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Edited Transcript of 8473.T earnings conference call or presentation 28-Apr-20 10:59am GMT

·68 min read

Full Year 2020 SBI Holdings Inc Earnings Presentation Tokyo Jul 23, 2020 (Thomson StreetEvents) -- Edited Transcript of SBI Holdings Inc earnings conference call or presentation Tuesday, April 28, 2020 at 10:59:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Yoshitaka Kitao SBI Holdings, Inc. - Chairman of the Board, President & CEO ================================================================================ Presentation -------------------------------------------------------------------------------- Yoshitaka Kitao, SBI Holdings, Inc. - Chairman of the Board, President & CEO [1] -------------------------------------------------------------------------------- Please allow me to make presentation while seated myself. And on the front line, there is the more than 6 meters -- the distance, so please allow me to take off my mask when I speak. I hesitated for a while to have this -- the financial results presentation. But as a responsibility for the company management to talk directly to the investors and mass media, I find it very important. And we are fully ready to have this meeting in a very safe way. And your temperature has been already taken when you entered this room and also your hands, I believe, are sanitized with alcohol liquid. And there are some people who cannot be here with us today, so the voices and the materials are also available on the Internet. So today, on April 28, this presentation for the fiscal year 2019 financial results, full year results, are now to be presented to you. The numbers are already known to you: up 4.7%, our revenue of JPY 368.055 billion; and pretax profit, down 20.7%, JPY 65.819 billion; and the other profit for the period, the JPY 45 billion, down 33.1%; ROE, 3.6 percentage point down at 8.23% (sic) [8.3%]. In March, market went down because of corona. And before that, the revenue and the profits were expected to be record high. However, the Japanese market as well as U.S. market and Asian markets showed rapid decline with very high volatility. Partly, that was the reason. And in our case, we are using IFRS. So the important thing is the share price at the end of March and FX at the end of March. Unfortunately, the last day of March, these numbers were not so high, lower than our expectation. And since it's the very end day, there's nothing left that we could do. Under such circumstances, fair value valuation, especially the listed shares, declined significantly. That said, it's a temporary thing. The volatility in the market by $1,000, up and down, things like that, that's happening in the U.S. market. What does it mean? Well, the ones -- the other drugs or vaccine for the corona would be -- would suffice to recover the market. It's not the real war. We still have the productivity and production. So basically, the market will recover very quickly. What is happening right now is only a temporary thing. Of course, that said, as today's newspaper reported, about 100 companies went down. The number of the bankruptcy is increasing. However, as far as the market is concerned, at least, once the lockdown is lifted or the limited outing is not the case anymore, then the market will recover. The central banks all over the world are desperate to do anything that they can do, as Mr. Kuroda of BOJ actually said so. And so what will happen after this corona, it's a different story. But some economists say that we will face with hyperinflation, but that is not my opinion. Well, that said, let's come back to this -- the company's result. The Financial Services Business, up 7.1%, JPY 246.753 billion; and the pretax profit, JPY 53.379 billion, down 20.2%. Asset Management Business revenue down by 2.4%; and the pretax profit, down 31.2% at JPY 51.1 billion to JPY 35.1 billion. Biotechnology-related Business, which is getting smaller, AKI is still there. And depending on the future development of AKI, as I'm going to touch upon later on, it is being impacted by coronavirus to some extent. And the quarterly pretax, the other financial services, the first quarter, they did very well. And the SBI SECURITIES in the first quarter, the JPY 10.2 billion was the largest among all the 4 quarters' FX business, and also the first quarter was the best. SBI VC Trade, the crypto-asset-related business, JPY 2.5 billion in the first quarter. What about banks? The JPY 1.3 billion for SBI Sumishin Net Bank. Asset Management Business, of which PE investment, down JPY 13.2 billion in the fourth quarter because of the March and share prices decline, so negative in the fair value valuation. However, SBI SAVINGS BANK did very well, with a record high for the fourth quarter. So we saw some declines in the numbers. And in the first quarter, we will see some recoveries and enjoying positive news. And as to dividends, under the current circumstances, the JPY 100, the full year, in other words, the year-end dividend amount JPY 80 per share with total share (sic) [shareholder] return ratio of 61.6%. So there was JPY 5 for the commemorative dividend last year. So in reality, it is an increase in the dividend. As to the shareholder benefit options, as I had been saying, though now we have added XRP as another option. And at the 5-ALA or the Hatsugagenmai no Sokojikara and ALA-related cosmetic series, these are all in the options from which you can make your choices. Impact on the company's consolidated financial results due to certain market change caused by COVID-19. In the Securities-related Business, an increase in volatility due to a sudden change in the market conditions positively affected its business performance. Well, the market went down, it's true, but it doesn't necessarily mean that the securities firms will have some negative numbers. Well, if the decline continues, there will be nobody left in the Securities Business. But ups and downs are the chances to make the profits for securities firms. And SBI SAVINGS BANK continued to steadily improve its performance to record-high contributions, second only to SBI SECURITIES, despite concerns of the impact of COVID-19 in South Korea. So they are growing very steadily. The PE business, private equity, as I mentioned earlier, we are incurring some losses. But as far as IFRS is concerned, banking and insurance businesses, because the fair value appraisal went down for the banking, JPY 500 million, and for insurance, JPY 3 billion. For the J-GAAP basis, they are all in positive numbers, but for IFRS, this is the result. Among the financial institutions, there's almost no other financial institutions using IFRS because there will be lots of adjustments to be made and so on. And the accounting, there will be some leniency in the accounting treatment because of the COVID-19. We understand that such arguments are happening, but it is irrelevant for us. Once we have decided to use IFRS, all we do is to apply those rules of IFRS, whether it gives us good numbers or bad numbers. As to the Bio-related Business, as I'm going to touch upon later on, it's being impacted negatively by COVID-19. So Securities-related Business, on J-GAAP basis for SBI SECURITIES, operating revenue, up 1.6%; down 23.9% for operating income; down 23.1% for ordinary income. So they had JPY 42.126 billion for operating income and JPY 42.622 billion for ordinary income. And here is the other number. SBI Holdings and Nomura and Daiwa were -- the other comparison with Nomura and Daiwa should be the numbers of SBI Holdings. For SMBC Nikko, I think this is fine because the Daiwa is banking and other businesses on a consolidated basis. And that corresponds to SBI Holdings' numbers -- consolidated numbers. For apple-to-apple comparison, we should not compare Nomura and Daiwa with SBI SECURITIES' numbers only. And the apple-to-apple, the SMBC Nikko securities with the SBI SECURITIES, to look at only the domestic numbers. SMBC Nikko's consolidated numbers include overseas numbers as well, and SBI SECURITIES do not have any overseas numbers. So SMBC Nikko's consolidated numbers could be compared with SBI Holdings' numbers. Matsui, down 33.8%, JPY 8.909 billion; and kabu.com, they are down 59%, with JPY 2.414 billion. So it's a very big difference with our numbers for the Securities Business comparison, maintained a high profit level despite the rapidly changing market conditions by expanding the customer base and diversifying revenue resources. Probably, this time, the number of our accounts had surpassed that of Nomura. Nomura's number is not yet available, but I think we can say that safely. The SBI share is dominant for the share of individual stock trading value; and the number of accounts, the 5,428,000, with deposit assets of JPY 12.9 trillion and operating income of JPY 42.126 billion. So the comparison with other online, the other companies, that is not so meaningful. There's not much competition anymore. With my strategies going forward, the difference will be even more visible and greater and large face-to-face. The entities should not feel secured anymore. And SBI's number, the 5,428,000, Nomura's number is yet to be determined. But our CAGR, 9.4%, so we can safely say that our number of account is larger than that of Nomura in Japan. So #1 in Japan, and we achieved it -- we have achieved it in about 20 years or so. Increased volatility in the fourth quarter contributed to SBI SECURITIES' financial results. So this is the average daily individual brokerage trading value, and this is the SBI