Deteriorating Revenue Environment Due to Population Decline, Low Interest Rates, Digitalization, and Cross-Industry Competition
First written in FY2021-Q3. 3 of 5 entries say "Worsened", first in FY2022. Latest entry: FY2026.
Hirogin Holdings moved to the "Worse" side of this theme in 2022, 3 years after the typical company in this theme (2019).
The whole theme swung hardest in 2017: 4 of 9 companies on the "Worse" side.
6 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「US tariff increases” “Rapid digitalization” “Economic recession caused by tighter monetary policy in response to persistently high global inflation (stagflation)” “Materialization of geopolitical risks” “Population decline」
In addition to the previously identified risks of population decline, digitalization, inflation, and geopolitical risks, the Group explicitly identified higher US tariffs as a top risk and described potential spillover effects, including deterioration in counterparties’ business performance, increased credit costs, and lost revenue opportunities. - FY2024WorsenedAnnual report
「・Economic recession caused by tighter monetary policy in response to persistently high global inflation (stagflation) ・Materialization of geopolitical risks ・Population decline ・Rapid digitalization」
In addition to the previously identified risks of population decline, digitalization, and intensifying competition, the Group explicitly identified recession caused by persistently high prices and tighter monetary policy, as well as geopolitical risks, as top risks selected in March 2024. - FY2022WorsenedAnnual report
「The international situation remains unstable politically and economically, with no clear prospect of containing COVID-19, heightened geopolitical risks including Russia’s invasion of Ukraine, and soaring raw material and fuel prices. In addition to the yen’s depreciation resulting from US interest rate hikes and divergence between Japanese and US monetary policies, Japan faces a continuing uncertain outlook as population decline and aging accelerate the contraction of regional economies, while higher resource prices are expected to drive inflation and suppress private consumption.」
In addition to the previously identified risks of population decline, low interest rates, digitalization, and intensifying competition, the Group has identified geopolitical risks, soaring raw material and fuel prices, yen depreciation, inflation, and sluggish consumption as additional risks to the revenue environment. - FY2021RestatedAnnual report
「The Group continues to operate in a challenging environment, including the contraction of the domestic regional economy due to population decline and aging, deterioration in the revenue environment resulting from prolonged negative interest rate policies, and intensifying competition due to entry by businesses from other industries.」
The Group continues to recognize population decline and aging, negative interest rates, and intensified competition from cross-industry entrants as structural challenges to the revenue environment. - FY2021-Q3First statedAnnual report
「The operating environment for regional financial institutions is becoming increasingly challenging due to the contraction of regional economies caused by population decline and the declining birthrate and aging population, deterioration in the revenue environment resulting from monetary easing policies, and intensifying competition, including from businesses in other industries, driven by advances in digital technology and deregulation.」
The Group recognizes demographic trends, monetary easing, digitalization, deregulation, and intensifying competition as combined structural headwinds facing regional financial institutions.