SBI Holdings Inc

TSE:8473

Earnings Call Transcript 2021-Q2

[Yoshitaka Kitao, executive]

Thank you very much for joining us today for the presentation of the first 6 months of the year despite your tight schedule. 40 to 50 people are also participating on the net and so about 100 people attending this presentation. Without further ado, we have 145 pages. So we would like to start the presentation right away, skipping some pages.

First, some numbers. As you already know, the revenue, JPY 228.165 billion or up 18.7%; and the pretax profit, JPY 54.512 billion, up 13.5%. As to these numbers, they are record high. The profit for the period, JPY 38.164 billion, up 8.8%; the profit attributable to owners of the company, JPY 33.104 billion, up 18.7%; and annualized ROE is 13.6% for the first half. And we will see what will happen in the second half. And if the trend continues, the ROE will also hit a record high for the year.

SBI Holdings, Nomura and Daiwa comparison. We are on the IFRS basis; Nomura, U.S. GAAP; and Daiwa, J-GAAP basis, so different accounting principles. But for example, for Daiwa, on the consolidated numbers, some bank and the asset management are included. And in that case, SBI Holdings and Daiwa Holdings and Nomura Holdings will be apple-and-apple comparison. So only the numbers from Nomura are available here, but as you can see, it seems that Nomura is doing a good job. For the first half, ROE, 14.0% in the first half. So they are doing well, not so much domestically but probably well overseas. And Daiwa is going to make an announcement tomorrow, October 29.

Next page, by segment. Financial Services Business doing very well. Both revenue and pretax profit hit record highs. Revenue, JPY 144.82 billion, up 27.9%; and the pretax profit for financial services, JPY 40.319 billion, also a record high. This is up 53.9%. Asset Management Business, record high for the revenue. But for the pretax profit, it went down a little bit year-on-year. Because of the big unlisted company -- actually 3 unlisted, the company has contributed greatly in the previous year. This negative number doesn't mean that the Asset Management Business is doing poorly. That doesn't mean that. Biotechnology-related business, there, the rate number has been reduced greatly.

Next page, about dividend. Interim dividend, the same JPY 20 as last year's interim. And if the second half is good, then we would like to increase the dividend. We will see to make judgment.

By segment, more details. Our securities business. As you already know, the operating revenue, the record -- hit high, JPY 74.030 billion, up 27.9%; net operating revenue, JPY 68.858 billion, up 32.5%; operating income, JPY 27.237 billion, up 50.7%; and ordinary income, JPY 27.316 billion, up 49.3%; profit attributable to owners of the company, JPY 18.988 billion or up 61.8%.

Here we are looking at average daily individual brokerage trading value compared to fiscal year 2019. Please look at the right-hand side. Fiscal year 2020 first half was better. It's up 52.4%.

And among this -- well, actually, our trading value increased more by 73.5%, and commissions increased by 61.7%. One of the reason is good performance of foreign stocks. There was a very good factor that we're going to touch upon later on.

SBI SECURITIES' overwhelming position. There is a comparison here. And as you can see, SBI is dominant. Those for the number of accounts, deposit assets, operating income and the share, we are dominant. In 1999, we started in the same way using the same systems, but the performance is now so different.

Bank-related business, that is doing very well. And so this is 7.6%, the increase for the equity earnings from the equity method companies.

And this is for the J-GAAP basis. Since the inception of SBI Sumishin Net Bank, it continued to increase ordinary income. But because of the BOJ's negative interest rate policy, it's down a little bit but already recovered from it and from the fiscal year 2017. And in the second quarter, fiscal year 2020, the numbers will surpass the previous year, the same period, because the announcement will come on November 12. So please wait for that date.

The number of accounts and the Internet banks comparison. The deposit is increasing. As of the end of November, it was JPY 5,743 billion, but now it increased to JPY 5,841 billion and with 4.2 million accounts. And on a monthly basis, the number of accounts and the deposits are increasing.

As to the insurance business, the ordinary income, up 25.9%; and ordinary profit, up 122.8% at JPY 2,184 million. And the profit attributable to parent of the company, up 247% at JPY 773 million.

And these are the bullet numbers. More detailed numbers will be available later on. And the SBI Insurance Group has been buying SSI entities. And on average basis, CAGR from March 2015 to September 2020, 16.4% increase. Compared to our standards, it's not really a high number. But if it increases too much, that will be translated into expenses. So profit-wise, it will not be that good. So this level of CAGR increase is good for insurance business.

Asset Management Business, the revenue up by 8.2%. Some negative elements here. Profit before income tax expense, JPY 24.8 billion. Please look at asterisk number one. Accumulated impairment losses to reflect the declining occupancy rate in the aircraft leasing business, about JPY 4 billion of the impairment losses. But if you look at SBI SAVINGS BANK in South Korea, JPY 13.9 billion, up 65.5%. And profit from the change in fair value and profit on sales of investment securities, they did very well for listed securities, but the profit is not so big for the unlisted securities in the first half.

As to IPO, for the full year basis, it was very good, and we expect that there will be over 25 companies. There are good names included, the fintech companies or bio companies of good caliber to be listed.

As to SBI SAVINGS BANK, when we purchased it in 2013, there were some criticisms. It's true back then, 51.6% NPL ratio was there, but now it went down to 1.8%. And the performing asset is increasing, which stands at JPY 972.8 billion, or exceeding KRW 10 trillion.

To revitalize bank, I think, is very easy. So it was a success for the Korean bank. So it is also certain for Japanese banks because our group can utilize our -- all kinds of capabilities to give support to Japanese banks, even Russian bank that is very likely to go into the black. So banks, even those banks on the verge of bankruptcy, they can be recovered. We used about JPY 130 billion or so to make this bank recover, and they made a very quick recovery. And following SBI SECURITIES, this entity is a cash cow. The SBI SAVINGS BANK will surpass full year results of the previous year in the first 9 months.

And Morningstar Japan celebrating the 20th anniversary of its listing. Thanks to you. They transitioned to the first section of the Tokyo Stock Exchange from JASDAQ listing. Both net sales and ordinary income are increasing.

I'd like to pay special attention to the following for Morningstar Japan. That is corporate-defined contribution plan, or DC plan both for corporate and individual DC plan. Especially, we would like to increase corporate DC going forward, in coordination with other securities, other strategies. And here, we have E-Advisor, DC promotion department. And we have more than 7.5 million DC subscribers of corporate plan as of the end of July.

And when it comes to pension, it is very important. Why corporate pension or individual pension is important? Well, because we had started a new company even before the input of the pension business, close to JPY 1,900 trillion of the individual assets, and 54% of which is deposit, which is not good for the investment or the asset accumulation. So we need some incentives given by the government so that this huge amount of money will go into investment. The international financial center, if we're going to make it, these investment activities should be part of the center of it. Not many countries have such a huge source of money. And there will be lots of money interest coming into this market. When I was working at Nomura, the oil price went fourfold back then and all the money went into the Middle East. Every 3 months or so, Saudi Arabian Monetary Agency or the Ministry of Finance, Bahrain and the rest of the area, I went to that area very often. And there is a place called the [ cheap side below the city ]. And we encouraged them to invest in Japanese vehicles, like stock and bonds. And we can create similar situation again.