SECURITIES' commissions. When the volatility goes up, the bars go up as well on a quarterly basis. Commissions for the fourth quarter, JPY 10.9 billion. And as to FX, first, second, third quarters and the fourth quarter and the operating income for FX business, dominantly, the fourth quarter number is the greater. With higher volatility, we can make very good business, and we are ready to do that. As to SBI SAVINGS BANK in Korea, so in 2013, this bank became a consolidated subsidiary of SBI Holdings. And the other -- that was -- they had the higher bar for FY 2014. And this is because of the other big reversal of the provisioning, with the market condition improving. And with this space, we achieved record high one after another, year after year, KRW 198.1 billion, with the A- rating. Several times, I've thought about changing the status of this bank to the regional bank. In 2 years' time, probably, the payout of dividends will be visible, and that's what we would like to achieve. And as to SBI SAVINGS BANK, and this is the nonperforming (sic) [performing] percentage. It used to be 51.6%, but it went down only to 2.3%. And the accumulated performing loan achieved KRW 7,596.6 billion, or about JPY 668.5 billion. So constantly, we accumulated performing loan. So in analogy, the regional banks, we can leverage our know-how and the management sources to revitalize regional banks. Shimane Bank, and also some other entities where we have a very small stake, basically we do not take initiative. It is those regional banks which make the initiatives or decisions, but wherever we are engaged, and then we find some difficult operation. The Shimizu Bank announced their revised numbers today, actually, so they were very much impacted by the asset management activities. And we were not involved in the activities of the asset management, but those banks are incurring some decreases in the asset management. And the FSA is saying that those regional banks should outsource their asset management activities, the Commissioner Endo has been saying repeatedly. And so I think that, that will be the direction going forward. Shimane Bank is working with us for asset management, and there will be a big difference to be seen in the future with other regional banks. The PE, private equity business as well as the banking and insurance businesses, have taken fair value losses for January to March 2020 mainly due to a drop in the market value of their held securities. And this is the other PE, the JPY 14.4 billion. They had a decrease. And unlisted securities, there were no significant movements, about JPY 1.1 billion profit gain. Unlisted securities have shown a decline in the number of IPOs rapidly. And there were movements towards financing of the new funds. However, they had problems in fund rating. So the business itself had been expanding, but the upgrading -- minor upgrade of fundraising used to be possible, however, it has become more difficult. I believe that when the market improves rapidly and settles, then I think that this situation will go away. During the fourth quarter, the valuation loss were accounted for in major issues of stocks. The major one was TP Bank. JPY 3.1 billion valuation loss was recorded because of the drop in share price and Vietnamese currency down, depreciated very much. Given these situations, we were hit like this. But fundamentals of the business are growing, as you can see at the bottom. Therefore, the impacts by coronavirus in terms of the number of patients infected by the virus is quite limited in the country. Mortality is also low in the country. Therefore, because of this, valuation loss of JPY 3.1 billion was unexpected. And Shinsei Bank, we had a 4.3% stake. During the quarter, from January through March, stock prices declined sharply and valuation losses amounted to JPY 8 billion. Temporarily, and for the purpose of averaging, we increased the shares to about 10%. The losses were reduced to about JPY 1.8 billion. But in terms of the voting rights, our stake is exceeding 10%. Therefore, the Shinsei Bank also has to make release on that. We are currently the second largest shareholder of the Shinsei Bank. The largest holder is government affiliated and the second one is ourselves, and the third ranked is also affiliated with government bodies. Other than that, Kiwi technology, JPY 1.6 billion in Taiwan; and NFC Holdings with JPY 1.3 billion loss. With these, because of these impacts by the listed shares, we had the impact of JPY 23.3 billion impact. So that is to say, we didn't have any fundamental problems in our business. In banking and insurance businesses. First, in banking. As I said earlier, a JPY 500 million loss was accounted for in the valuation of the securities. The equity method investment income based on an IFRS basis was reduced by 19.4% to JPY 5.845 billion. So this shows the drop significantly. But when it comes to accounted on a J-GAAP, which will be available on May 15, probably the financial results will exceed the previous year. So the landscape may be different significantly between the IFRS-based and the J-GAAP-based results. In terms of the number of accounts, steadily growing to 3.96 million (sic) [3.93 million]. And also, the deposit balance is now JPY 5,507.7 billion as of the 15th of -- 26th of April. So we have been doing quite well. The mortgage loan, housing loan balance, JPY 4.382 trillion; and housing loan handled exceeded JPY 5.5 trillion as of the 28th of November 2019. And therefore, we have been one of the leading provider of home loans, housing loans. And next, insurance business. Based on the J-GAAP and insurance consolidated, the ordinary revenue increased by 6.1%, ordinary profit increased by 10.7% to JPY 2.360 billion. Profit attributable to parent of -- the shareholders of the parent company decreased significantly because of the Group Credit Life Insurance sales increased significantly. And also, the provision for reserve for dividends of policyholders increased. And the net -- the level of net income attributable to shareholders of the parent company remained low as compared to ordinary income because this had to be accounted for before -- on the level of before ordinary profit. And also, the SBI Insurance Group's CAGR was 20.3% because in-force policies increased, exceeded 2 million. So in our -- we believe that we can get over this situation over time. And we are slated to acquire several companies. So in the insurance business segment, we were the latecomer into the segment. We started the business as the last one. But in the insurance business, not only through organic growth but through M&A, so we are thinking about increasing our business. In Biotechnology-related Business, SBI Biotech, SBI-3150 for -- as a treatment for autoimmune disease treatment, that has been licensed out to ASAHI KASEI PHARMA for a total of 4 out-licensed pipeline drugs. And Quark Pharmaceuticals, the AKI prophylaxis, this Phase III clinical trial was expected to be finished by the end of this April. However, because of the COVID-19, the trial could not have been completed, so Biotech turned into black ink. And the Quark Pharmaceuticals, because of the AKI clinical trial, that has to be completed first. And others are expected to be come back, and -- but we -- these others are discontinued. Therefore, we are not making significant impact on investments. And once AKI's development is completed, we are going to sell, and we are going to divest this Quark Pharmaceuticals. Regarding the Kubota Pharmaceuticals, shares have been already sold off. I know that the share prices are gradually increasing, but we are going to disconnect from them, and the selection and concentration. ALA-related business, that has been developed by ourselves and grown by ourselves, we are going to put much focus on that and SBI Biotech as well. SBI ALApromo, for the 3 consecutive years, we have been able to achieve the full year profitability. And photonamic as well, we could achieve the profitability on a full year basis for the third consecutive year. Under the coronavirus pandemic, regarding the AKI clinical trials, 980 subjects have been administered with the drug but, out of which, 169 people had to be followed up on day 90, including the blood withdrawals. But those patients could not come to the clinics or hospitals, therefore, we couldn't progress. And there are still remaining 62 patients that had to be administered on top of the 980 subjects. But to complete the clinical trial, 980 subjects have been already administered. But still, we have remaining 62 subjects who are yet to be administered, so we have to wait until these will be administered. And then we can expect the clinical trial -- Phase III trial will be completed, and then we will summarize the data for getting the approval from FDA. Now we reshuffle the personnel as the CEO was changed. Danny, Founder and CEO, was changed and replaced by Gal Cohen, who is going to serve as new CEO. He is a Jewish, and he obtained the MBA at Tel Aviv University. And he had a well -- much experience. And so Kubota's share value will be lost, and JPY 1.352 billion will be gone. And we believe that these factors will work positively and these factors will be accounted for. But during the first quarter, because of the impact by coronavirus, it will take longer time than we expected, but still reducing -- we are trying to reduce the headcount. Alliance strategy is being advanced proactively. I believe that this has been widely covered. We are working with SMBC Group to form basic agreement on strategic investment and business