SBI Holdings, Inc. (TYO:8473)

Earnings Call: Q1 2022

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Jul 29, 2021

Please allow me to stay seated and undertake off my mask when I speak. So here in this venue, about 20 people are present and a total of about 100 people are participating at this session on the Internet. Thank you very much for your continuous support. Now without further ado, let me walk you through the results of the Q1. We have 166 pages. It will be the longest presentation, and I'd like to go as fast as I can. So the Q1 FY 2021 consolidated financial results and the feasibility of the new medium term vision based on it. On April 28, we announced the 3 to 5 years new midterm vision of the group. And during these 3 years 5 years, we would like to achieve the 300,000,000,000 yen as consolidated pretax profit. And we are going to set up the new businesses in such a way that will contribute to about 20% of consolidated pretax profit new business, meaning the business utilizing the new technology such as digital assets and blockchain and any business which joined the group through M and A since April 2018. And in addition to deal organic growth, we will conduct M and As and with ROE maintaining 10% level. That's the message in April. And we are committed to achieving this goal. Now we are enjoying the Olympic Games, and they have strong commitment to get a medal, the gold medal. So I have a strong will to achieve this goal, to challenge this goal. So in that context, the Q1 of FY 2021, revenue, €137,474,000,000 or up 23.7 percent. Pretax profit, the 33,009,000,000 up 19 percent profit for the period, 33,106,000,000 or up 63.3 percent and profit attributable to owners of the company, 28,950 8,000,000 or up 77.8%. And according to the other calculation, the annualized ROE based on 1st quarter is 19%. So setting aside the outline, let us go through this page. This is the comparison of with the major face to face securities companies. DSABI Holdings, up 19% and Daiwa Securities with 35,176,000,000 or 45.5%. But probably as to the other net profit, we had overcome the Daiwa. And as MBS and Nico Securities, the numbers are here and Nomura is going to announce tomorrow. In the case of Nomura, because of the AKEGOS, AKEGOS did investment earlier, which it has been offset by the sale on the other stocks. That will also be reflected in their results. So what is the purpose of the trading? Well, each other entity has done what they have to do, and this is the result. By segment, Financial Services Business, the both revenue and the pretax profit were record high. Asset Management Business for the revenue, record high for the pretax profit, 15,712,000,000 or up 31%. This here, I'm going to talk about details. The Shinsei Bank's shares about 20% at our stake, a little bit less than 20% and their price went down and we incurred some losses. And it is JPY 14,200,000,000 and so that will be added. The well, without that 14,200,000,000 loss, the number would be much better. By the Technology Health Care and Medical Informatics business, the deficit has been reducing and the revenue is now record high. As to the new midterm vision, and if we are the attribute on the 3rd year, the CAGR should be 28.8% for the 1st quarter. And if it's achieved on the 5th year, then it will be 16.4%. And when we look at the actual the number for the Q1, it went up by 19%. That is the CAGR for the Q1, so exceeding the number for the 5th year's assumed number. And as to the Q2 2021, the Asset Management business has stocks that are expected to record valuation gains in FV TPL, thus possibly surpassing the Q1 results significantly. We are already seeing it in July. So probably, we are going to achieve the better results than those of the other Q1 in the second quarter. And this new midterm vision, medium term vision, So the full year for the FY 2021, the CAGR of 16.4% to 28.8% on the full year, though will they be exceeded unless something unexpected happens. For one thing, the pandemic situation, the Prime Minister is saying that the inoculation can be achieved by the end of the November and 60% to 70% of the Japanese people will be inoculated. So at least the people will not be seriously ill. So rather than looking at the number of infected people, we need to look more carefully the other people to be seriously ill or the number of deaths rather than driving people to be afraid of this pandemic that will only slow down the economy. So we should be engaged more in economic activities. So we think that the market will not be so bad, especially compared to Western markets. The Japanese market is behind the Western markets because of the delayed vaccination. So then the Japanese economy can make a good recovery later on. And as to Asset Management Business, 2nd quarter and beyond, more IPOs of Invested stocks are scheduled, mainly Fintech Funds and NB Fund, we will be IPO ed. So we will go into the period of recovery of investment. So I'm looking forward to it. And as to KUK, which has been in the red, that will be the sold off. So we will not incur losses from Coke Pharmaceuticals. That said, as to the other part of the Biotechnology, Healthcare and Medical Informatics business, we will have more the positive news. And also as to future M and As, we are reviewing some potential targets of these activities. So future M and A strategy is expected to secure new revenue sources as well. So, to secure new revenue sources as well. So we have this very positive view for the fiscal year 2021. As I mentioned earlier, compared to YOKIDAO or NASDAQ, Nikkei average is so slow, not rising so much. In the PER basis, as of June 30, 2021, Nikkei average and the other PER, as you can see, at 25.5319.83, while the U. S. And Nasdaq and the FTSE 100 compared to these other markets, the Japanese market is underevaluated. And this is only because of the delayed vaccination, we believe. And now the change and as to the individual brokerage trading value, the April, June is not so good. The January March was good, but there's some decline in the April to June, but not so different from 1 year ago. And as to Manda Bobo, the counter FX trading, as you can see, compared to 1 year ago, some decline maybe. But so this is the other environment of April to June. And once things turn around better way and the positive impact on our results as well. Securities related business, the performance has been strong. The pre trade, the Commission 0, the new entrants from the overseas. And NIO Securities Initiative, our definition is to eliminate trading fees for domestic stock transactions and some other fees that are currently incurred by investors. So the question is when we are going to do that. And there are 6 key indicators that we are going to use to make that decision as to the timing. So the Q1, SBI Securities, the operating revenue up 14.3%, the operating income up 8.3%, ordinary income up 8.3%, the net profit up 3.7%. It is not extremely good, but not so bad either. It is showing steady growth. So as to the 6 key indicators or KPIs, our focus is on the share of individual stock trading value, which continues to be very high at 43.6 percent as to deposit assets. And of course, the margin share is much higher than that. And the JPY 20,500,000,000,000 for deposit assets, followed by Rakuten Masai, NAU, Capcom. And these three entities altogether, they will still be smaller than SBI's numbers. Operating income, these are the other important KPIs. The Mannix, the 1,900,000,000 yen of profit for the security side with the coin check performance. But well, these are the results of ManEx, as you can see at the bottom. And in addition, we have trading revenue ratio to total revenue is another KPI and the stock trading commissions without online trading ratio to total revenue and quantitative tolerance and stability of the system within this fiscal year that we are going to be able to handle transactions of 11,000,000 accounts by the end of this fiscal year. So when the commission being 0, the quantitative impact that will over the systems capability. So we need to have the tolerance and stability of the system, the better. So the 6 key indicators, we are going to look at these KPIs to make a decision on when we are going to make commissions 0. And if we don't do that, then there will be some player coming from overseas markets. Look at Robinhood. There is a possibility of them being in this market. But that said, I don't think that either they can survive in this market because we will be their competitors and they will not be successful in the Japanese market. Again, wrapping up, 6 indicators, share of individual stock trading value and the establishment of a system to meet diverse customer needs: the younger people or the day traders and other frequent traders. And our group, the entities have been making efforts to handle their needs. And deposit assets will grow even more and as to profitability, not only the individual trading, but the wholesale business is in our the eye perspective to expand it. And the trading revenue ratio to total revenue, From 2008, we have been working on the FX business strengthening and the crypto asset business, which will be strengthened even more. Stock trading commissions without online trading, the other foreign stocks, IFA business or the real estate financial, the field where we conducted some of the M and As to explore untapped the market customer basis. And we are going to decide on timing of realization of NIO Securities initiative looking at these indicators. Now this is the alliance between SBI and SMBC Group, which is going very well. The Sumitomo Mitsui card and the other some services and have been offered and will be offered. And as to Neo Mobile, SMBC owns 20% of SBI Neo Mobile Securities. And the other seamless, the other services, including automatic fund transfers with SMBC. And as to SBI, Neo Trade Securities, this is mainly for traders and very strong enthusiasm from the traders. It is almost the 0 commissions. The number of accounts was 210,000 and customer deposit, €318,000,000,000 So we would like to increase the stock business. This means that the open interest and the net financial revenue are very closely linked. So we are going to increase the stock of the business, and the investment trust