So SBI Group's asset under management, including private equity, exceeded JPY 3.60 trillion. In 1 to 2 years, I personally think more recently, to increase it to JPY 5 trillion; and to JPY 10 trillion in 5 years. The regional banks and the investment is mainly for the JGB or the municipal bonds but they will be redeemed and no regional bank will buy the JGB again. JPY 80 trillion or so is invested there. And about -- more than JPY 30 trillion or so is invested in JGB or municipal bonds and -- that we would like to utilize more effectively. About JPY 15 trillion will be redeemed. JPY 15 trillion worth of JGB and municipal bonds will be redeemed in 3 years or so. And we'd like to grasp such money sources as early as possible, and Mr. Sakura and his team is making efforts in that area.

So for the Biotechnology-related Business, at that time, for Quark Pharmaceuticals, every fiscal year, every period, about JPY 10 billion of losses were being recorded. However, in the first half, it is now minus JPY 1.854 billion. So AKI has entered Phase III, which is for nephrosis. So the conclusion is going to be reached fairly soon. And if it's successful, it will be of tremendous value. And if not, we plan to sell it off. For biotech, we do have a rich pipeline. And with Kirin-Kyowa Hakko with entities as such, we have been delivering the candidates. And for ALA-related, it has been steadily progressing. So it's just Quark which is a problem. Once we pull out of it, we believe we'll be on a good track.

And also, due to COVID-19, the clinical trials for Quark's acute kidney injury prophylaxis has been somewhat delayed. However, blood sampling after 90 days and follow-up observation has been completed as of September 21. So now it's just doing the data cleaning for clinical trial database, DBL. And then by the end of March of this fiscal year, we will be able to reach a conclusion and we'll be able to sort things out. So that's where we are with this.

For ALA, for cisplatin nephropathy protection, Phase II was completed in September. We'll now enter Phase III. For mitochondrial diseases, Phase III is underway and is scheduled to be completed in April 2021. And at Oxford University Hospital, first patient in is expected to be completed by early November. So for Phase II, it will also be held at Leicester, Birmingham and Cambridge University Hospitals as well. For brain tumors, Phase II for PDT, photodynamic therapy. It's the therapy part. So if you have a brain tumor that is in a solid state where it's so large, 3 centimeters wide, it's hard to conduct a surgery. By utilizing ALA, you could use PDT. And if you are administered with ALA, the ingredients will be gathered in the tumor's part. And when you shed light on it, you'll be able to treat the tumor. So that's basically the theory. Activated oxygen may be generated. With regards to the mechanism, they are currently working on it. However, they are working on the preparation for Phase II. For breast tumors, Phase III is under preparation. It is being conducted by a Canadian company. photonamic, a wholly owned subsidiary in Germany, has entered a partnership with a Canadian company, and they will be preparing for Phase III. So this is PDD, photodynamic diagnostic agent.

For ALApromo, they have various types of foods with functional claims, improving quality of sleep with ALA PLUS Fukai Nemuri; or cognitive improvement functions with SBI Ichoha ginkgo biloba; and also improving exercise capacity with ALA PLUS Karada Active; as well as functions to improve high levels of fasting blood glucose levels and postprandial glucose levels. And currently, these products are under sale. But under development, our products to reduce cholesterol and blood pressure by utilizing germinated rice. And also, we are currently developing some ALA food products that improves depression and mood together with the University of Hawaii. And we are also working with Hiroshima University for recovery fatigue. And also with Hiroshima University, we are working to increase metabolism while suppressing sugar absorption not only with ALA but also with salacia-derived salacinol. We're also working on male menopause improvement. Men actually have menopause. I haven't but we're working on that. And also, within fiscal year 2020, we will be working on fatigue reduction after exercising. But in any case, we will have a wider product lineup in place. So we believe that this part of the business will grow steadily as well.

Drug stores carrying these products have grown to 17,396 after major drug store chains -- they have started to carry ALA products as well.

So the group's competitive advantage became clear in the COVID-19 crisis. That's how I feel. First of all, the group's online utilization, which was in place since its inception, led to a further increase in customers and in revenues in the wake of the COVID-19 crisis.

So looking at the number of brokerage accounts. In February 2020, we have exceeded 5 million and surpassed Nomura. And as of March, we completely surpassed them. And currently, we are close to 6 million accounts now. As of today, we may have already reached 6 million accounts. Every year, we're growing by 10.6% from here. So we are overwhelmingly #1 right now in the industry. So at Nomura, the growth rate is 1.5% when you look at CAGR. For SMBC Nikko, we have been seeing the increase because they merged with Friend Securities.

And for NISA accounts, finally, we have surpassed Nomura. We are #1 in the industry now. For NISA accounts, the customers who open up accounts, 69.2% of them are new, out of which 69.7% are beginners of investments. So these are the new customers we are getting. For junior NISA accounts, we currently have 98,000, which is approximately 30% of the entire securities industry's junior NISA accounts. That is our -- the share we have acquired.

For iDeCo too, we have completely made the fees free, and we have been seeing a buildup of accounts. March '16 until 2020 September, CAGR has been 53.1%. And when you look at the cumulative number of SBI Benefit Systems' subscribers for DC, it has been growing the individual type. And also, the balance of investment trust for 401(k) individual type distributed by SBI SECURITIES has grown. And CAGR from 2016 March to 2020 September has been 51.3%. There aren't that many products that grow at this rate at 50%, but we are seeing this growth at our company.

So with regards to cumulative number of individual DC plan customers, we have been industry leader. It used to be Tokio Marine, but we surpassed them in October 2018, and we have been widening the gap ever since.

So for SBI SECURITIES, looking at our productivity, it is far higher than that of Nomura and Daiwa when you look at this chart. When you look at productivity, it is the operating revenue and operating income per employee that we are comparing here. So when you look at operating income, because we're using online, the number of employees that are allocated is less. That's why it is higher per person and for profit as well. This is JPY 45 million per employee. But for Nomura, it's only 5 million per person. So this is very important. I don't know how you will look at this. But when you think about the future, productivity per employee is key. Some companies carry a lot of people and they're trying to reduce the number of head count. So everybody is working from home these days and they are working remotely. Some people are trying to reduce the personnel cost by having their people work remotely.

So for SBI Sumishin Net Bank, it's expanding its business base faster than its competitors. September 2007 was when it was established, and it was able to reach the dominant #1 position over a short period of time.

Mortgage volume is growing rapidly as well. As of June '20, the cumulative total of housing loans balance exceeded JPY 6 trillion.

And when you look at it per employee, once again, SBI Sumishin Net Bank, when compared with other mega banks and compare ordinary income and ordinary profit here, this is -- what's interesting with the banks are -- is we have the highest productivity, and there are differences amongst the mega banks as well. Sumitomo Mitsui Bank is JPY 29 million, as you can see here. And for MUFG Bank, we thought they would be a little bit higher per employee, but they were at JPY 14 million actually.