alliance initiative, and that has been released on -- today. In various ways, there has been approach from the other party. And we thought that with this partner, we thought we would be able to do many things. So we concluded that we would have a partnership alliance with them. And the investment into Money Tap and SBI R3 Japan and a capital participation has been already considered in order to realize the trade finance business in Japan. And there will be some personnel exchanges with members of the Board. And there are various relationships with SMBC Group, particularly in insurance companies and trading houses, trading firms, and we can work with them as well. If we were working alone, I believe that we do not have very strong ties with trading firms. I know that I have a lot of connections with individuals, but company-to-company, business-to-business relationship is not so strong. So in order to start a new relationship in business, the companies which have a long relationship with those companies will facilitate the process of doing business with those new customers. And this time, smartphone securities and mobile securities, SBI NEOMOBILE had 20% stake that will be acquired so investment will be done. And regarding the face-to-face securities business area, SBI MONEY PLAZA, there we'll consider investment into this entity. In other words, regarding the face-to-face sales and marketing, personal -- personnel support shall be provided by them as well. Although we are trying to hire personnel and opening the MONEY PLAZA outlets, there had been a lot of projects for opening new outlets. Therefore, we are not able to catch up with the demand for recruiting new people. So I hope that they will provide a support that will be very helpful. In terms of NEOMOBILE, what is most important is the solicitation of customers, how we can expand the customer base. That is the challenge for us. Therefore, we would like to see a further cooperation with them in that sense. And in mobile securities area, we believe that there is a great potential to be dominant player. Although it was not included in release today, but I believe that if we do this, I know that these potential ideas will increase the customer base significantly. And Takamura is working through negotiation and consultation with the other party. In investments, SBI Investment, 4+5 Fund, Industry 4.0, Society 5.0, and so commonly named as 4+5 Fund, there will -- SMBC Group will also participate as a limited partner. Regarding regional revitalization, what -- we are creating a newly established company where they will put in capital in the various projects. Expertise and know-hows in financial services will be provided by SMBC Group. In the securities systems and securities affairs area, both parties will continue to consider potential collaboration in system -- security systems, which are being dealt by the subsidiaries of the systems vendor and subsidiaries of both groups, and these can join. Not only these groups, but also maybe we can invite other companies, such as Daiwa Securities. We can work together in this area. That can be applicable to various other areas. We cannot have a turf war among players in the industry. I think we should not go into such turf war. And as you can see on this slide, the strengthening of capital relationship between the 2 groups at the bottom, and the other party offered to consider, thus far. And in principle, in my opinion, by going through these initiatives, we would like to see whether we have a good chemistry, whether we can have a win-win relationship between the 2 groups. And based upon which, we believe that we have to consider the last point on the screen. And our main bank has continued and will continue to be Mizuho Bank. So I have a strong sense of obligation to Mizuho. So I don't want to give back our betrayal to the good offices provided by Mizuho so far. So of course, I needed to make a rapid decision. And under the leadership of Ohta-san, and in our group as well, we needed to exhibit strong leadership to consolidate our group as well. Both parties will do this. And only after that, we will be able to realize this. When it comes to large corporations, there is a lengthy processes of decision-making in many cases. Therefore, having said that, SMBC, led by Ohta-san is different from that. That is my impression. Without that, I don't think that we would have been able to have such a wide-ranging partnership and alliance with them. It would have been pretty difficult. Of course, there has been a long process over many months, several months, to discuss with them, but we have been able to reach agreement as such. So the planning -- corporate planning and the research department people of SMBC Group may have had a lot of difficulties in the process, but we could reach conclusion, agreement. So far, so good. Win-win relationship and business can be realized through this very favorable alliance in business and capital alliance. I believe this will be very strategic. Strategic, meaning going forward in the not distant future, the landscape of the financial services sector will be envisioned in order to prepare ourselves to make groundwork. And that is a good match for this alliance so that, both parties, big fruits will be obtained in the future. So I believe that this very strategic capital and business alliance will be helpful in doing this. So let me skip this because this is what I have already mentioned. In the regional revitalization collaboration, SBI Regional Revitalization Services will be established newly and greater than 51% on the bias, but they will invest in this entity as well. Not only investment but also wisdom and knowledge, expertise will be gathered in order to promote the regional revitalization. Many investors are expected to participate in this. And many companies, including large corporations and ventures, those companies will gather what they have as wisdom in order to tackle the problem of regional revitalization in a fair manner for the benefits of the state as well as the public goods. And that is the belief we will keep. I believe that this work will bring about the benefits for all the participants. And to demonstrate that, so we will be forming different alliances with various companies in order to contribute to the revitalization of not only regional financial institutions but also regional economies to proactively contribute to regional revitalization. So within these last 3 years, I have spent a substantial amount of time to build relationship with the regional banks. You knock on the door cold, and they will not be able to trust you. SBI. But it's taken 3 years, and we took that time to develop trust. We were very sincere. We listened to them and discussed how -- what can we do to solve their problems. As a result of that, it's a positive for SBI Group, and it's positive for the regional banks. It's a win-win. These are the group companies that have been involved in this initiative. As you can see, there's many, and this has led to improvement in earnings, profitability and reductions in cost and revitalization of regional financial institutions. You can see so many group companies are involved and are supporting our vision of financial institutions comprehensively. As a result of that, we are also benefiting from SBI SECURITIES. We have, for example, 39 companies. So -- and so altogether, 40 that will be added to this. There are no other companies that have been able to form an alliance in brokerage business with 40-some banks. So as a result, our assets under management and also in terms of number of accounts have increased this much. If June 2018 is 1, then you can see that customer deposit assets increased by 12.4x and number of accounts by 5.5. And also, the business or the financial institution sales department have increased again. If March 2018 was 1, you can see it has increased by 2.1. And as for new issues and existing bond transactions, if March FY 2017 was 1, then it's 3.1x today. So whether it be equity trading or new issues and existing bond transactions, they have contributed to helping us expand our brokerage service. This is true with other businesses like MONEY PLAZA as well. You can see that asset under management, for example, compared to October 2017, you can see the customer deposit assets increased by 50x at the co-managed shops. Or even if you look at number of accounts at co-managed shops, if 1 in October 2017, then you can see that it has multiplied enormously to 52.7x. So Shimizu, CHIKUHO and Mie are asking us to do not just 1 branch but 2 branches. So that's why you see this increase, and there are 2 others that are committed to doing it. And what are the customers of the regional banks that are starting to get in touch with us? It is the corporate customers and wealthy individuals. And they are beginning to open accounts rapidly. Even with SBI Insurance and SBI Life Insurance, if you look at total number of contracts from partners, and if March 2019 is 1, then March 2020 was 6.3x. If you look at the number of applications for Group Credit Life Insurance, if anything gets below ordinary income, they will be treated as expense. So we're looking at the above the line, but it's 97,030. So to actively efficiently contribute to regional revitalization, we will newly establish a management company, Regional Revitalization Partners, and we will have 2 new subsidiaries under that. So we are starting to take some actions. Regional Revitalization Partners, JPY 500 million in paid-in capital for establishment. And we may increase