Group Management and Productivity Enhancement by Shinsei Bank Group - - PowerPoint PPT Presentation

Group Management and Productivity Enhancement by Shinsei Bank Group

February, 2018 Akira Hirasawa Chief Officer of Group Organizational Strategy Group Headquarters Shinsei Bank, Limited

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Direction of Group Management

 Establish unique and effective group governance framework with strong

sense of integrated management within Shinsei Bank Group, considering the current environment and advantages of the Group

[Current environment]

• Change in social structure and lower

margins in traditional finance business

• Change in needs, focus, and

expectations of customers

• Emergence of new players and

innovation of financial and information technologies

[Advantages of Shinsei Bank Group]

• A group consisting of extensive

sectors

• Group companies under almost full
• wnership of the Bank
• Quick decision-making by the

management team

×

Group EC1 & Important Committee

2

Consolidated corporate functions (Group HQ)

1

Cross-Group

• rganizations

(Units)

3

[Direction of Group management]

• Group integrated management

(governance enhancement)

• Platforms for business development
• Simpler organization and quick

decision-making

Medium

• to-long

term vision

(See p12)

【Group Governance Framework】

1 Executive Committee

3

Group Governance Framework I) Integration of Group Support Functions (Group Headquarters)

 This governance framework is completely different from that of all-too-common business holding

company or pure holding company. Group support functions (Corporate Function) are integrated into the Group Headquarters as a virtual company, and all businesses including the Bank will be reorganized into equal business units.

Source: P14, 2nd meeting(January 16, 2018) secretariat presentation material by CGS(Corporate Governance System) Research Group, METI

BoD BoD

Business B Business A Business C

Group Executive Committee (Group EC), Group Important Committees Board of Directors Corporate function

(Group HQ)

Company Group under business holding company

Parent company BoD BoD Corporate Function Business A Business B Business C 1 business unit

BoD BoD

Biz Biz Back Back

Subsidiary a Subsidiary b

Company Group under pure holding company

Holding company

Corporate Function Mgmt. Strategy

1 business unit

BoD BoD BoD BoD BoD

Biz Back Biz Back Biz Back

Biz Back Biz Back

Subsidiary a Subsidiary b Subsidiary c Sub-sub a Sub-sub b

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Group Governance Framework I) Integration of Group Support Functions (Group Headquarters)



The integrated group support functions (authority, operations, and human resources) are managed across the Group mainly by Chief Officers, to realize efficient and enhanced functions.

G Human Resources

G Corporate Planning & Finance

G Risk Management G General Services G Legal & Compliance G IT*

*Apr. 2018 -

Banking business (Shinsei Bank) Shopping credit & card businesses (APLUS Financial) Personal loan business (Shinsei Financial) Leasing business (Showa Leasing) Other businesses

Support function* Support function * Support function * Support function *

Chief Officers by function Group Headquarters Ｇ= Group * Each company will only maintain the functions necessary for internal control and meeting regulatory requirements.

• Convert functions into business units
• Convert each business into equal business units

through the integration

• f

group support functions into Group Headquarters as a virtual company

• Consolidate overlapping functions
• Remove
• verlapping

functions and reduce workload

• Expand room for better efficiency
• Realize room for much better efficiency by

sharing best practices and jointly implementing new methods

• Enhance functions across the Group・・・・・・・・
• Further enhance Group functions using extra

management resources realized through better efficiency

• Decision-making level
• Enable quick and consistent decision-making

without establishing a holding company and by simplifying reporting lines

Objectives of Group Headquarters

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Group Governance Framework II) Group Executive Committee, Group Important Committees

 Important matters under Group strategy are resolved at Group Executive

Committee and Group Important Committees attended by CEOs of Group companies as members of Group management team.

Committee Major purpose, etc.

Presidents of Group member companies*

Group Executive Committee President’s resolution body for daily business execution related to consolidated management

◎

Group Management & Development Committee Discusses, coordinates, and decides on the Group’s HR system and initiatives

◎

Group Compliance Committee Shares, coordinates, and decides on the Group’s compliance system and matters

◎

Group Risk Policy Committee Discusses the Group’s portfolio risk management policy, management framework, and policy for key portfolios, etc. ○ Group ALM Committee Discusses, decides policy for, and resolves medium-to-long term matters relating to ALM operation. ○

Group member companies (including the Bank) Group Executive Committee Support function Businesses Group Important Committees Support function Delegate authority Report

*◎: Attend regularly; ○: Attend depending on the agenda

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 In order to respond to diversified and borderless customer needs, establish

dedicated organization that creates synergies in business and management and fundamentally reforms Group businesses

Group Governance Framework III) Cross-Group Organization: Unit

(Mission) Review business operation systems on a group-wide basis, develop the Group’s new businesses, and consider and implement strategic partnerships in order to develop the new businesses

Group Business Strategy Division

(Mission) Build the specific Group organizations needed for executing Group business strategies and promote projects for enhancing the productivity of the entire Group

Group Organization Strategy Division

Shinsei Bank APLUS Financial Shinsei Financial Showa Leasing

Established in Apr. 2016

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Group Governance Framework III) Cross-Group Organization: Unit

 Establish “Cross-company Business Unit” consisting of cross-company

members working across multiple companies in order to facilitate businesses to fully demonstrate Group functions based on customer needs and to promote initiatives between Group member companies Institutional Business

Cross-company Business Unit

Established in

• Apr. 2017

Structured Products Individual Business Financial Institution Business Analytics

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• Move to a Group HQ system
• Reduce non-personnel

expenses

• Reform operations
• Reorganize / consolidate

businesses

• Optimize office network
• Review products & services
• Utilize AI, RPA, etc.