is part of it. And this is the balance of regular contribution investment trusts at the month's end basis. The upper limit is shown here, yen 43,291,000,000. And on the right hand side, Investment Trust balance, the yen 4,134,000,000,000, the record high. And this is the investment trust savings service using the credit card cooperating with the Desumito Mitsui card. And only in the 2 weeks from June 30, we achieved 6% of the total amount set aside and I have a very high expectation. And the other up to 3% points that is given in the campaign. And this is the Wholesale Business Reinforcement and we have finally reached 100% of the underwriting shares and of course industry leading figure. And from April to June, the total of 33 companies were listed and we underwrote all of these 33 other companies, some of them as lead managers. Actually, we lead managed the 6 companies. And there is one in June as well I mean, July as well. And as to POs, the Q1 of 2020 was so weak. And after that, the Q1, fiscal year 2021 saw an increase of 206 times. And as to corporate bond, we underwrote 7 corporate bonds in Toro, including that of SoftBank. So as to the financial the corporation business, we will increase the business. We have been increasing business with financial institutions. And our next target is the other financial corporations. And we will be aggressive in this area. And for that, M and A advisory section should be stronger. And we are going to multifaceted the proposals to those the other entities and also cooperating with regional FIs. And we are going to increase the number of corporate clients. And in each region, the banks are dealing with the high net worth individuals as well as the corporations, the local corporations. So we would like to provide our own financial products to such market and that will be a benefit for our allies, the regional financial institutions. So this is Sbera Securities Trading revenue trend. FX related revenue or the crypto asset related revenue, the Q1 before 2021 did not increase so much. And compared to the 1 year ago, there is some decrease in the crypto asset, but the other assets, including the foreign currency denominated bonds offset. So as a result, Q1 FY2021, in total, the top the results of the previous year. So in terms of the Real Estate Finance business field, we're going to come out with a lot of products. And this June, so we have concluded share transfer agreement with Tozai Asset Management Company, which manages and operates real estate assets and behind by the end of September, we were planning to acquire 55.91 percent of total shares. And through these type of activities, we would like to set up a private funds like the real estate funds. We would like to proactively expand the business in those areas. In terms of SAPI Securities, you can see that the foreign stock trading volume has rapidly increased. So in terms of compared to the Q1 FY 2019, in terms of foreign stock trading volume, it has expanded by 6 times. So the profitability has expanded by 5.5 times. So you can see that this area has grown. In terms of IFA business, Independent Financial Advisors, that stands for Independent Financial Advisors. We have been strengthening our relationship with IFAs in terms of the revenues from compared to FY 2020. This Q1 increased by 1.5x. In terms of AUM, it is 2,100,000,000,000 yen So in this past year, it has grown by 42.2%. Going to the SBI Money Plaza, and this is the co managed shops with the regional financial institutions. This is going very well. So in terms of the co managed shops, so we have 21 shops with 14 banks in August. There's going to be 1 shop added. So that means 14 banks in 22 shops will be the number. And for the co managed shops, the AUM is 98,500,000,000 yen So we've been closing to 100,000,000,000 yen In terms of the banking business, so as we started as a challenger bank and from the interim term under new concept, we have come out with a neil bank concept. So the definitions are written here. So a bank whether we have a license for a bank or not having a banking license, so the functions are used by the partners, we will support them and we will expand the customer base and provide various services through this partner. That is the definition. So as a challenger bank, we have been able to show a very high growth. So IFRS based earnings, it's 2,838,000,000, so up 40.3% year over year. So this is a fifty-fifty joint venture. So you can see that IFRS this equity earnings is under the IFRS basis. So under JGAAP, under the Japanese accounting standard, looking at that perspective, so we started from September 2,007, we've been able to see profitable in a single year and we continue to grow. In February 2016, the BOJ started negative interest rate policy and went down a bit. But after that, we have started to recover immediately, and we have exceeded the past peak. And we have over 20,000,000,000 yen by now. Going to the Sumixin Net Bank, the deposit balance is 6,400,000,000 yen. We are the number 1. And outstanding loans is 4,600,000,000 yen. Compared to RADAX10, what is the difference? The deposits and outstanding loans, so we are actually a little bit more than this, but this number. So Rakuten is 1,900,000,000,000 or outstanding loans. You can see that the deposit loan ratio is low. So that is the biggest difference. So this is ranked from Yokohama Banker Yokohama becoming 17 in terms of the deposits, JPY 6,448,000,000,000. So this is the end of March number. So out of the 74 banks, we are 17. So we are getting a higher ranking. So in terms of the loans, we want to do the mortgage loans, housing loans. So we haven't given loans to the businesses, entities. So we're focusing on housing loans. So in terms of the housing loans, it has exceeded 6,500,000,000,000 yen as of the 12th February this year. On the other hand, if you look at our NeoBank concept, what is how is this proceeding? So we started from Intel, we're going to Hikari Tsu, CCC Group, EPARC Group and Yamada Holdings, we have been increasing the number of partners. And at the same time, we have been aspiring to become a platformer for the NIOBANK through alliances. So the JAL mileage, it has been proceeding and advancing. So the JAL housing loan has started. And going to T Points for the T Point members, this is the T Net Bank, bank service for the T members. So the CCC Group's T Money, the T Points, so they are 70,000,000 T members who use this service, meaning that once this starts in earnest, it will be a major contributor to our business. And for Yamada Holdings, again, so there are 60,000,000 of Yamada Group customers. Again, this will be a substantial potential for us. And with the smartphone, you can complete all your banking transactions. And in terms of the account opening account, up to the minimum, you'll only take 3 minutes. Any other points will be accumulated. So this is what we are saying. So from our point of view, this is a very promising partner. Going to the insurance related businesses, so in terms of the premium returns of the group, it has been growing in terms of the profit level. In the ordering profit, it has gone up by 33%. Profit attributable to the parent of the company has gone up by 25.4 percent at RMB 13,000,000,000, still small, but the growth is important. On the CAGR basis is 15.5 percent growth. I think compared to other insurance companies, I think we have overwhelming growth rate. Compared to the major players because we started small, they will say that the growth rate is high. It's kind of natural. But we have been we will be maintaining this level of growth and then overcome them. I think that's the important point. So please look at this. This is when we started and back then. And then in terms of the short term small amount insurances, we have acquired those type of companies. And we have been increasing the premium income steadily. So from the end of March 2018 to end of March 2021, the cargo has been 12.7%. Rakuten, look at Rakuten. So it has been going down, it's minus 8.9%. So March 2021, they have been in the red, Lifenet Insurance, their growth is 17.5%. But they have been constantly generating losses there and had not been established as a business. So we will be focusing on the strengthening profitability of the measures to expand the business mix and promote initiatives to improve the business efficiency and active promotion of M and A, specifically focusing on the small amount and short term insurance. We have acquired 5. In terms of these areas, we'll continue for M and A. And when we acquire these companies, compared to when they belong to our group and after they came to our group, we can see that the growth rate is different substantially. So it has been about 20% year over year, but when they enter the group and by 2020, they had grown by about 40%. So you can see the growth rate has accelerated for Prism SSI. So it has been the growth rate about 10%. Once they joined our group, they saw a growth rate of 20%. So the differentiation to further strengthen the synergies within and outside the group and new mechanisms. So when we set up this group, so the business ecosystem was the organization that we seek thought that was optimal when in this era of Internet and this will be have a more advantage for us. So that is the reason why we have set up this organization in this manner. For instance, SBIA Insurance, if you look at their situation, about 40% more than 40% is fire insurance application and that is coming from SBI Mitsubishi Netbank. Or if you look at SBI Life Insurance, the SCUB Credit Life Insurance that is attached to the housing loans at SBI Mitsubishi Netbank because they are accelerating this business, that drives our SBI Life Insurance sales. And if you look at the non life business, so inswebs, this is a comparison site. And about 59% 9.9% of contracts comes from these comparison sites or the INZWEB. Or we have various agency websites within the group. And there about 90% of the contracts from the agency comes from agency websites. It means that synergy is being leveraged. It's not just within the group, but we are rapidly forming alliances and expanding. We have open alliance strategy, which we implement on a group wide basis. So each of these companies work with different companies and