For the insurance business, it has also displayed its strength amid COVID-19. This is interesting. As of March 2021, Q1, direct premiums written, when you look at the year-over-year change, ours increased by 22.1%. So this is SBI Insurance. For SBI Life Insurance, the change on a year-over-year basis was 35.2% up. Other players are down. So amid COVID-19, customers are migrating or shifting.

Or when you look at efficiency of the companies and net expenses, which are labor costs, advertising costs and et cetera, in our case, we are at 17.7% at SBI Insurance. Other players are at around 30%. For Life Insurance premium income per employee, we are far higher than others, as you can see for SBI Life Insurance. By looking at these KPIs, you're able to see whether you are able to manage your company in a productive manner. And I think this will determine the order of the ranks of your company in the future.

So strategies to further strain competitive advantages during the COVID-19 crisis. We think we're doing well so far. However, we are trying to do it even better. And how are we going to do that? First of all, for the Securities-related Business, proactively, we will engage in M&A activities to further strengthen overall capabilities. For fees, we have been saying that we will continue to reduce them. So we would like to leverage our comprehensive capabilities even more. In a diverse business, we need to generate our revenues.

So first of all, we used to be growing through organic growth mainly, but we would like to be more active in M&As. We would like to strengthen competitiveness through synergistic effects with existing businesses and cross-evolution, and we would like to expand economies of scale. And also, we would like to go through stepping stones towards global expansion with a focus on the future. Global will be a keyword going forward. Everything is going to be about going global. So for new businesses in the future, I will question whether that can be globalized. How can we globalize the business especially for virtual currencies or crypto assets? And that kind of business domain, this is the way I think. And for M&As, we will expand business foundation through M&A activities through the Neo-securities and Neo-bank initiatives. And M&A activities will basically be carried out at SBI Holdings or an intermediate holding company. For example, we have -- if we acquired shares for B2C2 or livestar Securities and also we invested into Hifumi. So these are some examples.

So for livestar Securities, it is very unique. Around the trader segment, it is being highly supported. So for margin trading, the fees are waived. And that is how we have been able to expand the customer base. So acquiring this entity was very important for us, and that's why we made the decision. And as of September of 2020, the number of accounts is 190,000 accounts and AUM is JPY 276 billion. So the SBI Group covers a broad range of customers from the high-end segment to traders and the future asset formation segment. We would like to offer various types of services to various types of segments perfectly. So that is how we would like to be organized.

And in fact -- so this is SBI SECURITIES' share of individual stock trading. When you look at SBI SECURITIES alone, we have been able to increase our share to 40.3% from 35.3% when you look at share of individual stock trading value. And also, of which, share of individual margin trading value was 41.5% from 35.4%. And on top of that, livestar has contributed by 3% as well as 3.8%, and we are starting to reach 50%.

Also, for the cryptocurrency business. Globally, whether it be Bitcoin or XRP, this is something that is global. So all the systems need to be global. All the ecosystems need to be made in a global manner. And to that end, we acquired B2C2 from the U.K. They are a crypto-asset market maker company. We announced that we're going to acquire 30%, but finally, the financial services agency of the U.K. has -- gave us the approval to acquire 90% of their shares. So this entity will be consolidated. And from Z Holdings, we acquired TaoTao. This is a small issue. But also, we endeavor to further increase trading revenue by expanding the customer base and leveraging the strength of both companies. So going forward, if there are opportunities that are good, we would like to go after them. So we will buy them globally.

So this is Hifumi. And Mr. Fujino is a great portfolio manager. I have met him several times and talked to him, and that's my impression of them. AUM is JPY 860 billion. And because the performance is so good, they're gathering a lot of money and their AUM is increasing.

So this is expanding the customer base through alliances with companies in different industries and contributing to further growth. So we will be forming alliances, SMBC or Takashimaya. And in banking business, we're collaborating with Japan Airlines, and I will talk about this later but Yamada Holdings, Hikari Tsushin, Asahi Kasei. Insurance, we're working with motorcycle manufacturer, Escrit.

So these are all positive steps for us to realize our Neo-securities initiatives. And in fact, we're moving ahead. We're making progresses on this.

The scope of free transaction fees at SBI SECURITIES is actually increasing. For example, you can see these preferential treatment conditions for large-scale margin trading have been changed. And also, we have, as of October 1, 2020, this is the new zero commissions for both cash and margin trading. And we now -- as of November 2, we'll be offering free -- fee-free domestic ETF that offer no fee transactions. We will have 4 brands. So this is, all together, 113 ETFs that we will be handling, both cash and margin trading, which is the largest number in the industry. I have been saying this from before, but you can see that we're making great progress here.

And we will realize Neo-securities initiatives in 3 stages so that -- in order to achieve this third step, SBI SECURITIES is endeavoring to reduce the contribution of commissions to operating income to become less than 5%. Now as overseas foreign equity, we can just simply increase our transaction. And also in SBI SECURITIES, how much can we earn from cryptocurrency? Basically, we're there in a position where they can offset it with other businesses. And this is true with any other business, but we think that whoever wins a share takes the greatest share wins. Especially in the Internet world, winner takes it all. So it's really about how much share can we capture. I think it all comes down to that. And the customer base is important that -- with this backdrop of very large customer base, you can actually improve your quality. And because you're able to improve quality, you'll be able to increase your customers. So basically, this is a principle that works in place. And so it's a virtuous cycle that allows us to continue to expand our business and grow.

This is the current initiatives to realize Neo-securities initiatives. There are 6 I have listed here.

So we just started off with a brokerage business as an online security business. In 2003, 71% comprised commissions. And you can see that this ratio has been decreasing. In fact, this first half has increased slightly to 29.3%, but you can see it's a nice decline. And online brokerage commissions for domestic stocks accounted for 19.3% of all brokerage commissions. You can see that steady increase -- decrease, excuse me, and we want to decrease to 5%. And we will continue to reduce fees as we monitor the situation closely. And you will wonder why we can do this without suffering our performance, but the key here is that we will keep maintaining our performance in our financial results. In fact, we have demonstrated that already, right?

So for example, we are increasing our wholesale business, and we have been #1 basically in IPO underwriting participation rate for the last few years. The number of companies that went public in that particular -- so for example, 27 in here. You can see that we are either underwriter here in 24 cases. And many of these companies may be small today but they will continue to grow. So we will continue to keep this relationship as a lead manager so that we can increase our wholesale business not only just for primary but also in secondary underwriting as well, and that's the significance here. And you can see our track record. So for example, regional power companies are issuing corporate bonds, and they're asking us to do it.

In M&A, we need to continue to strengthen this. This is an important business in wholesale. So we have -- M&A always comes with financing. So this is a very big deal. So we are basically striving very hard to increase this business here. And let's say that number of advisory contracts increased over 3x if the number of cases in first half of 2018 was 1.

And thanks to regional financial institution support, SBI's financial institutional sales department has been really increasing significantly. So for example, transaction volume of first half 2019 is 1, then the equity trading has increased 1.9, investment trust has increased to 5.7x. So you can see expansion in this department as well.

