interim report six-month period ended september 30, … 1994 established the nippon credit trust...
TRANSCRIPT
2016Interim Report
Six-Month Period Ended September 30, 2016
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Corporate Data
Corporate History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Directors, Audit & Supervisory Board Members and
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Staff Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Office Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Business Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Financial DataConsolidated InformationCONSOLIDATED BUSINESS RESULTS . . . . . . . . . . . . . . . . . . 8
Consolidated Financial Highlights . . . . . . . . . . . . . . . . . . . . . 8
CONSOLIDATED FINANCIAL REVIEW . . . . . . . . . . . . . . . . . . . 9
Consolidated and Equity-Method Companies . . . . . . . . . . . . 9
Analysis of Business Results . . . . . . . . . . . . . . . . . . . . . . . . . 9
Analysis of Financial Condition . . . . . . . . . . . . . . . . . . . . . . . 11
Disclosure of Exposure to Securitized Products . . . . . . . . . . 13
CONSOLIDATED SEMIANNUAL FINANCIAL STATEMENTS . . . 14
Consolidated Semiannual Balance Sheet (Unaudited) . . . . . . 14
Consolidated Semiannual Statement of Income
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Consolidated Semiannual Statement of Comprehensive
Income (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Consolidated Semiannual Statement of Changes in Equity
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Consolidated Semiannual Statement of Cash Flows
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Notes to Consolidated Semiannual Financial Statements
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
INCOME ANALYSIS (Consolidated) . . . . . . . . . . . . . . . . . . . . . . 45
Interest-Earning Assets and Interest-Bearing Liabilities . . . . . 45
Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Trading Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Other Ordinary Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Non-Consolidated InformationNON-CONSOLIDATED BUSINESS RESULTS . . . . . . . . . . . . . . 46
Non-Consolidated Financial Highlights . . . . . . . . . . . . . . . . . 46
NON-CONSOLIDATED SEMIANNUAL FINANCIAL
STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Non-Consolidated Semiannual Balance Sheet
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Non-Consolidated Semiannual Statement of Income
(Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Non-Consolidated Semiannual Statement of Changes in
Equity (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
INCOME ANALYSIS (Non-Consolidated) . . . . . . . . . . . . . . . . . . 50
Net Revenue, Business Profit . . . . . . . . . . . . . . . . . . . . . . . . 50
Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Yield on Interest-Earning Assets, Interest Rate on
Interest-Bearing Liabilities, Net Yield/Interest Rate . . . . . . . . 50
Average Balance of Interest-Earning Assets and
Interest-Bearing Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Analysis of Interest Income and Interest Expenses . . . . . . . . 52
Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Trading Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Other Ordinary Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
General and Administrative Expenses . . . . . . . . . . . . . . . . . . 54
DEPOSIT OPERATIONS (Non-Consolidated) . . . . . . . . . . . . . . 55
Balance by Deposit Account . . . . . . . . . . . . . . . . . . . . . . . . . 55
Balance of Time Deposits by Residual Period . . . . . . . . . . . . 55
Outstanding Balance by Depositor . . . . . . . . . . . . . . . . . . . . 56
Deposits per Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Deposits per Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
DEBENTURE OPERATIONS (Non-Consolidated) . . . . . . . . . . . 57
Outstanding and Average Balance of Debentures . . . . . . . . . 57
Balance by Residual Period . . . . . . . . . . . . . . . . . . . . . . . . . 57
Outstanding Balance of Debentures per Office . . . . . . . . . . . 57
Outstanding Balance of Debentures per Employee . . . . . . . . 57
LOAN OPERATIONS (Non-Consolidated) . . . . . . . . . . . . . . . . . 58
Outstanding Balance of Loans . . . . . . . . . . . . . . . . . . . . . . . 58
Balance by Residual Period . . . . . . . . . . . . . . . . . . . . . . . . . 58
Ratio of Loans and Bills Discounted to
Debentures/Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Loans per Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Loans per Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Loans to Small and Medium-Sized Enterprises (SMEs) . . . . . 59
Consumer Loans Outstanding . . . . . . . . . . . . . . . . . . . . . . . 59
Breakdown of Loans and Bills Discounted by Industry . . . . . 59
Risk-Monitored Loans by Industry . . . . . . . . . . . . . . . . . . . . . 60
Balance of Loans and Bills Discounted,
Classified by Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Breakdown of Balance of Acceptances and
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Breakdown of Loans and Bills Discounted by Collateral . . . . 60
Breakdown of Collateral for Customers’ Liabilities
for Acceptances and Guarantees . . . . . . . . . . . . . . . . . . . . 61
Write-Off of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Country Risk Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Disclosed Claims under the Financial Reconstruction Law . . . . 62
Risk-Monitored Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Reserve Provision Ratios for Each Category of Borrower,
Based on Asset-Assessments . . . . . . . . . . . . . . . . . . . . . . 62
Asset-Assessment, Disclosed Claims, Write-Offs,
Reserves and Risk-Monitored Loans . . . . . . . . . . . . . . . . . . 63
SECURITIES (Non-Consolidated) . . . . . . . . . . . . . . . . . . . . . . . 64
Outstanding and Average Balance of Securities Held . . . . . . 64
Balance of Securities by Residual Period . . . . . . . . . . . . . . . 65
Ratio of Securities to Debentures and Deposits . . . . . . . . . . 65
SECURITIES BUSINESS (Non-Consolidated) . . . . . . . . . . . . . . 66
Underwriting of Public Bonds . . . . . . . . . . . . . . . . . . . . . . . . 66
Over-the-Counter Sales of Public Bonds and
Securities Investment Trusts . . . . . . . . . . . . . . . . . . . . . . . . 66
INTERNATIONAL OPERATIONS (Non-Consolidated) . . . . . . . . 66
Foreign Exchange Transactions . . . . . . . . . . . . . . . . . . . . . . 66
Balance of Assets in International Operations . . . . . . . . . . . . 66
OTHER OPERATIONS (Non-Consolidated) . . . . . . . . . . . . . . . . 67
Principal Fees and Commissions . . . . . . . . . . . . . . . . . . . . . 67
Domestic Exchange Transactions . . . . . . . . . . . . . . . . . . . . . 67
Automated Installations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
CAPITALIZATION (Non-Consolidated) . . . . . . . . . . . . . . . . . . . . 68
History of Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Major Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Ownership and Distribution of Shares . . . . . . . . . . . . . . . . . . 69
Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline . . . . . . . 70
Share Procedure Information . . . . . . . . . . . . . . . . . . . . 93
Financial and Corporate Data
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Corporate Data
Corporate History
April 1957 Established as The Nippon Fudosan Bank, Limited (capital: ¥1 billion) in accordance with the Long-Term Credit Bank Law
July 1964 Started foreign exchange business as an authorized foreign exchange bank
September Listed stock on the Tokyo Stock Exchange
February 1970 Listed stock on the Osaka Securities Exchange
October 1977 Changed name to The Nippon Credit Bank, Ltd.
February 1994 Established The Nippon Credit Trust Bank, Ltd. (currently Aozora Trust Bank, Ltd.), the first domestic subsidiary classified as other type of business
December 1998 Started special public management in accordance with the Financial Reconstruction Law and terminated listing of stock on the Tokyo Stock Exchange and the Osaka Securities Exchange
September 1999 NCB Servicer Co., Ltd. (currently Aozora Loan Services Co., Ltd.), commenced servicer operations
September 2000 Share Purchase Agreement regarding the transfer of the Bank’s shares was signed between Deposit Insurance Corporation and SOFTBANK CORP., ORIX Corporation, The Tokio Marine and Fire Insurance Co., Ltd. (currently Tokio Marine & Nichido Fire Insurance Co., Ltd.), and other financial institutions
Ended special public management
November Commenced telephone banking services
January 2001 Changed name to Aozora Bank, Ltd.
March 2003 Moved headquarters
September Through a common stock tender offer conducted in accordance with the Securities Exchange Law, all common stock of the Bank held by SOFTBANK CORP. was transferred to the ownership of Cerberus NCB Acquisition, L.P., General Partner Cerberus Aozora GP L.L.C.
June 2005 Established a subsidiary, Aozora Asia Pacific Finance Limited, in Hong Kong
July Established New York Representative Office
April 2006 Converted from ‘Long-Term Credit Bank’ to an ‘Ordinary Bank’ Established a securities subsidiary, Aozora Securities Co., Ltd.
November Listed on the First Section of the Tokyo Stock Exchange
May 2007 Established Shanghai Representative Office
April 2008 Tender offer for common shares by Cerberus NCB Acquisition, L.P., General Partner Cerberus Aozora GP L.L.C.
April 2009 Established Internet Branch
Commenced Internet banking services
December 2011 Completion of acquisition of Japan Wealth Management Securities, Inc., making it a wholly-owned subsidiary of the Bank (Merged with Aozora Securities Co., Ltd. in February 2012. New company name: Aozora Securities, Co., Ltd.)
August 2012 Announced the Comprehensive Recapitalization Plan
December Established Financial Oasis Jiyugaoka (Shibuya Branch Jiyugaoka Office)
January 2013 Secondary offering of Aozora common stock by parent company, Cerberus NCB Acquisition, L.P., General Partner Cerberus Aozora GP L.L.C.
March Launched Aozora Cash Card Plus (Visa debit)
Established Aozora Regional Consulting Co., Ltd.
August Cerberus NCB Acquisition, L.P., General Partner Cerberus Aozora GP L.L.C. sold its entire remaining stake in Aozora
February 2014 Established an investment trust subsidiary, Aozora Investment Management Co., Ltd.
May Established Singapore Representative Office
January 2015 Established an investment advisory subsidiary, Aozora Real Estate Investment Advisors Co., Ltd.
June Full repayment of public funds
December Established a subsidiary, Aozora Europe Limited, in London
May 2016 Completed conversion to new Kanjo-kei core banking system
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Corporate Data
Business Activities (As of January 1, 2017)
● Deposits
Deposits
Checking accounts, savings accounts, time deposits, deposits-at-notice, non-residents’ deposits in yen and deposits in
foreign currencies
Negotiable certificates of deposit
● Lending
Loans
Loans on deeds, loans on notes and overdraft
Discount on promissory notes
Bankers’ acceptances and discounts on commercial bills and documentary drafts
● Securities investment business Public bonds, local bonds, corporate bonds, equity and other securities for cash reserves for payment of the deposit and fund
management
● Domestic exchange
Such services as money orders between branches of the Bank and those of other banks, collection of payments, etc.
● Foreign exchange
Remittance to foreign countries and other foreign currency-related businesses
● Consignment of bonds and registration Consignment business for soliciting or managing public bonds, registration of public bonds as a registered institution and issue
agent or payment agent
● Other services 1. Guarantee of liabilities (acceptances and guarantees)
2. Lending of securities
3. Underwriting of public bonds
4. Over-the-counter sales of public bonds, including national government bonds, and securities investment trusts
5. Trust business for secured corporate bonds
6. Agency business
➀ Revenue agency for Bank of Japan
➁ Handling of funds for regional public entities, including those in Tokyo
➂ Japan Finance Corporation; Organization for Workers’ Retirement Allowance Mutual Aid;
Government Pension Investment Fund; Japan Oil, Gas and Metals National Corporation; and
Welfare and Medical Service Agency
7. Custody services
8. Interest rate, currency and other derivative transactions
9. Over-the-counter sales of insurance products
10. Financial instruments intermediary business
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Organization Chart (As of January 1, 2017)
Institutional Banking Group
Institutional Banking Management Div.(Business Innovation Office)
(Facilitation of Financing Promotion Office)
Syndication & Securitization Div.
M&A Advisory Div. Asian Business Promotion Div.
Retail Business Strategy Div.
Retail Operation & Technology Div.
Retail SalesPromotion Div.
Direct Banking Div.
Retail Banking Div.
Internet Br.