our capital as business progress. Why do we remove our name SBI? Because this is company that is not trying to make a lot of profit. It's actually a planned -- company that presents and plans and proposes strategic guidelines for promoting regional revitalization and able to provide inputs and advices from a broader perspective. So we will have 51%, and we will have many people participating, especially Board members. So we will not decide on the percent -- number of Board members depending on the equity stake. So SBI Regional Revitalization Services has JPY 30 billion in paid-in capital and JPY 10 billion for Regional Revitalization Investment and Loan Co. So it's a collection of everyone's wisdom. And we bring together our ideas in this alliance, and we will implement specific measures. Functions provided by SBI Regional Revitalization Services. One is providing financial cloud that change -- help us change fixed system cost to variable cost, high-performance AI screening service, a white label regional currency issuance, ATM channel collaboration solutions that advances management efficiency. So robotics, process automations, RPAs. So there are different functions that will be delivered. As for cloud, we will be, in principle, be using Amazon's AWS. And we have our API platform in order to connect our SBI banking API. We will be using an Israeli company's open legacy system. So whether it be Hitachi or IBM or Fujitsu, regardless of the brand and the accounting system, they will be able to use and connect with us. And we will be carrying out high-performance AI screening service with Hitachi. We will issue digital currency. And we did this with CHIKUHO TOKOWAKA Coin, but we will be doing this sort of initiative with other regional banks. The name will be the same, but it will be a white label, and they will be using the digital tokens on Corda. So the Cordas and R3 people will be supporting this initiative. And for ATM, we will be asking [Nakomo-san] from ATM Japan to assist us in this. One of the problem of ATM is if you have a different passbook, you won't be able to use it. So in our 4th megabank concept, anyone who's agreeing with our concept, then they will be using the same ATM machines. We will commonize the passbooks. That's most desirable. And ATM needs to be overhauled because there'll be new bills that will be printed. And therefore, this is a good timing. And we'll be considering establishing a joint ATM operations center which runs around the clock, 24/7. And provision of measures to strengthen the profitability of regional financial institutions. Everything that I have discussed already is about improving our profitability, but what we think is probably the weakest among the regional banks is their ability to manage assets. And especially, the lower-ranking regional banks have lack of capabilities in asset management. So in case of Shimane Bank, they have basically entrusted to us the management of about JPY 62 billion. In the past, the real yield of an asset used to be negative, but now they became positive. So in this way, the balance of assets under management exceeded JPY 300 billion in March 2020. It's JPY 365.4 billion actually. It will soon quickly exceed JPY 400 billion. And if you add bond investment management, it's JPY 723.5 billion. And SBI Asset Management Group's private-placed mutual funds topped the list in terms of net asset inflows. We have exceeded Daiwa Asset Management. They probably have Japan Post money in there, but we have surpassed them, and we're now #1 in ranking. And we believe that we can continue to see capital inflow in line with the increase in asset management demands, especially from the regional financial institutions. So we would like to -- the biggest problem is because even if you look at the records of FSA, it's the inability to manage their assets. If they do a loss cut, they become complete loss making. So everything becomes in red ink. That's the situation with -- there. And they chase after others in terms of investment, and they have really poorly managed portfolios. So that's the case we saw there. So by streamlining that, really restructuring that, that's really important. And also, in terms of human resources, this is not just about regional banks, but it's also the regional companies as well. They need to have specialized science professionals, science experts. So for example, computer scientists, in the age of AI, such professionals will become increasingly important. And regional banks and regional companies are not able to hire them. So with SBI Neo Financial Services and with the SCOPE of Astamuse Company, which is a platform for hiring specialized professionals, we will be able to promote employment as well. So one other regional issue that -- issues at the regional community is this hiring of science professionals. And also, among the venture companies that we work with very closely, there are several things, companies that are very -- probably will be very useful in revitalizing the regional communities, and we will be inviting them to different projects. Now this is about Google, the Google Japan, their digital skill training program called the Grow with Google. With this, we are jointly having seminars in regions to raise digital literacy. So for example, with CHIKUHO BANK and Kurume City, we are planning to have 6 seminars with Google. But unfortunately, because of the coronavirus, it is postponed. And we did have a seminar for Shimane Bank employees once. So various seminars with Google that will be taking place to improve the digital literacy in regions. It is important or it is even more important to have such improved literacy than to hire the other experts. And those -- the banks have been doing business only in the region, but they can expand their business. For example, the confectionery, they're using the free-of-charge EC site who was developed to support nationwide the sales activities. And no monthly charge for that using such tools. Or the other, we are also working with the TRANBI for the business succession and advisory work to match sellers and buyers. And it's not only about matching. We need to have a fund on our own approximately JPY 100 billion in total, so that we can help those -- the small businesses in regions to find their successors. And those entities with good business but no successors should be helped that way. Or we can match such company with other -- the larger companies and the venture companies are also in the SCOPE to collaborate with us to further develop such regional small companies so that they can continue their business. In March, as -- first fund that we worked with the TOKUSHIMA KYOWA that we already invested in them. And as to real estate, the financial institutions that have real estate or the general corporations have some unused real estate, and we need to use such real estate in a more effective way. And the -- for that purpose, we have -- we will have this consortium, and we have this set -- the other companies participate. And as to Balnibarbi, it's a very interesting company. They are good at inviting restaurants and the other cafes to revitalize the abundant area with hotels and shops to raise values. For example, Minami-semba or -- in Osaka; Kuramae, Tokyo case studies here. And they are not necessarily abundant, but they are now attracting more and more people. And the case study 3 is Awajishima, Hyogo, which was facing depopulation. And now look at them, they have changed so much. In the Shimane Prefecture, there is an interesting region, and the Balnibarbi will visit that region as well. The one state -- the coronavirus problem has been solved. And this is the case to bring more Japanese products to China. We invest in a company called Inagora. It is the unique cross-border EC platform, specialized in Japanese products for Chinese customers. Some unique products are involved. For example, the Shiseido products and very famous companies' products have been bought by Chinese consumers. But now they know that there are other less-known products in the Japanese regions that they would like to buy. And the Chinese -- the visitors in Japan would like to repeat their purchase. And there are 70 million EC users in China which we would like to leverage to sell the products produced in Japanese regions. As to electricity, Hikari Tsushin, that has the local companies and the local electricity distributor, and the SBI Group will invest in that distributor. And the local prominent companies will also do so for the other solar power generation and wind generation. And the electricity will be provided to the shareholders of the distributor at a very reasonable price, cheaper than the normal rate. Or this is the example of a company called TBM. Currently, the marine plastic waste is a big problem. And this company is developing the new material to replace plastics. In Japan, there are many local plastic plants that are molding plastics. So instead of plastics, this company can provide limestone material, which can be used for the paper and the cups. And actually, my name cards are made out of this limestone material. It's a deal for many because it's water resistant. An annual report might be a bit too heavy, but lots of improvement there as well. In Japan, material recycling rate is only 23%, much lower than Western countries. So we can use existing molding equipments to produce some new products. Nowadays, the masks are in shortage, and the company like Sharp develops masks. That's a new initiative. And actually, today, I received an e-mail from a company