■J Trust Performance Trends (8508)
(3) Southeast Asian financial business
Operating revenue for the first quarter of the fiscal year ending 2024/12 was 11,227 million yen (up 36.2% from the same period last year), and operating profit was 1,026 million yen (up 32.3% from the same period). In Indonesia, the banking business is doing well, and the performance of service providers is also recovering. Furthermore, the performance of banks in Cambodia is also going well.
a) J Trust Bank Indonesia
Regarding J Trust Bank Indonesia, loan balances centered on large corporate enterprises and state-owned enterprises increased steadily to 250.6 billion yen at the end of 2024/3. In addition to reducing the amount of bad loans due to suppression of bad loans and collection, there was also an increase in loan balances, and the ratio of non-performing loans fell to 0.97%, which is lower than the Indonesian banking industry average of 2.4% (end of 2024/2), and it was 0.67% on the net excluding debt loss provisions. Loan balances accumulated under the new system since January 2020 have expanded to 94.28% of the total, but the ratio of non-performing loans remained at 0.13%, and almost no bad loans have occurred. It can be said that results of strengthening risk management have been shown. The balance of mortgages and heavy equipment loans is also steadily increasing.
Also, deposit balances also increased to 321.9 billion yen (end of March 2024). Meanwhile, deposit interest rates rose slightly to 5.83% due to policy interest rate hikes, but the fact that they have remained lower than Indonesia's policy interest rate of 6.00% (6.25% from 2024/4) also contributed to the strong performance of J Trust Bank Indonesia.
b) J Trust Royal Bank
At J Trust Royal Bank in Cambodia, loan balances continued to be strategically controlled, and remained generally flat at 145.5 billion yen at the end of 2024/3. Also, by strengthening collection and monitoring through auctions of collateral properties and legal procedures, etc., the ratio of non-performing loans has improved to 5.56%, and it is 2.30% on the net after deducting provisions for debt loss. Meanwhile, deposit balances have increased to 169.1 billion yen, and deposit interest rates are 3.95%. Acquisition of savings accounts is being strengthened in order to reduce deposit interest costs.
(4) Real estate business
Regarding the real estate business, J Grand, Globels Co., Ltd. and Livelent Co., Ltd. are mainly domestic, and Prospect Asset Management, Inc. is engaged in real estate business in Hawaii, USA, respectively. Operating revenue for the first quarter of the fiscal year ending 2024/12 was 4,592 million yen (up 36.0% from the same period last year), and sales increased due to the establishment of subsidiaries of Globels and LiveRent. Meanwhile, operating losses were 43 million yen (profit of 10,056 million yen for the same period last year). The decline in negative goodwill profit of 10,113 million yen caused by the merger and absorption of Mirai Novate was the main cause of the drastic decline in profit, but excluding that effect, operating losses were at the same level.
(5) Investment business
Regarding the investment business, JTRUST ASIA PTE.LTD. mainly provides management support for investment businesses and investee companies. Operating revenue for the first quarter of the fiscal year ending 2024/12 was 3 million yen (down 95.9% from the same period last year), and an operating loss of 916 million yen (loss of 204 million yen in the same period last year) was recorded due to an increase in litigation costs. In 2023/4, the Singapore High Court handed down a ruling ordering payment of approximately 124 million US dollars (about 18,173 million yen, 1 US dollar = 146 yen conversion) against the defendants Group Lease PCL and others, and interest etc. from 2021/8 on this, and the judgment was finalized in 2024/1. The company has already set sufficient debt loss provisions for monetary claims disputed in court, and since future collections will be recorded as profit, it is planned to contribute to the Group's performance by making efforts to collect them in the future.
(Written by FISCO Visiting Analyst Shigeki Kuni)