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Message from the Management

Director, President and Representative Executive Officer Resona Holdings, Inc. Seiji Higaki

We greatly appreciate your support and trust in the Resona Group.

The Japanese economy during this interim period retained moderate upward trend with the Nikkei Stock Average exceeding JPY 20,000, given the current domestic employment environment and steady overseas economies. On the other hand, the negative interest rate has led to harsh business surroundings for financial institutions.

Amidst such conditions, the actual net operating profit of Resona Holdings on a consolidated basis fell by JPY 17.1 billion to JPY 108.6 billion from the previous interim period, due mainly to bond-related losses and reduced profit from the net interest income. In the meantime, due to continued low credit expenses and realignment of loan guarantee subsidiaries, the net interim income attributable to owners of the parent amounted to JPY 94.0 billion, down by JPY 2.8 billion from the previous interim period. Nevertheless this has still exceeded the initial target. Considering these conditions, we revised up our full-year net income attributable to owners of the parent for fiscal 2017 by JPY 15.0 billion to JPY 16.5 billion. We have maintained a sound financial standing, with the non-performing loan (NPL) ratio and the capital adequacy ratio at the interim-end being 1.27% and 11.59% respectively.

We have raised the interim dividend by JPY 0.5 per share to JPY 10 per share, following our plan decided at the beginning of fiscal 2017 to raise it by JPY 1 per share to JPY 20 per share by the year-end. The JPY 100 billion Class Five Preferred Stock will be purchased and retired within fiscal 2017, premised that regulatory authorities issue approvals.

In pursuing Resona Holdings’ Medium-term Management Plan – Change to the "Next," we are building up our efforts for reformation of the revenue structure through expansion of functions and solutions in business areas such as corporate asset creation support and settlement business. Additionally, by acquiring a financial institution in Singapore as a subsidiary in July and launching as Resona Merchant Bank Asia, we have strengthened our global channel. In November, we founded the Kansai Mirai Financial Group in preparation for the business integration between three banks: Minato Bank, Kansai Urban Banking Corporation, and Kinki Osaka Bank, and solidified our support towards revitalization and development of the economy of Kansai Area.

At the Resona Group, we will maintain our basic stance that "Customers' happiness is our pleasure" while making the utmost effort to become the "No.1 retail" financial service group for the confidence local communities place in us and for the competence to look ahead together with the communities.

We look forward to your continued support.

December 2017