Kyushu Financial : Summary of Consolidated earnings for the fiscal year ended March 2021

Summary of consolidated earnings for the fiscal year ended March 2021

[under Japanese GAAP]

				May 13, 2021
Company name:	Kyushu Financial Group, Inc.	Stock exchange listings:	Tokyo, Fukuoka
Code number:	7180		URL: http://www.kyushu-fg.co.jp/
Representative:	President and Representative Director	Yoshihisa Kasahara
For inquiry:	Executive Officer, General Manager of	Shinichi Yamakata Tel.	096-326-5588
Corporate Planning Dept.
Date of general meeting of shareholders:	June 18, 2021	Dividend payment date:	June 1, 2021
Filing date of securities report:	June 18, 2021	Trading accounts:	Established

Supplemental information for financial statements

Investor meeting presentation

: Available
materials detailing consolidated earnings
: Not scheduled (to be posted on company website	)
(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2021

(1) Results of Operation				(% represents change from previous fiscal year.)
	Ordinary income		Ordinary profit		Profit attributable to
			owners of parent
	million yen		%	million yen		%	million yen	%
Fiscal year ending March 2021	180,896		5.0	21,682		(19.7)	15,012	(17.7)
Fiscal year ended March 2020	172,140		1.0	27,033		(19.8)	18,261	(17.7)

Note: Comprehensive income	Fiscal year ending March 2021	68,705million yen Fiscal year ended March 2020 (20,805)million yen
		Earnings per share	Diluted earnings	Return on equity	Ordinary profits to	Ordinary profits to
			per share	total assets	ordinary income
		yen		yen	%	%	%
Fiscal year ending March 2021	34.12		－	2.3	0.1	11.9
Fiscal year ended March 2020	40.70		－	2.8	0.2	15.7

(Reference) Income from investments in affiliates	Fiscal year ending March 2021 －million yen	Fiscal year ended March 2020 －million yen
(equity method):

(2) Consolidated Financial Conditions

		Total assets		Net assets	Equity-to-asset ratio	Net assets per share
		million yen		million yen	%		yen
Fiscal year ending March 2021		12,204,020		683,152	5.5		1,548.61
Fiscal year ended March 2020		11,079,796		619,754	5.5		1,404.71
(Reference) Shareholders' equity	Fiscal year ending March 2021	681,254million yen	Fiscal year ended March 2020	617,951million yen

Note: Shareholders' equity is total net assets at the end of the period less non-controlling interests at the end of the period. "Equity-to-asset ratio" is shareholders' equity divided by total assets at the end of the period. Note this "equity-to-asset ratio" is not the capital adequacy ratio specified in the Ministerial Notification of Capital Adequacy Ratio.

(3) Consolidated Cash Flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at the end of the period
	million yen	million yen	million yen	million yen
Fiscal year ending March 2021	794,763	(3,590)	(5,322)	1,955,589
Fiscal year ended March 2020	195,306	(222,741)	(11,805)	1,169,723

2. Dividends

		Dividends per share		Total	Payout ratio	Dividends on
			net assets ratio
						dividends	(consolidated)
	End of 1Q	End of 2Q	End of 3Q	End of FY	Total	(consolidated)
	yen	yen	yen	yen	yen	million	%	%
	yen
Fiscal year ended March 2020	－	6.00	－	6.00	12.00	5,348	29.4	0.8
Fiscal year ending March 2021	－	6.00	－	6.00	12.00	5,278	35.1	0.8
Fiscal year ending March 2022	－	6.00	－	6.00	12.00		40.9
(forecast)

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2022

(%: changes from corresponding period of previous fiscal year)

	Ordinary income	Ordinary profit	Profit attributable to owners of parent	Earnings per share
	million yen	%	million yen	%	million yen	%	yen
2Q (cumulative)	84,600	(5.7)	9,900	(23.8)	7,100	(23.0)	16.13
Full year	168,200	(7.0)	18,800	(13.2)	12,900	(14.0)	29.32

Notes:

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanied by changes in scope of consolidation)
2. Changes in accounting policies, accounting estimates and restatements
3. 1. Changes in accounting policies due to revision of accounting standards
   2. Changes in accounting policies due to reasons other than (i)
   3. Changes in accounting estimates
   4. Restatements

:None

:None

:None

:None

:None

(3) Number of common stocks outstanding

(i) Number of stocks outstanding at end of period

Fiscal year ending

463,375,978

Fiscal year ended

463,375,978

(including treasury stocks):

March 2021

shares

March 2020

shares

(ii) Number of treasury stocks outstanding at end

Fiscal year ending

23,464,730

Fiscal year ended

23,464,212

of period:

March 2021

shares

March 2020

shares

(iii) Average number of stocks outstanding during

Fiscal year ending

439,911,548

Fiscal year ended

448,630,718

period:

March 2021

shares

March 2020

shares

Reference: Summary of Non-consolidated Results

1. Non-consolidated Results for the Fiscal Year Ended March 31, 2021

(1) Non-consolidated Results of Operation

(% represents change from previous fiscal year.)