We have been able to do foreign bonds as well. This is the investment trust balance and how it's rapidly increasing. You can see that big upstart surge. And we have achieved record high on quarterly balance.

And robo-advisor, this is WealthNavi. This is JPY 64.8 billion just in AUM for securities business. And if you actually combine the customer base with SBI Net Bank -- Sumishin SBI Net Bank, then it's actually JPY 95.4 billion. And this is a business where we can get a lot of management fees, stable revenues.

And also trading revenue. You can see that there's the significant increase just in -- not only to FX-related revenue but revenue from crypto-assets. This is 64.9% increase year-on-year.

And with regards to foreign exchange and cryptocurrency, crypto-assets in various weather -- measures, we have been able to -- different businesses. We have done [ SCMD B2C ]. We have done collaborative marketing. We have started funds for crypto-assets. This will be done between '20 and '22.

And you can see that co-managed branches with regional financial institutions have rapidly increased in terms of their accounts and AUM. Let's say there are 6 regional banks and we -- it's like we take 4. So excuse me. If the regional banks take 60%, then we take 40%. That's the structure. So in -- total customer deposit assets increased by 90x as compared to October 2017. That's the new business. You can see that that's the track record for September 2020, 90x. And we established a total of 16 branches with 12 banks to operate joint operations starting with Tsukuba. And you can see many others wanting to join forces with us.

And if you look at the customer deposit assets and their attributes, they do mainly structured bonds, very popular with the regional overall high net worth customers. And you can see attributions. You can see there's nice breakdown. In 2020, October 2, we will be launching second branch with Sendai Bank. And in addition to that, aside from 3 regional financial institutions that are planning to open a second branch, a regional financial institution is newly planning the launch of another co-managed branch.

With regards to IFA business, IFA stands for independent financial adviser. It seems as though this is a pure-play Rakuten. That's how it's written. But actually, we are overall the #1. If you look at the trend in SBI SECURITIES' IFA business' AUM, Rakuten is JPY 0.6 trillion. You can see we're JPY 1.7 trillion. That's how different the gap is. We never really announced it because there's many other things we wanted to announce, but that's -- let's say, but because it's perceived this is Rakuten's main business, IFA is their dedicated business, their strength, I want to make sure that we are actually #1.

So SBI SECURITIES' foreign stock trading volume. Again, this is an area we want to continue to trend whether it will be Biden or Mr. Trump that will win this election. Some people say it's Biden. Some people say -- there's great fans of equity trading who are Trump's fan. So we don't know how it will turn out, but in any case, I think transaction will be very active. And I think as long as there's transaction, that's good for us.

So M&A. You can see these are the areas we want to continue to work.

And this is the Neo-bank initiative. Again, this is our collaboration with Yamada Holdings. Yamada has large customer base with over 12,000 physical stores in Japan and abroad and approximately 60 million members. And we will be able to provide banking service, online banking service, to Yamada. So this is a great strength for Yamada and for us as well. So it's positive for us. So this is the sort of alliance that we want to be very thorough and be active. We will be able to increase the corporate value of both companies and improve the convenience of the society.

And NetMove. Security has become increasingly important. We have implemented Smart Authentication NEO in July. We are receiving high regards. So I think that NetMove was a very good company. It's been a great success.

SBI Group's comprehensive strengths are fully demonstrated in the regional revitalization efforts through the revitalization of regional financial institutions. So what have we done over 3 years? The collaboration with regional FIs and more development with new partners. So we would like to make it advance and go deeper.

SBI SECURITIES already are cooperating with 42 regional FIs. And for the intermediary business and so on, SBI MONEY PLAZA, and also via the SBI Life Insurance started the cooperation with 24 regional FIs; and SBI Insurance with 19 FIs. And SBI Neo Financial Services, 9 banks have introduced a white-label banking app with 2 more in consideration. So I'm not going into details.

Morningstar Japan, 142 regional FIs have adopted Wealth Advisors. And they are using the Wealth Advisors to sell investment trust to their customers. It's a must, indispensable for them. And Money Tap, 38 institutions have invested in them, and it will be very important connection. Very -- I'm looking forward to it. SBI Regional Revitalization, 38 invested and with JPY 570 billion of AUM, and we would like to exceed so that you can benefit. And SBI Investment, 74 regional FIs have invested in venture capital funds. If their performance is good, that will contribute to the improvement of regional FIs' performance. So -- and for the FX, SBI Remit, there are 4 banks using SBI Remit for international remittance. So we're doing more and more.

We are making advancements with the new partners, as you know, SMBC Nikko Securities and SBI MONEY PLAZA going in the strategic alliance. And 33.4% of SBI MONEY PLAZA or more than 1/3 of stake that will be purchased in -- by SMBC Nikko Securities. And that announcement was made in September. And we have to send 4 people or so to 1 bank and for MONEY PLAZA EFFORTS and so on and so forth. And on their part, they are very aggressive and we'd like to secure the good quality personnel with experience in securities so that we can continue to send people to the regional financial institutions. So SMBC Nikko Securities alliance is a good news for us. We need people of good quality. And so that's why we have approved to give 33.4% of SBI MONEY PLAZA shares to SMBC Nikko Securities, expecting receiving people of good quality. I think it's a gentleman's agreement.

And SBI Life Insurance. Now we have 118,182 applications, or twentyfold in 3 years is the number of applications for credit life insurance. New initiatives is to form a joint credit system with the General Incorporated Shinkin Bank Association of Nagano Prefecture. By each prefecture, we would like to -- similar initiatives to increase the number of customers.

And alliance with Keystone Partners. It's a very good company. We invested 1/3 of the stake, 33.4% of their stake. It's not equity deal. It -- I mean it is not about the equity business. It is about the debt business because Keystone Partners is very good and helpful in helping us to expand the debt business in regional areas.

SBI Regional Bank Holdings is committed to solving the challenges of its strategic capital and business partners and their customers, Shimane Bank, Fukushima, CHIKUHO, Shimizu, Towa. As we have been saying, the maximum should be 10 and we have a very clear idea of who will join the team, but we need to visit FSA and there should be the attendance at the executive officers meeting where the decision-making scheme of regional banks is so different from ours. It's not a question of good or bad. It just takes time. We will not go beyond the 10 regional banks as an alliance. It could be 8 or 9. It's not that the bigger the number is better. There are banks who want to align with us, and the question for us is whether we can give real support to them or not.

In that sense, there are some common issues for regional FIs. Sophistication of securities operations. They have to work on fintech, and they have to deal with increasing systems costs. And from different angles, we would like to give comprehensive support to them.

SBI Regional Bank Holdings will have -- will be a hub to provide all of these functions so that we can leverage our comprehensive capabilities in a very centralized way. Because there are some common issues among those regional financial institutions. So we can use the common prescription.

And so Morita-san is taking lead in these efforts and self-transformation of the other regional banks. And the new Prime Minister has also used this word, "self-transformation".

