owned subsidiary in January of 2024, and this also, once they joined our group, suddenly revitalized and grew four times year on year in the wholesale business area and has also expanded dramatically due to the vitalization of sales activities and strengthening of cooperation with the group.
The corporate activities and financial corporations network has increased, and also distributions to regional financial institutions, et cetera. They are growing, and Shinsei Bank has made partial acquisitions of the shares of NEC Capital Solutions, 33.3% of voting rights. Now acquisition method applied in our country, and they have about JPY 10 billion of a negative goodwill under the J-GAAP. This
is going to be posted in the third quarter, but JPY 70 billion, but just as negative we had JPY 70 billion. So this 10 billion is going to be offset easily, but that's going to be outside the accounting journal, and it is going to be able to reach a sufficient level. Reorganization between the SBI Group and SBI Shinsei Bank Group Investment Management. SBI Asset Management will be merged, and the Shinsei corporate investment will come under the SBI Holdings, and they will all be lined up together.
So they will go under the holding company and Shinsei Securities transfer securities business to SBI Securities for integrating the overlapping operations. So we are going to improve the efficiency by 1.5 billion JPY and the new fund. So between the Sumitomo Mitsui Trust investment and SBI corporate investment we will have a new fund. So this is the former Sumitomo Trust investment and from the Tokyo
Metropolitan Government we have received 3 billion JPY and is going to arrange a 10 billion JPY fund or I did talk about Singapore of the exchange of executives. The lady that was an SBI Securities she's very capable so we brought her over here to us and keeping in mind of both securities and bank I asked her to conduct the sales activities and from Kawashima-san's Mr. Kawashima's perspective that was a loss.
But when I think it's going to be a win-win I will bring in people from other companies. I talked about Singapore before. Within the internal recruitment system we're going to have SBI Group and Shinsei Bank Group recruitment system. And this is the growth strategy for the future. So this is going to become the core of the wide area regional platform. This is the fourth megabank concept is going to be
embodied. And within this concept, what was indispensable was a Shinsei Bank and that became into our hands. And with this finally we will be able to move this forward in full scale. We are prepared for it now. Improvements in efficiency and expansion of our business scope through wide-ranging collaboration and aim for wide area regional platform. SBI Group also has alliances with over 100 regional financial institutions nationwide.
Before Shinsei Bank came, they are all the first tier regional banks. But after Shinsei Bank joined us, the second tier regional banks also have joined us and the relationship is becoming closer and closer. So SBI Shinsei, whatever it took, we needed to have them join our group. So as it was a hot topic before 20 years had the borrowing of 350 billion JPY of the Japanese people's taxes and they were called a
robber. But the politicians and FSA said yes, it's working and the bank's TOB was realized and no one imagined such a thing to happen. And steadily, as I have imagined, things have moved forward. That is the current situation. And currently Shinsei Bank and the regional banks participate in loan deals arranged by SBI Shinsei Bank: 2,001.1 billion JPY with 11 regional banks.
With the term loan we'll arrange a total of JPY 10 billion amount, and this term loan is the Restar semiconductor wholesale company, and we bought this company to include this semiconductor company in our ecosystem, and we partially bought this because the semiconductor is going to have incredible momentum movement moving forward, so we believe we can generate certain profit so we
will be able to make a certain level of profit and sustainable finance, and by utilizing that at the first half we have arranged a JPY 360 billion of finance and provision of expertise and promotion of exchanges personnel from 12 trainees were received from 10 regional banks mainly from the Structured Finance Department. FY 2022, it was 19 banks and 27 trainees. Since then, that is the current situation, so with the regional banks the relationship with them has become extremely strong.
For example, we conducted the semiconductor seminar in Sendai City and we filled the lecture room of Shinsei Bank and including the president of the bank the room was full. So many people have attended. And the other day we celebrated the 25th anniversary and 700 people for the nighttime session and total of 2,100 people, the total number of the day session and night session has actually participated.
And within that, how many presidents of the regional banks or how many promising banks or a leading bank regional banks and leading politicians were there or the top management of the leading corporations attended? Everybody was surprised of seeing the attendance. And I have received many phone calls or congratulatory letters from many people. The current stage that SBI is at is different from the past. Moving forward, the stage is going to be further escalated or go above.