Initiatives for Enhancing Productivity

Enhance productivity in a sustainable manner through initiatives including

excluding redundancies, applying best practices, and optimizing resource allocation under consolidated Group management. This is a different approach from simple cost reduction. Reduce redundant costs

＜Expected effects＞

Phase 1 Phase 2 Fully review businesses

• Smaller workload

(generate extra personnel)

• Reduce non-personnel

expenses

• Expanded top line

(re-allocate resources)

• Improve servicing

efficiency

Add Value to Customers Increase Corporate Value

Enhance productivity

9

Reference

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[Reference] Specific Initiatives for Enhancing Productivity (1)

Optimize branch network Improve call center efficiency

• Planning to close Shinsei Bank’s retail and

institutional branches in Takamatsu and Kanazawa by June 30, 2018. Three retail branches (Kawaguchi, Sakaihigashi, and Takatsuki) will be closed by February 28, 2018 (The number of Bank branches as of February 28, 2018: 32)

• The Lake business will close 30 unprofitable

branches by February 28, 2018

• Implement initiatives eyeing stronger customer

needs for non-face-to-face channels and improving services by strengthening the coordination between face-to-face and non- face-to-face channels

• Focus management resources including human

resources on fields that have higher added value for our customers

• Promoting a project aimed at improving call

center operations and enhancing customer satisfaction of Group member companies

• Improving operational efficiency eyeing the

usage of RPA and AI, as well as reviewing customer support processes (printing materials, FAQ, talk scripts, etc.) and reducing the number

• f inbound calls by using the Internet and

applications

• Bank call center reduced its service hours for

deposits, etc. from February 2018 by enhancing functions relating to transactions and administrative applications via the internet including smart phone

• APLUS’ customer support reduced the number
• f inbound calls by about 25% YoY by sharing

best practices

• f
• ther

Group member companies

Retail & Institutional businesses

• June

2018 Group member companies in progress

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[Reference] Specific Initiatives for Enhancing Productivity (2)

Reorganize businesses by consolidating subsidiaries Improve housing loan process efficiency

• Reorganized businesses that are expected to

create synergies by being consolidated in the Group

• Servicer

business consolidated ALPHA SERVICER and Shinsei Servicing & Consulting

• Mortgage loan business consolidated Shinsei

Property Finance and Shinsei Investment & Finance

• Aiming to create new businesses beyond the

existing framework by fundamentally reviewing

• ur businesses from the customer’s perspective
• Established wholly-owned subsidiaries for the

two businesses to create a simple governance system

• Drastically

improved housing loan credit screening process by implementing a new workflow

• Shorter credit screening time
• Better workflow by reviewing operations
• Online group credit life insurance
• Outsourced simple operations related to

credit screening

=> 30% cost saving

• Outsourced loan remittance processing
• Started to implement RPA in credit protection

and management after disbursing a housing loan

Institutional Consumer Finance

• Oct. 2017

Retail

• Mar. 2017

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[Reference]

Summary of the Shinsei Bank Group/Medium-to-long term vision

Shinsei Bank

Bank

－

APLUS Financial

Shopping Credit Credit Card

95 %

Shinsei Financial

Personal loan

100 %

Showa Leasing

Leasing

100 %

Shinsei Securities

Securities

100 %

Shinsei Trust & Banking

Trust

100 %

Other subsidiaries: Mortgage loans, servicing, asset management, etc., which are wholly-owned by Shinsei Bank Sector Ownership ratio

Shinsei Bank Group Medium-to-long term vision (Announced in Jan. 2016)

1.To be a financial innovator that provides

innovative financial services made possible through the integration

• f

its Group companies

2.To be a financial group that achieves

• utstanding productivity and efficiency by

implementing lean

• perations

through

• ngoing improvements and reforms

3.To be a financial group which, in addition to

rewarding its stakeholders, is unified by the core values born from confidence, sense of fulfillment, and the pride created through the achievement of the above

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Disclaimer

• The preceding description of Shinsei’s Medium-Term Management Plan contains forward-looking

statements regarding the intent, belief and current expectations of our management with respect to our financial condition and future results of operations. These statements reflect our current views with respect to future events that are subject to risks, uncertainties and

• assumptions. Should one or more of these risks or uncertainties materialize, or should

underlying assumptions prove incorrect, our actual results may vary materially from those we currently anticipate. Potential risks include those described in our annual securities report filed with the Kanto Local Finance Bureau, and you are cautioned not to place undue reliance on forward-looking statements.

• Unless otherwise noted, the financial data contained in these materials are presented under

Japanese GAAP . The Company disclaims any obligation to update or to announce any revision to forward-looking statements to reflect future events or developments. Unless otherwise specified, all the financials are shown on a consolidated basis.

• Information concerning financial institutions other than the Company and its subsidiaries are

based on publicly available information.

• These materials do not constitute an invitation or solicitation of an offer to subscribe for or

purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.