HS Holdings

Basic Information

Stock Code
8699
Industry
Securities, Commodity Futures Trading
Category Detail
Banks
Prefecture
Tokyo
Establishment Year
January 1958
Listing Year
October 2004
Official Website
http://www.sawada-holdings.co.jp/
TSE Information
TSE Information
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Overview

HS Holdings is a financial holding company founded in 1958, engaged in banking and securities businesses centered on Asia, achieving growth through diversification based on its unique financial conglomerate concept.

Current Situation

HS Holdings recorded consolidated sales of approximately ¥61.5 billion and consolidated net profit of approximately ¥6.5 billion (fiscal year ended March 2022), advancing group management under a holding company structure. It has mainly Khan Bank in Mongolia and Kyrgyzkommertsbank in Kyrgyzstan as consolidated subsidiaries, establishing a strong position in local financial markets. Entering the 2020s, it sold its domestic securities subsidiary to concentrate management resources on Asian financial markets. Its financial base is solid, with consolidated total assets exceeding ¥570 billion, maintaining a stable earnings structure. In terms of sustainability, it is focusing on sustainable regional financial support and governance enhancement. In the future, it aims to expand financial services in Asia's growing markets as growth drivers and further enhance the group's regional financial presence by the latter half of the 2020s. In recent years, it has also been reorganizing its group structure and disposing of non-core assets to improve management efficiency.

Trivia

Interesting Facts

  • Has a history as part of the former H.I.S. (HIS) Group.
  • Holds 55.3% stake in Khan Bank in Mongolia, nurturing it into the local market leader.
  • Made Kyrgyzkommertsbank a consolidated subsidiary and is expanding in Central Asia.
  • Sold subsidiaries in securities and debt collection to concentrate resources on banking.
  • Founder Hideo Sawada diversified from travel industry to financial sector.
  • Seiko Holdings founding family and Junichi Hattori serve as de facto owners.
  • Head office located in Dutch Hills Mori Tower, Toranomon, Minato-ku, Tokyo.
  • Formerly known under old name 'Sawada Holdings'.
  • Listed on the Hercules market of the Osaka Securities Exchange in 2004.
  • Acquired Daito Bank shares from SBI Holdings in 2023.
  • Adopts holding company structure to oversee group strategy.
  • Financial conglomerate aiming for regional diversification.
  • Implemented equity method investment in Russia's Solid Bank.
  • Strengthening community-based financial services as core business.
  • Upsilon Investment Business Limited Liability Partnership supports management as lead shareholder.

Hidden Connections

  • Founder Hideo Sawada built the foundation of HIS travel group and shifted to financial business expansion.
  • Known in industry inside and outside for de facto control by Seiko Holdings founding family.
  • Holds significant influence in local financial market through stake in Mongolia's largest Khan Bank.
  • Listed on Tokyo Stock Exchange Standard market while directly involved in management of overseas local banks.
  • Characteristic regional financial portfolio operations using consolidated subsidiaries and equity method affiliates.
  • Advancing expansion of financial presence domestically and internationally via Daito Bank stake acquisition.
  • Sale of some former subsidiaries represents growth strategy through efficient allocation of group resources.
  • Aggressive entry into emerging country financial markets, distinct from traditional Japanese financial institutions, draws attention.

Future Outlook

Growth Drivers

  • Expansion of financial needs due to economic growth in Asian emerging markets
  • Efficiency improvements and customer base expansion in financial services through digitalization
  • Growing importance of regional economic recovery and SME support
  • Strengthening responses to international financial regulations and ESG investments
  • Group resource concentration and business portfolio reorganization
  • Expansion of sustainable regional support and local banking business
  • Increase in medium- to long-term asset management in emerging countries
  • Expansion and utilization of global financial network
  • Product development responding to diversifying customer needs
  • Earnings improvements through advanced financial IT infrastructure
  • Market share expansion through strengthened partnerships
  • Deepening of financial education and regional contribution activities

Strategic Goals

  • Market share expansion and presence strengthening in Asian emerging markets
  • Achieve over 50% of total sales from ESG-considerate financial products
  • Efficient capital allocation across the group and ROE improvement
  • Customer satisfaction improvement through expanded digital financial services
  • Strengthening regional contributions via sustainable regional economic support
  • Realize earnings diversification with diverse financial services
  • Group-wide governance strengthening and advanced internal controls
  • Nationwide rollout of regional financial education programs
  • Establishment and strengthening of international risk management framework
  • Promotion of medium- to long-term financial technology investments