Aozora SecuritiesCo., Ltd.
Aozora Investment Management Co., Ltd.
Metropolitan Business Div. I
Metropolitan Business Div. II
Metropolitan Business Div. III
Corporate Business Div. II
Corporate Business Div. III
Corporate Business Div. IV
Corporate Business Div. VI
Public Institutions Div.
Acquisition & Project Finance Div.
Special Situations Div.
Real Estate Finance Div.
GlobalReal Estate Structured Debt Div.
Corporate BusinessDiv. I
Corporate BusinessDiv. V
Aozora Loan ServicesCo., Ltd.
AozoraReal Estate Investment AdvisorsCo., Ltd.
International Business Management Div.
International Business Div.
Overseas Representa-tive Offices(New York,Shanghai,Singapore)
Aozora Asia Pacific Finance Limited
Aozora Europe Limited
Financial Institutions Div. I
Financial Institutions Div. II
Aozora Trust Bank, Ltd.
Aozora Regional Consulting Co., Ltd.
[Aozora SecuritiesCo., Ltd.]
[Aozora Investment Management Co., Ltd.]
TreasuryFunding Div.
Treasury Investment Div.
Credit Investment Div.
Market Products Div.
Derivatives Sales Div.
Market Products Development Div.
Financial Control Div.
Financial Management Div.
Corporate Communica-tion Div.
IT Control Div.
ApplicationManagement Div.
InfrastructureManagementDiv.
Business Technology Strategy Div.
Operations PlanningDiv.
Operations Management Div.
Corporate Banking Service Div.
Integrated Risk Management Div.
Credit RiskManagementDiv.(Risk Management Administra-tion Office)
Market RiskManagement Div.
Compliance Management Div.
Compliance & Governance Unit
Head of Compliance & Governance Unit
Human Resources Div.
Human Resources Unit
Head of Human Resources Unit
Management Committee
Board of Directors
ShareholdersAudit & Supervisory
Board Members
Audit & Supervisory Board
Office of Audit & Supervisory Board
[Branches]
Kansai Br., Nagoya Br., Fukuoka Br., Sendai Br., Hiroshima Br., Sapporo Br., Takamatsu Br., Kanazawa Br.
Shinjuku Br., Nihonbashi Br., Shibuya Br., Ueno Br., Ikebukuro Br., Yokohama Br., Chiba Br., Osaka Br., Umeda Br., Kyoto Br., Financial Oasis Jiyugaoka
AlliedBanking
Group
Group Head
BusinessBanking
Group
Group Head
CorporateBanking
Group
Group Head
Retail Banking
Group
Group Head
Integrated Risk
ManagementGroup
Chief Risk
Officer(CRO)
FinanceGroup
Chief Financial
Officer(CFO)
OperationsGroup
EO in charge of
Operations Group
Technology Group
Chief Technology
Officer(CTO)
Credit Div. I
Credit Div. II
Credit Div. III(Facilitation of Financing Review Office)
Workout Div.
Appraisal Div.
Credit RiskManagement
Group
Chief Credit Risk
Officer(CCRO)
Specialized Banking Group
SpecialtyFinance Group
Group Head
International Finance Group
Group Head
FinancialMarkets
Group
Group Head
Business Strategy Div. (Digital Innovation Office)
Corporate Administration & Service Div.
Crisis Management Div.
Corporate Strategy Unit
Head of Corporate Strategy Unit
Internal Audit Div.
Asset Assessment Div.Chief Executive Officer (CEO)
EO in charge
Office of Corporate Secretary
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Directors, Audit & Supervisory Board Members and Executive Officers (As of January 1, 2017)
Staff Profile (As of September 30, 2016)
Number of Employees Average Age Average Years of Service
1,753 (234) 42.1 14.1
Notes: 1. The number of employees includes executive officers and locally hired staff overseas, but excludes temporary employees.
2. The figure in parentheses is the average number of temporary employees for the year.C
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Corporate Data
Directors and Audit & Supervisory Board Members Executive Offi cers
Director and Chairman Makoto Fukuda*
Representative Director
and President
Shinsuke Baba*
Representative Director
and Deputy President
Masaki Tanabe*
Director and
Senior Managing Executive Offi cer
Takeo Saito*
Directors Shunsuke Takeda
Hiroyuki Mizuta
Ippei Murakami
Tomonori Ito
Standing Audit & Supervisory Board
Member
Shinichi Fujihira
Audit & Supervisory Board Members Kiyoto Hagiwara
Toraki Inoue
*Serving as Executive Offi cer concurrently
Senior Managing Executive Offi cer Masatatsu Ozeki
Managing Executive Offi cers Clark D. Graninger
Katsuya Hosono
Kei Tanikawa
Masaaki Harada
Jorge A. Leon
Yukio Sekizawa
Koji Yamakoshi
Hideaki Kuraishi
Executive Offi cers Fumihiko Hirose
Tomomi Akutagawa
Masayoshi Ohara
Yutaka Aoyama
Masato Mano
Takayoshi Nomura
Takeshi Ito
Takashi Kato
Hideto Omi
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Office Directory (As of January 1, 2017)
Singapore Representative Office
Chief RepresentativeNorikazu Terashima
Address50 Raffles Place, #16-05A Singapore Land Tower, Singapore 048623Tel: +65-6221-9221 Fax: +65-6221-9421
Overseas Network
● Representative Offices
New York Representative Office
Chief RepresentativeMasato Nagatani
Address1270 Avenue of the Americas, Suite #1040, New York, NY 10020, U.S.A. Tel: +1-212-830-1680Fax: +1-212-314-3124
Domestic Network
● Head Office3-1, Kudan-minami 1-chome,Chiyoda-ku, Tokyo 102-8660, JapanTel: +81-3-3263-1111SWIFT: NCBTJPJT
(The Bank plans to relocate its head office to Kojimachi, Chiyoda-ku, Tokyo in May 2017.)
● Branch OfficesSapporo
1-4, Kita Sanjo-nishi 4-chome,Chuo-ku, Sapporo 060-0003Tel: 011-241-8171
Sendai
2-1, Chuo 3-chome, Aoba-ku, Sendai 980-0021Tel: 022-225-1171
Shinjuku
37-11, Shinjuku 3-chome,Shinjuku-ku, Tokyo 160-0022Tel: 03-3354-1600
Nihonbashi
3-11, Nihonbashi 3-chome, Chuo-ku, Tokyo 103-0027 Tel: 03-3517-7888
Shibuya
7-7, Shibuya 1-chome, Shibuya-ku, Tokyo 150-0002Tel: 03-3409-6411
Ueno
12-20, Ueno 2-chome, Taito-ku, Tokyo 110-0005Tel: 03-3835-7511
Shanghai Representative Office
Chief RepresentativeKiyohide Sunaga
Address27F, Hang Seng Bank Tower, 1000 Lujiazui Ring Road, Pudong New Area,Shanghai 200120, ChinaTel: +86-21-3899-6288 Fax: +86-21-6841-2882
Ikebukuro
28-13, Minami-Ikebukuro 2-chome, Toshima-ku, Tokyo 171-0022Tel: 03-3988-0911
Chiba
14-1, Fujimi 2-chome, Chuo-ku, Chiba 260-0015Tel: 043-227-3111
Yokohama
4-1, Kita-saiwai 1-chome, Nishi-ku, Yokohama 220-0004Tel: 045-319-1588
Kanazawa
2-37, Kamitsutsumicho,Kanazawa 920-0869Tel: 076-231-4151
Nagoya
28-12, Meieki 3-chome, Nakamura-ku, Nagoya 450-6404Tel: 052-566-1900
Kyoto
79, Kankobokocho, Muromachi-Higashiiru, Shijo-dori,Shimogyo-ku, Kyoto 600-8009Tel: 075-211-3341
Kansai
12-12, Umeda 1-chome, Kita-ku, Osaka 530-0001Tel: 06-4799-3541(Kansai Branch deals solely with corporate clients.)
Osaka
2-3, Namba 2-chome, Chuo-ku, Osaka 542-0076Tel: 06-4708-2051
Umeda
12-12, Umeda 1-chome, Kita-ku, Osaka 530-0001Tel: 06-4799-3533
Hiroshima
13-13, Motomachi, Naka-ku, Hiroshima 730-0011Tel: 082-211-0125
Takamatsu
9-6, Konyamachi, Takamatsu 760-0027Tel: 087-821-5521
Fukuoka
8-36, Tenjin 2-chome, Chuo-ku, Fukuoka 810-0001Tel: 092-751-4261
Internet Branch
3-1, Kudan-minami 1-chome,Chiyoda-ku, Tokyo 102-8660http://www.aozorabank.co.jp/netbranch/
Financial Oasis Jiyugaoka(Shibuya Branch Jiyugaoka Office)
28-1, Okusawa 5-chome, Setagaya-ku, Tokyo 158-0083 Tel: 03-5483-3223
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Business Network (As of September 30, 2016)
*All companies listed below are consolidated subsidiaries.
Aozora Bank, Ltd.
Banking operations
Other operations
Head Office and branches
Main affiliates
Main affiliates
Management consulting servicesFinancial servicesFinancial servicesInvestment vehicleInvestment vehicleInvestment vehicleInvestment vehicleInvestment vehicleInvestment vehicleInvestment vehicleInvestment vehicleInvestmentsInvestmentsInvestments
Trust services, Banking operationsDistressed loan servicingSecurities servicesInvestment management servicesInvestment advisory services
Aozora Regional Consulting Co., Ltd.Aozora Asia Pacific Finance Limited Aozora Europe LimitedAZB FundingAZB Funding 2AZB Funding 3AZB Funding 4 LimitedAZB Funding 5AZB Funding 6AZB Funding 7AZB Funding 8 LimitedAozora GMAC Investment LimitedAozora Investment, Inc.Aozora Investments LLC
Aozora Trust Bank, Ltd.Aozora Loan Services Co., Ltd.Aozora Securities Co., Ltd.Aozora Investment Management Co., Ltd.Aozora Real Estate Investment Advisors Co., Ltd.
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Subsidiaries (As of September 30, 2016)(%)
Company Name Location Business Activities Established CapitalAozora Bank Shareholding
Group Shareholding
Aozora Trust Bank, Ltd. 3-1, Kudan-minami 1-chome, Chiyoda-ku, Tokyo
Trust services, banking operations
February 28, 1994
8,751 millions of JPY
85.1 —
Aozora Loan Services Co., Ltd.
13-5, Kudan-kita 1-chome, Chiyoda-ku, Tokyo
Distressed loan servicing
June 18, 1996
500 millions of JPY
67.6 —
Aozora Securities Co., Ltd. 3-1, Kudan-minami 1-chome, Chiyoda-ku, Tokyo
Securities services January 23, 2006
3,000 millions of JPY
100.0 —
Aozora Regional Consulting Co., Ltd.
3-1, Kudan-minami 1-chome, Chiyoda-ku, Tokyo
Management consulting services
March 21, 2013
10 millions of JPY
100.0 —
Aozora Investment Management Co., Ltd.
3-1, Kudan-minami 1-chome, Chiyoda-ku, Tokyo
Investment management services
February 4, 2014
225 millions of JPY
100.0 —
Aozora Real Estate Investment Advisors Co., Ltd.