they build and expand customer bases and businesses. And SBI Insurance, life insurance, I think this is quite an interesting initiative. So they have first Japan's 1st joint scheme of Credit Life Insurance, Group Credit Life Insurance for Financial Institutions. And so SBI Life Insurance is one of the founders of Zenko kudanshin Tsui Shin Kyoka, which is a general and corporate association established jointly by Shimane Bank and SBI Life Insurance. So we started this in January 1, 2021. And 2 other banks, Fukushima and Sendai Bank, have also participated. Now we have 3 additional regional banks. So we have altogether 6 regional banks. And 13 Shinkin Banks and 8 Credit Unions have joined altogether. So now the total number of membership is now 27. So it is extremely efficient in terms of business operations, especially for those members. InsurTech, even in, I think, non life insurance business, which is SBI Insurance, they have working very hard on this. We have invested in this U. S. Company called DataRobot. They have an office in Japan as well. So we form an alliance with DataRobot to see how much we can improve on inbound call center rate or recommendations insurance products or automating contract administration or detecting fraudulent billing to do so automatically. And in fact, we have formed an alliance with Albert Inc. We actually invested in this company as well. So in this way, our business in every single aspect implements new technology and realize efficiency and improve customer satisfaction. Same thing as you can read here. With regards to Asset Management business, it might be quicker if you look at the slide, so you can see that our revenue has increased by plus 20% year on year, 31% increase in profit before income tax expense. SBI Savings Bank from Korea is plus 79.6%. And if you look at profit and loss from the changes in fair value and profit loss on sales and investment securities is minus 70.3. Now like I said earlier, among the public names, they were 8,400,000,000 yen that was negative. And we have Shinsei Bank here in valuation loss of minus JPY 14,200,000,000 by Shinsei Bank. So this is included in here as well. So we have about 20% or so in equity, which poses us risk. But again, you can also realize large returns. So risk and return is a trade off. So for example, BOJ, their monetary policy changes. So everything will turn around with the changing monetary policy. And in fact, if you look at the asset multiples, what about it? Basically, these are the names it's worth holding on to. They often ask us what do you plan to do. And I always say this is pure investment. Furthermore, this is net income from SBI Savings Bank. So this year's net income has exceeded KRW 100,000,000,000 in Q2 for the first time on a quarterly basis. So it's now so the currency of course, it depends on foreign exchange rate. It's about 1 tonne. So it's about KRW 193,600,000,000. So this is probably the next largest, earners of our business next to SBA Securities. Now Morningstar, again, their asset business is doing really well. And with regards to asset management business, we have, for example, private equity business here. As I said earlier, we have Fintech Fund established in December 2015 with 30,000,000,000 yen Our investment ratio is about 20%. Normally, our equity stake is about 20% in general. We have AI and Blockchain Fund established January 2018. It was 60,000,000,000 yen. SBI 4+5 Fund, Society 5 and Industry 4.0, it's a combination of that. So this was established in April 2020. So we launched these funds one after another. So everything that we have launched in early stage is now in a payback period. We're able to gain earnings and are profitable. And so we continue to establish new funds. So once we get the payback and the performance is good, then we are able to pay back the or give the returns to regional banks and operating companies that have invested in these companies and they're more interested in investing furthermore. So they make a lot of money from this. So it becomes easier and easier to raise funds for these new funds. So now we have established 5 companies that were taken public under IPO. 1 company subject to M and A's, altogether 6. In Q2 onward, we have 9, 177. You can see that in Q2, Q3, Q4. So that's what's expected. So altogether, for full year, in 2021, will be 39. Now in previous year, it was 22. So you can see that this is changing rapidly. And even after that period, we have many expect much expectations. We're expecting 35 between April December 2022, 45, 2023 and 36, 1, 2024. So we will continue to see good return and payback on investment, and we will continue to build new funds establish new funds. So we're in that process already. This is on SBAC. This is growing quite rapidly in U. S. I think in was peak was in March, it fell in April, May. But then again, we begin to see increase around June. I don't think this will decrease so quickly. Wherever we are investing so far, so for example, this is student loans, personal loans, housing loan service. As of July 23, July, it's USD 12,600,000,000 in valuation estimate, and it went public on June 1, 2021. So this is our valuation. So we're investing as well. So we have now been able to secure a large amount of profit already. And we can secure even more bigger profit, which is eToro. This has already been announced in various places. It will go listed in 2021 September. We're looking at the valuation estimate of USD 10,400,000,000, and we have a substantial percentage in this. So we have venture funds that I have just described earlier, but we also have Corporate Venture Capital Fund, CVC Fund. I would say we are probably the largest in Japan at 100,000,000,000 yen And you can see a list here. And there's maybe 1 or 2 that ask not to be disclosed. So we have this is just a part of the example of the companies we work with. And you can see that we have continued to build up and now we have reached 100,000,000,000 yen. In addition to that, we have established a joint fund to support local business. So this is a collaboration again with regional banks. And it was Towa Bank and Tsukuba Bank that have announced this together with us to establish this capital fund. So in 3 years, the government was suspended subsidies on interest. And we are investing in venture companies. So we have to look at how we monitor those companies and how to help them grow. And we have built in expertise on this, which we can offer to these partners as well. So we are able to monitor them. And that is why we have decided to establish this capital fund together. Now, Tsukuba Bank, for example. Tsukuba is a very interesting city. Tsukuba University is located in Tsukuba area, and you can see they're number 4 among the number of venture companies that was born out of university in terms of ranking. So this is the largest concentration in commercial seats in Japan. And so we will, through this fund, support these startups and venture companies that from the universities, and this will lead to business. And of course, this will help develop the local economy as well. So this is the reason why we have decided to establish this fund. Business Accession Fund. On cumulative, we're planning to achieve JPY 100,000,000,000. So we have now number 1 fund for business succession, and we have 2. So number 1 fund was an investment made in Tokushima Kyowa, which operates a dispensing pharmacy. And today, we have completed 7 acquisitions. Now if they were left alone, there would be no business succession, and there was a possibility that they will have to liquidate their business. So we have brought these 7 together so that they can increase their sales. So rather than to focus just on 1, it was better to be more collective so that they can increase the probability of success as business. So this is the way you need to think in terms of business succession. Same thing with large rice wholesaler. XIME Holdings is the largest rice wholesale. And they the fund undertook its 1st investment to a RISE Wholesaler, Hamamatsu Beikoku. And of course, this is also related to what will happen to the permanent listing of Dojima Exchange. But the media reported, so everything has been decided. But I don't think it's that issue has not been completely decided yet. It's not finalized. Even if it's undecided, then Dojima will exit from doing any rice wholesale business. So in yesterday's Board meeting, we have decided that about Dojima. And today, I believe they will hold a press meeting. Mr. Nakatsuta, I believe, will do a press meeting on us. So with regards to this case, I would say 90% of people were fixed on this, and they said they will not be opposed to it. And so we have decided to go with the permanent listing, but then there was 1 member of parliament began to say that I will put my life and the political life at stake to oppose this. And for some reason, there was a surmising by the government ministry. So they have went undecided. So I wonder how long these parliamentary members continue to do things like this. They think that it's more effective to win the election. They really need to do is bring in measures to innovate agriculture. If they think about it, it's easy to think how what they can what they need to do to win this election in that sense. I will not mention her name, but there was one nonsense parliamentary member who opposed it. So these are sort of I think agriculture is probably the worst. These are the parliamentary members that are very linked to these agricultural policymaking. And I think this is an area that really needs reform. They need to really drastically reform Agricultural Land Act. I have been saying this because this is an outdated law that was implemented post war. Same thing with fisheries rights as well. So all of these things need to be changed. This will lead to modernization of Japan in a true sense. So modernization of politics, I think we need to cut off several ties with these members of parliament who are connected to particular ministries and policies. I'm not saying this as on behalf of the company. This is just my personal opinion. But I think I'm always for free and open policies. It's not just one area or region that should be open and free. I think it should be the entire nation that should be open and free