I met with him over breakfast. And he said, "[indiscernible], I read that newspaper article." And we met at Hotel Okura, and there was an interview with Yomiuri newspaper a few days before that. And I said that it's not about self-transformation. I said that very clearly to the interviewer of Yomiuri newspaper and the Prime Minister liked my comment. It's about self -- it's about self-transformation. It's not about restructuring or the -- it's not about restructuring. That's what I said to the interview of Yomiuri newspaper. It has to be self-transformation. There should be a very strong willpower to make that happen. And when you want to do that, when you want to transform yourself, it might be translated as denial of self, of what you have been doing in the past. But you need to think about how to change the conventional behaviors or actions. And also you need to think about what should be changed on organizational basis. And you develop yourself and as well as you develop your organization. Self-transformation, self-denial. And not on the personal basis, but also on the organizational basis, you should do that. And we would like to help those financial institutions when they do that.

So what about Shimane Bank in the first half? So bottom right, the 2019, 2020. And please look at the changes in the core operating income and ordinary income at the top. How it has changed? How it has improved? Well, drastic improvement in profitability in the area of alliances with the SBI Group, including fully outsourcing of securities operations through the SBI Group and operating of the co-managed shops. And reduced various costs through restructuring stores and promoting selection and concentration of businesses.

So they -- it's a self-help, self-assistance and mutual assistance process. And as a result of that, such improvement was made. When you look at the PBR table, 0.21 improved to 0.43 in 1 year from September 2019 to September 2020. No regional bank achieved this before.

So the investors are evaluating very highly our involvement. And they are observing those changes. Don't tell me, just show me that's what I always tell my people. Show me, show me, and that's where it happens. So this is what we have been doing in our own organization. We decided on doing something, and we made that happen with the full spirit. And I do not hesitate to see people leaving our organization if they can't do it.

Steady progress on initiatives with subsequent partner banks. So this is just the September and October examples are shown here. And if we have to talk about everything, then we need more paper space. And here, we have the rapid increase in number of accounts and the customers' deposit assets. The Shimizu Bank started in March 2018. And the revenue increased 69.1x. 16.7 for number of accounts and 9.6 for customer deposit assets, starting point of being 1. CHIKUHO achieved 140.3 or 42.6. And Shimane 63 and 33.3, and so on. So it's a big success.

SBI Holdings' AUM expanded. The capital and the business partners about 30% of the consigned money. So that means that the 70% comes from the entities without such partnerships. And that may -- that makes JPY 1.5 trillion of AUM. As to Towa Bank, strategic business alliance. Towa has already made an announcement on that. I skip details here. It's okay for the partner entity to explain about the alliance in a comfortable way for them. The only thing that we care about is that their results will improve. How to explain about the alliance is not that important. Regional revitalization partners, joint initiative with several partners.

The financial institutions alone cannot recreate the regions or localities, there should be other lines of the business and the knowledge and people. And also local governments should also be in the picture.

So in order to revitalize the local economy, it -- everyone should work for that because it's part of the national strategy. So now we have partnered such as DBJ, Yamaguchi Financial Group and Shinsei Bank and Concordia for regional revitalization partners. So my favorite phrase, public good will lead to the private -- the good or interest that will be realized.

There's no investment involved here. This is about planning. How to improve the local economy. So there are some experts of the local economies involved in this effort. And this scheme has been explained to the top people of partners. So on the human resources basis, the regional revitalization partners, the 5 companies. They have right to dispatch people as directors for SBI Regional Revitalization Services or Revitalization Investment and Loan, but it should be limited to one director per entity.

Under SBI Regional Revitalization Services, we set up silent partners for systems, HR succession and Smart City and International Financial City or environmental energy, and the fund size here will be JPY 30 billion as minimum.

And here, we, SBI Group owns more than 51% and about 10 shareholders, but the capital will be small at JPY 2 billion to JPY 3 billion level. While SBI Regional Revitalization Investment and Loan capital will be JPY 100 million to JPY 200 million and the several shareholders.

And who are going to be shareholders? Well, they will be mainly from big investors. And for this entity, we form limited partnership for investment business. This is the same -- the message. Business fields to focus on for new innovations toward future business development. And I'm going to start up new businesses in addition to the regional revitalization. And we will thoroughly work on revitalization of localities. But not only that, there are things that we have to do.

One is as follows: the real estate development companies -- the synergies with us. And another is entering into the medical informatics field, importance of which was recognized during the COVID-19, the crisis.

So for real estate, we have a lot of high net worth customers at SBI Securities. So managing equity is one thing. And another important asset management is in the area of real estate. So we haven't been in real estate in a large way in the past. So we thought that was missing. So we would like to strengthen the real estate brokerage business. And we would like to target high net worth customers. We have no intention of turning into a developer, and we endeavor to establish a consulting service that will meet the needs of each customer from both real estate and financial perspective. So a customer might have this much amount of money. We could consult them on doing asset management from a financial point of view. If we find good property, we could propose to them, why don't you allocate some of your money into real estate? That's the kind of advice we can provide.

In order to do this, in China, a top-class life insurance company in China, which is Ping An. We have decided to acquire shares of Ascot. Ping An is a large financial conglomerate, and Ascot is a JASDAQ listed company.

Now they are in the real estate business. They planned development of condominiums as well as offices. And they also do value projects of used property and offer real estate solution to businesses. So we would like to partner with them. And also, The Global is another company that is in view. They acquire land, and they also have a track record on condominium development. Ascot will enter a partnership with The Global. And the 3 entities will develop a new type of property business. There's various types of meanings attached to this. So high net worth customers is our target area. And it's a matter of how we can enrich our service that we provide to them. That's one aspect.

Another thing is that we will -- withdraw from Hong Kong was, what we mentioned earlier -- before, and we've received letters from people in Hong Kong. But we would like to go into Mainland, China instead to develop a financial business. So we believe that Ping An will be a good partner in this regard. And I have a good relationship with Mr. Ma. It's not just a financial business, but Mr. Ma in the area of ALA, He is a great man, and he takes a lot of ALA. He thinks it's really good, and he's also said that he's passed it out to his friends. So we'd like to develop our ALA business in China. So a deep relationship with Ping An is what we would like to develop.

Also, medical informatics is something that I felt strongly about this time around. In Japan, when it comes to medical statistics and the aggregation of data, we are quite behind. And building big data and analyzing it, this kind of method and capability, we don't have it at all in Japan. Actually, as we speak, we are behind in IT in the real estate area as well. I didn't write it in the slide, but digitalization is -- we are behind in real estate as well as medical informatics. So that's why I would like to do something about it. So it's not just about investing into Ascot, and we're not just going to offer services to the high net worth customers.

The next step will be the digitalization of real estate business. We would like to do this expression seamlessly. Of course, sometimes in front of a station, there is a real estate company and people will visit those stores. That used to be the case and also in Japan.

For real estate, one of the characteristics is that all developers are quite strong. They develop condominiums, and every part of the process is covered by the developers. So it's hard to enter this space unless it's used property, but it's fine. I would like to go into secondhand property as a business.

For medical information, we want to build big data with regards to predicting the outbreak. What kind of people with what kind of diseases are likely to develop COVID-19.