executive, a venture company, and he is taking initiative to put together the power of other ventures as well to do something new. So it's not a good thing to be dependent on just one country for the supply chain. Japan has been buying more than 90% of masks, and its material from China. And it should not be that way. After the corona -- post the corona era, that will not be the case. Japan has to develop the essential products and materials and the masks and other protective equipments are part of the essential products. And if you give the patents too easy, that will not be good. And after the patent period is ended, the entity or the other companies start to sell the similar products. And what is happening in China is that there's this medicine, which is authorized in China, and there's a thesis about this medicine. Actually, this thesis had to be withdrawn by the government to avoid other countries to be interested in that medicine. What -- this medicine -- rather, this thesis has now been revived. But the other point here is that, in China, there are so many patients and people who took this medicine, and it is working. And why not in Japan? Why not the same product medicine could not be used in Japan? More than 2,000 patients have used this medicine, and they are recovering. I wrote about it in my blog today. The Japanese Health Ministry should not stick to existing old rules. We are in the world with an invisible enemy. And as is the case with physical wars, that we should have the national orders. And we need to have law to make that happen, especially for the area of medicine. The other day, the Nikkei newspaper wrote about Japan, which might develop medicine fast but approve it last. And sometimes, Germany and U.S. start to use the medicine before we do. That should not be the case. And here, it's about the commercialization of technological seeds based on researcher data and the networks of businesses, and the good results achieved in the regional areas that cannot be fully utilized or leveraged. And for that, we need to put together the human resources, researchers and the other scientific seeds that should be well connected with the chances of commercialization. A good example here is a company called Cyfuse, which is based on the technology developed by Dr. Nakayama, who used to be working at Kyushu University and now at Saga University. It's about the development of regenerative medicine for internal tissue and organ regeneration. For example, using this technology, you can develop artificial blood vessel. And Cyfuse is based on the combination of ideas of Dr. Nakayama and the Shibuya Corporation. It's a small company, but they had good ideas. And I think that Cyfuse is going to be listed. It's a very wonderful example. We'd like to see more of examples like this. And we are more than ready to make investments in such other initiatives, and we can work for listing involved entities. Now about the other SBI Regional Revitalization Investment and Loan. That will contribute to regional revitalization and identifying and providing high-yield investments and loans, both domestically and abroad. So there are many areas which would contribute to regional revitalization, and we would like to make investments in such areas so that we will have more innovation and economic revitalization. From the perspective of venture capitalists' eyes, we'd like to do more of these initiatives, inviting other participants as well. The other day, in Kobe, Kimura-sensei's laboratory, they came up with this idea to -- something to replace the mammography. So it is not painful as mammography. And sometimes, it is rather difficult for Japanese women to be detected with the cancer -- breast cancer. And the Miyako Capital is one of the investors in Kimura-sensei's initiative, and we would do so as well. And there are more and more opportunities that we would like to invest. In the other (foreign language) program, I introduced some -- the other new companies, existing companies, which could contribute to this country. And there are many more investors who would like to invest in those companies, which were less known in the past. And we would like to develop these businesses so that they can prosper. And overseas, and of course, there are some other requirements to be met. And we would like to have this investment and loan scheme, which includes -- which could include regional banks. As shareholder, or they don't need to be the shareholder, if that's their choice, they can participate even if they do not invest. Overseas, you can find very high yield. SBI Royal Securities, more than 8.5% yield can be achieved. Or the SBI LYHOUR BANK, therefore, the USD-denominated, in Cambodia, yield of 5%; for Japanese yen, 2%. And in the case of Vietnam, TP Bank, the 7-year term, 9.5% yield. And of course, the regional banks cannot make -- directly invest in these entities. But the other, they can participate in the other investment opportunities with others in certain scheme and enjoy high-yield investment opportunities. It just happened, last week and this week, the Sri Lankan bonds producing more than 28% or around 30% yield. We have bought 2 securities firms in Sri Lanka. So the USD-denominated vehicles are available in Sri Lanka. And Sri Lanka, itself, will not go under. It could be a very rare event, unless there is a big war or something. So we have invested in Shimane, Fukushima, CHIKUHO and Shimizu banks. This is different from the three-party scheme that -- this is SBI Holdings' initiatives alone. And for that, we are going to establish a new holdings firm. It is a new holding company, 100% owned by the SBI Group, SBI Regional Bank Holdings. And those regional banks' shares will be transferred to this holding. And it is 100% owned so there will be no problem with the other Japanese FSA. And of course, the good know-how and services from other initiatives could be used in these 4 regional banks as well. These 4 regional banks would like to ally with SBI Group. And we will expect 6 or 7 more banks to be under this other holdings. So it's -- so the investment will happen at the new holding -- the other company. The SBI Regional Revitalization Services and SBI Regional Revitalization Investment and Loan will work together for the 4th megabank concept. So this is a separate unique scheme. And this is about the 4th megabank concept that we have been talking about. And this is the other basic approach. Though we do not stick to the size of stake, the important thing is that the other partners should have a strong will to better their business. And the management and the employees should work together to achieve their goals. And more than 10 banks are going to participate in this concept. So we need to mutually help each other. And of course, they would like to help themselves as well, but we need to mutually help each other among the participants in this concept. So based on that, we can work together. And as to the shinkin banks and credit cooperatives, which were not in the picture before, now they are in the picture. Shinkin banks and credit cooperatives, they have a very strong relationship or alliance with regional businesses, especially small ones and providing very good services to those businesses. So we would like to help them as well. We'd like to work together with them as well for regional revitalization. And if shinkin banks -- if any shinkin banks are in the difficulties, we can help them, or shinkin bank and the regional bank could be integrated into one. And here is the list of the initiatives taken with Shimane Bank. They are changing greatly. And as to their earnings forecast, they are upwardly revised from the previous forecast. And especially for the second half, the results, namely regarding profits, will be positive. And the net core business, the profit will recover very steadily. The SBI SAVINGS BANK in Korea, they were on the verge of bankruptcy. And now they have become the #1 bank in Korea in such a short period, contributing greatly to the consolidated basis. Second to -- only to the SBI SECURITIES. And so such bank, which was on the verge of bankruptcy, is getting better and better. If we could do that overseas, though, we can of course do that in Japan. And this is the Fukushima Bank, we have 19.25% of the stake in the bank. And as to the secondment of the other executives, there were -- they asked if it's possible for us to send some other executives. And we can recommend some people, but we have no intent to force them to accept the people from our side. And we would like them to do what is most suitable for the Fukushima Bank itself. And this person that I would like to recommend surprised the Fukushima Bank people. I do not announce the name of the person to be sent to the Fukushima Bank to advise the management of the bank. So if they -- if that's what they want us to do, we can either help them. But if -- it should be their initiative. The -- if they want us to help them, we can help. And as to these 4 banks, regional banks -- Masahiro Yasouka that I like very much. His book was published by the Chichi Publication. And we sent the copies of the book to the -- those regional banks. And the Ninomiya Kinjirou's movie that touched me greatly. The copy of the video was also sent out to the regional banks as well as to the head employees of our own entity. So it's to change the mindset of the people. It's very important. Something superficial only cannot change the world, cannot change the society. We need to start with the minds of the people. Sometimes I write books. And