3-1, Kudan-minami 1-chome, Chiyoda-ku, Tokyo
Investment advisory services
January 6, 2015
150 millions of JPY
100.0 —
Aozora Asia Pacifi c Finance Limited
Hong Kong Financial services June 29, 2005
100,000 thousands of USD
100.0 —
Aozora Europe Limited London Financial services December 15, 2015
1,000 thousands of GBP
100.0 —
AZB Funding Cayman Islands, British West Indies
Investment vehicle June 1, 2012
0 thousands of USD
— —
AZB Funding 2 Cayman Islands, British West Indies
Investment vehicle March 19, 2013
0 thousands of USD
— —
AZB Funding 3 Cayman Islands, British West Indies
Investment vehicle September 18, 2013
0 thousands of USD
— —
AZB Funding 4 Limited Dublin, Ireland Investment vehicle March 18, 2014
0 thousands of EUR
— —
AZB Funding 5 Cayman Islands, British West Indies
Investment vehicle August 18, 2014
0 thousands of USD
— —
AZB Funding 6 Cayman Islands, British West Indies
Investment vehicle July 7, 2015
0 thousands of USD
— —
AZB Funding 7 Cayman Islands, British West Indies
Investment vehicle November 26, 2015
0 thousands of USD
— —
AZB Funding 8 Limited Dublin, Ireland Investment vehicle August 15, 2016
0 thousands of USD
— —
Aozora GMAC Investment Limited
London Investments November 6, 2006
30,070 thousands of USD
100.0 —
Aozora Investment, Inc. Delaware, USA Investments November 21, 2006
411 thousands of USD
— 100.0
Aozora Investments LLC Delaware, USA Investments November 22, 2006
500,282 thousands of USD
— 100.0
Corporate Data
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Consolidated Financial Highlights For the six-month periods ended September 30, 2016, 2015 and 2014, and the years ended March 31, 2016 and 2015
(Millions of Yen)
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2014 Mar. 31, 2016 Mar. 31, 2015
Ordinary income . . . . . . . . . . . . . . . . . . . . . . . . 65,990 60,242 68,237 124,054 130,035
Ordinary profit . . . . . . . . . . . . . . . . . . . . . . . . . . 27,830 29,675 38,024 55,721 59,671
Net income attributable to owners of parent . . . 25,857 24,297 23,654 43,499 43,689
Comprehensive income . . . . . . . . . . . . . . . . . . . 29,101 7,413 33,673 23,158 90,295
Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000 100,000 100,000 100,000
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424,674 400,251 519,692 405,498 567,414
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,575,072 4,638,332 5,043,453 4,592,921 4,924,472
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 241,386 228,886 219,465 246,112
Deposits (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . 2,876,842 3,036,721 3,078,298 2,932,131 2,984,747
Loans and bills discounted . . . . . . . . . . . . . . . . 2,475,431 2,610,391 2,719,842 2,511,622 2,775,817
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925,605 949,581 1,220,203 923,526 984,060
Total equity per share (yen) (Note 2) . . . . . . . . . . . . 362.19 342.33 313.46 346.83 336.83
Basic net income per share (yen) (Note 2) . . . . . . . . 22.16 20.83 19.65 37.29 36.19
Diluted net income per share (yen) (Note 2) . . . . . . . 22.15 17.80 15.03 34.36 27.77
Consolidated capital adequacy ratio
(domestic standard) (%) (Note 3). . . . . . . . . . . . . . 11.33 11.02 14.95 11.03 14.45
Net cash provided by (used in)
operating activities . . . . . . . . . . . . . . . . . . . . . 80,001 162,107 91,248 180,160 (139,546)
Net cash provided by (used in)
investing activities . . . . . . . . . . . . . . . . . . . . . . (46,789) 18,998 (36,644) (6,014) 291,989
Net cash provided by (used in)
financing activities . . . . . . . . . . . . . . . . . . . . . . (10,121) (174,753) (30,100) (185,339) (39,083)
Cash and cash equivalents, end of period . . . . . 512,798 507,251 412,042 489,707 500,900
Notes: 1. Deposits include negotiable certificates of deposit (NCDs).
2. Total equity per share, basic net income per share and diluted net income per share are calculated by applying ‘Accounting Standard for Earnings Per
Share’ (Financial Accounting Standard No. 2, September 13, 2013) and ‘Implementation Guidance for Accounting Standard for Earnings Per Share’
(Financial Accounting Standard Implementation Guidance No. 4, September 13, 2013). 3. Consolidated capital adequacy ratio (domestic standard) is calculated based on Basel III.
Consolidated Business Results
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1. Consolidated and Equity-Method Companies
The consolidated financial statements include the accounts of
the Bank and its significant subsidiaries. The number of con-
solidated subsidiaries was 19 as of September 30, 2016 and
18 as of March 31, 2016.
AZB Funding 8 Limited was established and is now
included in the scope of consolidation as a subsidiary.
No subsidiaries and affiliated companies were accounted
for using the equity method.
2. Analysis of Business Results
Aozora reported net income attributable to owners of parent
of ¥25.9 billion, an increase of 6.4% year on year.
(1) Income
Total income was ¥66.0 billion, an increase of ¥5.7 billion year
on year.
Interest income was ¥31.9 billion, a decrease of ¥0.6 billion
year on year, due to decreased interest on loans and
discounts.
Income from fees and commissions was ¥5.5 billion, a
decrease of ¥0.7 billion year on year, mainly due to a decline
in earnings from the sale of investment trusts and insurance.
Trading income was ¥10.3 billion, an increase of ¥4.9 billion
year on year. Earnings from the sale of derivative-related prod-
ucts targeting the asset management needs of our financial
institution customers remained strong in a negative interest
rate environment.
Other ordinary income was ¥13.1 billion, an increase of
¥0.2 billion year on year. Contributing to this result were gains
on the sale of foreign government bonds and J-REITs.
Other income was ¥5.2 billion, an increase of ¥2.0 billion
year on year, mainly due to increased reversal of allowance for
loan losses.
Consolidated and Equity-Method Companies(Number of Companies)
Sep. 30, 2016 Mar. 31, 2016 Change
Consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 18 1
Subsidiaries and affiliated companies accounted for using the
equity method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0
(Millions of Yen)
Sep. 30, 2016(6 months)
Sep. 30, 2015(6 months) Change
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥65,990 ¥60,242 ¥ 5,748
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,912 32,541 (629)Interest on loans and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . 20,685 21,799 (1,114)Interest and dividends on securities . . . . . . . . . . . . . . . . . . . . . . . 10,649 9,557 1,092 Interest on deposits with banks . . . . . . . . . . . . . . . . . . . . . . . . . . 100 46 54 Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 1,138 (662)
Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,512 6,246 (734)
Trading income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,293 5,440 4,853
Other ordinary income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,092 12,847 245 Gains on sales of bonds and other securities . . . . . . . . . . . . . . . 5,068 4,846 222 Gains on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 — 424 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,599 8,001 (402)
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,179 3,166 2,013 Gains on sales of stocks and other securities . . . . . . . . . . . . . . . 417 81 336 Gains on investments in money held in trust . . . . . . . . . . . . . . . . 330 214 116 Recoveries of written-off claims . . . . . . . . . . . . . . . . . . . . . . . . . . 771 2,216 (1,445)Reversal of allowance for loan losses . . . . . . . . . . . . . . . . . . . . . 3,148 — 3,148 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 510 ¥ 654 ¥ (144)
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(2) Expenses
Total expenses increased ¥7.6 billion year on year, to
¥38.2 billion.
Interest expenses increased ¥2.3 billion year on year, to
¥9.5 billion, as a result of increased U.S. dollar funding costs.
Trading expenses were ¥0.2 billion, a decrease of ¥0.1
billion year on year, due to decreased expenses on securities
related to trading transactions.
Other ordinary expenses increased ¥1.6 billion, to ¥4.2
billion, reflecting increased foreign exchange transactions.
General and administrative expenses increased ¥2.9 billion
year on year, to ¥21.9 billion. The increase mainly reflects
amortization expenses incurred in relation to the Bank’s new
core banking system.
Other expenses increased ¥0.8 billion, to ¥1.7 billion,
mainly due to increased losses on disposal of loans.
(3) Net income attributable to owners of parent
Income before income taxes decreased ¥1.8 billion year on year, to ¥27.8 billion. Income taxes were ¥2.0 billion. As a result of the
above factors, net income attributable to owners of parent for the first half was ¥25.9 billion, an increase of ¥1.6 billion compared
with the first half of FY2015. Net income per share was ¥22.16.
(Millions of Yen)
Sep. 30, 2016 (6 months)
Sep. 30, 2015 (6 months) Change
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥38,160 ¥30,570 ¥7,590
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,493 7,144 2,349 Interest on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,369 4,236 (867)Interest on debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 308 (54)Interest on borrowings and rediscounts . . . . . . . . . . . . . . . . . . . . 726 668 58 Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,141 1,930 3,211
Fees and commissions expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 571 480 91
Trading expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 318 (110)
Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,219 2,636 1,583 Amortization of debenture and bond issuance costs . . . . . . . . . . 53 34 19Losses on foreign exchange transactions . . . . . . . . . . . . . . . . . . 2,559 1,491 1,068 Losses on sales of bonds and other securities . . . . . . . . . . . . . . 258 359 (101)Losses on devaluation of bonds and other securities . . . . . . . . . . 500 0 500 Losses on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 53 (53)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 697 150
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . 21,921 19,063 2,858
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,745 926 819 Provision of allowance for loan losses . . . . . . . . . . . . . . . . . . . . . — 43 (43)Provision of allowance for credit losses on off-balance-sheet instruments . . . . . . . . . . . . . . . . . . . . . . . . . . 71 247 (176)Write-off of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 40 (8)Losses on disposal of noncurrent assets . . . . . . . . . . . . . . . . . . . — 2 (2)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,641 ¥ 592 ¥1,049
(Millions of Yen)
Sep. 30, 2016 (6 months)
Sep. 30, 2015 (6 months) Change
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥27,829 ¥29,672 ¥(1,843)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,985 5,365 (3,380)
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,045 367 3,678 Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,059) 4,997 (7,056)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,844 24,307 1,537
Net income (loss) attributable to non-controlling interests . . . . . . . (13) 10 (23)
Net income attributable to owners of parent . . . . . . . . . . . . . . . . . . ¥25,857 ¥24,297 ¥ 1,560
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3. Analysis of Financial Condition
(1) Loans and bills discounted
Loans were ¥2,475.4 billion, a decrease of ¥36.2 billion, or
1.4%, from March 31, 2016.
Domestic loans increased ¥18.5 billion, as the Bank
maintained its focus on balancing risk and return. In U.S.
dollars, overseas loans increased $302 million (due to the
strengthening yen, a decrease of 54.7 billion on a yen basis)
as a result of the Bank’s selective origination of real estate
non-recourse loans and corporate loans, mainly in North
America where the risk-return profiles remain attractive.
Risk-monitored loans on a consolidated basis decreased
¥6.4 billion from March 31, 2016, to ¥17.4 billion, and the
ratio to loan balance decreased 0.2%, to 0.7%.
Risk-Monitored Loans (Consolidated) (Millions of Yen)
Sep. 30, 2016 Mar. 31, 2016 Change
Loan balance (end of period) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,475,431 ¥2,511,622 ¥(36,191)
Risk-monitored loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,439 23,823 (6,384)
Loans to bankrupt borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Past due loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,026 19,278 (4,252)Loans overdue for three months or more . . . . . . . . . . . . . . . . . . . . . — — — Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 2,412 ¥ 4,545 ¥ (2,133)
Ratio to loan balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7% 0.9% (0.2%)
Breakdown of Loans and Bills Discounted by Industry (Consolidated) (Millions of Yen)
Sep. 30, 2016 Mar. 31, 2016
Domestic offices (excluding Japan offshore market accounts) . . . . . . . . . . . . . . . . . . . . . . . . ¥2,084,236 ¥2,083,188
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206,744 215,294Agriculture, forestry and fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,339 3,774Mining, quarry, gravel extraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 800Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,700 17,795Electricity, gas, heat supply and water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,510 18,731Information and communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,893 29,632Transport and postal service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,204 62,743Wholesale and retail trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,411 110,774Finance and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,792 382,403Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,767 514,247Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,690 84,067Various services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,581 152,379Local government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,107 22,970
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456,343 467,575
Overseas offices (including Japan offshore market accounts) . . . . . . . . . . . . . . . . . . . . . . . . . 391,195 428,434
Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391,195 428,434
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,475,431 ¥2,511,622
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reflected the Bank’s continued efforts to secure stable
income, despite continued uncertainty in global markets,
through an ongoing focus on diversification and efficient asset
allocation in its investment portfolio.