In blood types. There's a lot of research that's happening globally. It seems that type O is less likely to contract COVID and less likely for the symptoms to become more serious. And Type A is likely to get COVID-19 more. But in any case, the research leads to the same conclusions wherever you are in the world. But in any case, we want to gather an aggregate of this data and make decisions on it. But we don't have that system in Japan.

If there is a certain disease that is a problem, even if they haven't contracted COVID-19, these people may need to be hospitalized at an earlier rate. That kind of decision can be made, even more. I forgot the actress, What was her name? Because I'm not interested in that space. But -- so I forget their names easily, but the actress, she had breast cancer. And she was going through treatment, but she was at home. So this is ludicrous. If they were going through cancer treatment. It means that their immune system is very weak. They definitely need to be hospitalized so that their symptoms don't develop into serious symptoms.

If remdesivir is approved, they need to take it every day. And also Avigan. About 10,000 people are taking it. What's happening to them? What's happening to their data? It's not being disclosed. And Fujita, university, there were 75 people that were able to see that it's effective, but we're not able to tell anything from that. We're offering ALA to the farming government. And NIH is also doing clinical tests in a group of several thousands of people. So this is what we need to do. If we're not able to do this, we won't be able to aggregate big data, and we won't be able to verify the data. We need to be able to do this. I'm going to turn this into a business.

For the sake of people, I want to make this effective and something that we can use. And this is related to the revitalization of regional cities as well.

[ Takiguchi-san ] has a business called JMB, Japan Medical Business Corporation, and we have a JV with them. We would like to engage a our health account business going forward. So JMB. And we have made investments into Ogaki Kyoritsu Bank, and for hospitals and so forth. The health account business have been established as of this is one already pretty much. So what we would like to do is we want to rapidly develop this business and engage this business as soon as possible and to regional financial institutions, as an interesting initiative. We hope that they could come on board.

So the Prime Minister has been talking about self-help, mutual assistance and public assistance. For self-help and public assistance, [indiscernible] has been talking on this a lot.

So President Kennedy actually paid attention to self-help and public assistance. He said that, "You need to think about what you can do for your country, instead of just thinking about what the country can do for you." It's a famous speech. It actually comes from [indiscernible] and his philosophy.

Therefore, President Kennedy back then said that, it's one of his Japanese people that he respect deeply. And then the Prime Minister talked about this as well. We believe that the health account business will be extremely important as an initiative. We're meeting the health of people and for regional financial institutions to strengthen their times with the people. So for self-help, expenses related to one's owned medical care should be reserved in advance into a dedicated account and prepared by oneself and for public assistance. For mutual assistance, the minimum necessary medical insurance will be provided in case a significant amount of medical expenses are required.

As for public assistance, we should have efforts made to realize health account balance inherited deduction and so forth. If we -- that, if happened, we believe this will develop quite rapidly. So all of our people are insured right now in Japan under a universal medical system. But of course, it's not going to hold for a long period of time if the finances of Japan are going to stay where it is, because nursing care insurance as well as medical insurance keeps on increasing. But if you start to help yourself from when you are young and accumulate money in your account and have a health account at the regional banks that will help you. So it's going to happen in an installment basis with time deposits. And if something were to happen and if you were visit a hospital, the medical expenses can be advance -- paid for in advance manner in this capital structure that we have with Dr. [indiscernible] through MEX and MFT.

And then for users at hospitals, they won't have to wait for payments, and we'll be able to promote cashless payments. And also, we will work on collecting the advance payments for medical expenses as well. And when we start this initiative, I'm assuming that each region will have one prefecture -- one prefecture will have one regional bank that offers this kind of health account. So for each of the prefectures, one regional bank will work on this initiative. And then people will be able to accumulate their savings for these types of contingencies. Of course, in the future, it might be numerous banks per prefecture.

And for the public assistance part, we could work together with the government and lobby towards the government for something to happen. So for our financial business and regional financial institution business, we believe that this kind of initiative will connect these entities with local economies even more. So these are the types of concepts and ideas that we need to come up with by using our wisdom.

So advance adoption of blockchain and DLT, which is expected to become the next-generation core technology for the financial sector. So we would like to continue to do this through Money Tap. Currently, 38 companies have made investments. And we will continue to do the implementations. So that's where we are right now.

So going forward, money capital will be used for P2P. We could pretty much do this for free between the banks, instantaneously. Remittance fees are not expensive like it was before. We would like to make it as free as possible. And also, for P2P -- not just for P2P, but peer-to-business, P2B. Even for this area, for the connecting to prepaid charging service providers will enable QR payments and corporate remittances, and we hope that people can adopt Money Tap to do this.

So the prepaid charge operators will be able to gain more security in the services they provide by -- because we plan to implement eKYC. So for the banks as well as the prepaid charge operators, their concerns can be wiped away because we'll have eKYC. On top of the 3 new -- existing 3 banks, 3 new banks have been offered connections. So we have a total of 6 and negotiations will continue as well. The more you use this, it will become even more convenient.

So for LINE Payor PayPay from January 31 to March 31, they have already announced that they are part of this system. But for currencies as well, for Kyushu Electric and Chikuho Bank and ourself, we worked together to issue digital currencies. Dazaifu Pay or premium local coupons for Fukuoka. Ukiha City has also been issuing their own digital currencies. We would like to develop this nationwide in each of the regions of Japan. This kind of idea is something that we would like to make nationwide. I met with the President of Kyushu Electric the other day, as well as Mr. Sato, the President of Chikuho Bank, and talked about this initiative. And we were able to reach a consensus. So eventually, we'll be able to conclude a contract so that we could have a JV in place.

Furthermore, on this platform, what's important is Kyushu Electric's IT system is important, of course, but S coin's platform, we built it using Cord. This is important. And we would like to use this in a full-fledged manner. It's by R3. Also, we would like to create the next -- new next-generation financial products to establish the security token issuance and distribution markets.

So now crypto-asset derivatives and STRs are covered under the Financial Instruments and Exchange Act that became effective in May 2020. We now have good laws in place. So now we need to be compliant with law and turn it into a business. And we established a self-regulatory organization as well. 12 companies are regular members. The main ones are already members, and we also have 41 companies that are supporting members. So a total of 53 companies are currently participating.

So for the self-regulatory organization, it has been already approved of, and I will be serving as the head for the time being, and we would like to run promotions going forward. And in order to start -- owing to the mended field law, effective as of May 1, the Japan's first security token business is scheduled to be launched by using SBI eSports. So we will -- SBI Holdings will be doing the underwriting. And together with NRI, BOOSTRY will be utilized as a platform. And we plan to acquire 10% stake.

We could have done it alone. However, when it comes to these types of initiative, we believe it's a public asset. It's like our PTS. We believe it's a public asset. So we didn't want to be competing with someone else rather. We have 10%, but actually I am not satisfied, I want to increase this investment amount even more. And I think we'll be able to generate a track record. And I think going forward, eventually, we're not going to be staying at 10%.