sometimes I have my employees write an essay about the books that they read. And we have some arguments. Some people might not be in agreement with my ideas. But I will continue to do what I think right, and that is our long-lived corporate culture. Even after I leave this SBI Group, I hope that will be remaining with the other people at the group. It is an analogy, I would say, like the classics that remain with the people, generation after generation. And though, in our case, we made lots of efforts to lower commissions, lower fees, and that is for the good of the society, for the profit, for the benefits of the investors, for the people living in the society. And that kind of thing should be well understood. So that is the mindset that I'm talking about. Just the injection of the capital would not change anything. So the co-managed -- the branches with CHIKUHO and with Shimizu are the other 3% stake of total number of outstanding shares of CHIKUHO through Mizuho, not directly. And Mizuho agreed to let us do that, to have 3% stake in CHIKUHO. We provide various ideas. Of course, we offer concepts. And also, we can analyze the current status, but they are the ones who make decision. That is our stance. The new bank initiative on unbundling the banking functions and providing them to business partners is steadily progressing for IPO. And the lead manager is not Daiwa Securities, and we are going to ask -- have Nomura Securities as lead manager this time. And we are preparing for IPO. This new bank concept or initiative, one of the leading new banks in the world towards which we are steadily growing. And the banking functions, major functions, deposit, payment, loans and other, there are 300 functions played by banks. And that will be all unbundled. And as an API, these will be coordinated and provided, respectively. In today's newspaper, JAL appeared. At last, JAL is later to start banking business. That is what has been reported in newspaper. We are going to support them so that banking functions will be held by JAL. With various companies, we are going to form partnership and expand it further. This is about the JAL NEOBANK, which was carried in Nikkei newspaper. I thought that this should have been much bigger article in the paper, but the SMBC's article was too large. Therefore, JAL's article was made so small. And I think that -- I think -- I feel sorry for them. So maybe after this announcement, but there is nothing we can do about that. Hikari Tsushin as well, which has a very solid and a powerful customer base in SMEs. Therefore, through partnership with them will help us to create innovative new businesses and also leading to the rejuvenation of the regional economy. And Z Holdings, our alliance with Z Holdings Corporation, which is about to be started on a full-fledged manner. And this will be more showing in next fiscal year. And also because of the financial announcement, we are not able to disclose much. So we have been quiet so far. But with the conclusion and agreement, and once JFTC approves the acquisition, and then the line -- so what about the line? What to do with the line? And also alliance with Z Holdings, in order to provide financial services, how such services should be covered? For the time being, provision of Flat 35 through the Japan Net Bank. Currently, the majority is held by Yahoo! and the remainder is held by SMBC now. With this bank, the Japan Net Bank, we are working with them. So such relationship with bank has been established. And in the securities side, and we are working towards the Neo-securities initiatives. My definition of a Neo-securities initiative is waiving online trading commissions and partial costs that investors currently incur. These will be made to 0 in about 3 stages in over about a time line of 3 years. And in various ways, the commissions are made to free of charge. And the next stage is to charge no fees for stock trading by Neo-Moba. That is our plan. Inclusive of all these, there are various new initiatives. And then SBI Securities and Neo-Moba will be able to gain earnings. Already, as you can see, here is the list of various initiatives to embody such realization of our profits. This time, in the securities business, SBI FXTRADE and SBI VC Trade, these are earning great -- large profits, and establishing a business structure that is less dependent on stock brokerage commissions. And steadily, such business structure is being built in the cryptocurrency area. And by nature of our business, such business has to be deployed globally. So in both ways, when it comes to our M&A strategy, we have to consider and introduce -- promote global M&A strategy. Wherever we go, Bitcoin stays Bitcoin and XRP stays XRP in which countries -- in whatever countries in the world. So like this, the ratio of the trading commission in our profit shall be decreased. And from March 30, 2020, Yahoo! Japan ID is available. That has already started for log-ins to SBI SECURITIES' accounts through this. And the -- we are expecting to improve the customer benefits. And probably people are saying that we are conscious of Rakuten. We are trying to address the Rakuten economic bloc. We didn't have such intention at all at the announcement of this alliance. If we think in that way, I believe that this partnership shall be more visible or tangible. But furthermore, we do not -- I do not have any intention to tie up with any specific economic bloc or any partners, specifically. Well, Rakuten's group can join in our group, and that is the choice of customers. If customers wishes to see Rakuten to be used by them, and then they can continue to use Rakuten points. And the points are preferred by customers, they can use DOCOMO services. So our concept here is not about the SoftBank is using the T-Point and SBI also utilizing the T-Points. So we are not relying solely on T-Points. That's not case. Perhaps we will disregard such boundary and through expansion of business base, and that will be beneficial for our alliance partners. I'm sure that they will be the beneficiary of the benefits. So our concept is not confined by such narrow boundary. So we do not have to stick to any boundary. So whatever to be chosen will be all done by customers. Customers are the ones who choose. Customers will think if they prefer locked-in point, of course, that is the case. If Amazon wants to do the same things and then they can -- alliance with Amazon will be desirable, in my opinion, like that. I think maintaining this framework would not be positive in the future anymore. Everything will be opened up for everybody. For example, looking at the concept of open innovation. That is the same thing. Everything will be made open, where you will see the potential innovation. Once everything is made open and then new customers will be cultivated. And when you are making up open, new wisdom, ideas will come up. And that is my basic way of thinking. We are -- why we are making everything open and then all the customers will be locked in? So that is the way how we are going to form a platform, to further dramatically increase our existing ecosystem, ecosystem or platform. We formed that alliance with Takashimaya Company, players in different industries. We are proactively working with them. If you think a little bit and the enemies until yesterday can be partners for today's joint venture. If you look at other industries, you can find those examples a lot, and those are happening in other industries. Such things are not happening, or actually rather rare in financial services industry. That situation can be changed and broken. That is a concept of us, our group and SMBC. Both parties had that mindset to reach an agreement to form this alliance, at least myself had that concept -- way of thinking. And probably, our customers will become customers of SMBC Group, and their customers will become our customers. Furthermore, there will be progress. Ultimately, customers will be enjoy and select best services, and there will be opportunities for -- a choice for customers that can be maximized. So whoever who will present such maximized opportunity will be the winner. That is my philosophy. Investment trust or mutual fund, which is growing rapidly. And Hifumi funds -- regarding our acquisition of Hifumi, we reached agreement with various points, and we decided to work together towards IPO. Takamura-san's group is working very hard, and we are also supporting them in various ways. Asakura-san's team is also supporting, I think. Advisory Board -- M&A Advisory Board was established, and I believe that this business is growing fast. M&A -- after coronavirus pandemic is over, and there will be a prime chance for our M&A because asset prices are declining sharply. It is very cheap. And if you are not considering M&A at such time, what will you do? So if you buy things at a high price, you won't have good results. So at the low prices, you have to make investments in order to carry out M&A when prices are low. After the end of corona pandemic, those holders of assets may be revitalizing through civil revitalization process. And whatever will be bought, buy and buy and buy will be the approach. Of course, we will have very selective eyes. First, the potential candidates have to be a good match for our strategy. Those targets will be the subjects of our acquisition. FX-related business, as I said earlier, by nature, FX business can be -- have to be global. We are expanding globally. And most of the major players in Korea are now our customers. And then BYFX in Hong Kong, or sub in Hong Kong, through which