CHUBU SECURITIES FINANCING CO.,LTD. (E03690) Stock Price

Chubu Securities Finance is a specialized securities finance institution licensed under the Financial Instruments and Exchange Act. It primarily provides lending services secured by securities to securities companies and investors. Its main services include funds and stock lending for margin trading on the Nagoya Stock Exchange, funds lending secured by bonds, and stock purchase financing for general investors. The company also handles securities management and custody operations, as well as agency services for principal and interest payments on government bonds.

The company's primary customers are securities companies participating in margin trading on the Nagoya Stock Exchange and individual investors engaged in stock investment. Revenue is primarily generated from interest income on various loans provided to these customers, with lending rates ranging from approximately 0.95% to 4.05% annually depending on customer category and collateral type. However, the company has decided to dissolve and has currently suspended new lending operations.

The company's business is divided into seven major segments. The most significant is margin trading lending (operations have since been transferred to Japan Securities Finance), bond lending, general lending for securities company working capital and individual stock purchase financing, and general stock lending. Additionally, the company engaged in securities management operations centered on Japanese government bonds, custody operations for securities companies' concentrated asset management, and agency services for government bond principal and interest payments, providing comprehensive financial infrastructure that supported the smooth functioning of securities markets.

Chubu Securities Finance decided to voluntarily cease operations in 2017 and has been proceeding with dissolution and liquidation procedures as of the end of September that year. As a securities finance company, the firm had long supported the securities market; however, it determined that realizing future growth strategies had become difficult due to a significant deterioration in the business environment. The company has also discontinued formulating medium-term management policies from the 85th fiscal period onward, and no new numerical targets or growth plans have been established.

Behind the business contraction lies a substantial reduction in core operations. The company's securities lending balance declined sharply from approximately 7 billion yen at its peak to approximately 100 million yen in recent periods, while loans to financial instruments traders and individual investors fell significantly from over 5 billion yen at peak to approximately 500 million yen. Contributing factors include reduced demand for funds and intensified competition from other financial institutions, which severely weakened the company's business foundation.

The company determined that it had become difficult to stably fulfill its public role as a securities finance company and chose voluntary liquidation at this stage rather than face the risks of continuing operations. Management has stated that avoiding the risk of impairing the company's valuable assets and prioritizing the protection of all stakeholders' interests, including shareholders, is paramount.

The company has currently halted new business operations and is focusing on smoothly proceeding with dissolution and liquidation procedures, contingent on approval from relevant regulatory authorities. The company has clarified its policy to conduct an orderly wind-down through appropriate procedures without inconveniencing stakeholders, with maximizing liquidation value being the key focus for investors.