But we have to be careful that we don't fall out from the high position. Yesterday for lunch, what I ate, I ate with a CEO of a company. And this person came from the USA. And this is a person that you are not able to frequently meet up with. But that person dined with me and was able to have a long discussion. We are already at that position or that stage. So the further we go up, the concept that I have in mind right now is going to be easier to embody the next generation account system. What came to mind when I saw the regional banks is that this account system needs to be changed from the fixed cost to a variable cost. If not, they will have a high amount of depreciation and the profitability of the regional banks will not go up.
I approached Hitachi first. They reviewed a lot of things but they said they can't do it. Then finally we found somebody who will do this with us. That was Future Architect. Finally from July 16th of this year, they started the operations. After next will be Shimane Bank. Then for the performance improvement of regional banks I said that we need to do two things: to have advanced operation of the bank operation
itself. This accounting system, we need to improve it. All the major banks once every 10 years renew their account system and spend a tremendous amount of money between JPY 5 billion-JPY 10 billion. The banks cannot bear the depreciation. By changing this fixed cost to variable cost, let's pay every year like this. This is the business acquisition fund with JPY 100 billion.
I said I will create it. Fund one, fund two. As we have the new one, the amount will go up. So it's JPY 10 billion. JPY 31 billion is going to be JPY 100 billion. Mr. Imai is the president. He has quite a good sense. He is handling the business succession of high quality companies. The difficulty of this succession, wanting to do and identifying companies, that's easy. But how are we going to link them to people who
want to buy these companies? This is the difficulty in the general M&A. But when it comes to business succession, it becomes even more difficult. However, but the performance is increasing largely. Furthermore, for the regional financial institutions we created a fund together to back up the local TOB. SBI Customer Support Fund was established or founded in January 1, 2021.
But SBI Regional Revitalization Fund founded July 21, 2021. Tsukuba is a science and university city so they are suited for this and also Taiko SBI Regional Revitalization's advisory fund. This is reflecting that local characteristics. Repayment of the public funds of SBI Shinsei Bank, which is the SBI Group considers as a great cause. JPY 19.3 billion has been repaid and first payment of a portion of public
funds in nearly 18 years. This is what it's going to be. In addition to that, the three shares out of seven held by S-Grant we took two and Shinsei took one and our interest became close to 70%. And we have the special voting rights because we are above 2/3. So we can do various things. And without doing various things, how can we exit first?
Is that JPY 70 billion and JPY 15 billion the things we have committed to? We need to break through those or achieve those. We are already having visibility that we will be able to achieve that. As I said, the deposit balance March end of 2020 was JPY 6.3 trillion has went up to JPY 12.5 trillion as of end of September 2024. In Japan, the interest rate will further increase, but the United States have lowered it
and it will be further lowered for sure. Operating asset balance, the people who come to us are very weak. The governor of BoJ. Academic people are weak even though they're academic people like the United States. They have to be sharp people. What's interesting is that Trump was mumbling something and he was mumbling something.
That middle to old age person does have certain strengths, and those type of age person has to have a courage and make a decision. Well, in the 30 years of deflation. Well, the monetary policy for a second it did work, but the interest rate has to be lowered and normalize the situation. But the BOJ continued to say that still deflation, deflation, deflation. And I really thought that politicians are mute to economics. And I looked at Mr. Ishiba's book which is 3,400 pages, but I only read 10 or several pages. But I found out that he has no knowledge about economics. The most important element is economy. As.
Marx has said, quoted the economic structure on top of that the job structure is on top and this stock market structure is the economic structure if that crumbles, the economy will crumble. So China I think will crumble as well. 8% economic growth rate. You will have to have that, said the Chinese economy will face a danger and there will be social instability that's going to occur and look what's happening over there now. Economic growth rate at this point is a question mark as we don't know the economists one after another is changing their forecast. It's dangerous and the US is looking at China in the same way and it's the Arab countries are the only ones they're looking towards China. So what's going to happen?
First of all, the must is to achieve our target and we will be able to and if so my way of thinking as soon as possible repay the balance of the public funds about 100 billion all at once. So from here, FSA and the Deposit Insurance Corporation or the Resolution and Collection Corporation will have a discussion and I'm going to directly go have a discussion with the Minister and in various opportunities I would like to have a discussion so that I would like to pay back 100 billion yen as soon as possible, this saying that by the end of March of 2025 I have no intention at all after faithful discussion etc. Etc.