market. And I am a big promoter of that. I'm sorry, I sidetracked, so I'm going to move on. This is Overseas Financial Service Business. Like I said before, SBI Savings, Benko, their overall delinquency rate was 51.6 percent in overall loans since this is 2013. Everyone in the media have really criticized about this shopping as a bad shopping. But now the delinquency rate is 1.6%. And I would say following SBI Securities, they bring us more stable profit. So they have transformed like this. And I think this is possible in regional banks as well. The same picture can be realized scenario can be realized with the regional banks, but they need to support. But what's most important is that what we have thought out for this Korean SBI Savings Bank is for them to change their mindset. I believe that in order that's the greatest weapon to make to realize this transformation. Regional banks, all the management and employees, they need to change their mindset. And they need to once again remember, recall that glory that was lost and restore that. They need to be determined. I'm listening to all the gold medal list who have played in Olympics, and I was quite touched and impressed. And I thought I looked at these young people, and I was very hopeful about Japan's future. I thought Japan has a lot of future as well. And I think the same thing with regional banks. They have potential as well. We invest and they can leverage our resources. Mr. Morita is working his utmost to realize this, but that's how they will be able to transform. And that's like one light shining over the dark area, and it lights up the entire market. So this is what you have to do in Japan as well. And this is how the regional banks in Japan will change, like Cider Bank in Korea, and they're contributing to the expansion of customer base. They quickly implemented technology and built customer base. They have changed the old ways of doing business before. This is something that have demanded strongly and they've transformed themselves. Vietnam, FPT Securities, we have an investment ratio of 20%. This is growing rapidly as well. Between January June 2021, this is 20,700,000,000 yen. This is full year, remember, over here. And also, TP Bank I'm sorry, between January June 2021 was 2,065. So and now the market cap is 180,200,000,000 yen for TP Bank. This is a bank we have invested early on. And Vietnam is one of the economies in Southeast Asia that is probably will grow most quickly. Young population, and because of China's situation, there will be changes in supply chain management and many of the production bases in supply chain will be shifted to Southeast Asia. And Mr. Ving, the Chairman of FDP and I are almost like brothers. And he is the Chairman of Agriculture Association of Vietnam. And Vietnam has a number 2 producer of kakawo next to Brazil. And there's another company that he runs. And he said that can that be gone public in Japan. And he asked me what about rice. So he has ideas one after another. And I will be meeting with 1 of the top officials of Agriculture Ministry in Vietnam. So Japan is obviously is behind, then I will go to these other countries that is and that will in the end result will be positive for Japan. Here is a Russian bank we have acquired and it's now revitalized and is now profitable. And you can see that between April June, it has grown like this. Thai and Cambodia. This is Cambodian Bank. So we had acquired a medium sized microfinance company and transformed it into a commercial bank. And they had written off all the losses and became profitable quite quickly. This is online securities in Thailand, and you can see that it is now generating a lot of profit. This is asset management business. I think that asset management, whether it be asset managers or security companies, I think this is an area is where JITAN is most attractive in terms of market because there's an enormous amount of personal financial assets value at 1940 6,000,000,000,000 yen 54% of that personal financial asset is among that, and 20% is cash and deposits. So BOJ, even though it's negative interest rate, there's about 20% of that cash and deposits of the personal financial assets can be transferred to pension funds. Then if we build this system, can design a sense of incentive to move those funds from cash and deposit, then we will be able to attract money managers from all over the world. I have been saying this from on and off, both to the government and also the parliamentary members. And there is a tremendous opportunity to expand investment management contracts. As of the end of February 2021, 127,600,000,000,000 yen among which outstanding balance of low yield in yen bond is 85,000,000,000 yen which will never improve your performance. And so 15,000,000,000,000 yen or about 40% of the ZGBs and local bonds that will be redeemed by around 2022. So what should we do? And the regional FIs do not have people that to deal with this transition. And that's why outsourcing to us that will help them. SBI Asset Management Group is interested with asset management of 95 regional financial institutions, 54 the regional banks over 95. And it's not only the yen bonds, but the U. S. Municipal bonds, Canadian provincial bonds, Australian provincial bonds are the other competition of the investment and alternatives as well to improve performance and Asagura san and his team are doing that. Already the PIMCO, our joint venture partner, SBI Bond Investment Management and the another entity, SBI Regional Reiter Addition Asset Management, the co invested by 39 regional financial institutions. These two entities together exceeded 2,000,000,000,000 yen of total AUM, among which the 34% are from the other banks with the capital and business alliances and the rest is 66%. So again, there is the other small other beacon or small light that which can help the whole picture. The SBI mindset management group, the following Mitsui Sumitomo in Invesco and BlackRock, we are ranked number 4. The number 4 in terms of cumulative inflows of privately placed investment trusts. And why are we doing so well? For example, let us look at SBIV S and P 500 Index Fund co funded with Vanguard Inc. 271,100,000,000 is the net asset with trust fee ratio of 0.0938 percent as of July 26 compared to Rakuten and other entities, the fee ratio is so low, the performance of the investment trust depends significantly on how low you can set the fee ratio. And here SBI Asset Management Group's AUM, both in public and private placements, 3,200,000,000,000 yen is the balance of the investment assets. With Private Equity, the SBI Group as a whole, the JPY 4,000,000,000,000,000,000,000 and in 2 to 3 years, we would like to reach JPY 10,000,000,000,000 and we are already halfway to that goal. Many people are doubting if we can achieve that goal, but we are already halfway to that goal of 10,000,000,000,000 yen liberating our the will and the know how and effort we will make it. We have been accumulating the performance in this financial world and our posture, positive posture it's like DNA shared among all the executives of the other group. So I know that we will make that happen. Biotechnology, Healthcare and Medical Informatics Business, as I mentioned earlier, the loss here will be 0 as to Coke Pharmaceuticals and SBI Pharmaceuticals will be in the black for the full year. And we have been saying that we should not branch out to too many other areas. So the R and D cost, there will be the forecast. And the German, the guy, that is the actual the CEO of the entity and he is doing a very good work, very good job. And I think that the there are 3 11 companies and I cannot see them all. So I depend on each the leader. And SBI Pluroma is growing. And for dynamic, we will be in the black for the full year although some other losses in June, April to June. And the medical data vision, 64,000,000 already. So this section, this business section will turn around. SBI Ala promo, their sales grew 1.9 times and the pretax profit grew 8.1 times. And the adespe ada promise products containing 5 ada. Recently, we are seeing lots of the ada non certified the ada products on the Internet. That's why we are now using this mark, other plus mark to give authenticity to our product. And we have the patent of 5 other, the phosphate and that we manufacture and sell under the exclusive license for the substance. The accelerated development of new business such as research and products for the with COVID-nineteen era. So other as spools with the other functional claims, there are lots of papers and about the effectiveness of the 5 other phosphate for the other corona patients. And that is officially carried on the Open COVID journal on July 16. And also the Bahrain government is also in the picture. The Royal Research Institute and University is also studying to alleviate the suffering of the other corona patients and they are collecting lots of data in that context. And so with corona, the virus, the people are becoming more conscious of their health and we are going to increase the number of products using 5 other. And there are many people who are depressed because of the pandemic. That's why we have launched Ada Plus Mental Care. Actually, on the other July, the 6th and as to other plus 5, other 20, it is going to be released on August 2. This July shows 1 point 3 times increase in the Monstery sales compared to 1 year ago. And where the other 5 other is very effective to suppress the sugar absorption, But here in the autumn of 2021, we are going to launch Allaplastodonealacia. And this product uses the salacia derived, the salasino, it's the native tree in Sri Lanka. And you use this, the wood to make a cup. And when you read water using that cup, that makes you the more healthy. And also as to recovery from fatigue, another product which is AdAPLUS Gold Hero Kan Kagen to be launched in spring 2022. And for male menopause, we have conducted clinical trials with Juntendo University and a stethatic reduction after exercising the same collaboration with Juntendo University, though we are planning to identify these products. And for the sake of investment, though we continue the investment activities, one example is CureUp. It is for the medical application and diagnosis and the treatment and medical devices