we are approaching leading players in Southeast area -- Asia. And they have become our customers. And trading revenue in SBI SECURITIES, it is growing FX and others. FX-related revenue, others and trading revenue related to crypto-asset exchange and foreign currency-denominated bond included, these revenues will be increased. On the other hand, we would like to reduce our dependency on the trading brokerage fees, and we will be able to exceed exchange swap. Our exchange swap ratio stands at about 5%. So we believe that we can take necessary measures to exceed them. We believe that we can do more than that. And we have secret measures. Such secret measures, bullets, if they are reasonable and then we will carry out this, and we can shorten this period time line to less than 3 years. SBI VC Trade. Given the revisions slated for May this year, and there will be a lot of changes. And given this situation, we would like to expand our businesses through new businesses, we are making process -- preparation for that. In group, XRP shall be provided, granted to shareholders as shareholder benefits. XRP has been added as 1 option for shareholders. Morningstar started. And the 19% and/or 2,800, about 20% of their shareholders have opted for XRP. So what will happen to SBI Holdings? Well, institutional investors hold our stocks to about 70% to 73%. So particularly, overseas investors are holding much. So in this, individual investors are increasing now slightly. So domestic institutional investors will sell, and that will increase the individual investors and also overseas investors, foreigners will also increase. And M&A targets stay the same, and these are the targets. And not only through organic growth but through M&A, inorganic way, we are going to grow. And on the 31st of March, Rheos Capital, including Hifumi Toushin, 51.28% has been -- will be acquired. We reached an agreement to acquire that stake. And I think this was very favorable. Rheos Capital Works, Rheos Capital and Hifumi Toushin itself. The President of Hifumi -- all very good with connoisseurship in management of assets. We are not intervening in the management of assets. They can do like what they have been doing. We are not going to intervene in their business at all. But when it comes to sales and marketing, that will be dealt by SBI SECURITIES. We will be promoting our marketing proactively. So given this COVID-19 pandemic, and that there will be accelerating social changes, in post-corona period, and I think that there will be a lot of changes, what should we do? There are 6 items listed here. First, not only -- we have just listed what we can do in the business-related areas like Financial Services. In the post-corona area, there will be new trends emerging. In social lives, there will be a transformation. I think there, you will see a lot of such changes. So we are not going to touch upon those social changes, but I would like to just limit to talk about what is related to our businesses or areas which are drawing attention in terms of business perspective. The accelerating cashless trend. So if you touch any bills or notes, and then you might have a risk of being infected with the virus. So to reduce the hygienic risk, that is to say, touching the money to give the money to another person, and there is always a risk of infection. So we can see advancement in cashless payments. In light of that, we will be utilizing Money Tap for P2P remittance between individuals. And we will also do P2B remittance. We will truly use Money Tap for those purposes. So there are 35 companies who are already shareholders of Money Tap. But for regional banks, this is costly. So they wanted to keep it as low as possible. In fact, maybe we take on the cost in case of regional banks. That's something we had in mind. And so where would that source of funds be? I cannot say, but now that we don't want to have a financial burden. But we want to have the regional banks realize new connections as much as possible. And Money Tap, because they're connected with PayPay and LINE Pay, now if we do this, these are the prepaid charging service providers. We will no longer need to pay the cost for connection developments. And they can aggregate charges into one account so they can realize great efficiencies. And in principle, they will now go through CAFIS, the existing infrastructure. So the connection is lowering cost. So that, in itself, is different. So why not do it? So I'm sure in addition to PayPay and LINE Pay, others will join, and we can see a great increase. And we will have Money Tap, utilize that. And in fact, Sumishin SBI Net Bank then charges -- PayPay charges from the SBI Sumishin Net Bank has grown to 3x in terms of number of transfers and 4x the amount of money in daily use since its commencement. And this is between February 1 and April 19. Now we see social fragmentation driving adoption of blockchain technology in a wide range of industries. So we will see utilization of blockchain for authenticity and transparency. And I will mention this more later on in the supply chain section, but I think this blockchain technology will be used more and more. Now in terms of the financial industry trends, regulators are indicating a support for the entry of nonfinancial companies owning (sic) [owing] to pressures on existing businesses and deregulations. So CAFIS and Zengin-Net, these are all inefficient. And if they did not exist, then the end users, the customers will pay much less in fees and service charges. So eliminating such things. And FTC has admitted that the denial of fintech connection is an anti -- violation of antitrust law. Mr. Sugimoto, the Chairman of FTC, has promoted this. So even in the securities industry, JSCC, Japan Securities Clearing, and I will talk about this later on, but you can see JSCC's clearance commissions. And they have not been reducing fees since August 2008. It has remained the same all these years. And if you look at JASDEC, presettlement matching system fee, the most recent fee reduction was 2016. You can -- how much do you know -- how much do you think the fees and commissions have been reduced for equity trading? What sort of risk and how much burden does JASDEC fees have? How much ideas have they put in? How much risk have they taken to run JASDEC system? How much is the system cost for this presettlement matching system? This is like monopoly and it's a JSCC-run group. And in Japan securities associations, just as Internet council, we talked about JASDEC. And a member from Rakuten talked about this, and he talked about JSCC's clearing commissions. There's a lot of complaints filed from Nomura Securities. So we were unanimous in promoting this. However, JSDA is like a legacy 1 vote, 1 member. And these are security companies that may not exist going forward, but they all have 1 vote. So with the existing situation, we said everyone would die. We will not survive. That's what I've been saying all this time, but nothing has changed over the years. Such subjects is first discussed when I have joined. So up until -- from August 2008 until today, what have they discussed? Nothing. Isn't it JSDA's job to discuss subjects like this? In my opinion, I think it's a waste of time for me to be sitting on the council. And we rotate around same companies, or taking a chairmanship or sitting on the Board, and you wonder how much contributions they are making. The way the industry should be. I think we should question that to the regulators because they're responsible for supervision. And FTC, I think, should be intervening more and more. As a successor, Mr. Sugimoto should be proactive. And if you look at the SBI SECURITIES' basis points, you can see how much reductions we have achieved during the same time. Such a data is not disclosed at all. So now blockchain initiatives by SBI Group. Ripple is for international remittance, and it should become a de facto standard. And I said R3 could be other areas. So Corda is very useful. And to spread this to the world is for the benefit of the world. And we are the top shareholders for both R3 and Ripple. We have identified them from early stage, and we have helped them grow. And we have invested and established joint ventures. And one initiatives of blockchain in SBI Group is to utilize blockchain in improving business efficiencies of FX trading confirmation operations. We're using Corda for that. We will continue to use things like this to realize the ecosystem that I have -- or mentioned earlier, to expand the ecosystem using DLT and blockchain. And through collaboration with SMFG, SMFG will be investing 14% in R3; we have 51%; R3, 35%. So within this framework, regardless of sector, industry, business, they are all involved in trade finance one way or another. So Corda technology, I think, at this point in time, is the best technology in the world in blockchain. It's a useful technology, and it embeds smartphone technologies in it, too. In the swap market, even in cryptocurrencies, if the legal system is in place, and we need to build something like this rapidly. FXcoin, this is the -- they became a JVCEA second-tier membership, and we're supporting this. And there's a clear market, it's a U.S. e-trade services, OTC derivatives company. Together, we've established crypto-asset swap trading market, and we work with a Singaporean company as well. And we want to do this in Japan. If we can't do it in Japan, I'll just do it outside of Japan. Cryptocurrency. Crypto assets are, in principle, by nature, global. So we can develop businesses around the world in all different