Operating revenue

Operating income

Ordinary profit

Net income

million yen

%

million yen

%

million yen

%

million yen

%

Fiscal year ending March 2021

8,992

21.7

6,896

29.1

7,073

29.6

7,066

29.8

Fiscal year ended March 2020

7,386

2.7

5,340

0.9

5,454

3.2

5,440

3.9

Earnings per share

Diluted earnings per share

Earnings per share

yen

yen

Fiscal year ending March 2021

16.06

－

Fiscal year ended March 2020

12.12

－

(2) Non-consolidated Financial Conditions

Total assets

Net assets

Equity-to-asset ratio

Net assets per share

million yen

million yen

%

yen

Fiscal year ending March 2021

462,775

449,939

97.2

1,022.79

Fiscal year ended March 2020

459,129

448,151

97.6

1,018.73

(Reference) Shareholders' equity Fiscal year ending March 2021

449,939million yen

Fiscal year ended March 2020

448,151million yen

Note: "Equity-to-asset ratio" is total net assets at the end of the period divided by total assets at the end of the period.

Note this "equity-to-asset ratio" is not the capital adequacy ratio specified in the Ministerial Notification of Capital Adequacy Ratio.

• "Summary of consolidated earnings" is outside the scope of audit by certified public accountants or audit firms.
• Notes on proper use of forecasts, etc.

Statements about the future in this document, including earnings forecasts, are based on the information the Group currently possesses or premises that we believe are reasonable. They are not intended to be promises that the Group will achieve the forecasts. Actual results may diverge significantly from the forecasts.

Contents of Appendix

1. Overview of Results of Operations and Financial Conditions ...……………………………………P.2
2. 1. Overview of Results of Operations ..………………………………………………………………P.2
   2. Overview of Financial Conditions ....………………………………………………………………P.3
   3. Cash Flows …………………………………………………………………………………………..P.3
   4. Future Outlook ………………………………………………………………………………………P.3
3. Basic Views on Selection of Accounting Standards ...………………………………………………P.3
4. Consolidated Financial Statements and Important Notes .....………………………………………P.4
5. 1. Consolidated Balance Sheet ……………………………………………………………………....P.4
   2. Consolidated Statement of Income and Consolidated Statement of Comprehensive Income P.6
      Consolidated Statement of Income ………………………………………………………………..P.6 Consolidated Statement of Comprehensive Income …………………………………………….P.7
   3. Consolidated Statement of Changes in Shareholders' Equity …………………………………..P.8
   4. Consolidated Statement of Cash Flows ……………………………………………………………P.10
   5. Notes on Assumptions of Going Concern …………………………………………………………P.11
   6. Notes on Consolidated Financial Statements ……………………………………………………P.12 (Business Segment Information) ……………………………………………………………………P.12 (Per-Share Information) ………………………………………………………………………………P.14 (Subsequent Events) …………………………………………………………………………………P.14
6. Non-consolidatedBalance Sheet ………………………………………………………………………P.15
7. 1. Balance Sheet ………………………………………………………………………………………P.15
   2. Statement of Income …………………………………………………………………………………P.17
   3. Statement of Changes in Shareholders' Equity …………………………………………………P.18
   4. Notes on Assumptions of Going Concern …………………………………………………………P.18
8. Executive Personnel Changes …………………………………………………………………………P.18
9. 1. Representative Director ……………………………………………………………………………P.18
   2. Other Executives ……………………………………………………………………………………P.18

Attachment:

Briefing Material for FY2020 Financial Results

1. Overview of Results of Operations and Financial Conditions

(1) Overview of Results of Operations

During the fiscal year under review, which ended March 31, 2021, the Japanese economy faced a tough situation as economic activities slowed down, affected by a rapid spread of COVID-19. In the April-June period, GDP dropped significantly by 29.3% from the previous three-month period in the annualized figure, as a state of emergency was issued across the nation from April to May. Thereafter, the economy showed some signs of recovery toward the year-end as measures to stimulate demand in tourism, restaurant and service industries gained traction. Toward the year end, the number of infected people increased and regions across the nation were hit by the third wave of infection, with the state of emergency announced once again. More recently, while the difficult situation remains, some signs of recovery are seen, although weakness is felt in some areas.

Under such economic environment, the Nikkei index, which hovered at low levels affected by COVID-19, recovered to above 30,000 for the first time in three decades and six months in February 2021, as investors took their cue from the global trend of rising stock markets in a positive reaction to economic measures and monetary easing steps taken by nations, as well as the start of vaccination. The yen, which was trading around the range between 105 yen and 109 yen to the dollar at the beginning of the fiscal year under review, rose above 102 yen to the dollar amid concerns for a fresh global spread of infections as the end of 2020 approached. The currency subsequently trended downward as long-term rates rose in the United States.