and the prevention diagnosis, treatment and we have been investing in those entities in these areas as well as long term care and the products to alleviate the diseases coming from the lifestyles and health promotion, digitalized medical information, we have been investing in each one of these the medical health areas. And in this context, we wanted to add medical informatics via the business. That's why we acquired Medical Data Vision, the MDV, our stake is 20.69 percent and development of new products and services, promotion of business that contribute to the revitalization of local economies and strengthening cooperation with SBI subsidiaries and companies invested by the SBI Group in this area. So the factoring for the other medical, the entities because MDB has the biggest database in this area. And also the health account, it's just the question of time that we are going to make this new service the viable and with regional banks, for example, deferred payment service for medical expense or the medical insurance or apps for health care management or the nurse calls when you have some concern about your health and you can talk with a nurse. All of these things are on the health account in different regions. As to the Medipol Holdings, which is largest pharmaceutical wholesaler and we have business alliance with them. Medipar Holdings, they invest in JPY 10,000,000,000 in CVC. And the MidiPa Innovation Investment Partnership was established in March 2021. And they have a good eye for promising area. We have a good eye both at home and abroad. And so we can combine their capability with others and we can utilize the pharmaceutical distribution networks of investee companies at sales channels. So it's a strategic alliance with them. Now digital asset related businesses, we have been focused in this area for some time. The world best digital asset related business, That's our goal, and we have been making lots of efforts. Starting with crypto asset related business for fiscal year 2021, the 4,570,000,000 yen or the plus 56.3 percent that is for crypt asset related business. Though we do not increase the spread only because we think it's a promising business, We would like to narrow the spread as much as possible. And the cryptocurrency is not an exception. So the steadily and in a very assured manner, we are going to exercise our strategies. Strategically speaking, this B2C2 acquisition has been very effective. B2C2 is the world's largest crypto asset market maker. So they are in alliance with us and they can utilize their know how for the FX trading as well. And on our side, for the crypto asset technology like the Quants and other technology systems can be utilized for our FX business or for our crypto asset business. So I'm very happy to have this business relationship with this B2C2. We have 90% stake. From July 1, 2021, we started opening and trading of corporate accounts for crypt asset CFDs. And we will expand the product lineup related to crypt assets, develop cryptasset derivative products, options, etcetera. As to this development of options, for the institutional investors to attract them, we have been encouraging Takano san to do it as early as possible because that would allow individual investors to hedge their risks and we can differentiate ourselves from other players. When I was with Nomura, the corporate the other section and I could produce tremendous amount of profit because of the options. And back from the U. K, and I led the other corporate section and Mr. Tani, the then President, called on me. And I said that I would like to do more of derivatives. And this President said, yes, that's good. And he had a very good wide range, the know how and good eye for the other promising business. And Kawashima san here has been working so hard in that the corporate area as well. So the Section 3 of the other corporate department at Nomura became the strongest section both in terms of the revenue and profit. So derivatives is something that I hold very dear to. So it's a very important thing whether we can do it or not. That said, derivatives requires expertise. You should not have half baked strategy. You have to go through the other your professional approaches. That's what we are going to do. And provide liquidity to domestic overseas crypto asset exchanges, securities companies, investment management companies because B2C2 is the world's largest market maker. That's the best partner for us. So we can expand the expertise of B2C2 to other field, as I mentioned earlier. And if we are the VC Trade, the VC Trade Pro is the exchange of 500,000,000,000 is the criteria for me to start the business. For the Bitcoin and Litecoin was the start. There is always a risk, so the minimum of 5 100,000,000,000 yen and of course, this the project has cleared that criteria as well. And as to stablecoin, I'm very prudent for that. Why? Well, Once the Central Bank Digital Currency is in place, there will be no chances there. So I will not branch out to that area. It's not profitable or not, that's not the question. We need to think about future risks, whether it will benefit our customers or not. That's my criteria to make decisions. Some people say that Kitano san, this will be very profitable. Why do you not want to do that? I do not give explanation to such comments. You need to think by yourself. If not, you do not deserve being the head of a group entity, for example. Taotao, they were registered for the Type 1 Financial Instrument business on May 10, 2021, considering the offer of industry first product to meet customer needs. About SVI Crypto, it was very costly. But still the mining of Bitcoin, the mining uses lots of energy And in this trend of clean energy, the CO2 emission reduction, this mining of bitcoin is negative because it consumes lots of electricity. It will be a very big problem in the near future. So whatever the cost is, 90% of the electricity or power consumption should be renewable energy. And of course, the bitcoin price went down, so there are some appraisal losses, but that's okay. Now our mining activity uses clean energy. 90% of the power is clean energy. Now next generation, the products and services. And first, I'd like to talk about the concept that I have created. 1999, when I started this SBI business, it was Fintech 1.0. In other words, all the business on Internet and that is the idea of Fintech 1.0. Www web was indispensable to do that. And on the web, information is exchanged globally. That's the concept that I started with. And in a while, the financial ecosystem was established. And then the AI, big chain, IoT, robotics, very elemental technologies were developed and enhanced. And when that happened, I wanted to incorporate them into our data ecosystem, and that is Fintech 1.5, followed by Fintech 2.0. And here, the Blockchain is the core technology. And of course, DLT is extremely important as a concept. And existing element of the technology will be even more enhanced and combined with the blockchain, it will further develop. Now we are talking about exchange of values vis a vis exchange of information. So that is the other Fintech 2.0 concept that I have introduced. So now we are in Fintech 1.05 and then Fintech 2.0 will come around. More specifically, it is DLT smart contract, international digital exchange, decentralized finance, security token offering, non fungible token, digital asset bank and central bank digital currency. These things should be well organically nicely incorporated into the other ecosystem to create a new financial ecosystem, and 60% of my mind is focused on that. Now the new financial products and services at the glass, security token offering. Between 2017 2019, at least 123 projects were established. From 2020 to 2025, the CAGA, that will be 56.9%. DeFi or decentralized finance, this financial service provided through a program that runs on the blockchain automatically. And the low cost, the high transparency, scalability, equality, the RDL characteristics and the total value locked on the blockchain or TBL is more than $50,000,000,000 maybe more than that. It is underestimated maybe. Moving on to non fungible token. The more you study it, the more interested it becomes. So NFT is a token that proves the uniqueness or authenticity of a digital artifact game using blockchain DLT. And then CBDC, Central Bank Digital Currency, as of 2020, 86% of 65 Central Banks have conducted some kind of research and study. And 14% are already at the pilot project stage. This is the reality. There's no time to be delayed. The FSA should also study these areas. I have been I have asked that to the new Commissioner of the FSA. We have this the research basis that which used to be the university and the or the graduate school and of which could be transformed into the private company. So the academies and the actual business and some other legal aspect, regulation change maybe. All of these aspects should be put together to create the financial market which can compete with the other markets globally. Now security token. So as you can see, so this is a very traditional one. This is centralized and then gradually goes to decentralized scheme. So the security token is still it has to be certified and then it's centralized. It's a consortium. And if you go to DeFi, it's non certified. It's a public verifier. And the operators are multiple and it's distributed. So there are various schemes and crypto assets, Bitcoin that is. Again, this is the public decentralized, distributed and this is a kind of representative player. So you can see there are new financial areas and definitions are being generated. So in terms of security tokens, it used to be called ICO, initial coin offering. Well, there was initial coin offering. So actually this was a fraud. So it was become a fraud over the world. So there was this sense of concern. And Japan was one of the forerunners to set up a legal system for STO. For the October 2019, the Japan STO Association has been established. And from May, the amendment of the Payment Services Act and Financial Instruments and Exchange Act was enacted. In April 2020, the FSA certified the Japan Steel Association, well, I am the direct president there, as a self regulatory organization. So through this, you can see that as the