sectors. We will be investing in Germany. It's the second largest stock exchange in Germany, and they have established digital exchange. And we invested it there, and we will do the same in Singapore. So there are different projects underway. And it's a project involving a very prominent German company. Now STO Association, and this will become increasingly important in financing -- e-financing. So you can do STO to do e-financing. And self-regulatory rules will be developed by Japan STO Association. And May 1, 2020, the law will become effective. So by the end of this month, Japan STO Association will be certified. And once it's certified, then at this point in time, we have 9 companies participating as SMBC Nikko Securities, kabu.com, Daiwa Securities, Tokai Tokyo, Nomura, Monex, Mizuho and Rakuten. We have too many companies participating at the beginning, then it becomes difficult because it's too big. But I think we will go with 9 for the while, with our company taking the leadership, but it will be a very democratic organization. But I want to be sure that it would be either self-nomination or other people nominating, and once you become the lead, then you won't be doing it consecutively. You will be skipped and someone else will take over. So it's very democratic. And by doing that, each participant will be proactive in managing this association. I think they'll be more motivated. That's the truth with humankind. It's important that we take the initiative. We are spontaneous. That's where you can see the best results. Whether you're a member of an organization or official, you have to be independent, and you need to be proactive. And that's how you can create a good organization. So that's how we want to operate this association from next month, and we'll bring together pertinent knowledges from the participants to realize STO's business opportunities with strict legal compliance and investor protection. With the cryptocurrency, we had so many different issues and scandals. And it was a very difficult situation. There were top exchanges, where the top was not involved doing cryptocurrency exchange at all. It was strange, and there was an external Director who had no knowledge about cryptocurrency. So I think it's irresponsible for the organization to invite someone like that. But someone who joins it, that is irresponsible as well. So they should be a member of the council or they should be sitting on the Board of an organization, association like this. So they should have some sort of formality, should have an opinion of him or herself and have some kind of vision. You need to invite someone like that. Otherwise, they will be completely useless. So in this way, we want to be selective of people. And that's how we choose people outside the company as well. So cases of blockchain adoption in other industries. We have seen the case of disruption in supply chains. We have been so dependent on the mass production to China. We're in so much trouble. All the companies around the world are in trouble. So the supply chain going forward, we were sourcing from multiple sources, and they need to be very flexible in terms of managing the supply chain. So which national is resistant towards virus, for example? You have to think about at that level. Which country is transparent, is willing to disclose information, willing to cooperate with the world and try to solve this humankind -- the issues of the humankind? These are the things we need to do. And one important thing is that transparency is there. Transparency is important. One more is the fact that it's traceable. The traceability is important. This is called TaaS, Traceability as a Service. So you can trace the supply chain and identify what the issue is, and how do you want to shift the supply chain. Whether it's a manufacturer or multinational, you need to be able to bend your judgment. In Ripple's parent company's Board meeting, I don't participate. I asked my attorney to participate on behalf, but I asked him to speak on behalf of me like this. This is what I wanted to tell them is that, up until now, we have been focusing only on remittance and tying up with banks or money transfer brokers or agents because they wanted to -- their mission was to create revolution in international remittance. But large trading firms have bases around the world, and that's probably true with all the multinationals. Why don't you move the money around there? You don't have to work with just the finance sector. You can invite the multinational network into Ripple, and you can accelerate commercialization. Or maybe XRP can be used in games. That's so much more interesting. So you can purchase something and you have a system that's very similar to pachinko. Rather than developing something like that, go with -- use an XRP and buy a game, and that's how much you make money. So I was engaged in a transaction, I was playing this in solitaire, this game, solitaire. And if this was real money, I would have been able to generate so much money, have been so rich. I would have thought I'm a genius. Such a concept like this should be used for commercialization. Next is digital transformation. I think you can see that advancing in different industries. And people are working at homes now from offices. So we see advancement in remote work. And what's important at that time is that you don't want to be attacked by a hacker when you're working remotely at home. I think the remote work environment today is not necessarily secure. So I think we need to introduce zero-trust network. You're working on zero-trust basis that no one is good. So that all traffic is untrustworthy, and also the approval system. We just carried on SoftBank culture. So all the approvals is electronic from the beginning. It doesn't matter, the order. You don't have to be too conscientious of your supervisor. If you think it's yes, you sign it off. If you think it's no, don't sign it. And we do this electronically. So it's been all electronic, digitized. Someone's absent, you don't have a conclusion. You're sitting and waiting, if you're waiting for someone to physically stamp approval on it. We need to eliminate paperwork like that, documents. So securities services are implemented. SBI DigiTrust is offering a service like that. And also, we need to expand investment to areas that meet the needs of the times. So the 4+5 Fund, again, this is going along with the trend. But with the post corona, I think the interest is increasing in vaccination, therapeutic drugs, diagnostic kits. And I think this is where we need to maybe invest on maybe nonface-to-face health care or health management. And in Japan, we're finally able to have remote -- tele -- remote diagnosis. And -- but that's a temporary law. And there was a stupid reason that the medical association was against it. So that is why it's been so late, and we're finally able to implement it, but it's only for the time being. So if you wanted to do remotely, how precise can we be in medical care? We need to put together some ideas with them. So maybe it's better to use robot with da Vinci for surgeries to achieve a better outcome for prostate cancer. In SBI-sponsored TV program, Kenja no Sentaku, I introduced Dr. Sugimoto of an AR and VR company. And Dr. Sugimoto was saying this, too. But before or during the surgery, you can keep in mind the 3D structure. So you can scan it with MRI and you can form a 3D structure and project it during the surgery on top of the patient you're operating on. That's the world that is about to expand. So to deny remote medicine, it's not that age anymore. That's the sort of thing that needs to be done and also health care tech. The antibody testing, yes, there's a lot of questions about accuracy. And I think it should be done on everyone. So we were trying to implement the kits for checking antibodies at the hospital for everyone. But this kit still lacks reliability or preciseness. Now I think we can see increasing accuracy going forward. And I want our hospital to be able to do it -- test it on all patients. I want PCR testing on all patients. And immediately, when we -- someone said that PCR -- Mikitani-sensei -- that we are able -- they're selling PCR kit, the medical association went all against it. So fortunately, Japanese people have low fatality. The risk, is it -- what's the reason? There was a theory of BCG vaccination, maybe Japanese people are very hygiene conscious. In allergy pollen season, Japanese people have a custom of wearing a mask. We're gargling, and we're washing hands regularly. Or maybe Japanese food is increasing our immunity system. There are different rumors. But you have this absolute fact that the fatality rate in Japan is low. We don't know the reason yet, but... And then you have the RPA robotics. The company is running without people. If you have more RPAs in place, then maybe you can even do better. Why did you have to hire so many people? We're now beginning to see this reality in the business-operating companies. And in this high-volatility situation, we looked to see what is the best hedging method. And we have decided to develop products, hedge products. And we want to promote this method to outside the group as well. So you have those marketable securities, how do you reduce the volatility? How do you reduce the risk? We're looking at different hedging methods for that. So it's 6:00 sharp, so I think I would like to end my talk. Thank you so much for your attention. [Statements in English on this transcript were spoken by an interpreter present on the live call.]