Total unrealized gains increased ¥11.6 billion from March
31, 2016, to ¥34.7 billion, as a result of the Bank’s continued
focus on a diversified investment portfolio in consideration of
correlations.
(3) Deferred tax assets
The balance of deferred tax assets decreased ¥0.5 billion
from March 31, 2016, to ¥21.1 billion.
The proportion of deferred tax assets to net assets was
5.0% as of September 30, 2016.
(4) Deposits, debentures and bonds payable
The Bank continued its efforts to flexibly manage its funding
volume in line with its assets. As a result, total core funding
(deposits, negotiable certificates of deposit, debentures and
bonds) decreased ¥79.3 billion, or 2.5%, from March 31,
2016, to ¥3,112.3 billion. The percentage of retail funding to
total core funding remained above the 60% level.
While U.S. dollar funding costs have increased since last
year, market availability of foreign currency remains stable.
The Bank will continue its efforts to secure stable funding
through the diversification of its funding sources.
As of September 30, 2016, the Bank maintained adequate
liquidity reserves of ¥630.4 billion.
(2) Securities
Securities were ¥925.6 billion as of September 30, 2016, an
increase of ¥2.1 billion, or 0.2%, compared with March 31,
2016. In the first half of FY2016, ETFs and mortgage bonds
increased, while investment trusts and foreign government
bonds were reduced.
Interest and dividends on securities were ¥10.6 billion, and
gains on bond transactions were ¥4.3 billion. These results
(5) Equity
Equity was ¥424.7 billion, representing an increase of ¥19.2 billion, or 4.7%, in comparison with March 31, 2016.
Outstanding Balance of Securities Held (Consolidated) (Millions of Yen)
Sep. 30, 2016 Mar. 31, 2016 Change
Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 63,841 ¥ 77,447 ¥(13,606)
Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . 8,050 28,254 (20,204)Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . . . 20,824 15,140 5,684 Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,966 34,052 914
Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,965 42,222 5,743
Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813,799 803,856 9,943
Foreign securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629,465 623,108 6,357 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184,334 180,748 3,586
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥925,605 ¥923,526 ¥ 2,079
Deposits, Debentures and Bonds Payable (Consolidated) (Millions of Yen)
Sep. 30, 2016 Mar. 31, 2016 Change
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,876,842 ¥2,932,131 ¥ (55,289)
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,402,619 2,522,254 (119,635)Liquid deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464,008 398,527 65,481 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,213 11,350 (1,137)
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 219,465 (50,005)
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 66,000 ¥ 40,000 ¥ 26,000
Note: Total of deposits and time deposits include negotiable certificates of deposit (NCDs).
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4. Disclosure of Exposure to Securitized Products
(1) CDO, CMBS and RMBS ExposureExposure of the Group to CDO (Collateralized Debt Obligation), CMBS (Commercial Mortgage-Backed Securities) and RMBS
(Residential Mortgage-Backed Securities) is as follows:
(2) Leveraged FinanceThe exposure of the Group to leveraged finance is as follows:
The following amount is the aggregated amount of loan balance rendered for M&A finance (including refinance for M&A deals in
the past). It excludes loans that are in investment grade or equivalent ratings.
Geographical distribution Total leveraged finance
(100 Million Yen)
Sep. 30, 2016
CDO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
CMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
RMBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(100 Million Yen)
Sep. 30, 2016
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482Oceania. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863
(100 Million Yen)
Sep. 30, 2016
Loan balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799Commitment line (Unfunded) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863
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Consolidated Semiannual Balance Sheet (Unaudited)Aozora Bank, Ltd. and Consolidated Subsidiaries
September 30, 2016
Millions of Yen
Thousands ofU.S. Dollars
(Note 1)
Assets Sep. 30, 2016 Sep. 30, 2015 Mar. 31, 2016 Sep. 30, 2016
Cash and cash equivalents (Notes 3 and 24) . . . . . . . . . . . . . . . . . . . . ¥ 512,798 ¥ 507,251 ¥ 489,707 $ 5,072,190 Due from banks (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,549 62,519 56,550 816,514 Call loans and bills bought (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . — 20,059 56 —Receivables under securities borrowing transactions (Note 24) . . . . . . — 14,861 67,895 —Monetary claims bought (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,211 30,632 34,856 348,282 Trading assets (Notes 4, 12, 24 and 25) . . . . . . . . . . . . . . . . . . . . . . . 356,514 296,632 337,373 3,526,358 Money held in trust (Notes 6 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . 26,881 13,871 26,325 265,893 Securities (Notes 5, 12 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925,605 949,581 923,526 9,155,351 Loans and bills discounted (Notes 7, 12 and 24) . . . . . . . . . . . . . . . . . 2,475,431 2,610,391 2,511,622 24,484,983 Foreign exchange (Notes 8 and 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,062 24,972 24,221 238,009 Other assets (Notes 12, 15 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,127 82,713 96,430 1,059,620 Tangible fixed assets (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,091 21,891 21,918 218,509 Intangible fixed assets (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,454 9,778 11,257 123,189 Net defined benefit asset. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,196 5,662 951 11,838 Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,114 25,276 21,573 208,851 Customers’ liabilities for acceptances and guarantees (Note 10) . . . . . 29,574 26,307 30,514 292,528 Allowance for loan losses (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,589) (63,450) (61,384) (559,737)Allowance for investment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (953) (620) (476) (9,436)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,575,072 ¥4,638,332 ¥4,592,921 $45,252,942
Millions of Yen
Thousands ofU.S. Dollars
(Note 1)
Liabilities and Equity Sep. 30, 2016 Sep. 30, 2015 Mar. 31, 2016 Sep. 30, 2016
Liabilities:Deposits (Notes 13 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,876,842 ¥3,036,721 ¥2,932,131 $28,455,412 Debentures (Notes 14 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 241,386 219,465 1,676,162 Call money and bills sold (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,763 137,499 90,268 828,524 Payables under securities lending transactions (Notes 12 and 24) . . . . 269,317 256,612 263,521 2,663,870 Trading liabilities (Notes 4, 24 and 25) . . . . . . . . . . . . . . . . . . . . . . . . . 252,769 230,028 269,869 2,500,191 Borrowed money (Notes 12 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . 224,364 190,961 208,048 2,219,230 Bonds payable (Notes 14 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 10,000 40,000 652,819 Other liabilities (Notes 15 and 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,331 98,206 122,827 1,655,110 Net defined benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,166 7,910 8,961 90,673 Provision for directors’ retirement benefits . . . . . . . . . . . . . . . . . . . . . . 1 1 2 11 Provision for credit losses on off-balance-sheet instruments . . . . . . . . 1,464 1,985 1,394 14,484 Provision for contingent loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 451 409 3,275 Reserves under the special laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7 7 79 Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 — — 39 Acceptances and guarantees (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . 29,574 26,307 30,514 292,528
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,150,398 4,238,080 4,187,422 41,052,407
Equity:Shareholders’ equity:
Capital stock (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000 100,000 989,119 Capital surplus (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,315 87,313 87,313 863,651 Retained earnings (Notes 16 and 28) . . . . . . . . . . . . . . . . . . . . . . . 214,446 191,081 199,785 2,121,129 Treasury stock—at cost (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . (3,387) (3,388) (3,388) (33,507)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398,373 375,006 383,710 3,940,392 Accumulated other comprehensive income (loss):
Valuation difference on available-for-sale securities . . . . . . . . . . . . . 24,199 16,301 16,258 239,366 Deferred gains or losses on hedges . . . . . . . . . . . . . . . . . . . . . . . . 1,830 2,207 4,438 18,110 Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . (1,840) 1,168 (3) (18,205)Remeasurements of defined benefit plans . . . . . . . . . . . . . . . . . . . . (98) 4,614 139 (979)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,091 24,293 20,833 238,292 Subscription rights to shares (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . 296 182 182 2,934 Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,912 769 772 18,917
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424,674 400,251 405,498 4,200,535
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,575,072 ¥4,638,332 ¥4,592,921 $45,252,942
See the accompanying notes to consolidated semiannual financial statements.
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Consolidated Semiannual Statement of Income (Unaudited)Aozora Bank, Ltd. and Consolidated Subsidiaries
For the six-month period ended September 30, 2016
Millions of Yen
Thousands ofU.S. Dollars
(Note 1)
Sep. 30, 2016 (6 months)
Sep. 30, 2015 (6 months)
Mar. 31, 2016 (1 year)
Sep. 30, 2016 (6 months)
Income:Interest income:
Interest on loans and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥20,685 ¥21,799 ¥ 43,437 $204,602 Interest and dividends on securities . . . . . . . . . . . . . . . . . . . . . . . . 10,649 9,557 20,058 105,339 Interest on due from banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 46 131 994 Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 1,138 1,595 4,715
Fees and commissions income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,512 6,246 12,512 54,524 Trading income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,293 5,440 12,907 101,814 Other ordinary income (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,092 12,847 25,472 129,502 Other income (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,179 3,166 7,939 51,233
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,990 60,242 124,054 652,723 Expenses:
Interest expenses:Interest on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,369 4,236 8,341 33,333 Interest on debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 308 603 2,522 Interest on borrowings and rediscounts . . . . . . . . . . . . . . . . . . . . . 726 668 1,380 7,188 Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,141 1,930 5,093 50,858
Fees and commissions expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571 480 1,048 5,654 Trading expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 318 698 2,067 Other ordinary expenses (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,219 2,636 7,545 41,737 General and administrative expenses (Note 21) . . . . . . . . . . . . . . . . . 21,921 19,063 41,140 216,827 Other expenses (Note 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,745 926 2,485 17,265
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,160 30,570 68,337 377,451 Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,829 29,672 55,716 275,272 Income taxes:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,045 367 1,257 40,014 Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,059) 4,997 10,946 (20,371)
Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,985 5,365 12,204 19,643 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,844 24,307 43,512 255,629 Net income attributable to non-controlling interests . . . . . . . . . . . . . (13) 10 13 (135)Net income attributable to owners of the parent . . . . . . . . . . . . . . . . ¥25,857 ¥24,297 ¥ 43,499 $255,764
Consolidated Semiannual Statement of Comprehensive Income (Unaudited)Aozora Bank, Ltd. and Consolidated Subsidiaries
For the six-month period ended September 30, 2016
Millions of Yen
Thousands ofU.S. Dollars
(Note 1)
Sep. 30, 2016(6 months)
Sep. 30, 2015(6 months)
Mar. 31, 2016(1 year)
Sep. 30, 2016(6 months)
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥25,844 ¥ 24,307 ¥ 43,512 $255,629 Other comprehensive income (loss):
Valuation difference on available-for-sale securities . . . . . . . . . . . . . . 7,940 (18,629) (18,672) 78,544 Deferred gains or losses on hedges. . . . . . . . . . . . . . . . . . . . . . . . . . (2,607) 2,352 4,583 (25,791)Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . (1,837) (40) (1,212) (18,175)Remeasurements of defined benefit plans . . . . . . . . . . . . . . . . . . . . . (238) (576) (5,052) (2,356)Total other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . 3,257 (16,893) (20,353) 32,222
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥29,101 ¥ 7,413 ¥ 23,158 $287,851 Comprehensive income attributable to:
Owners of the parent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥29,115 ¥ 7,403 ¥ 23,145 $287,990 Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14) 10 13 (139)
See the accompanying notes to consolidated semiannual financial statements.