Business Segments

Corporate Financial Services

Overview
Broadly addresses corporate finance and fund procurement needs, providing growth support and asset management.
Competitiveness
Deep network in Asian emerging markets and collaboration with local banks
Customers
  • Small and medium enterprises
  • Local governments
  • Large corporations
  • Financial institutions
  • Real estate companies
  • Trading companies
  • Importers and exporters
  • Manufacturing
  • Retail
  • Services
Products
  • Corporate lending
  • Corporate bond management
  • Fund procurement consulting
  • Corporate payment services
  • Trade finance
  • Credit guarantees
  • FX hedging
  • Asset management
  • M&A advisory
  • Investment fund management

Securities Brokerage Business

Overview
Deploys efficient securities and futures trading services for diverse customer segments.
Competitiveness
Extensive experience and strong partnerships with local securities firms
Customers
  • Individual investors
  • Institutional investors
  • Corporate pension funds
  • Investment corporations
  • Fund managers
  • Financial advisors
  • Stock exchanges
  • Finance departments
  • Real estate investors
  • Investment advisors
Products
  • Securities trading brokerage
  • Commodity futures trading
  • Investment information services
  • Risk management tools
  • Market analysis
  • Options trading
  • Stock research reports
  • Investment education programs
  • Online trading
  • Custody services

Debt Collection Services

Overview
Specializes in debt management and collection to streamline customer fund recovery.
Competitiveness
Broad legal support and community-based approach
Customers
  • Financial institutions
  • Loan companies
  • Credit card companies
  • Leasing companies
  • Lenders
  • Insurance companies
  • Real estate companies
  • Corporate customers
  • Law firms
  • Accounting firms
Products
  • Debt collection agency
  • Debt management systems
  • Legal procedure support
  • Risk assessment services
  • Credit investigations
  • Consultation and negotiation support
  • Asset investigations
  • Debt trading
  • Compliance support
  • Debt restructuring

Overseas Banking Operations Support

Overview
Addresses diverse banking needs in Asian emerging countries.
Competitiveness
Specialized team and network versed in local conditions
Customers
  • Overseas investors
  • Multinational corporations
  • Foreign government agencies
  • International economic organizations
  • Overseas operators
  • Japanese companies abroad
  • Local financial institutions
  • International banks
  • Development banks
  • Chambers of commerce
Products
  • Local currency deposit services
  • Foreign currency remittances
  • Trade finance
  • Local subsidiary support
  • Risk management services
  • Investment consulting
  • Asset management advice
  • FX handling
  • Economic information provision
  • Visa and legal support

Investment Business and Asset Management

Overview
Provides comprehensive asset management services for diverse investment targets.
Competitiveness
Strategic investment expertise focused on Asian markets
Customers
  • Individual investors
  • Corporate investors
  • Funds
  • Pension funds
  • Foundations
  • Financial institutions
  • Insurance companies
  • Securities firms
  • Venture capital
  • Government agencies
Products
  • Investment fund management
  • Asset management consulting
  • Risk management
  • Portfolio design
  • Fund establishment support
  • Asset valuation
  • Real estate investment
  • Private placement investment trusts
  • Equity investment
  • Bond investment

Financial Consulting and Advisory

Overview
Accelerates client growth through multifaceted financial support.
Competitiveness
Extensive knowledge and track record across diverse industries
Customers
  • Small and medium enterprises
  • Startups
  • Investors
  • Listed companies
  • Local governments
  • Financial institutions
  • Audit firms
  • Law firms
  • Venture companies
  • Executives
Products
  • Management consulting
  • Fund procurement support
  • M&A advice
  • Financial strategy formulation
  • Risk management
  • Business improvement support
  • Market research
  • Business plan creation
  • Financial modeling
  • IT implementation support

Fund Procurement Support

Overview
Meets funding needs of growing companies with multifaceted procurement methods.
Competitiveness
Extensive investor network domestically and internationally
Customers
  • Venture companies
  • Small and medium enterprises
  • Startups
  • Succession businesses
  • Local governments
  • Listed companies
  • Investment funds
  • Financial institutions
  • Individual investors
  • Government agencies
Products
  • Equity financing
  • Debt financing
  • Crowdfunding
  • Government subsidy support
  • Guarantee program utilization support
  • Financial institution introductions
  • Investor introductions
  • Financial strategy advice
  • Cash flow improvement support
  • IR support

Payment and Remittance Services

Overview
Realizes fast and secure fund transfers with diverse payment methods.
Competitiveness
Customization capabilities tailored to local needs
Customers
  • Individual customers
  • Corporate customers
  • Retailers
  • Food and beverage operators
  • Logistics operators
  • Financial institutions
  • Online shops
  • Overseas operators
  • Local governments
  • Service industries
Products
  • Domestic remittances
  • International remittances
  • Credit card payments
  • Electronic money
  • Mobile payments
  • Online payments
  • Automatic debit
  • Billing agency
  • Payment system provision
  • Payment security

