8508.T

• Company Overview & Business Model: J Trust is a global comprehensive financial group founded in 1977, with over 3,000 employees operating across Japan, Korea, Indonesia and Cambodia. It has built in-group synergies across its multiple business lines, and geographic diversification reduces overall group risk.
• Japan Financial Business Segment Structure: The segment has four core pillars, all delivering stable or high growth:
  • Guarantee Business: Operated by Nihon Hosho, with steadily growing guarantee balance exceeding 260 billion yen, driven by strong demand from partner regional banks. It is a stable growth stock business.
  • Servicer Business: Operated by Partir Debt Collection, which benefits from market consolidation as new licenses are difficult to obtain. Outstanding receivables exceed 1 trillion yen, with stable growth supported by experienced collection capabilities and consistent new purchases of non-performing loans.
  • Securities Business (JTG Securities): Acquired in 2022, it is a mid-sized full-service securities firm that differentiates itself via private banking with no rotating relationship managers, building multi-generational trust with high-net-worth clients. It has recruited experienced private banking leadership and targets 1 trillion yen in assets under management by 2029, which would deliver over 3 billion yen in standalone operating profit.
  • Card/Installment Business (Nexus Card): Installment sales for medical/aesthetic services, particularly脱毛, are growing rapidly, with installment balance growing nearly 3x between March 2023 and December 2024. A new large merchant addition this year is not included in the 3-year plan, creating upside.
• Overseas Business Operations: In Korea, two savings banks have recovered steadily, with funding costs falling, net interest margins recovering, and non-performing loans stabilizing. In Indonesia, BJI is one of only 5 foreign banks allowed to operate, and has built win-win partnerships with 4 Japanese regional banks to support their SMEs' market entry and talent recruitment, with more partnerships expected. Cambodia offers a high-growth, less competitive market with a stable dollarized economy.
• Shareholder Return: The company follows a progressive dividend policy with no planned dividend cuts, targeting a payout ratio of over 30%. It plans a dividend increase to 17 yen per share for the current period (up 3 yen from the previous period). It will conduct share buybacks up to a total of 1.5 billion yen / 4 million shares this period, executed flexibly based on market conditions.

• The company targets consolidated operating profit of 11.1 billion yen for the current period (ending December 2025), 14.3 billion yen for 2026, and 17.4 billion yen for 2027. These base targets do not include potential upside from three sources, meaning final results are likely to exceed the published targets.
• The three unincluded upside sources are: (1) JTG Securities' full growth potential for 2026 and 2027, (2) BJI's growth from its planned 3 billion yen capital increase over the 2025-2027 period, and (3) potential recovery of the remaining ~16 billion yen in investment claims.
• JTG Securities' AUM target is 1 trillion yen by 2029, which would deliver over 3 billion yen in standalone operating profit.
• BJI's potential profit after capital increase is expected to double the base plan targets, reaching 1.8 billion yen by 2027.
• Q1 2025 consolidated operating profit came in at 2.1 billion yen, 800 million yen above the 1.3 billion yen plan, giving a strong start to the full-year target.
• The company expects the current full-year 11.1 billion yen target to be achieved, with Q1 results already beating plan.

1. Japan Financial Business: Planned operating profit of 7.4 billion yen for the current period, 6.7 billion yen for the next period, and 7.5 billion yen for the period after next. JTG Securities' results are intentionally excluded from 2026 and 2027 plans, leaving upside potential. This segment accounts for the majority of group profit, even though it contributes less than 30% to total consolidated operating revenue.
2. Korea Financial Business: After a temporary operating loss in 2023 due to rising funding costs and non-performing loans, it returned to a 0.9 billion yen surplus in 2024. Planned operating profit is 1.7 billion yen for the current period, 5.0 billion yen for the next period, and 5.5 billion yen for the period after next. The Mongolian business was sold in April 2025 and will be removed from the segment name.
3. Southeast Asia Financial Business (Indonesia and Cambodia): Planned operating profit is 3.0 billion yen for the current period, 3.8 billion yen for the next period, and 5.3 billion yen for the period after next. Growth from BJI (J Trust Bank Indonesia) capital increase is not included in the base plan, leaving upside potential of up to 100% additional profit if the capital increase succeeds.
4. Real Estate Business: Recorded 0.3 billion yen profit in the previous period due to project delays, with plans for stable growth starting from the current period.
5. Investment Business: A planned 750 million yen recovery from a won court case was fully completed in Q1 of the current period, with ~16 billion yen in remaining recoverable claims that are not included in 2026-2027 plans, creating additional upside.

Total consolidated operating revenue in the previous period was 128.1 billion yen, with overseas revenue accounting for over 70%.

• Securities business results are highly dependent on overall market conditions, which can cause significant earnings volatility, which is why the business is not included in medium-term base plans.
• BJI requires additional capital to expand lending under BIS regulations, and while the company is actively pursuing the 3 billion yen capital increase, there is uncertainty around whether it will be completed on schedule.
• Trumps' proposed tariffs could negatively impact global stock markets, which would indirectly affect JTG Securities' performance, though the company notes it would have minimal impact on its other core businesses.
• Recent bankruptcies in the脱毛 industry create some headline risk, though management notes that J Trust only works with a limited set of vetted operators and has not been impacted by recent failures, and may actually benefit from industry consolidation.

Q: Why has Japan Financial Business performed so well recently, and what is its outlook going forward?

A: Strong performance is driven by very stable earnings from the core guarantee and servicer businesses, which are large, growing stock businesses with 260 billion yen in guarantee balance and over 1 trillion yen in outstanding receivables respectively. Upside comes from two fast-growing segments: JTG Securities, which is on track to hit 1 trillion yen AUM by 2029, and Nexus Card's installment business, which has recently added a large new medical脱毛 merchant that was not included in the 3-year plan, creating additional upside.

Q: Why is JTG Securities' performance excluded from the medium-term plan, and what should investors expect for its future?

A: It is industry standard to not publish fixed earnings forecasts for securities businesses because results are highly dependent on market conditions, which is why most large securities firms also do not provide fixed forecasts. The current plan calls for ~0.5 billion yen in profit this period, and the long-term target is over 3 billion yen in standalone operating profit once 1 trillion yen AUM is reached in 2029, so investors can expect steady growth along that trajectory.

Q: Why did J Trust choose to expand banking in Indonesia and Cambodia specifically?

A: J Trust entered Indonesia in 2014 to capture long-term high growth from Southeast Asia's large, fast-expanding economy, where Indonesia has 270 million people and is a high-priority market for Japanese businesses, with J Trust already operating 48 full-service branches. Cambodia was chosen because Vietnam was already overcrowded, while Cambodia has untapped growth potential, a fully dollarized economy that is easy to invest in, and is positioned as a favorable plus-one manufacturing location between Vietnam and Thailand. J Trust is the only firm that operates banks in both countries, giving it unique exposure to this growth.

Q: What is the likelihood that BJI will complete its planned 3 billion yen capital increase, and how will the funding be raised?

A: The company is fully committed to completing the capital increase, which is why it is not included in the base plan to avoid overpromising. So far, 500 million yen has already been secured from Japanese banks and non-bank firms this period, and BJI is now tasked with raising additional capital locally (with support from J Trust headquarters), rather than relying on parent company funding. If successful, all growth from the expanded lending will be pure upside to the current plan.