YenU.S. Dollars
(Note 1)
Sep. 30, 2016 (6 months)
Sep. 30, 2015 (6 months)
Mar. 31, 2016 (1 year)
Sep. 30, 2016 (6 months)
Per share information:Basic net income per share of common stock (Note 26) . . . . . . . . . . . ¥22.16 ¥20.83 ¥37.29 $0.22 Diluted net income per share of common stock (Note 26) . . . . . . . . . 22.15 17.80 34.36 0.22 Cash dividends applicable to the period:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00 8.00 18.60 0.08
See the accompanying notes to consolidated semiannual financial statements.
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Consolidated Semiannual Statement of Changes in Equity (Unaudited)Aozora Bank, Ltd. and Consolidated Subsidiaries
For the six-month period ended September 30, 2016
Millions of Yen
Shareholders’ equity Accumulated other comprehensive income (loss)
Subscription rights to shares
Non-controlling interests Total equity
Capital stock
Capital surplus
Retained earnings
Treasury stock-at cost Total
Valuation difference
on available-for-sale
securities
Deferred gains or
losses on hedges
Foreign currency
translation adjustment
Remeasure-ments of defined benefit plans Total
Balance, April 1, 2015 . . . . . . . . ¥100,000 ¥ 289,676 ¥235,035 ¥ (99,333) ¥ 525,377 ¥ 34,931 ¥ (145) ¥ 1,209 ¥ 5,191 ¥ 41,187 ¥ 81 ¥ 767 ¥ 567,414
Net income attributable to owners of the parent . . . . . . 43,499 43,499 43,499
Cash dividends paid . . . . . . . . . . (20,490) (21,245) (41,735) (41,735)
Purchase of treasury stock (Note 16) . . . . . . . . . . . . . . . . . (143,430) (143,430) (143,430)
Retirement of treasury stock (Note 16) . . . . . . . . . . . . . . . . . (239,375) 239,375 — —
Transfer to capital surplus from retained earnings . . . . . . . 57,502 (57,502) — —
Net changes of items during the year . . . . . . . . . . . . . (18,672) 4,583 (1,212) (5,052) (20,353) 100 4 (20,248)
Balance, March 31, 2016 . . . . . . ¥100,000 ¥ 87,313 ¥199,785 ¥ (3,388) ¥ 383,710 ¥ 16,258 ¥ 4,438 ¥ (3) ¥ 139 ¥ 20,833 ¥182 ¥ 772 ¥ 405,498
Net income attributable to owners of the parent . . . . . . 25,857 25,857 25,857
Cash dividends paid . . . . . . . . . . (11,197) (11,197) (11,197)
Purchase of treasury stock . . . . (0) (0) (0)
Disposal of treasury stock . . . . . 1 1 3 3
Net changes of items during the period . . . . . . . . . . . 7,941 (2,607) (1,837) (238) 3,257 114 1,140 4,512
Balance, September 30, 2016 . . ¥100,000 ¥ 87,315 ¥214,446 ¥ (3,387) ¥ 398,373 ¥ 24,199 ¥ 1,830 ¥(1,840) ¥ (98) ¥ 24,091 ¥296 ¥1,912 ¥ 424,674
Thousands of U.S. Dollars (Note 1)
Shareholders’ equity Accumulated other comprehensive income (loss)
Subscription rights to shares
Non-controlling interests Total equity
Capital stock
Capital surplus
Retained earnings
Treasury stock-at cost Total
Valuation difference
on available-for-sale
securities
Deferred gains or
losses on hedges
Foreign currency
translation adjustment
Remeasure-ments of defined benefit plans Total
Balance, March 31, 2016 . . . . . . $989,119 $863,634 $1,976,120 $(33,516) $3,795,357 $160,819 $ 43,901 $ (30) $ 1,377 $206,067 $1,805 $ 7,640 $4,010,869
Net income attributable to owners of the parent . . . . . . 255,764 255,764 255,764
Cash dividends paid . . . . . . . . . . (110,755) (110,755) (110,755)
Purchase of treasury stock . . . . (6) (6) (6)
Disposal of treasury stock . . . . . 17 15 32 32
Net changes of items during the period . . . . . . . . . . . 78,547 (25,791) (18,175) (2,356) 32,225 1,129 11,277 44,631
Balance, September 30, 2016 . . $989,119 $863,651 $2,121,129 $(33,507) $3,940,392 $239,366 $ 18,110 $(18,205) $ (979) $238,292 $2,934 $18,917 $4,200,535
See the accompanying notes to consolidated semiannual financial statements.
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Consolidated Semiannual Statement of Cash Flows (Unaudited)Aozora Bank, Ltd. and Consolidated Subsidiaries
For the six-month period ended September 30, 2016
Millions of Yen
Thousands ofU.S. Dollars
(Note 1)
Sep. 30, 2016(6 months)
Sep. 30, 2015(6 months)
Mar. 31, 2016(1 year)
Sep. 30, 2016(6 months)
Cash flows from operating activities:Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 27,829 ¥ 29,672 ¥ 55,716 $ 275,272 Adjustments for:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,017 1,625 3,332 19,953 Increase (decrease) in allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,748) (280) (2,314) (46,967)Increase (decrease) in allowance for investment losses . . . . . . . . . . . . . . . . . . . . . . . . . . 477 272 128 4,725 Increase (decrease) in net defined benefit asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (631) (974) (1,943) (6,245)Increase (decrease) in net defined benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 41 160 2,458 Increase (decrease) in provision for directors’ retirement benefits . . . . . . . . . . . . . . . . . . . (1) 0 1 (13)Increase (decrease) in provision for credit losses on off-balance-sheet instruments . . . . . 71 248 (341) 705 Interest income (accrual basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31,912) (32,541) (65,223) (315,650)Interest expenses (accrual basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,493 7,144 15,418 93,901 Loss (gain) on securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,726) (4,568) (9,549) (46,754)Loss (gain) on money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (330) (214) (393) (3,270)Foreign exchange losses (gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,650 (5,137) 59,430 1,064,789 Loss (gain) on disposal of noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 3 — Net decrease (increase) in trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,140) 50,472 9,730 (189,326)Net increase (decrease) in trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,100) (81,229) (41,388) (169,139)Net decrease (increase) in loans and bills discounted . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,290) 166,508 237,248 (82,001)Net increase (decrease) in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,289) 51,974 (52,615) (546,879)Net increase (decrease) in debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50,005) (4,725) (26,646) (494,617)Net increase (decrease) in borrowed money (excluding subordinated borrowings) . . . . . . 16,315 3,724 20,811 161,384 Net decrease (increase) in due from banks (excluding due from the Bank of Japan) . . . . . (28,090) (12,906) (7,802) (277,845)Net decrease (increase) in call loans and bills bought and others . . . . . . . . . . . . . . . . . . . (298) 478 16,258 (2,954)Net decrease (increase) in receivables under securities borrowing transactions . . . . . . . . 67,895 44,027 (9,005) 671,563 Net increase (decrease) in call money and bills sold, payables under repurchase agreements and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,505) (13,689) (60,920) (64,343)Net increase (decrease) in payables under securities lending transactions . . . . . . . . . . . . 5,796 (36,408) (29,499) 57,329 Net decrease (increase) in foreign exchange—assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 4,287 5,038 1,571 Increase (decrease) in straight bonds—issuance and redemption . . . . . . . . . . . . . . . . . . 26,000 10,000 40,000 257,171 Interest and dividends received (cash basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,099 33,607 65,546 317,500 Interest paid (cash basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,844) (7,990) (15,756) (107,266)Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,106 (39,176) (22,665) 228,548
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,243 164,245 182,760 803,600 Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,242) (2,138) (2,599) (12,291)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,001 162,107 180,160 791,309
Cash flows from investing activities:Purchase of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (518,232) (516,734) (1,094,599) (5,125,940)Proceeds from sales of securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390,904 493,293 992,918 3,866,511 Proceeds from redemption of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,848 37,336 106,428 839,252 Increase in money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35,612) (30,568) (65,820) (352,252)Decrease in money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,213 39,722 62,670 348,300 Purchase of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,326) (897) (2,051) (13,121)Purchase of intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,583) (3,156) (5,563) (25,554)Proceeds from sales of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 2 —
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . (46,789) 18,998 (6,014) (462,804)
Cash flows from financing activities:Repayments of lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (77) (76) (164) (764)Proceeds from stock issuance to non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . 1,160 — — 11,483 Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,197) (31,238) (41,735) (110,755)Cash dividends paid to non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (8) (8) (67)Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0) (143,430) (143,430) (6)Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 — — 0
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,121) (174,753) (185,339) (100,109)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,090 6,351 (11,192) 228,396 Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489,707 500,900 500,900 4,843,794 Cash and cash equivalents, end of period (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 512,798 ¥ 507,251 ¥ 489,707 $ 5,072,190
See the accompanying notes to consolidated semiannual financial statements.
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Notes to Consolidated Semiannual Financial Statements (Unaudited)Aozora Bank, Ltd. and Consolidated Subsidiaries
Interim period ended September 30, 2016
2. Summary of Significant Accounting Policiesa. Use of Estimates—The preparation of consolidated
semiannual financial statements in accordance with Japanese
GAAP requires management to make estimates and assump-
tions that affect the reported amounts of assets and liabilities,
disclosures of contingent assets and liabilities at the date of
the consolidated semiannual financial statements, and the
reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those esti-
mates. Material estimates that are particularly susceptible to
significant change in the near term include, but are not limited
to, those that are related to the determination of the allow-
ance for loan losses, deferred tax assets, and the valuation of
financial instruments.
b. Consolidation—The consolidated semiannual financial
statements include the accounts of the Bank and its signifi-
cant subsidiaries. The number of consolidated subsidiaries
was 19 as of September 30, 2016.
AZB Funding 8 Limited was established and consolidated
from the six-month period ended September 30, 2016.
Under the control and influence concepts, those entities
in which the Bank, directly or indirectly, is able to exercise
control over finance and operations are fully consolidated,
and those entities over which the Group has the ability to
exercise significant influence should be accounted for by
the equity method.
Practical Issues Task Force (‘PITF’) No. 20, ‘Practical
Solution on Application of Control Criteria and Influence
Criteria to Investment Associations,’ issued by the Accounting
Standards Board of Japan (‘ASBJ’), provides additional
guidance on how the control and influence concepts should
be practically applied to investment vehicles, such as limited
partnerships, Tokumei Kumiai arrangements (a silent partner-
ship under the Commercial Code of Japan), and other entities
with similar characteristics in order to prevent these invest-
ment vehicles from being inappropriately excluded from
consolidation.
The consolidated semiannual financial statements do not
include the accounts of certain subsidiaries such as Aozora
Chiiki Saisei Co., Ltd., because the combined total assets,
total income, net income (loss) and retained earnings, etc.
of such subsidiaries would not have a material effect on the
accompanying consolidated semiannual financial statements.
Investments in unconsolidated subsidiaries and affiliated
companies, such as Vietnam International Leasing Company
Limited, Aozora Daiwa Finance Co., Ltd., and AZ-Star Co.,
Ltd., are generally stated at cost. These companies are not
accounted for using the equity method of accounting because
the effect on the accompanying consolidated semiannual
financial statements would not be material even if the equity
method of accounting had been applied to the investments in
these companies.
1. Basis of Presentation of Consolidated Semiannual Financial Statementsthe 2015 consolidated financial statements to conform to
the classifications used in the consolidated semiannual
financial statements for the six-month period ended
September 30, 2016.
The consolidated semiannual financial statements are
stated in Japanese yen, the currency of the country in which
the Bank is incorporated and operates. Japanese yen figures
of less than one million yen are truncated, except for per
share data. As a result, the totals do not necessarily equal the
sum of the individual amounts. The translation of Japanese
yen amounts into U.S. dollar amounts is included solely for
the convenience of readers outside Japan and has been
made at the rate of ¥101.10 to $1.00, the rate of exchange
at September 30, 2016. Such translations should not be
construed as representations that the Japanese yen amounts
could be converted into U.S. dollars at that or any other rate.