system is already going ahead And we are now doing some pilot activity so that this can really be commercialized or not. So this is case 1. This is third party allocation of new shares by SBI Esports, Avaya and STO that has been conducted on October 30, 2020. So this was the first ever case in Japan. So the issuance of security tokens in full compliance with the Financial Instruments and Exchange Act with securities appearing on tokens. So SBI was see this and BOOSTRI, this was a Sawa Spy Nomura Group and we have a 10% stake in BOOSTRI. So individually, we could have conducted this, but I think having a partnership and building a market, I think that it has been a necessity. Now that has been my decision. So that is the reason why well, I decided that I should put 20% stake in BOOSTRI. But as the top runner of the industry, Nomura handling these type of services, I think that's very important. Number 2 is the SBI Securities conducts the 1st public offering of asset backed ST ST in Japan. So this is the first ever case with the general investors. So this is based on Ibiborfin. First STO for general investors, Japan collaboration, Boostrix, etcetera. So SCBS Securities announced the first security token offering STO for general investors. So this is the 4 companies, SBS Securities, SMBC Nikko Securities and Wells Securities and Boostrix are the IBEX for Fin Blockchain consortium in June 2021. I thought that whether then just relying on one company, it's important to have this consortium. So we want to become a decentralized financial platform. And case 3, again, this is with the Mitsubishi, which is a Trust and Banking Kinetics and Nomura Securities in collaboration with these companies. So this is a public offering of asset backed STs. So Mitsubishi HVG Trust and Banking Progmat, the platform we're going to this platform has been provided by Mitsubishi with J. H. B. J. P. Ascent Banking. And this is one of the major things that are happening for the commercialization. So for issuer and investor and regulator, so we want them to acknowledge that there are huge benefits of this. I think this is the right timing. So for the issuer, this will be not as burdensome as IPO in terms of fundraising. And unlike stocks, the external financing can be considered without relinquishing control of management from the investors. So they will be able to get non monetary returns. So unprecedented investable products will be accessible. From the regulators, so this will be compliant with all regulations in terms of the information disclosure. It means that new markets will be made and new services will be handled. I think so they said this is a great thing. So basically Japan as a whole should be focused on this. And I think this is a social contribution that we are engaging in. And going into the in terms of the distribution, the secondary market is what I want to focus on. So globally, there are a lot of movements here. So there are this looks in Singapore, we are going to set up a digital asset exchange with the company from Switzerland, 6 digital exchange. We want to start in 2022. And so this will start from Singapore first and with BJ's Stuttgart, a number 2 stock exchange group in Germany. So they have a digital exchange. We will be have invested 10%. And in terms of the crypto asset custodian business, although there is a company that handles that and they are we are going to planning to invest in this investment company of the both the Sutera Group. So the international brokerage or the custodian business, it means that we will be able to create an actual demand for these four assets worldwide. For this global development, so we have a digital SBI Digital Asset Holdings. We have started this new holdings. So exchange, distribution in Europe and Singapore and systems, so this will be global endeavor. And by handling these products, we can offer we have to offer a full security. And what gives us this technology? These are venture companies that give us this technology. So we have to have a good eye, and all the companies should be able to have a good eye for these type of investments and introduce new technologies and distribute those investments. And so we will invest, introduce and then distribute all these technologies. So that is what we're trying to do. And ultimately, we want to create the world's largest global corridors. So Japan is taking the leadership and creating this type of endeavor. So in any conference I go, I proactively discuss matters with overseas counterparts and I persuade them. By doing so, I have been setting up a lot of joint ventures and has been successful in that. In this area, I am committed to following through my initiatives. The partners, we have good partners already and we have these partners already. So non fungible tokens, NFTs. So within a group, we have a SBI Art auction, an auction site. So whether this will be connected to NFT, when we set up this auction company, I didn't think that it was possible because I was very, very interested in art. Because of this interest, I set up a auction house. Another is that the affluent people will purchase artworks. They always do. The Chinese affluent people, wealthy people, so they will get a lot of proceeds through these auctions, glamorous mansions. And then they have collected these Western and Chinese antiques. So this is like the Wild West in the United States. So the people immigrate from Europe and to the U. S. And the people who are successful in U. S, they bought up all the European antiques. And then they display this in these very gorgeous mansions when they built it in the United States. So these wealthy people, they will always purchase and be interested in artwork. That was what I was thinking. So I have been very interested in art from the past in London, in New York. Most of the colleagues will go to golf, but I will go to antique shops and go to auction houses. With my wife that is. So through these experiences, what I found out was that these artworks, the wealthy people are well, almost always purchase artwork. So that's a fact all over the world. So I set up this auction, but they are going to be engaged in the non fundable NFTs. So this is a good positive cycle. We have partnered with Stockbarn. So we will issue blockchain certificate to those who have been successful bids. So since April 2019, introduction in April 2019, the number of users 250, number of certificates issued exceeded 500. With Start Trail, the Blockchain Start Trail, we will utilize this and then accelerate this activity. And I have to what I have to do is that is to create the NFT marketplace, you have to have a secondary market. So not having the certificate is enough. You have to sell it somewhere. For instance, for inhibitors issues, you have to connect this in this manner or else things won't work. The Startrail excuse me, the Start Ban, a company, the CEO is a very bright person. I discuss matters with the CEO. I think we have to try to extend this business furthermore, but I have I'm very sure that I can partner with Stockholm through these discussions. And not only artwork, there is media, game, virtual space, real asset linked products, all of these things can be will be leveraging on fungible tokens. So in 2021, you can see that the market of NFTs expanded rapidly. According to a research institution U. S, in the Q1 2021, it surged 17 times compared to the Q1 2020 and surpassed $1,200,000,000 Of course, various issues have risen. So how are you going to ensure the authenticity? Or how are you going to confirm the continuity with existing rules for copyright and ownership transfer? And you have to have established a legal issue here. And establishing a reliable secondary use in secondary distribution market environment will have to be done. So how are the tax regulations going to be? So this legal tax regulation issues for the FSA in various on various aspects I will discuss and we want to go forward. But I'm not we are not going to jump onto this. The rules should be established first, and we'll have to have a condition that the investors will not be inconvenience, and then we'll do business. If that environment is not available, you may have Mt. Box and Coin Check, you will go down that road. So we are different from the TAC. We have been focusing on the traditional financial businesses, and we will clear all the certifications and requirements. And with the new areas, we will challenge with the cutting edge technology. That's our characteristic as a group. Then going into the decentralized finance, DeFi. So within the group, we have a lot of companies preparing to service the DeFi ecosystem and we have already been engaging in this. So the group investee companies, partner companies as well are part of the ecosystems. So within the SBI Group, the DeFi project, so it means that the apps that you can easily use for the smartphones as a model, we already have a model. We want to brush it up within the project team. So we are under development. And with this, so I think it's very important that we have these kind of what is from the academia point of view. How does this FSA thing. So we have to verify that, those aspects and then create new products in new markets. And the regulators and the BOJ are also keeping a close eye on the future of DeFi. And for instance, the FSA has a Fintech Innovation Hub. They have published the activity report on the July 2021. And they the FSA newly established a working group on dealing with digital and decentralized finance. Going into the Central Bank and Digital Currency Ahead, we already talked in detail about this already. But the digital Chinese won in China. In 2014, they started this research. In 2017, they started official development. In 2021 June, about 14 provinces and 20 cities in China, well, there are provinces and cities in China, they have a massive population. So number of settlements is already more than 17,700,000. So the total amount of settlement is already 34,500,000,000. And what stands out is that they are have this general use CBDC, general purpose CBDC. Well, normally, people go for wholesale CBDC. But for the EC and I, they target both individuals and enterprises. So China, apparently, they want to from this dollar oriented financial system from Bretton Woods system, they