Accumulated equity capital and low ROE
It is obvious that Chori’s equity capital has been accumulated since the Global Financial Crisis in 2008.
Chori’s equity capital in FY2004 was JPY 15,451 million. Now it is JPY 53.813 million in FY2018 (capital-to-asset ratio is 45.4%）.
As a result of such accumulated equity capital, Chori’s ROE declined from ca. 20% to ca. 10%.
Change of Chori’s equity capital and ROE
（Source：QUICK ASTRA MANAGER）
Change of net profit and payout ratio
（Source：QUICK ASTRA MANAGER）
The decline of ROE was mainly due to 1) Chori’s capital policy of low payout ratio that leads to accumulation of equity capital and 2) low growth of net profit compared to the accumulation of equity capital.