The accompanying consolidated semiannual financial
statements of Aozora Bank, Ltd. (the ‘Bank’) and consoli-
dated subsidiaries (together, the ‘Group’) have been prepared
in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Act, the Banking Act of
Japan and other related accounting regulations, and in accor-
dance with accounting principles generally accepted in Japan
(‘Japanese GAAP’), which are different in certain respects as
to the application and disclosure requirements of International
Financial Reporting Standards.
In preparing these consolidated semiannual financial
statements, certain reclassifications and rearrangements
have been made to the consolidated semiannual financial
statements issued domestically in order to present them
in a form which is more familiar to readers outside Japan.
In addition, certain reclassifications have been made in
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The difference between the cost of an acquisition and the
fair value of the net assets of the acquired subsidiaries at the
date of acquisition is charged to operations when incurred
due to its immateriality. A bargain purchase gain is charged to
operations on the acquisition date after reassessing the pro-
cedures of acquisition price allocation to ensure that an
acquirer has correctly identified all of the assets acquired
and all of the liabilities assumed with a review of such
procedures used.
All significant intercompany balances and transactions
are eliminated in consolidation. All material unrealized
profits resulting from transactions within the Group are
also eliminated.
The ASBJ issued ASBJ Implementation Guidance No. 22,
‘Implementation Guidance on Determining a Subsidiary and
an Affiliate for Consolidated Financial Statements,’ on May 13,
2008, which clarifies the conditions where a company does
not regard an entity as a subsidiary even if the controlling
interest of the entity is held by the company. This accounting
regulation was implemented from the fiscal year commencing
on and after October 1, 2008, and was applied by the Group
from the year ended March 31, 2010.
In accordance with PITF No. 18, ‘Practical Solution on
Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements,’ for-
eign subsidiaries’ financial statements prepared in accordance
with either International Financial Reporting Standards or gen-
erally accepted accounting principles in the United States are
used for the consolidation process with certain limitations.
c. Cash and Cash Equivalents—Cash and cash equivalents
consist of cash on hand and due from the Bank of Japan.
d. Trading Assets/Liabilities—Transactions for trading
purposes (for the purpose of seeking to capture gains arising
from short-term changes in interest rates, currency exchange
rates or market prices of securities and other market-related
indices or arbitrage opportunities) are included in ‘Trading
assets’ or ‘Trading liabilities,’ as appropriate, on a trade-date
basis. Trading assets and liabilities are stated at fair value.
Profits and losses on transactions for trading purposes are
shown as ‘Trading income’ and ‘Trading expenses,’ as
appropriate, on a trade-date basis.
e. Securities—All securities are classified and accounted for,
depending on management’s intent, as follows:
(1) trading securities which are held for the purpose of earning
capital gains in the near term (other than securities booked in
trading accounts) are reported at fair value, and the related
unrealized gains and losses are recognized in the consoli-
dated semiannual statement of income, (2) held-to-maturity
debt securities which are expected to be held to maturity with
the positive intent and ability to hold them to maturity are
reported at amortized cost and (3) available-for-sale securities
are reported at fair value, with unrealized gains and losses, net
of applicable taxes, reported within accumulated other com-
prehensive income as a separate component of equity. The
cost of sale of these securities is determined mainly by the
moving-average method.
The measurement at cost or amortized cost of available-for-
sale securities is prohibited, unless the fair value cannot be
reliably determined under ‘Accounting Standard for Financial
Instruments’ (ASBJ Statement No.10).
Non-marketable equity securities are generally regarded as
securities whose fair value cannot be reliably determined and
are measured at cost. However, certain non-marketable debt
securities, such as privately placed corporate bonds and cer-
tain asset-backed securities, are measured at fair value. The
cost of sale of non-marketable available-for-sale securities
stated at cost is determined by the moving-average method.
For other-than-temporary declines in fair value, the cost of
securities is reduced to fair value and the impairment losses
are recognized by a charge to operations.
The Group records its interests in investment limited part-
nerships, associations under the Civil Code of Japan, and
Tokumei Kumiai arrangements, based on its proportionate
share of the net assets in such entities, and recognizes its
share of profits or losses in a manner similar to the equity
method of accounting. The Group records such interests
in ‘Securities.’
Securities included in money held in trust on behalf of the
Group are accounted for in the same manner as the securities
mentioned above.
f. Derivatives and Hedging Activities—Derivative financial
instruments (other than derivatives booked in trading
accounts) are classified and accounted for as follows:
(1) All derivatives other than those used for hedging purposes
are recognized as either assets or liabilities and measured
at fair value, with gains or losses recognized currently in
the consolidated semiannual statement of income.
(2) Derivatives used for hedging purposes, if they meet certain
hedging criteria, including high correlation of fair value
movement and effectiveness between the hedging instru-
ments and the hedged items and the assessment of its
effectiveness, are recognized as either assets or liabilities
and measured at fair value. Valuation gains or losses on
derivatives used for hedging purposes are primarily
deferred over the terms of the hedged items within accu-
mulated other comprehensive income as a component of
equity and are charged to operations when the gains and
losses on the hedged items are recognized.
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Hedges of Interest Rate Risk
The Bank applies deferral hedge accounting to hedges of
interest rate risk associated with financial assets and liabilities
in accordance with ‘Accounting and Auditing Treatments
on the Application of Accounting Standards for Financial
Instruments in the Banking Industry’ (the Japanese Institute
of Certified Public Accountants (‘JICPA’) Industry Audit
Committee Report No. 24, February 13, 2002).
Under the JICPA Industry Audit Committee Report No. 24,
hedges to offset changes in fair value of fixed-rate instruments
(such as loans or deposits) (‘fair value hedges’) are applied by
grouping hedging instruments and hedged items by their
maturities. The assessment of hedge effectiveness is generally
based on the consideration of interest rate indices affecting
the respective fair values of the group of hedging instruments
and hedged items.
Hedges of Foreign Currency Risk
The Bank applies deferral hedge accounting to hedges of
foreign currency risk associated with foreign currency-
denominated financial assets and liabilities in accordance
with ‘Accounting and Auditing Treatments for Foreign
Currency Transactions in the Banking Industry’ (the JICPA
Industry Audit Committee Report No. 25, July 29, 2002).
In accordance with the JICPA Industry Audit Committee
Report No. 25, the Bank designates certain currency swaps
and foreign exchange swaps for the purpose of funding for-
eign currencies as hedges for the exposure to changes in
foreign exchange rates associated with foreign currency-
denominated assets or liabilities when the foreign currency
positions on the hedged assets or liabilities are expected to
exceed the corresponding foreign currency positions on the
hedging instruments. Hedge effectiveness is reviewed by
comparing the total currency position of the hedged items
with that of the hedging instruments by currency.
For hedging the foreign currency exposure of foreign
currency-denominated available-for-sale securities (other than
debt securities), which were designated in advance, fair value
hedge accounting is adopted on a portfolio basis when the
cost of the hedged securities is covered with offsetting
liabilities denominated in the same foreign currency as the
hedged securities.
Hedges of Stock Price Risk
The Bank designates available-for-sale securities (stock, etc.)
as hedged items and total return swaps, etc. as hedging
instruments and applies individual deferral hedge accounting.
The assessment of hedge effectiveness is generally based
on the comparison of changes in value of the hedged item
and hedging instruments.
Intercompany and Intracompany Derivative Transactions
For intercompany and intracompany derivative transactions
for hedging purposes (‘internal derivatives’), including cur-
rency and interest rate swaps, the Bank currently charges
gains and losses on internal derivatives to operations or
defers them within accumulated other comprehensive income
as a component of equity without elimination in accordance
with the JICPA Industry Audit Committee Reports No. 24 and
No. 25. These reports permit a bank to retain the gains and
losses on internal derivatives in its consolidated semiannual
financial statements without elimination if the bank establishes
and follows strict hedging criteria by entering into mirror-
image offsetting transactions with external third parties within
three business days after the designation of internal derivatives
as hedging instruments.
g. Tangible Fixed Assets and Intangible Fixed Assets—
Tangible fixed assets and intangible fixed assets are stated
at cost.
Depreciation of tangible fixed assets of the Group is
computed primarily by the declining-balance method at
rates based on the estimated useful lives of the assets,
while the straight-line method is applied to buildings, including
structures and equipment attached to buildings, of the Bank.
The ranges of useful lives are principally from 15 years to 50
years for buildings and from 5 years to 15 years for other
tangible fixed assets.
Amortization of intangible fixed assets of the Group is com-
puted by the straight-line method over the estimated useful
lives of the assets. Costs of software developed or obtained
for internal use are amortized over the estimated useful lives
of the software (principally 5 years to 11 years).
Lease assets under finance lease transactions, in which
substantial ownership is not deemed to be transferred, are
depreciated by the straight-line method over the lease term.
The salvage value is zero or the guaranteed amounts if
specified in the lease contracts.
(Accounting change)
Starting in the six-month period ended September 30, 2016,
some consolidated subsidiaries applied the ‘Practical Solution
on a change in depreciation method due to Tax Reform 2016’
(ASBJ PITF No. 32, June 17, 2016) and changed their depre-
ciation method from the declining-balance method to the
straight-line method for structures and equipment attached
to buildings.
This application has little effect on the consolidated
semiannual financial statements.
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h. Long-Lived Assets—The Group reviews its long-lived
assets for impairment whenever events or changes in circum-
stances indicate that the carrying amount of an asset or asset
group may not be recoverable. An impairment loss would be
recognized if the carrying amount of an asset or asset group
exceeds the sum of the undiscounted future cash flows
expected to result from the continued use and eventual dis-
position of the asset or asset group. The impairment loss
would be measured as the amount by which the carrying
amount of the asset exceeds its recoverable amount, which is
the higher of the discounted cash flows from the continued
use and eventual disposition of the asset or asset group or
the net selling price at disposition.
i. Deferred Charges—Corporate bond issuance expenses
are deferred and amortized by the straight-line method over
the terms of the corporate bonds.
Debenture issuance expenses are deferred and amortized
by the straight-line method over the terms of the debentures.
j. Write-Off of Loans and Allowance for Loan Losses—
Loans to borrowers who are assessed as ‘Bankrupt’ (in the
process of legal proceedings for bankruptcy, special liquida-
tion, etc.) or ‘De facto bankrupt’ (in serious financial difficulties
and are not deemed to be capable of restructuring) under the
Bank’s self-assessment guidelines are written off to the
amounts expected to be collected through the disposal of
collateral or execution of guarantees, etc. The amounts
deemed to be uncollectible and written off were ¥22,920
million ($226,711 thousand) and ¥24,091 million at
September 30 and March 31, 2016, respectively.
For loans to borrowers who are assessed as ‘In danger of
bankruptcy’ (not yet bankrupt but are in financial difficulty
and are highly likely to go bankrupt in the foreseeable future),
a specific allowance is provided for the loan losses at an
amount considered to be necessary based on an overall
solvency assessment of the borrowers and expected collect-
ible amounts through the disposal of collateral or execution
of guarantees, etc. For loans whose future cash flows of
principal and interest are reasonably estimated, the differ-
ence between the discounted cash flows and the carrying
amount is accounted for as an allowance for loan losses
(the ‘DCF method’).
For other loans, the Bank provides a general allowance by
applying the estimated loan loss ratio, determined based on
the historical loan loss data over a defined period in the past.
However, for borrowers with a large credit exposure, catego-
rized as ‘Need attention,’ etc., under the internal credit rating
system, the loan loss amount estimated by the DCF method
is reflected as an addition to the allowance for loan losses cal-
culated based on the estimated loan loss ratio, if necessary.
An allowance for loans to restructuring countries is provided
for the amount of expected losses based on an assessment
of political and economic conditions in their respective
countries.
