SBI Holdings ((JP:8473)) has held its Q3 earnings call. Read on for the main highlights of the call.
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SBI Holdings’ recent earnings call conveyed a positive sentiment, as the company reported robust financial results, with record-breaking revenues and significant profit growth across core business segments. The recovery in the Crypto Asset Business further bolstered the overall positive outlook, despite ongoing challenges in certain areas like SBI ARUHI and South Korea’s SBI Savings Bank, as well as deficits in Next-Gen investments.
Record-Breaking Revenue and Profit
SBI Holdings achieved a remarkable milestone with a record-high revenue of JPY164.7 billion and a profit before income tax of JPY100.1 billion. The profit attributable to owners increased nearly sevenfold year-on-year, largely due to the absence of last year’s negative factors, highlighting the company’s strong financial rebound.
Strong Financial Services and Asset Management Performance
The Financial Services and Asset Management segments of SBI Holdings reached unparalleled levels, setting record-high revenues and profits. SBI Securities was a standout performer with record highs in most operating metrics, while the Asset Management business experienced a substantial 15% growth in AUM, underscoring a strong year-over-year performance.
Recovery in Crypto Asset Business
The Crypto Asset Business showed a significant turnaround, posting a profit of JPY2 billion this year, a sharp contrast from the substantial losses of JPY17.3 billion the previous year. This recovery was attributed to overcoming external failures that had previously impacted performance.
Dividend Increase and Shareholder Benefits
SBI Holdings announced an increased year-end dividend of JPY130, including a special 25th-anniversary commemorative addition, leading to a total annual dividend forecast of JPY160. This move underscores the company’s commitment to enhancing shareholder value.
Challenges in SBI ARUHI
SBI ARUHI faced hurdles with declining revenue and profit, attributed to the impact of interest rates on its Flat 35 sales. Despite these challenges, the company is strategizing for recovery through product and structural enhancements.
Struggles in South Korea’s SBI Savings Bank
SBI Savings Bank in South Korea experienced a notable profit decline due to revised criteria for doubtful receivables. However, the bank is on a recovery trajectory, achieving a record-high capital adequacy ratio, indicating a strategic response to the challenges faced.
Continued Losses in Next-Gen Business
The Next-Gen business segment remains in deficit, primarily due to ongoing investments in biotechnology and Web3-related ventures. Despite this, there is progress towards potential IPOs, signaling future growth opportunities.
Forward-Looking Guidance
Looking ahead, SBI Holdings provided detailed guidance for the fiscal year 2023, projecting continued strong performance. The company aims to exceed JPY 20 trillion in AUM by 2027 and anticipates an annual dividend of JPY 160 per share. The forecast includes significant growth across various financial services, supported by initiatives like zero commissions and the expanded NISA program.
In summary, SBI Holdings’ earnings call reflected a positive outlook, with record-breaking revenue and profit figures highlighting the company’s robust performance. While challenges persist in specific segments, the overall sentiment remains optimistic, driven by strong results in major business areas and strategic initiatives for future growth.