want to move away from that. So the key factor will be this that you're seeing. So they will be using it for trade gradually. And this as a if this is used as the currency for trade, relatively speaking, the positions of the dollar will be diminished. So the U. S. And Europe are they will have to seriously look at the situation or they'll suffer. So the Fed Chair, Jerome Powell, told the hearing on the U. S. House of Representatives to the Financial Service Committee on July 14th. The report on the digital was expected to be released around the beginning of September. I'm looking forward to this report. For the Eurozone, things are moving forward. The Japanese government, so in terms of first phase of POC, they began on April 5 this year. Compared to the speed that's happening in the world, BOJ seems to be a bit slow. So the Japan's 1st crypto asset fund, anonymous association, we're going to start this plan to begin this in fall 2021 with only using crypto asset. So this will be anonymous association fund. Well, we want this to be a public fund, but the FSA said that, that will not do. So I said, Private will be okay. No, they said. So now we decided that discussed and decided to be an honest association. So I think for the ETF, I think in the U. S, it was a matter of time. So the ETF will be approved. So I think that's the trend in the world. So we want to come out with this and accumulate know how. And Mr. Sakura's division is doing this. By doing this, we want to accumulate the know how. And this and our crypto asset, the cryptocurrency business will be closely linked. So SBI Securities and SBI VC Trade, SBI Asset Management, these will be a trinity so to speak and we will dominate this area. So the SBI Financial and Economic Research Institute, I talked about that. So we have this academia as institution and I have set this up on the 1st April and we have invited Masai san, a former member of the Bank of Japan's Policy Board and as a Director and I will be a normal Director. Because if I lead these type of things, people will say that, oh, Mr. Kitau is just leading this as he pleases. But this will we want to accumulate the know how, the accumulated know how through business. We want to offer that to this academia and by exchanging opinions with FSA. So we want to hire a lot of excellent outstanding people, and we want to have a certain number of researchers. And we're focusing on those four themes. So I think this is a wholly new concept in terms of what our research institute is going to do. And next, so R3, which we have a partnership and Ripple, well in terms of R3, the supply team management and the various other areas, they will have a DLT that will contribute to the business efficiency, distributed ledger technology, and they will focus on that. So luckily, this R3, the U. S. Company has set up a joint venture and we are the largest outside shareholder. So Ripple, so we have the largest we are the largest outside shareholder with 8.76 percent of investment. And Ripple, we have 60% of Ripple Asia and we have 40% in the U. S. So in terms of international remittance, using XRP, we are going to switch to XRP, a crypto asset that is. In terms of our fund management, in terms of the security and in terms of the cryptocurrency distribution business and in terms of the global development, everything will be combined. So this is how we go forward with the business and I thoroughly thought of this way of doing business and we are going to do this in the same way. For R3, so we have 51% in joint venture. It was 64%, but SMBC, they want to do this trade finance business. So they put in 14%. So SMBC, well, both companies made a sacrifice and SMBC has 14%. So this LC quota, so they already have more than 300 refinancing solutions. So in many ways they will be utilizing Corda, what's promising is trade, supply chain management and Marco Polo. This is where SMBC is putting a lot of efforts in. And Kontoor, which is LC Transactions. So again, HSBC, Standard Chartered Bank, Citi are involved. And also, we have manufacturing traceability. We have capital markets. So all around the world, big players are now entering this business using Corda. We also as a group, like I said before, as much as possible, we will quickly create this world of 2.0. So we will implement this one after another whether at liquidity market or SSI or SBI traceability. We have established a company called SBI traceability or we have Byfeng, which is ABI Group's local subsidiary in Hong Kong. Furthermore, we will utilize Corda to issue digital currency in multiple regions in partnership with regional banks and local entities. So we have track record. Today, there are 5 projects, which are scheduled to be announced. So this is information platform called machino wa and machino en. So machinouan is established by 3 companies, but this is not just Kyushu. It's Kyushu because Kyushu Electric Power is part of it, but it's actually rolled out in different regions. So it's ready to be rolled out. And ultimately, where I really want to emphasize is at Kansai Osaka Kansai World Exposition, we would like to propose a use of corda in digital currency. In the previous Expo and also even outside of Expo, when there was a questionnaire that was done on the foreign visitors to Japan, one out of every 6 foreign visitors said that there's lack of places to exchange money in Japan. So we'll change this all around. So we will use Ripple to send money to do international remittance, and then we will use korodoro to convert that into local currency. And Japan Association for 2025 World Exhibition will be the issue of the digital currency. And so without having to exchange money, they can freely use this. So this is something that we definitely want to do. And also even at Toyota Tsusho, they are starting called electronic contract service called TAV Lock Sign, which is also using Corda. And also DLT from Ripple in U. S, So more than 300 financial institutions have been participating RippleNet. I would say 90% of the business is outside of U. S. Even when I was Director, I have been saying this, let's split it into 2, the U. S. And non U. S. So even if you lose on our litigation on this side, it will be just limited to that. And we can continue to do the business, as usual, on this side. So I've been saying this from before. So we'll see what happens. They think that they can win this litigation, this battle. We're yet to see what will happen. But in any case, we will simply because this is legalized in Japan, we will roll this out in other countries that are legalized. So we will continue to expand business using SRP. Same thing with MoneyTap. There are 38 regional banks that are investing in MoneyTap already. U. S. Ripple also holds 33%. They're the largest external shareholder. And again, P2B remittance will continue. And P2B will also become possible using MoneyTap or prepaid charging service providers like PayPay. They can go through this and expand this. And number of banks that will be connected will reach 20 by the end of this year. And once we reach 20 banks, we can expect to see an expansion of economic effect. And I think this will have a big leapfrog growth. SBI Remit, this is companies both in Vietnam and Cambodia. Again, they are using Ripple to do international remittance with these two companies. So something like this will be increased more and more. And we just recently announced this and actually helped increase the price of Ripple, but SBI REMA deploys Japan's 1st international mine transfer service using crypto assets. So this will be used to do international remittance from Japan to Philippines. So this is a new service using Ripple's payment infrastructure and digital asset, XRP. By utilizing such technology, the credit risk and cost will be reduced significantly. This is the overwhelming competitiveness. Remit will become overwhelming number 1 in international remittance. And not only in Japan, but they could become a global player as well. In addition to that, there's I'm making them make SBR Aptica to do a used car business and I'm planning to use Ripple for transmission or remittance of the money here. And I'm planning to invest in a bank over there. I'm looking at some candidate. I think it was a Uganda bank, which I made an investment before. And we made money, so I sold it because there's a lot of political uncertainties and I felt some risk in that country. So I exited quite early, divested early. But I would like to buy a bank something like that or maybe establish something like that. Maybe in Africa, we can establish digital bank. So for example, a former colony country, so it could be U. K. Or French colony, but we can work together with the local financial institutions and establish business there. The other day, someone from France came and he said that, please do more business with French companies. This man from French Embassy came and said that. So what I have in mind is that we should be working with former colonies. African Financial Institutions of former colonies, I would like to collaborate with them. And eventually, when we can see actual business increasing on this side, we can do all the remittance of money using this. That's what I wanted to do. So next generation financial products and services, again, in various areas like CBDC or even Ripple. They have XRP Ledger. They have smart contract function. Or CBCD and XRP, they are not competitors, but they are complementary to each other. So again, we are trying to enter into new domain one after another. And we work with companies like this because they develop good technology and we would utilize that. So proactively utilizing M and A to further expand business space. Just the other day, we have issued corporate bond, straight corporate bond of 80,000,000,000 MTN bonds of 30,000,000,000 yen. So altogether, 120,000,000,000 yen. So this is have the funds for us to make future growth. And these are the targets that I have mentioned before in the past. Earlier, at the beginning, I said our midterm sort of 3 to 5 year vision in order to materialize that, we will engage in various M and A activities. And we will do that in addition to our organic growth so that we can achieve that number that we have laid out. So this is in our first to attract