All loans are monitored in line with an internal self-
assessment standard, etc., on an ongoing basis. Operating
divisions or branches review internal credit ratings of bor-
rowers (‘Borrower Ratings’) which are defined in line with
‘borrower categories’ and those ratings are then approved
by the divisions in charge of credit. The division in charge
of asset assessment, which is independent of operating
divisions or branches and the divisions in charge of credit,
reviews the appropriateness of internal credit ratings on a
sample basis.
Based upon the borrower categories determined by the
aforementioned process as of the balance sheet date, oper-
ating divisions and branches initially compute the amounts
of write-offs and allowance, and the division in charge of
asset assessment verifies the amounts and determines the
final amounts.
With regard to the allowance for loan losses of consolidated
subsidiaries, a general allowance is calculated for the amount
of estimated loan losses using historical loan loss data over
a defined period in the past. For loans to ‘In danger of bank-
ruptcy’ borrowers and ‘De facto bankrupt’ and ‘Bankrupt’
borrowers, a specific allowance is provided or the uncollect-
ible amount is written off based on an assessment of
collectibility of individual loans.
The independent internal audit divisions periodically audit
the appropriateness of the write-off and allowances based on
the self-assessment.
k. Allowance for Investment Losses—Allowance for
investment losses is provided for estimated losses on certain
investments based on an assessment of the issuers’ financial
condition and uncertainty about future recoverability of the
decline in realizable values of the investments.
l. Asset Retirement Obligations—Asset retirement obliga-
tion is defined as a legal obligation imposed either by law or
contract that results from the acquisition, construction, devel-
opment and the normal operation of a tangible fixed asset
and is associated with the retirement of such a tangible fixed
asset. The asset retirement obligation is recognized as the
sum of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the obliga-
tion is incurred if a reasonable estimate can be made. If a
reasonable estimate of the asset retirement obligation cannot
be made in the period the asset retirement obligation is
incurred, the liability should be recognized when a reasonable
estimate of asset retirement obligation can be made. Upon
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initial recognition of a liability for an asset retirement obligation,
an asset retirement cost is capitalized by increasing the carry-
ing amount of the related fixed asset by the amount of the
liability. The asset retirement cost is subsequently allocated to
expense through depreciation over the remaining useful life of
the asset. Over time, the liability is accreted to its present
value each period. Any subsequent revisions to the timing or
the amount of the original estimate of undiscounted cash
flows are reflected as an increase or a decrease in the carry-
ing amount of the liability and the capitalized amount of the
related asset retirement cost.
m. Provision for Directors’ Retirement Benefits—
Provision for directors’ retirement benefits is provided
at the amount that would be required if directors and Audit
& Supervisory Board members of some consolidated
subsidiaries retired at the balance sheet date.
n. Provision for Credit Losses on Off-Balance-Sheet
Instruments—Provision for credit losses on off-balance-sheet
instruments is provided for credit losses on commitments to
extend loans and other off-balance-sheet financial instru-
ments based on an estimated loss ratio or individually
estimated loss amount determined by the same methodology
used in determining the amount of allowance for loan losses.
o. Provision for Contingent Loss—Provision for contingent
loss is maintained for possible losses from contingencies,
which are not covered by other reserves.
p. Reserves under the Special Laws—Reserves under the
special laws are reserves for financial products’ transaction
liabilities which are provided for compensation for losses from
securities brokering in consolidated domestic subsidiaries in
accordance with the Financial Instruments and Exchange Act,
Article 46-5 and the Cabinet Office Ordinance on Financial
Instruments Business, Article 175.
q. Retirement and Pension Plans—The Group accounts for
net defined benefit liabilities (assets) based on the defined
retirement benefit obligations and plan assets at the balance
sheet date. The defined retirement benefit obligations are
calculated based on the benefit formula attribution of the
expected benefit over the service period of employees. Prior-
service cost is amortized using the straight-line method over a
period (nine years) within the employees’ average remaining
service period at incurrence. Net actuarial gain and loss are
amortized using the straight-line method over a period (five
years) within the employees’ average remaining service period
commencing from the next fiscal year after incurrence.
Some consolidated subsidiaries adopt a simplified method
based on the defined retirement benefit obligations for each
retirement plan that would be required if all employees retired
voluntarily at the consolidated balance sheet date.
r. Lease Transactions—All finance lease transactions are
capitalized to recognize lease assets and lease obligations on
the balance sheet.
All other leases are accounted for as operating leases.
s. Income Taxes—Deferred income taxes are recorded to
reflect expected future consequences of temporary differ-
ences between assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax
purposes. These deferred taxes are measured by applying
currently enacted tax rates to the temporary differences. The
Bank assesses the realizability of deferred tax assets based
on consideration of the available evidence, including future
taxable income, future reversals of existing temporary differ-
ences, and tax-planning strategies. The Bank reduces the
carrying amount of a deferred tax asset to the extent that it is
not probable that sufficient taxable income will be available to
allow the benefit of part or all of that deferred tax asset to be
realized. Such reduction may be reversed to the extent that
it becomes probable that sufficient taxable income will be
available and warrant the realization of tax benefits.
Starting in the six-month period ended September 30,
2016, the Group applied the ‘Guidance on Recoverability of
Deferred Tax Assets’ (ASBJ Guidance on Corporate
Accounting Standard No. 26, March 28, 2016).
t. Foreign Currency Items—Assets and liabilities denomi-
nated in foreign currencies held by the Bank are translated
into Japanese yen at the exchange rates prevailing at the
balance sheet date except for investments in equity securities
of unconsolidated subsidiaries or affiliated companies, which
are translated at historical rates.
Assets and liabilities denominated in foreign currencies
which are held by consolidated subsidiaries are translated into
Japanese yen at the exchange rates as of the consolidated
balance sheet date, while equity accounts are translated at
historical rates. Differences arising from such translations are
shown as ‘Foreign currency translation adjustment’ within
accumulated other comprehensive income as a separate
component of equity.
Revenue and expense accounts of consolidated foreign
subsidiaries are translated into Japanese yen at the average
exchange rate. Differences arising from such translation are
included in ‘Non-controlling interests’ or ‘Foreign currency
translation adjustment’ as a separate component of equity
in the balance sheets.
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u. Per Share Information—Basic net income (loss) per
share is computed by dividing net income (loss) attributable
to common stockholders by the weighted-average number
of shares of common stock outstanding for the period,
retroactively adjusted for stock splits or reverse stock splits.
Diluted net income per share reflects the potential dilution
that would occur if dilutive options and warrants were exer-
cised or the securities were converted into common stock,
also retroactively adjusted for stock splits or reverse stock
splits. Diluted net income per share of common stock
assumes full conversion of the preferred stock at the begin-
ning of the year (or at the time of issuance) with an applicable
adjustment for related dividends to preferred stock, unless the
preferred stock has an antidilutive effect.
Net assets per share of common stock are computed by
dividing net assets attributable to common stockholders by
the number of shares of common stock outstanding at the
end of the period.
Cash dividends per share presented in the accompanying
consolidated semiannual statement of income are dividends
applicable to the respective years including dividends to be
paid after the end of the period.
v. Accounting Changes and Error Corrections—In
December 2009, the ASBJ issued ASBJ Statement No. 24,
‘Accounting Standard for Accounting Changes and Error
Corrections’ and ASBJ Guidance No. 24, ‘Guidance on
Accounting Standard for Accounting Changes and Error
Corrections.’ Accounting treatments under this standard and
guidance are as follows:
(1) Changes in accounting policies
When a new accounting policy is applied due to a revision
of accounting standards, the new policy is applied retro-
spectively unless the revised accounting standards include
specific provisions. When the revised accounting stan-
dards include specific provisions, a company shall comply
with the specific provisions.
(2) Changes in presentation
When the presentation of consolidated financial state-
ments is changed, prior-period financial statements are
reclassified in accordance with the new presentation.
(3) Changes in accounting estimates
A change in an accounting estimate is accounted for in
the period of the change if the change affects that period
only and is accounted for prospectively if the change
affects both the period of the change and future periods.
(4) Corrections of prior-period errors
When an error in prior-period consolidated financial
statements is discovered, those consolidated financial
statements are restated.
4. Trading Assets and LiabilitiesTrading assets and liabilities as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Trading assets:Trading account securities . . . . . . . . . . . . . . . . . . . . . . . ¥ 210 ¥ — $ 2,081 Derivatives of trading account securities . . . . . . . . . . . . . 975 360 9,645 Securities related to trading transactions . . . . . . . . . . . . 15,021 15,050 148,581 Derivatives of securities related to trading transactions . . 482 255 4,777 Trading-related financial derivatives . . . . . . . . . . . . . . . . 339,824 321,707 3,361,274
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥356,514 ¥337,373 $3,526,358
Trading liabilities:Derivatives of securities related to trading transactions . . ¥ 1,948 ¥ 295 $ 19,276 Trading-related financial derivatives . . . . . . . . . . . . . . . . 250,820 269,574 2,480,915
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥252,769 ¥269,869 $2,500,191
3. Cash and Cash EquivalentsCash and cash equivalents as of September 30, 2016 and 2015, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Cash on hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 9,800 ¥ 11,203 $ 96,939 Due from the Bank of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . 502,997 496,048 4,975,251
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥512,798 ¥507,251 $5,072,190
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The costs and carrying amounts of available-for-sale securities with fair value as of September 30 and March 31, 2016, were as follows:
Millions of Yen Thousands of U.S. Dollars
Carrying amount Cost Difference
Carrying amount Cost Difference
September 30, 2016
Carrying amount exceeding cost:
Japanese stocks . . . . . . . . . . . . . . . . . . . . . ¥ 42,759 ¥ 13,354 ¥29,405 $ 422,946 $ 132,094 $290,852
Japanese national government bonds . . . . . 30 29 0 298 297 1
Japanese local government bonds . . . . . . . . 18,438 18,132 305 182,378 179,354 3,024
Japanese corporate bonds . . . . . . . . . . . . . 27,973 27,719 254 276,687 274,174 2,513
Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . 221,988 219,730 2,258 2,195,733 2,173,395 22,338
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233,118 221,105 12,013 2,305,819 2,186,995 118,824
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544,308 500,071 44,236 5,383,861 4,946,309 437,552
Carrying amount not exceeding cost:
Japanese stocks . . . . . . . . . . . . . . . . . . . . . 663 776 (113) 6,567 7,685 (1,118)
Japanese national government bonds . . . . . 8,020 8,035 (15) 79,327 79,479 (152)
Japanese local government bonds . . . . . . . . 2,385 2,392 (6) 23,598 23,660 (62)
Japanese corporate bonds . . . . . . . . . . . . . 6,993 7,011 (17) 69,177 69,355 (178)
Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . 144,535 145,403 (868) 1,429,624 1,438,219 (8,595)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,555 152,069 (8,514) 1,419,933 1,504,153 (84,220)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306,153 315,689 (9,536) 3,028,226 3,122,551 (94,325)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥850,462 ¥815,761 ¥34,700 $8,412,087 $8,068,860 $343,227
5. SecuritiesCertain amounts shown in the following tables include certain beneficiary interests in trust classified as ‘Monetary claims bought’ in
addition to ‘Securities’ stated in the consolidated semiannual balance sheets.
‘Securities’ stated in the consolidated semiannual balance sheets as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Japanese national government bonds . . . . . . . . . . . . . . . . . . ¥ 8,050 ¥ 28,254 $ 79,626
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . 20,824 15,140 205,977
Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,966 34,052 345,864
Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,965 42,222 474,436
Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366,523 374,476 3,625,357
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447,275 429,380 4,424,091
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥925,605 ¥923,526 $9,155,351
As of September 30 and March 31, 2016, securities included equity investments in unconsolidated subsidiaries and affiliated
companies that amounted to ¥24,677 million ($244,087 thousand) and ¥23,592 million, respectively.