So, I want to do it earlier. I will resolve this earlier than this, and last time, when I spoke at the year-end financial results session, when we complete the repayment of public funds, our exponential growth of our banking business is going to happen. Oh, it will be like this. So, I will disclose this information, and the market down, it was JPY 10,000. It was JPY 8,720. The IPO price, that was the price, but now it's close to JPY 40,000. The Dow Jones, how much is that? If it becomes like this, what's going to happen to the share prices? The business performance has improved steadily, and moving forward, my next target is, I think I can exceed this JPY 76 billion easily in the full year of results.
If you triple 443, it's 886. Or double, excuse me, double 443: 886. And various things will occur, and the stock market will go up and down. I'm thinking of things based on that. Things will move, but whatever it takes, the group as one will achieve this numerical target. And after that, I am going to conduct thorough negotiations, strengthen the asset management business to develop a new revenue stream. I already said that: JPY 20 trillion. At the end of March 2017, it didn't even reach JPY 1 trillion. With the JPY 3 trillion, JPY 5 trillion, we had JPY 10 trillion as a target. We have achieved the JPY 10 trillion of AUM. This is showing that in September 2018, the group-wide AUM reached JPY 1 trillion, and that reached JPY 5 trillion. In September 2021 and May 2024, it has exceeded JPY 10 trillion.
I said 20 trillion JPY when I said that. Mr. Asakura said yes, we can do that. However, but probably you all thought that it's impossible. The range of the management period was not enough is probably what you thought. The good thing about our group is that what we say will definitely be done. And that.
It's a great cause of our group. That is why we have to do it. If we try, we can do it. That is the spirit we have. And for us achieving that 20 trillion JPY. And we are going to be leading an asset management company in Japan. And then we'll look into the world towards that 100 trillion JPY, the Japanese yen. It says that 2,200 trillion JPY of individual money exists in Japan. And if we can use that, there's so much potential with just Japan and the individual financial assets. Lucky or not, the deposit is a 54%. And when these people have this sense of crisis that they cannot stay as it is. That's when things move.
The TV or the newspaper or the media, the people who are living on their pension money, they should report how they are living in an accurate manner to make it in a way that politicians will feel that something has to be done that is going to be the public benefit, and by seriously pursuing that is going to lead to a revenue. SBI Global Asset Management AUM approximately JPY 6.4 trillion and active JPY
3.1 trillion private equity. I have to make it one trillion but it's 0.8 trillion alternatives JPY 10 billion M&A. With these AUM is going to increase further. ORIX has a very successful asset management M&A, well, and then we have Nikko, which has succeeded. I wanted to buy that, but at that time we were not able to. If it was now we can acquire certain size.
Expanding the product lineup for corresponding new NISA and investment in growth markets. The new NISA product lineups have been expanding by group entities, very good names listed and high dividend equity funds both in Japan, U.S. and Europe. I have bought them on a personal basis. Of course we need to be careful about insiders. But these things we can buy. I was not engaged in such the investment but
the high dividend equity fund was interesting, the Old World High Dividend Equity Fund. So, the dividend yield forecast at 4% and October 25th it started on the 1st of October and on the 25th it's already JPY 5.597 billion, that's very rare. The commissions are very low. Fees are very low. It's not zero, but very low. And here's the SBI Okasan as I mentioned fund the Asia Semiconductor Focus Fund, that's interesting. As of the end of.
September, as much as JPY 24.2 billion. That's the total asset SBI Asset Management Japan's first Saudi Arabia ETF exactly when I was in Saudi this news that came out and that's the plan of Asakura-san so in Saudi it was a big news PIF from May it's about Mizuho and they also made an announcement on newspaper whether the PIF related news that is usually make a good news but the Mizuho didn't do that. But.
I think it was a Nikkei newspaper which wrote the article on Mizuho related to the news. In May we made an announcement. Nikkei wrote about it about SBI about PIF. I made my argument. His Excellency from Saudi Arabia was there in Japan, and so I made an announcement, but the mega banks in Japan are not even thinking about ETF. They are thinking about lending overseas. Saudi Arabia, you might be thinking that they are very rich, but they are spending so much, so they have to do some funding. Saudi Arabia, that's their status, so the mechanism is described here.
I myself bought this Saudi ETF to know what kind of minimums are there and what kind of economic growth will be achieved, and for that we need to look at the portfolio itself. That's the best way to study about it. That's why I bought it myself. Collaborating with leading global asset management companies to launch new investment products with Man we made this the joint venture fund this. Man Group.