So security tokens, we would like to continue to offer investment opportunities to general investors as well. And also the world's first digital asset bank, SYGNUM. We are planning to establish a joint fund, whether it be either decline, XRP. I mentioned earlier that everything is global. So we need to think about things in a global manner, whatever it be, for security token offerings as well. In various regions, there are various regulators, so we need to gain approval from each of the regions. But when it comes to the expertise and know-how, we will be accumulating a wealth of expertise. And we would like to gain licenses in each of the regions we do businesses in or have partnerships with entities that have a license already.

So establishing a global ecosystem to develop the security token market at home and abroad, this is what we will continue to do. Already today, for example, the second largest stock exchange in Germany, when they wanted to start up business, we raised our hand and joined forces. Switzerland, SYGNUM Banking, I had just mentioned it's a very hot topic. And also, we are scheduled to establish a new company under the offices of SBI Digital Asset Holdings to overseas security token business in Singapore.

And in the United States, there are 2 track record companies called Securitize and Templum, which we have already invested in.

Now Next is about Next-Generation International Financial Center Concept in Osaka and Kobe. Before attracting this international financial center, there are things we need to do; and that is, we need to develop and enhance existing infrastructure, the financial infrastructure.

On 1st of October, TSE had to stop completely. So they were not able -- we were not able to do any equity transaction on this platform. Why did such a thing happen? When similar incident happened in New York, New York Stock Exchange, it wasn't a big issue because they had alternative exchange to trading. TSE basically is -- has -- TSE has put in the utmost efforts to monopolize this market. And we try to break that through PTS. But then they said -- for 3 years, they said, you can't do margin trading. And I think I have told FSA that they're responsible for this as well. I said that to the Prime Minister as well. If you continue to do things like this, you will not be able to establish international financial market. You need to have an alternative market, PTS. Because TSE's market share is 87%. I don't -- how do they avoid antitrust law when they merged with Osaka?

They said, because PTS are not monopolizing the market. That's what they said, but that's completely wrong. They did not allow margin trading And the problem still exists. So it took 3 years to allow us to do margin trading, but it does not allow us nighttime. And now they said because SBI Securities is the large shareholders, they can't do training on PTS.

And I'm wondering why this is not possible when you can do this systematically automatically. And all the committees and advisers are basically influenced by TSE. So when they established a council, I think it's just a collection of people who don't really understand. And they have this big excuse that this is what the council says, advisers say, and they don't allow us to do this.

So since 2006 and 2005, I mean, there were major system failures. This is an article from Asahi Shimbun on October 1, 2020, you can see these are the major system failures that had occurred at TSE. And you can see this is TSE concentration on TSE.

How could Japan become a financial center when TSE monopolize this market. So I said this, their market share is 87%, New York is 21%. NASDAQ 19%, Chicago 16%, and others comprised 44%. And if you look at the system, so for example, virtual server, which is the entrance of the exchange, can only process about 200 transactions per second. I think NASDAQ's OUCH processes several thousand transactions per second. It's completely different. So we use NASDAQ.

In Osaka, we will be building second PTS, and we'll be implementing NASDAQ system. It's cutting-edge. And the second PTS will be ordinary shares, handling ordinary shares.

Securitize or security tokens will eventually be establish, so security token distribution markets will be established eventually. And in terms of operation and services, they lack an attitude of pursuing fiduciary duty that delay in coping with troubles. It's unbelievable that the market doesn't open for an entire day. An unclear criteria for trading suspension measures and this should be completed following on PTS services. For example, the introduction of increments after decimal points, and they're following a trend. Actually, the government's role is to allow competition so that they can actually improve the services. That's the role of FSA, which they have not done.

And as for the commissions and trading, it's quite a bit cheaper than the -- in the -- for years among the lowest in the world. But I think that this brokerage commission could be 0. And market data fee is actually very high compared to global standards. So this -- the 10,000 data -- piece of the data on the Japanese market, and they're selling this at a very high price.

In 2006, we established the oldest and largest PTS operator in Japan. 33 companies are participating in the market so far. Something like this should be developed and should be competed in the equal footing grounds. And that's the best way for fiduciary duty, whether it be institutional investors.

In U.S., they would have to do discretionary trading. And if it was basically using a higher-priced system than SEC could be -- could penalize them. So Japan is doing basically what they did in stone age. And we are currently still doing this legacy system scheme. It's impossible. And I hope that Suga administration will reform this, change this one way or another. And I think this is the outright calls, which I want to continue to insist on.

You might say Mr. Kitao, if you say that TSE, you will have backlash from TSE. The FSA will tell you otherwise. If there is something that wrong -- if there's illegal, I may do it, then that will be a problem. And I will point that out. So in order to foster competitive PTS. And I said this to LDP party as well. We need this, we urgently need to develop a new PTS in Japan.

And promoting inter-market competition for entrance of new trading facilities, regulation of the market share, for example. If trading on PTS exceeds 20% of share of an individual stock and 10% trading value of public exchange, it must become a public exchange. A normal thinking will be looking at -- we will calculate on the market share PTS divided by public exchange. I'm sorry, normally, you would calculate it as PTS divided by some of public exchange and PTS, but that's not the case in Japan. This is a foolish calculation method. And FSC Commissioner was quite surprised when he learned about, as he said, "I'm sorry, I didn't know about this." He lacked knowledge, but he was shocked. And please read rest of it.

Media need to work to make the society better. If you're out beaten by power, authority, you will lose out. I'm old, and I'm still fighting the authorities. I think you should, the media should fight back as well. So these are the adverse effects of high exchange clearing fees. If you look at JSCC's fees, it has not been reviewed since 2008. Even though online brokers are increasing and they're paying so much money. JSCC 2008 have not reviewed a revised [indiscernible]. As a result, the money they make is incredible.

And finally, at the bank level, finally, there's a breakthrough in CAFIS and Zengin-Net. Now you have to -- they need to have a breakthrough in JSCC and JASDEC. And I'm mobilizing the opinions of scholars and lawyers, and I want to bring this subject up to FTC, JFTC because we need to change this. If you look at this, if you look at the clearing commissions at JSCC, 2006 April, it's 10,000, so JPY 0.06 per JPY 1. Currently, it's 10,000 of JPY 0.04 per JPY 1. The volume discount is maximum 5%.

And JASDEC transfer fees. We've been insistent, and therefore, they have changed slightly. But the recent revision was 2016. So basically, TSE group is the only one that's making profit of this. And remember, TSE is a public company. How could a public company monopolize this?

This is the fee table of overseas. You can see it's very different. The maximum is 97%. U.K. is 97%; Japan is max 5%. It's unbelievable. As a result, what happens? If you look at the financial structure, you can see their CAGR of revenue was 3.03%. Even though operating expenses is increasing by 4.66%, they still continue to mark profit margin at a very high level. And how could have they have an ordinary profit margin of 30% more -- 30.65% recurring profit ratio? And you can see that JSCC's fixed liability is low with JPY 50.1 billion of return earnings added at the end of March 31, 2020.

Cash deposits increased to JPY 60.5 billion. Why do they need to build up so much cash?