international financial center, Dohsaka, in cooperation with local governments and various other stakeholders. So attracting international financial centers, this is not I think we can't just stick with Tokyo. I think we have talked about this before. It never has been successful. Why? Because we need new global financial market. We need new global financial product. We need new technology to be used proactively. Without these 3, we will not be able to establish International Financial Center in Japan. And I said that. So I want to bring about these three elements. That is why I have worked with SMBC and Osaka Digital Exchange. This is equity plus SD. And we have Dojima will be the comprehensive exchange. So we will run this as well. Now this is now a stock holding company now. As you can see, percentage wise, voting rights, we have about 49%. Japan NEXT Securities is 19.42%, but we have stake in Japan NEXT as a result. And SBIA Holdings again, we have direct holding as well, JPY14.57. We will implement different measures in order to improve the performance. And there are market makers who want to join this party in overseas financial institutions that's interested in participating as well. But one of the bottlenecks is that we have to reduce our share. And also, the Osaka just exchange more so than Dojima, there's great interest from overseas as well. But like I said before, whether domestic players will join or not, if not, if they are, then I would like to prioritize domestic financial institutions. So that's how we have decided with SMBC. So the timeline has been decided. We will be sure we implement this. So now again for Dojima Exchange, we have applied for permanent listing of recipes on July 16. And on the 7th August, there will be a conclusion that will be drawn. This is what I had just said earlier. And in addition to these 2, there is one more weapon that I want to mention, which is the API march. This is linking domestic and foreign Fintech companies with domestic and foreign financial institutions. Of course, there's others. So we will create this to attract international financial centers. So what is this? So we will establish Osaka Fintech Center. We need to have an industry cluster in Osaka. Otherwise, we will not be able to revitalize Osaka. We can't otherwise, Osaka will continue to deteriorate and sink downwards. So we need to do this with Fintech. There's 171 companies. We have already implemented 170,000,000,000 yen in this Fintech companies. And maybe we I would say we're the greatest investor, the largest investor. So we will be attracting people to Osaka. And that weapon at that time when we plan to do this is the API Mart. This is application interface. This is API, as we always talk about, API. I want not just financial institutions, but we need to have users of API based Fintech functions on one side, and we want to have domestic and overseas Fintech function providers. So it will allow the matching of these 2. So once those who are in and out of Japan can match the right partner, so whether it be English or Japanese, it's like a comparative site or it's like a search engine or it has kind of a dual function of that. So we have established a project team and this has started moving. And I said, you need to create this no matter what. This is my 3rd pillar in Osaka. On the 3rd, I am planning to go to Osaka And Osaka headquarters is now opened in Nakajanosimasumitomo building and I have my office there as well. And I will be traveling to Osaka very often. Along with that, on 3rd, I will be meeting with the Governor and Mayor. We will do a signing ceremony together. So we will document our alliance and we will sign that. So we have that signing ceremony with Governor and Mayor. And SBI's future business Activity Guidelines with COVID-nineteen era. So with penetration of vaccination, even if you look at the major countries, economic activities are resuming. The problem is the number of fatalities and people who are having severity. And this now has to do with infections. I think even influenza, flus should be announced. Why is it we have people dying every day who have been vaccinated above 65 years old. So whether it's 5,000 or whether it's 3,500 or 4,000 people who are above 65, the number of that will not increase that much. I mean, this is becoming like a common sense of the world. And I think it's only Japan that's dealing this as a common not a common sense. And this is media and also the opposition party. And also with regards to U. S. Fed Chair cautioning about earlier rate hikes, seeing the accelerated inflation in the U. S. And accompanying the Fed rates hike opposition is a temporary factor. And also Japan's market recovery is driving due to delay in vaccination. Why was Japan lagging? It's not because of Mr. Suga and his administration. It's because of the Japanese legal system. It's a system run by MHLW. We need to quickly change this, but they were not able to do so. So maybe in that sense, maybe it was government's fault. They have this group of experts. Every time they have to consult them and from my point of view, I'm wondering what their expertise is in. They're not really an expert in anything, it seems to me. But because of these reasons, there was a significant delay in vaccination. So if the delay in approval if there's a delay in approval, then there's delay in vaccination. So now they want to do this properly and quickly. So we have the rapid progress with 37.4% total population vaccinated first time and 26.3% for the 2nd time. So we see a rapid progress. And Mr. Kono, I think he has lagged a little bit, but I think a quick vaccination will prevent people becoming severe. And even if you have been vaccinated, of course, you can be infected. But the important thing is that you don't die from it. Look at the flu. People, even if you are vaccinated for flu, you sometimes catch flu every year and you don't die from it, right? I don't catch I don't have a vaccination for flu and I don't catch flu, but people who get vaccines still get flus. So the greatest mistake is that they had designated as a designated infectious disease. And according to characterization of designated infectious disease, you have to be segregated and you have to be quarantined in hospital. That's why the hospital is overflowed flooded. So maybe you need to have people at home. And also with and also the health care centers, they say they do the vaccination and also PCR testing, but I think it should be done at the local clinic. Everyone has their family doctors. It should be done there. And Mr. Honjo said that, even if you create a vaccine like this, there will be a variant one after another. It's true. I see variant one after another. And the efficacy of vaccination is will deteriorate. So maybe we need to have a booster to have a 3rd shot. But there's a fact that it does have a certain efficacy to a certain extent. So what do we need to do in the meantime is that we need to develop treatment drug. We are implementing or executing SOE state emergency call. All this time, there's no effect. I don't there's not much effect. I think it's great that there's Olympics at this time because people can stay at home and watch TV. They don't go outside. So that may be the best effect of Olympics. So people are sitting at home watching TV. And if you watch Olympics, you're touched. If you're Japanese, they fight to win this medal. It could be gold or it could be any other color, but I think it's great. And it's so touching, impressive to see athletes compete for that. And there are people who criticize, but I think it's great. I think it's good to see things like that. So it's good that we had Olympics. So in principle, we can see economic activity resuming and recovering. And once it recovers, we can see savings rate increase because there's people who did not have that money to spend and the government kept giving subsidies and benefits and so they kept selling money. So once they cannot give cover, they will begin to use that. So once their consumption increases, then there will be more investment. So this is a virtuous cycle, which will continue, I hope, within the next 2 or 3 years. In Japan, like I said before, we're behind and we're lagging. So our business activity guidelines going forward is that we will, first of all, have our employees vaccinated. We had 12,000 employees or so starting from June 21 being inoculated. And I think most of them will complete the 2nd round. So we have come to the stage where the second inoculation is almost complete. And what we plan to do is to do tests. We will use our hospitals to truly implement tests. I'm so glad we built a hospital. So those group employees who have completed the second inoculation, after 2 weeks, they will go through antibody tests to see whether they have been able to build antibody or not. If you don't have an antibody, we will tell you, you don't have an antibody, so please be careful and please go get an antibody test every so often. So that's what I plan to do. And of course, vaccination, this is for people who it's a voluntary basis. If you're opposed to it, that's fine. That's your choice. Why? Because every time there is a variant, that person will be infected unless he or she has strong immunity. So but if you get infected, it has the same effect as vaccination. So maybe you had one infection and you can have vaccination and then that would give you a really powerful immunity. So because there's a lot of young people and they it doesn't get severe for them, So we don't need to control it. We don't have to make it mandatory. But if you are to over a certain age, we see people in the 50s getting a severe case of COVID because of delta, because delta variant causes your lung to be completely white very rapidly, and you have to switch to artificial ventilator or oxygenator. So it's easy to get severe quickly. And what's important is that you need to do timely and appropriate PCR testing in a per timely and appropriate manner and identify infected person with those who are not. These are the things that we need to carry out on principle in order to carry out our business activity aggressively. So that's the end of my talk. Thank you very much for your kind attention.

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