Has a very interesting asset management approach. Alternative fund the 12 billion JPY. That's the name. That asset only in 32 business days more than the 12 billion JPY, so it's very very successful. It is conducted operated by this, the. Lady.
Man Group JPY 26.5 trillion of total investment. I said JPY 20 trillion. That's meaningful. It is the globally famous Man Group and the JPY 26.5 trillion yen and Franklin is also the CEO is woman it's a very interesting person again I always had dinners with her and she was very active in M&As. And the net asset is increasing so much ETF and the Indian equity are included. They bought Templeton. That's big
to increase the asset size. When I was in New York, I visited Templeton often. They bought Templeton the JPY 265 billion. That is an AUM size focusing on alternative investments to diversify the investment products and enhance performance. KKR is the other focus. The joint venture with KKR. KKR usually doesn't form the joint ventures with anyone. But we convince them to form joint venture with us.
I expect the very strong sales. KKR investment platform JPY 96.8 trillion. KIT, KKR Income Trust or KIT. It's about private debt. KIT with private credit strategy JPY 16 trillion growing very fast. Strong for credit. Very good combination with the Arab countries in private debt. The strength is the direct lending and asset based finance combination. I think it will be very well accepted among institutional investors
overseas markets as well. In Saudi Arabia, the ETF number one player there. We are going to sell Japanese ETF there. We are going to set up joint venture there. We are going to make the formal announcement in the future. This is that KKR joint venture and this is to provide offer private debt fund to domestic institutional investors. This is to attract the private investors.
We are going to allocate management resources to countries. The G7 average did 6.8%, but the Japanese number is much lower than that more than 30 years. I'm 73 years old and in January I will turn 74. I have sufficient assets so I will be fine. But you. You need to think about your future. If not, you cannot survive because the current pension system will collapse. Insurance collapse. The insurance provided by the government that will not survive, and education tuition is rising even among the national universities,
and interest rate is not normalized yet, and the yen is getting weaker, and India is attracting lots of other capital. Because 36.9% of the GDP strengths the growth 35.5%, 34%, 32.8% in the countries like Philippines, Cambodia and Vietnam. That's why we have been focusing on these countries. In China much lower 20.3%.
But announcement by the government is this number. So it's a question mark whether it reflects the real economy. Overseas business was counted for 0.5% in the total assets, here it says. And major companies are listed at the bottom in terms of asset size. And SBI Group has extensively expanded its financial services business overseas with a focus on Southeast Asia, for example, in Cambodia, securities is very loyal. The securities
we have 65% established. In February 2010, only one Japanese securities firm, SBI LY HOUR Bank Micro Finance Co., was acquired and converted to the bank. It's merely for bank. We had what we have 70% and insurance business that they had, we bought 40% of which. So the other three sections of bank securities insurance in Cambodia and in Russia we have SBI Russia. We have a 90% stake. SBI Bank in Russia.
In August 2017, all the Japanese players withdrew from the market. Now this SBI bank in Russia is very profitable. In the U.S., there's a telephone call from the Ministry of Commerce saying that they would like to use our bank in Russia. I instructed the Russian company to say no to that request. This entity in Russia doesn't need to obey what the U.S. says. The Russia-Ukraine war. About that war, Trump is saying that he is going to end that war in a day. Maybe not in a day, but it could happen in a very short period of time. It's very important for us to have this business in Russia. I just instructed the SBI bank in Russia not to be thrown out of Russia. Aikido, karate, the Mr. Oyama, the very famous.
The master and one of his pupils is involved in this entity, and he had this stomachache and the appendicitis. He went to the nurse station, and the nurse scolded him. It was a scary experience, and he regained his health anyway. He had been training himself physically and mentally, and that's very important. The SBI Savings Bank in Korea that we hold 100% it is not becoming the regional bank. What is the potential of having this bank that. There have been some internal discussions on that among the directors of our Group. As to TPBank in Vietnam. So.
The 20% ownership is the upper limit. We have 20% and a very good entity. 260 billion JPY of market capitalization. SBI Securities with 24.44% of ownership. We have the 1/4 of the market cap. 20 billion JPY. As to MB Shinsei Finance, which used to be held by Shinsei, it's a good entity too. We have 49% ownership. The former, the management invested in this one and the good ones were disinvested earlier
in Indonesia, BNI Sekuritas or the BNI. 25% is the ownership or Latitude in Australia, UDC in New Zealand, this Latitude and UDC were held by Shinsei Southeast Asia and the high growth area and are captured and this is the performance. With some entities that we are using from January to September that period and we are seeing some recovery.
