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Financial Information

Q1

Please provide an overview of financial results in the consumer finance business.

Q2

How is the acquisition of new contracts for unsecured loans by AIFUL?

Q3

What is the current trends for non-performing loans?

Q4

What is the current demand for interest repayment?

Q5

How is the cash flow situation?

Q6

What is the current equity ratio?

Q7

What are AIFUL's current credit ratings?

Q8

Can you describe your strategies to strengthen corporate governance?



Q1

Please provide an overview of financial results in the consumer finance business.

A1

AIFUL parent worked toward expanding the new accounts and operating loan assets by improving customer satisfaction through efficient advertising run mainly on television and internet, and enhancing the convenience of the mobile site. As a result, non-consolidated operating revenue recorded 10.6% increase on year on year, to 48.1 billion yen while interest income on loans to customers increased by 13.8% on year on year, to 34.0 billion yen for the third quarter of fiscal year ending March 31, 2018.
Operating expenses increased 6.2% year-on-year, to 43.9 billion yen. This was mainly attributable to 16.3% increase on year on year in credit cost, to 14.8 billion yen, which is followed by rose in loans outstanding. Other expenses were 4.5 billion yen for financial expenses and 15.7 billion yen for other operating expenses which includes general and administrative expenses.

As a result, for the third quarter of fiscal year ending March 31, 2018, AIFUL posted operating income of 4.2 billion yen, ordinary income of 4.7 billion yen. Net income stood at 5.7 billion yen, reflecting a gain on reversal of subscription rights to shares of 0.7 billion yen as extraordinary income.

Q2

How is the acquisition of new contracts for unsecured loans by AIFUL?

A2

In terms of the number of contracts for unsecured loans AIFUL parent is implanting effective advertising on both television and websites, enhanced the convenience of the mobile site to improve its customer satisfaction.
The numbers of applications were 314 thousand (up 4.0% year on year) and new contracts were 143 thousand (up 2.2% year on year) for the thirds quarter of fiscal year ending March 31, 2018.

Q3

What is the current trends for non-performing loans?

A3

As a benefit of the restrictions on total lending limits, non-performing loans ratio is remained at low and stable level. The amount of non-performing loans in the third quarter of fiscal year ending March 31, 2018 increased by 3.3% year-on-year, to 62.5 billion yen and NPL ratio fell 0.9 point on year on year to 16.7%. The amount of non-performing unsecured loans rose 22.0% from a year ago, to 30.6 billion yen due to increase in operating loans, and unsecured loans NPL ratio remained at low and stable level of 9.3%.

Q4

What is the current demand for interest repayment?

A4

In terms of interest repayment claims at AIFUL, ongoing caution is warranted even though the number of claims declined significantly after hitting a peak in February 2011 and also the downward trend became more apparent in the current fiscal year.
Interest repayment for the third quarter of fiscal year ending March 31, 2018, decreased 23.4% year-on-year, to 15.7 billion yen, and the waiver of principal accompanying interest repayment declined 29.7%, to 2.1 billion yen year-on-year, totaling 17.8 billion yen, or a decrease of 24.2% from the corresponding period of previous fiscal year.

As a result, for the third quarter of fiscal year ending March 31, 2018 at AIFUL parent, the balance of the allowance for losses on interest repayment stood at 15.2 billion yen, and that of the waiver accompanying interest repayment was 6.5 billion yen, registering 21.7 billion yen for the total amount of allowances associated with interest repayment. As for the Group, the balance of the allowance for losses on interest repayment stood at 17.8 billion yen, and that of the waiver accompanying interest repayment was 6.5 billion yen, registering 24.3 billion yen for the total amount of allowances associated with interest repayment.

For the detailed information about interest repayment claims, please refer to the "Annual Report 2009".

Q5

How is the cash flow situation?

A5

Cash and cash equivalents ("funds") for the third quarter of fiscal year ending March 31, 2018, increased by 6.1 billion yen, or 18.3%, compared with the previous fiscal year-end to 39.6 billion yen. The situation of each category and the contributing factors are as follows.

(Cash flows from operating activities) Net cash used for operating activities stood at 52.0 billion yen, increased 36.9% compared with the corresponding period of previous fiscal year. This was mainly attributable to the decline in funds due to the increase in operating loans and the decline in funds due to the drop in the allowance for losses on interest repayment.
(Cash flows from investing activities) Net cash used for investing activities stood at 2.8 billion yen, decreased 48.7% compared with the corresponding period of previous fiscal year. This was mainly attributable to the purchase of tangible fixed assets.
(Cash flows from financing activities) Net cash provided by financing activities amounted to 59.1 billion yen, increased 31.5% compared with the corresponding of previous fiscal year. This was mainly attributable to increase in borrowings.

Q6

What is the current equity ratio?

A6

The AIFUL Group's equity ratio stood at 17.1% on a consolidated basis and 18.3% on a non-consolidated basis at the end of the third quarter of fiscal year ending March 31, 2018.

Q7

What are AIFUL's current credit ratings?

A7

Please refer to Corporate Bonds/Rating.

Q8

Can you describe your strategies to strengthen corporate governance?

A8

Under a corporate philosophy of "Earn the trust of society through corporate activity based in integrity" the AIFUL Group recognizes that the important objective of its corporate governance is to become a company that is trusted by shareholders and society through its contribution to socioeconomic development, and to achieve corporate management that offers transparency, fairness, and efficiency, based on corporate activities that observe compliance.
For the details, please refer to Corporate Governance.