Investment Business

The Norinchuin Bank

Pursuing stable profit as the ultimate manager of funds for JA Bank and JF Marine Bank

Business Overview

Ensuring stable profit over the medium to long term through globally diversified investments based on advanced risk management

The Bank plays the role as ultimate manager of funds entrusted with JA Bank and JF Marine Bank. To fulfill this role, the Investment Business effectively manages funds by taking advantage of economies of scale to meet its ultimate goal of ensuring stable profit over the medium to long term and continuing to return investment profits to our members.
In striving to achieve this goal, the Investment Business was one of the first to pursue “globally diversified investments” in global financial markets when Japan entered an era of low interest rates some 25 years ago. We are building a global network using overseas sites, including local subsidiaries. We control the risk of our overall portfolio (investment assets) through careful scrutiny of ample data and by diversifying our investments in markets and assets with different risk-return characteristics rather than concentrating investments in limited markets and asset classes. To pursue the utmost stability of profits for the medium and long term, we constantly review our investment methods and risk management and will continue to take on the challenge of upgrading our globally diversified investments.
In our Investment Business, we are also engaged in sustainable finance. For example, by actively investing in bonds focusing on the important theme of risk management for natural disasters, we support the development of a sustainable environment, society and AFF(agriculture, fishery and forestry) industries from an investment perspective.

Further bolstering asset management business

Making group-wide efforts to diversify revenue sources

Under the policy of reinforcing our asset management business, we transferred our credit and alternative investment functions to group company Norinchukin Zenkyoren Asset Management (NZAM) in fiscal 2021. In the same year, we established Norinchukin Capital (NCCAP), for private equity investment, and Nochu-JAML Investment Advisors (NJIA), for managing a domestic real estate private REIT. In addition to these new companies, our asset management business centers on five group companies, including The Norinchukin Trust & Banking and Norinchukin Value Investments (NVIC). We will continue to use our management experience to meet the diversified needs of customers.
With the aim of achieving more integrated functioning of the Bank itself and group companies, the Bank newly established a dedicated team within its Credit and Alternative Investments Division—on the frontline of the investment business—to support the asset management business. We continue to aim to further strengthen the asset management business on a group-wide basis. Through the diversification of revenue sources by acquiring management fees less vulnerable to economic fluctuations, we will increase and stabilize Investment Business revenue, ultimately fulfilling and demonstrating the Bank’s Purpose.

Asset Management Group Companies of the Bank ~ Providing customers with an extensive product lineup ~

Investment Business in Our Medium-Term Vision

The business environment in 2030 (Investment Business)
  • Changes are underway in the investment environment, with the demise of the Great Moderation (low inflation, low interest rates, and low volatility), a resurgence of rising interest rates across the globe, and policy adjustments taking place at a greater frequency. On the other hand, there have been no major changes in the economic cycle to a certain degree or strict financial regulation faced by the Bank.
  • We aim to improve and diversify earnings sources while bearing in mind what changes and what stays the same over the long term.

Concept for Achieving Our Vision for 2030

As we look back on our financial management to date, we will further develop globally diversified investments, including a review of the investment and lending portfolio, while taking into account expected changes in the environment.
As we work to improve the earnings of our lending and asset management businesses, we will strive to build and maintain a sustainable financial and earnings base as well as meet member expectations for stable earnings and functional returns.

Main Initiatives

Initiatives by Norinchukin Zenkyoren Asset Management (NZAM)

Support for asset building and expansion of the asset management business backed by JA

NZAM’s strength is its ability to access a full lineup of assets, including credit and alternative investments. Backed by this strength, it aims to provide a wide range of products to nationwide institutional investors, including JA Shinnoren, develop specialists, and further expand solutions functions for portfolio and risk management.
For individuals, meanwhile, NZAM offers a large number of investment trust products through JA etc. The company supports the management of individuals’ assets by holding training and seminars for JA employees responsible for investment trust sales and for cooperative members and users who actually buy such products, leveraging its know-how and expertise as an asset management company.

Initiatives to enhance real estate ESG integration

Advances in ESG integration and effective use of cooperative assets

Across the entire organization, the Bank aims to contribute to a sustainable society and has set a target of 10 trillion yen in new sustainable finance by fiscal 2030. We are pursuing ESG integration*1 in the real estate investment and financing field, where sustainable financing should be accelerated, and in September 2021, became a GRESB*2 investor member. We are strengthening ESG integration through GRESB Assessments and green building certifications as well as investing in real estate funds that proactively engage in ESG initiatives.
To further improve ESG integration, we hold dialogues (engagement) with all domestic real estate asset managers and reflect ESG assessments in our investment decisions (whether to invest, investment amount and share). In this way, we are promoting bolstered ESG initiatives in the real estate field from the standpoint of an investor.
Based on these initiatives and our policy, we support the acquisition of ESG certifications for older buildings likely to achieve enhanced value, especially assets held by the cooperative organization. Specifically, JA Mitsui Leasing and NJIA (Nochu-JAML Investment Advisors) have teamed up for work on the JA Kyosai Saitama Building.

Overview of ESG integration

*1 When making investment decisions, we make a comprehensive decision based on the financial data of investees as well as ESG-related initiatives.

*2 GRESB (Global Real Estate Sustainability Benchmark) is an organization that operates and provides benchmark assessments measuring environmental, social, and governance (ESG) initiatives for real assets. The GRESB Real Estate Assessment is the benchmark for listed and private real estate funds and listed real estate companies that invest directly in real estate and has become the global reporting standard.

What is The Norinchukin Bank?

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