For SBI the savings and 2.2 billion JPY for the first quarter. Sorry for the January to September period in Russia and 189.5% for SBI our bank and the TPBank 10.2%. Dividends are good too. As to securities, as you can see that we incurred some losses in Thailand. The financial concrete merit in Thailand is very strong. They list their subsidiaries and they buy their subsidiaries from the market and the other we
should not be involved in such transactions. The GMO actually did involve in that any cut of 40 billion JPY or so last this. There is a certain Japanese, the online securities firm and he went to Thailand and he joined our Thailand, the Thai entity and he was not good. But the GMO hired him and they incurred losses.
So, no bank listed here. Insurance in Cambodia, they are going to grow a lot, and so we are going to penetrate into the market more. So, our SBI Savings Bank, though we at the peak JPY 34.2 billion, and the SBI Savings Bank, the NP ratio is coming down to 4.7%. It used to be 51.6%. That's the delinquency rate. So, the fight, but the real estate was the area that we did not operate. The TPBank is moving on very well. The JPY 31.7 billion, and the other SBI our bank, the former Microfinance, and then the Bank UDC are making positive profit with JPY 9.8 billion. The net operating profit and gross operating profit the 9.8 and 14.2 respectively.
Overseas investment activities. So for investment he started from investing. So for China just this one single person, a Japanese was sent over. Right now it's zero. We don't have any Japanese presence there anymore. Mr. Miyazaki used to be there. He's been there for more than five years separated from his wife. So he came back. Now he's in Japan. So there's no expat presence in China. But we're still doing
well and we have been able to expand the business quite a lot. So BRICS targeting BRICS for business expansion where high economic growth is expected. So four countries became five and on top of that this new member countries have been added. On top of that an additional 13 partner countries are expected to be added on for nominal GDP as well as population.
It's going to be a big group so we shouldn't be in conflict with these countries. We shouldn't fight with them. That's what I'm telling my people, and for currencies Pax Americana it took about 50 years to reach that status. It will still take some time but you never know if the U.S. dollar is going to remain to be the key currency. It really depends on Trump as well, I think. I thought that countries like Russia, if they were moved out of SWIFT, they won't be able to bear it, so focusing on investments in the Middle East we have been working on various things, so this is one I visited.
This is the Ministry of National Guard - Health Affairs CEO, His Excellency. He's the head, and I also met the head of MISA, Ministry of Investment for Saudi Arabia, just in order to meet me as PIF was underway. There were 16 meetings set up, but this gentleman took this time. This person turned this oasis after 40 years into this amazing garden, and it was breezy when I went and you have. It's very big, so you have to
drive through it on a cart, and this person actually drove in order to meet me. I really thought as an afterthought that it was great that I was able to go. For investments in MISA, we are trying to establish a health fund. This person; this is one of the largest ICT companies in Saudi Arabia. The chairman of Uncertain met me as well.
This is called an Arabian Tuxedo. He gave it to me as a gift. This gentleman is from the Zamil Group which is the largest conglomerate in Saudi Arabia and petrochemicals. They started from petrochemicals and right now they're focused on Southeast Asia as well as India engaging in the steel business and their personnel a total value of USD 40 billion. This gentleman continued to hold my hand
and wouldn't let go and continue to hold my hand as we head toward dinner. This person is from BIN. This picture is from BIM Ventures. We concluded a contract over there. Also the BIM Ventures chairman's house; this is actually his house. All these famous people attended this meeting. I'm right here and we chat before we had dinner. Their mansions are like a hotel's lobby. This person, this person is from Saudi Aramco.
He actually allocated an hour of his time to talk about technological innovation. He's the CEO of Saudi Aramco. So it's been about a two-day trip and I've been able to meet so many distinguished people and I don't think there are any other Japanese people who have this opportunity like this person. We talked about biotech and healthcare and there aren't any tech heads who are able to converse in that manner.
Whatever it be from IT fusion or semiconductors, I'm able to talk about whatever topic. So everybody was quite surprised. Africa is a region we also need to go out to. We engaged in a partnership with Novastar and we made investments into these entities. So for the overseas operations, as our group increases, we would like to bring profit before tax to 20-30% of the overall group profits in the future.