Lending Services

Overview
Provides flexible lending products tailored to diverse needs for support.
Competitiveness
Community-based credit screening and prompt lending response
Customers
  • Individual customers
  • Small and medium enterprises
  • Large corporations
  • Real estate companies
  • Construction companies
  • Manufacturers
  • Retailers
  • Service providers
  • Agriculture, forestry, and fisheries
  • Local governments
Products
  • Housing loans
  • Auto loans
  • Business loans
  • Equipment investment loans
  • Working capital loans
  • Leasing finance
  • Real estate collateral loans
  • Education loans
  • Consumer loans
  • Free loans

Foreign Exchange and Trade Finance

Overview
Provides funds and risk management services essential for international transactions.
Competitiveness
Prompt response from specialized staff knowledgeable about local markets
Customers
  • Importers and exporters
  • Trade-related companies
  • Financial institutions
  • Government agencies
  • Trading companies
  • Manufacturing
  • Logistics
  • Investors
  • Real estate
  • Services
Products
  • FX risk hedging
  • Letters of credit issuance
  • Import/export payment settlement
  • Trade credit insurance
  • Trade finance
  • Foreign currency-denominated loans
  • FX forward contracts
  • Short-term fund procurement
  • Fund transfer services
  • Trade consulting services

Competitive Advantage

Strengths

  • Strong local presence in Asian financial markets
  • Holding company structure capable of handling diverse financial services
  • Stable financial base and large scale of consolidated assets
  • Trusted relationships and networks with local banks
  • Diverse lineup of financial products
  • Extensive financial industry experience of management team
  • Ability to swiftly concentrate and reorganize management resources
  • Compliance with international financial regulations
  • Robust risk management system
  • Global team supporting multiple languages and cultures
  • Capabilities to meet Asia-specific needs
  • High transparency in investor information disclosure
  • Good relationships with local communities
  • Ongoing efforts to strengthen governance
  • Sustainable environmentally conscious management

Competitive Advantages

  • High market share in Mongolia and Kyrgyzstan with community-based services
  • Risk diversification through HS Holdings' unique financial conglomerate concept
  • Efficiency and speed of integrated management encompassing diverse financial businesses
  • Business expansion aligned with financial infrastructure growth in Asian emerging countries
  • Collection of local information and swift decision-making via proprietary networks
  • Strategic investments and M&A leveraging ample capital
  • Portfolio diversification for stable earnings
  • Formation of long-term partnerships with local financial institutions
  • Business model incorporating sustainable regional development support
  • Flexible internal controls adapting to changing financial regulations
  • High service quality and reliability for investors and customers
  • Specialized financial solutions for diverse business types
  • Business efficiency improvements through financial IT system introductions
  • Established compliance framework and risk management
  • Potential for market expansion through collaborations with Japanese companies

Threats

  • Political instability in Asian emerging markets
  • Risk of earnings impact from exchange rate fluctuations
  • Increased burdens from intensified international financial regulations
  • Intensifying competition with local rival banks and major global financial institutions
  • Impact of infectious diseases like COVID-19 on financial markets
  • Increased loan default risks due to regional economic downturns
  • Demands for business transformation from rapid technological advancements
  • Delays in product development to meet diversifying customer needs
  • Rising cybersecurity risks
  • Credit damage from legal and compliance violations
  • Rising volatility in global financial markets
  • Increased business costs from strengthened environmental regulations

Innovations

2022: Concentration of management resources through sale of HS Securities

Overview
Sold shares of securities subsidiary to J Trust to concentrate resources on Asian banking business.
Impact
Successfully improved management efficiency and strengthened earnings base.

2023: Expansion of stake through acquisition of Daito Bank shares

Overview
Acquired 19.5% stake in Daito Bank from SBI Holdings to expand ownership.
Impact
Contributes to strengthening regional financial network.

2021: Transfer of management rights and changes in shareholder structure

Overview
Lead shareholder changed to Upsilon Investment Business Limited Liability Partnership, advancing management renewal.
Impact
Promotion of business reorganization by new management team.

2022: Transfer of debt collection business

Overview
Transferred all shares of HS Debt Collection Co., Ltd. to Kiraboshi Bank to streamline business.
Impact
Advancement of concentration on core businesses and efficiency.

2022: Group structure reorganization and integration

Overview
Implemented group reorganization by selling multiple non-core assets and subsidiaries.
Impact
Contributes to financial health and improved investment capacity.

Sustainability

  • Support for regional economic revitalization through regional financial services
  • Strengthening group governance and improving transparency
  • Expanding introduction of ESG investment standards
  • Enhancing risk management for sustainable business operations
  • Environmentally considerate office operations and energy-saving initiatives
  • Implementation of social contribution activities through collaboration with local communities
  • Customer education programs to improve financial literacy
  • Thorough compliance adherence
  • Promoting diversity and inclusion
  • Regular publication of sustainability reports
  • Environmental and social considerations in supply chain
  • Strengthening regional CSR activities