Our regional economy continued to face a tough situation overall, as did the rest of the country, affected by COVID-19 in the fiscal first half, with tourism- and consumer-related sectors slowing significantly. Consumer- and tourism-related sectors recovered in the fiscal second half, thanks in part to recovery in production activity and the "Go To" campaign, the government's economic stimulus measure. Since the beginning of 2021, there have been areas remaining in tough situations, including the tourism-related sector, which slumped once again due to the impact from factors such as suspension of the Go To Travel campaign in response to a renewed spread of COVID-19. Still, signs of recovery are seen overall.

Under such financial-economic environment, in terms of business performance during the fiscal period under review, ordinary income increased 8,756 million yen from a year earlier to 180,896 million yen as other operating income increased driven by an increase in the number of subsidiaries and other ordinary income rose thanks to an increase in gain on sales of stocks and other securities.

On the other hand, ordinary expenses increased 14,106 million yen from a year earlier to 159,213 million yen, due mainly to an increase in other operating expenses, driven by an increase in the number of subsidiaries, and an increase in other ordinary expenses, pushed up by an increased provision of allowance for doubtful accounts.

As a result, ordinary profit decreased 5,350 million yen from a year earlier to 21,682 million yen. Net income attributable to owners of parent decreased 3,248 million yen from a year earlier to

15,012 million yen.

Segment Situations

a. Banking

Ordinary income increased 4,710 million yen from a year earlier to 143,752 million yen, while segment profit decreased 12,106 million yen from a year earlier to 22,668 million yen.

b. Leasing

Ordinary income increased 4,748 million yen from a year earlier to 37,683 million yen, while segment profit increased 13 million yen from a year earlier to 1,363 million yen.

c. Other

Ordinary income increased 618 million yen from a year earlier to 9,979 million yen, while segment profit increased 578 million yen from a year earlier to 1,669 million yen.

(2) Overview of Financial Conditions

In terms of the financial position at the end of the fiscal year under review, total assets increased 1,124.2 billion yen from the end of the previous fiscal year to 12,204.0 billion yen, while net assets rose 63.3 billion yen from the end of the previous fiscal year to 683.1 billion yen, driven by such factors as increases in cash and due from banks and loans.

In terms of balances of key accounts at the end of the period, deposits increased 950.2 billion yen from the end of the previous fiscal year to 9,509.3 billion yen, driven by such factors as an increase in personal deposits, while negotiable certificates of deposit decreased 59.9 billion yen from the end of the previous fiscal year to 147.3 billion yen, due mainly to a decrease in corporate deposits.

Loans rose 393.4 billion yen from the end of the previous fiscal year to 7,580.3 billion yen due mainly to increases in those to public entities.

Securities decreased 21.4 billion yen from the end of the previous fiscal year to 2,195.5 billion yen due mainly to a decrease in foreign securities.

(3) Cash Flows

Cash flow situations and main factors in the period under review are as follows.

Cash flows from operating activities came to a positive 794,763 million yen, driven by such factors as increased deposits.

Cash flows from investing activities was a negative 3,590 million yen, due to factors including expenditures for purchasing securities.

Cash flows from financing activities was a negative 5,322 million yen, due to such factors as dividend payouts.

As a result of the above, cash and cash equivalents at the end of the period came to 1,955,589 million yen.

(4) Future Outlook

The Japanese economy, while still remaining in a tough situation affected by COVID-19, is on a recovery trend. On the other hand, our regional economy remains in an uncertain situation, affected by COVID-19, although it has moved sideways overall.

Under such circumstances, in terms of earnings forecast for the year ending March 2022, we expect, on the consolidated basis, ordinary income of 168.2 billion yen, ordinary profit of 18.8 billion yen and net income attributable to owners of parent of 12.9 billion yen.

In coming up with estimates for the year ending March 2022, we assumed the following figures for the end of March 2022 and used them as the basis for calculation:

• Overnight call rate: -0.050%
• Short-termprime rate: 1.975%
• Nikkei index: 29,000-31,000 yen

Although we calculated the above earnings estimates based on information available at the time, including the impact from the spread of the novel coronavirus, we may change them depending on a variety of potential factors, including expansion of impact of the novel coronavirus on our customers. When we make changes to earnings estimates, we will promptly release them.

2. Basic Views on Selection of Accounting Standards

As our mainstay banking business operates only in Japan, we use the Japanese GAAP, at least for the present.

At the same time, we will continue a study to determine whether we need to introduce the International Financial Reporting Standards, monitoring foreign ownership of our shares and taking into consideration domestic peers' moves to introducing the standards.