We have been increasing headcount as well, who are well versed in English as well as in Chinese. People who are multilingual in three or four languages. We have a lot of them in our organization, and the head of the International Business department we are trying to attract a person who is VP class, and we currently have two or three candidates that we would like to select from next generation growth areas.
Digital assets for cryptocurrency assets, the total number of accounts are now at 950,000. We might easily exceed a million. For staking services, we have been focused on this area according to the amount of staking. You are able to become involved into approvals as well as blocks, and you are able to receive a fee in return. For VC Trade, BitPoint is what we acquired.
VC Trade, Bitcoin, we have all these new currencies. And Elon is doing Dogecoin in India. So all these new things are increasing and emerging. So Elon Musk is engaged in Dogecoin when he talks about it, it continues to rise in value. Oasys, this is around games. Saudi Arabia's 67% of their population is called gamers. And the Prince is also leading initiative around games. But so this is a blockchain platform that is
dedicated to the use in games. And we engaged in a partnership with a company that's engaged in that solution, an SBI VC Trade for Prime. We're going to do this kind of trade service for large corporate customers and also cryptocurrency ETFs. Franklin is actually stronger than SPACs. So this is something we would like to do in Japan. But the development of law is necessary. Also for Web3.
I got a lot of things around this. But for WebX I was a part of it and I delivered a keynote speech and there were a lot of foreign participants and there were a lot of Japanese attending as well. WebX Osaka at this timing, at the time of the Expo, we are going to be conducting this WebX Osaka on a joint basis and for the foreign investors or IT companies that we invest into. There's about a thousand companies that we invest into that reside overseas but we would like to have them attend and Osaka financial center is what we would like to realize and we would like this to be a good opportunity. So because of COVID our plans were delayed.
However, we did Dojima for Rice Futures Market and we also did the exchange and we will be doing options in this area and regarding carbon neutrality and emissions trading, this is another thing we would like to do here. This is also Expo related. This is about WebX that I was referring to in 2025 and this is R3. At the same timing as Ripple I made an investment here and their technology is quite good. Corda,
the program Mitsubishi UFJ Trust and Banking has been adopting it and for doing trade finance you have to use Corda. What we're doing right now with Machinowa which is a local wide area currency is what fits here. But for AsiaN ext we've been doing joint ventures in Singapore, Chiliz. Strategic partnership has been concluded. They are the largest sports token platform in the world.
We've been working on various things. I would like to see more progress here. Go. November 2023 we formed a capital and business alliance with Mynavi and our ownership will increase from 19.77% to 20% by November 24th. We would like to enhance a win-win relationship and enhance corporate value on both sides and we'll be engaging in various initiatives. This is a welfare fringe benefit service. I was
listening to what the Mynavi people were saying and Uncertain sounds like delicious. This is the name of their service which is fresh vegetables and so forth are provided to their employees at a low price because of the inflationary environment. I asked my people to implement this service and I think many of them are taking advantage of it and also for hiring.
This is what MyNavi has strengthened, and we would like to combine that with business succession, and this is about career assessment and life planning that can be combined together, so Wealth Advisor or Mr. Asakura will be covering this part in his business, and this is some reference material where we talk about the details of synergies, and we are currently close to 52 million customers on a group-wide basis,
and the number of we sold some companies and we liquidated some operations in China and reduced the number of headcount, so this is where we stand. We now have from 19,000; it declined by 400-500 people. SBI Securities; there is a team that is engaged in systems in Dalian and China, but I have asked my people to reduce it to zero and transfer it to Vietnam.
Because personnel costs are lower in politics in Vietnam at a point was unstable. However, right now, together with the FPT Group, we have established a joint venture, and what I think is interesting is the FPT Group together with Nvidia. They have engaged in a partnership, and from Nvidia, they make about 3.5 million there, but only about 10,000 come to Japan. There are seven countries that can enter the
country, and they're one of them, and good high quality data center is being developed. They were saying that they want to work together with us, so I said yes, that we will go ahead with this plan, so we're working on this. For shareholder composition, the balance is becoming better. Foreign investors 33% as well as institutional investors 25%, individual 25%. Things have been trending steadily.
There has been a great amount of slides today and I went through each slide quite diligently and I think I talked quite a lot in detail. So time has passed quite a lot and I just have dinner left, so I could take questions until half past. Please go ahead.