JASDEC. Operating revenue grew at a CAGR of 4.74%. Operating expense was minus 7.15%. The recurring profit remains at 50.65%. I said to Prime Minister, the profit margin is higher than telecom companies. It's inconceivable, it's impossible, something like this should not happen. They have basically near 0 fixed liabilities. The retainer earnings has added JPY 46 billion. Their cash deposits increased to JPY 28.5 billion. Don't you think this is strange? So they need to fix this. That's important. That's number one.

And secondly, you can't spend too much time fixing this because a lot of things are moving very quickly. Japan, May 27 have entered Super City bill. And there has been a major move towards realization of smart cities. In fact, today, a management committee, [indiscernible] is part of a director, external director. And I have asked him to do this. But Hong Kong's two country, one system has broken down. And this is a great change in trend. If you look at the JETRO survey. 1/3 of the Japanese companies are considering withdrawal, downsizing in Hong Kong. And with regards to the base of operations in Hong Kong, may reconsider in the future 15% scaling down; 12.9% reviewing the function as a central base 4.5%, withdrawal is the 1.7%; altogether it's 34.1% in total.

If you look at London, because of Brexit, how many Banking institutions are leaving London? So for example, giant, JPMorgan Chase is removing JPY 200 billion in assets to U.K. -- Germany by the end of the year. EY is saying that they're moving GBP 1.2 trillion of the assets to Europe. And they go to Dublin, Luxembourg, Paris, Frankfurt, Amsterdam. The companies are transferring operations all else. This is Brexit. What happens if it becomes -- so Hong Kong becomes -- basically, there's a breakdown of one country and two system. Those are not European institutions that I talked to you and they said that everything they do in Hong Kong, they hedge it.

And it'd be nice if Osaka City does what you say, we no longer need to do hedges. China is actually a great opportunity, and you can actually gain -- leverage a opportunity in the Mainland, China. And global cities of the world, New York, London, Tokyo, there's great infections increasing, on the rise. And that itself is a risk. So we need to attract next-generation global financial center to Japan, and the timing has come.

And over the last 20 years, Tokyo, there's a high move towards attracting international financial center, but it has never realized. Now Osaka will be really putting an emphasis on promoting this. And if they can combine this with Smart City concept and if they can encourage the government to act, provide incentives, they could really realize this. I know that the billions have now been decided. Ripple is actually looking at Japan as -- return one of the headquarters, global headquarters. Now Osaka is the -- one of the birthplace of futures market, rice market commodity market.

And Dojima Exchange, I think it's time for them to convert into a comprehensive exchange. Recommendation has been made. They need to become a stock company, and they do, the commodity exchange will rise, but they need to become this and become a comprehensive exchange market. So they need to continue to add different commodities so that they can become a global market.

So for example, the other day, [ Dr. Vitran Vietnam ], he's the head of Agriculture Association. [ Vietnam ] is #2 in cocoa after Brazil, and they were talking about commodity exchange in Japan for cocoa. So that's the situation. That's where we want to bring it to reality. And what about the affinity with the Sub-Capital Vision? We're not sure what would happen to Sub-Capital Vision, but there's a great affinity with it. And more than anything else, residential land price in Osaka is only 40% of Tokyo, so you will be able to reduce real estate cost. And so if you look at in Tokyo, you will continue to have this high real estate. And you don't really need to. And as long as you have good security, you don't really have to transfer offices anymore. And I was talking to a foreigner about why don't you transfer your office to Osaka? And he was saying, "Yes, great. Osaka and Kyoto have great tourists attractions as well." So it has its charm. And also, like I said before, personal individual finance assets in Japan is JPY 1.183 trillion. Among which 54.2% is in cash and deposits. You need to change it for -- in this negative interest rate environment, the Japanese citizens' asset formation needs to change. It needs to shift from cash and deposits to pensions. And that sort of -- you need to have a tax system and that would incentivize people to make that shift, whether it be NISA. When Mr. Suga was a Cabinet Secretariat, he called the shot and launched it. And there's a lot of struggle to do this, but what happens without NISA and iDeCo? What would have happened to asset formation? It was good that he was able to realize that at that time. So now we see big shift to NISA and iDeCo.

So punchline, we really need to do something about this. In order to do this, I said that we will invest JPY 2 trillion and Asset Management Business with JPY 10 trillion, and we want to do an M&A of a fund manager who's actually good at managing pension funds. And suggestions for global financial center concept. So establishing strategic special zone, deregulation in that zone and reducing tax rates to internationally competitive levels, designing tax incentives to shift funds from cash deposits to pension and other asset-building activities, relaxing requirements of Visa. All of these can be realized on self-help basis. As long as the tax is changed, incentives are given, because you don't change the tax system, we need to use the public assistance. We talk about medical insurance and the pension, which we were able to receive 65, now their ages are raised to 70, 75. And if you have a job, that's fine, but you know it's not the case. If you look at the Japanese economic growth bridge itself, I think self-help is a very important concept. Self-help and mutual assistance and minimum public assistance, without that Japanese economy will sink. And the government is to launch funds with private venture capitalist to foster fintech industry. You have to work with private sector.

They talk about Medi and then establish all these semi-government agencies. Look at the performance. Now if you look at South Korea, they are basically transferring all the funds that's been managed by semi government agencies to private sector. Basically, if they don't underperform, they change to a different manager. So all the government needs to do is monitor They don't need to think about parachuting because all the good talents can work in private sector from early age early on, in English-speaking schools. And we need to make all the registers -- and all the government forms need to be in English as well. We need to cooperate with the U.K. We -- I think we need to align with the U.K. because there's a potential to cooperate from a geopolitical perspective, For example, the markets are operating at different hours. So we can basically build a system that is complementary. And that's what I have in mind when I established PTS. And example of how SBI Group can support the realization of this concept. So for example, very advance technology in the financial business, we have various fintech technologies. The global community appreciates that. We can attract fintech venture companies to invest via SBI Investment. So as a condition to invest, you need to come to Japan. I'm thinking making that a written condition.

And building a global comprehensive exchange through Osaka Dojima Exchange. If this becomes a stock company, I will take -- we will take 15% of the shares. And perhaps we can invite other global companies to take a stake in it.

Creating financial products of the next generation and establishing a handling market. We an established market for issuance and distribution security tokens. We can establish new PTS. We can do that in Osaka. I called up the governor of Osaka other day, he was in some sort of confusion at that point. But he said, "once I'm done with this situation, I will create a task force. I will create a team to work on this. And so Mr. Kitao, please, I need your support for that." He said that. So I think SBI will continue to have an input in attracting financial center concept to Osaka. And SBI Group corporate closely with R3 and Ripple, and which could become de facto standard of next generation. And you can see all this lineup of fintech companies that we are investing in. Many of them have gone public. Formation of global comprehensive exchange through Osaka Dojima Exchange, you can have a holding system like this. We need to basically eliminate that monopoly by JPX Group. And we need to establish financial products of next generation and the market that handles that. So for example, we can build a security token market and the secondary market in Osaka in the future. So we have 15 more minutes to go, and we can take Q&A, and I want to finish at 6:00. So if you have a question, please.