As of September 30 and March 31, 2016, the Group extended guarantees of ¥225 million ($2,226 thousand) and ¥225 million,
respectively, to certain Japanese corporate bonds issued in private placements.
No held-to-maturity bond was held as of September 30 and March 31, 2016.
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The Group has adopted its impairment criteria based on
the severity of decline of securities by ‘borrower category’
of the issuer of securities in the determination of significant
declines. A significant decline is regarded as an other-than-
temporary decline unless the significant decline is reasonably
recoverable. Impairment losses are recognized for other-than-
temporary declines.
For the six-month period ended September 30 and the year
ended March 31, 2016, the Group wrote off marketable avail-
able-for-sale securities in the amounts of none and ¥6 million,
respectively, as other-than-temporary declines. The break-
down of write-offs for the year ended March 31, 2016 was
¥6 million for foreign bonds.
If fair value declines more than 50% from the acquisition
cost or amortized cost, the Group generally deems the
decline to be significant and other than temporary. However,
based on the borrower category of the issuer of securities, the
following impairment criteria determine whether or not the fair
value decline is significant under the internal standards for
write-offs and reserves.
‘In danger of bankruptcy,’ ‘De facto bankrupt’ and
‘Bankrupt’ … If fair value declines from cost.
‘Need attention’ … If fair value declines more than 30%
from cost.
‘Normal’ … If fair value declines more than 50% from cost.
For debt securities categorized as ‘Normal,’ the fair value
decline is deemed significant if fair value declines more than
30% from cost.
For securities other than debt securities, whose fair value
remains below a certain level, the fair value decline is deemed
significant even if it does not meet the above criteria.
‘Bankrupt’ borrower means an issuer of securities under
legal proceedings, such as bankruptcy or liquidation.
‘De facto bankrupt’ borrower means an issuer of securities in
a similar condition as ‘Bankrupt’ borrower. ‘In danger of bank-
ruptcy’ borrower means an issuer of securities that is not cur-
rently bankrupt but is highly likely to become bankrupt. ‘Need
attention’ borrower means an issuer of securities that needs
to be monitored carefully. ‘Normal’ borrower means an issuer
of securities categorized as other than ‘Bankrupt,’ ‘De facto
bankrupt,’ ‘In danger of bankruptcy’ or ‘Need attention.’
Of securities received under unsecured lending agree-
ments, lending agreements with cash collateral or resale
agreements, etc., and securities received as collateral for
derivative transactions, which permit borrowers to sell or
repledge such securities received, ¥725 million ($7,179
thousand) and ¥12,238 million were repledged, and none and
¥5,324 million were re-loaned under such agreements and
¥21,107 million ($208,781 thousand) and ¥65,766 million
remained undisposed, as of September 30 and March 31,
2016, respectively.
Millions of Yen Thousands of U.S. Dollars
Carrying amount Cost Difference
Carrying amount Cost Difference
March 31, 2016
Carrying amount exceeding cost:
Japanese stocks . . . . . . . . . . . . . . . . . . . . . ¥ 37,026 ¥ 13,405 ¥ 23,621
Japanese national government bonds . . . . . 20,034 20,031 2
Japanese local government bonds . . . . . . . . 14,067 13,810 257
Japanese corporate bonds . . . . . . . . . . . . . 23,845 23,538 307
Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . 304,606 302,177 2,429
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,900 137,739 11,160
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548,481 510,703 37,778
Carrying amount not exceeding cost:
Japanese stocks . . . . . . . . . . . . . . . . . . . . . 654 726 (72)
Japanese national government bonds . . . . . 8,220 8,242 (22)
Japanese local government bonds . . . . . . . . 1,072 1,076 (3)
Japanese corporate bonds . . . . . . . . . . . . . 10,206 10,236 (29)
Foreign bonds . . . . . . . . . . . . . . . . . . . . . . . 69,869 70,491 (621)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,014 223,974 (13,960)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,037 314,746 (14,708)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥848,518 ¥825,449 ¥ 23,069
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The above amounts are stated after write-offs of uncol-
lectible amounts but before deduction of the allowance for
loan losses.
‘Loans to bankrupt borrowers’ are loans to borrowers who
are legally bankrupt and are placed on nonaccrual status.
‘Past due loans’ are loans on which accrued interest
income is not recognized, excluding loans to bankrupt
borrowers and loans on which interest payments are
deferred in order to support the borrowers’ recovery from
financial difficulties. ‘Past due loans’ include loans to
borrowers who are assessed as ‘In danger of bankruptcy’
and ‘De facto bankrupt’ under the self-assessment
guidelines.
‘Loans overdue for three months or more’ are accruing
loans for which principal or interest remains unpaid for at
least three months, excluding loans to bankrupt borrowers
and past due loans.
‘Restructured loans’ are loans in which lending conditions
have been relaxed, such as by reducing the interest rate
or by forbearing interest payments or principal repayments
to support the borrowers’ recovery, excluding loans to
bankrupt borrowers, past due loans and loans overdue for
three months or more.
Overdraft contracts and contracts for loan commitments
are those by which the Group is bound to extend loans up
to a prearranged amount, upon the request of customers,
unless the customer is in breach of contract conditions. The
unutilized balance of these contracts amounted to ¥549,650
million ($5,436,698 thousand) and ¥575,653 million as of
September 30 and March 31, 2016, respectively. Of these
amounts, ¥461,405 million ($4,563,851 thousand) and
¥477,234 million relate to contracts with residual contractual
terms of one year or less as of September 30 and March 31,
2016, respectively.
Bills discounted are accounted for as financing
transactions in accordance with ‘Accounting and Auditing
Treatments on the Application of Accounting Standards for
Financial Instruments in the Banking Industry’ (the JICPA
Industry Audit Committee Report No. 24, February 13,
2002), although the Bank has the right to sell or pledge them
without restriction. The face values of such bills discounted
held as of September 30 and March 31, 2016 were ¥1
million ($19 thousand) and ¥28 million, respectively.
6. Money Held in TrustThe carrying amounts and related valuation gains recognized in earnings for money held in trust classified as for investment purpos-
es as of September 30 and March 31, 2016, were as follows:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Carrying amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥26,881 ¥26,325 $265,893 Unrealized gains recognized in earnings . . . . . . . . . . . . . . . . . — — —
None of the money held in trust was categorized as held to maturity or available for sale as of September 30 and March 31, 2016.
7. Loans and Bills DiscountedLoans and bills discounted as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Bills discounted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1 ¥ 28 $ 19Loans on notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,975 29,350 286,607Loans on deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,285,425 2,303,466 22,605,597Overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,121 177,098 1,583,792Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 906 1,678 8,968
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,475,431 ¥2,511,622 $24,484,983
The following risk-monitored loans were included in loans and bills discounted as of September 30 and March 31, 2016:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Loans to bankrupt borrowers . . . . . . . . . . . . . . . . . . . . . . . . . ¥ — ¥ — $ —Past due loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,026 19,278 148,631Loans overdue for three months or more . . . . . . . . . . . . . . . . — — — Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,412 4,545 23,865
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥17,439 ¥23,823 $172,496
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8. Foreign ExchangeForeign exchange as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Assets:Due from foreign banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥24,062 ¥24,221 $238,009
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥24,062 ¥24,221 $238,009
9. Tangible Fixed Assets and Intangible Fixed AssetsTangible fixed assets as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 9,909 ¥10,613 $ 98,013Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,235 9,235 91,351Lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402 479 3,983Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,215 45 12,021Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,328 1,544 13,141
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥22,091 ¥21,918 $218,509
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥26,318 ¥25,817 $260,323
Intangible fixed assets as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,384 ¥11,187 $122,499Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 69 690
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,454 ¥11,257 $123,189
10. Customers’ Liabilities for Acceptances and GuaranteesAll contingent liabilities arising from acceptances and guarantees are included in acceptances and guarantees. As a contra
account, customers’ liabilities for acceptances and guarantees are shown as assets representing the Group’s right of indemnity
from customers.
11. Allowance for Loan Losses Allowance for loan losses as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥50,186 ¥52,145 $496,401Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,403 9,239 63,336
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥56,589 ¥61,384 $559,737
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12. Pledged Assets and Collateralized DebtsThe carrying amounts of assets pledged as collateral and collateralized debts as of September 30 and March 31, 2016, were as follows:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Assets pledged as collateral: Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 15,021 ¥ 15,050 $ 148,581 Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263,264 250,931 2,604,005 Loans and bills discounted . . . . . . . . . . . . . . . . . . . . . . . . . 54,922 43,400 543,249
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥333,208 ¥309,382 $3,295,835
Collateralized debts: Payables under securities lending transactions . . . . . . . . . . ¥269,317 ¥258,179 $2,663,870 Borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,357 32,270 260,706
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥295,674 ¥290,449 $2,924,576
13. DepositsDeposits as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Current deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 18,771 ¥ 19,453 $ 185,668Ordinary deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,366 374,113 4,365,646Deposits at notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,870 4,960 38,284Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,265,744 2,300,654 22,410,929Negotiable certificates of deposit . . . . . . . . . . . . . . . . . . . . . . 136,875 221,600 1,353,858Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,213 11,350 101,027
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,876,842 ¥2,932,131 $28,455,412
In addition, the following assets were pledged or deposited as margin money for future trading and collateral for transactions,
including exchange settlements and derivatives as of September 30 and March 31, 2016:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥25,183 ¥22,555 $249,093 Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,110 11,268 100,000 Other assets
Cash collateral paid for financial instruments . . . . . . . . . . . . 43,156 41,364 426,872 Guarantee deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,665 4,559 46,143
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥83,115 ¥79,748 $822,108
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14. Debentures and Bonds PayableThe Bank converted its long-term credit bank charter to an ordinary commercial bank charter on April 1, 2006. The Financial
Services Agency of Japan, however, allows the Bank to retain the ability to issue debentures without registration, which was one
of the benefits the Bank enjoyed as a long-term credit bank, for a period of ten years following the conversion to an ordinary
commercial bank.
Debentures as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands of U.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Two-year coupon debentures . . . . . . . . . . . . . . . . . . . . . . . . ¥ 15,750 ¥ 43,200 $ 155,786Three-year coupon debentures . . . . . . . . . . . . . . . . . . . . . . . 102,350 124,900 1,012,364Five-year coupon debentures . . . . . . . . . . . . . . . . . . . . . . . . 51,360 51,365 508,012
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥169,460 ¥219,465 $1,676,162
Bonds payable as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands of U.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Three-year unsecured straight bond issued by the Bank . . . . . ¥60,000 ¥40,000 $593,472Five-year unsecured straight bond issued by the Bank . . . . . . 6,000 — 59,347
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥66,000 ¥40,000 $652,819
15. Other Assets and LiabilitiesOther assets and liabilities as of September 30 and March 31, 2016, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Other assets:Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 5,540 ¥ 6,332 $ 54,798Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,419 14,325 83,282Derivatives other than for trading assets . . . . . . . . . . . . . . . 41,772 24,192 413,179Deferred debenture issuance expenses . . . . . . . . . . . . . . . . 88 118 871Cash collateral paid for financial instruments . . . . . . . . . . . . 43,156 41,364 426,872Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,150 10,097 80,618
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥107,127 ¥ 96,430 $1,059,620
Other liabilities:Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 8,027 ¥ 10,050 $ 79,406Derivatives other than for trading liabilities . . . . . . . . . . . . . . 33,998 14,764 336,285Matured debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,474 3,727 34,367Lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 499 4,180Asset retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . 2,067 2,035 20,448Cash collateral received for financial instruments . . . . . . . . . 91,738 66,105 907,399Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,602 25,644 273,025
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥167,331 ¥122,827 $1,655,110
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16. EquityCapital Stock and Capital Surplus
Based on the resolution of the Board of Directors’ meetings
held on May 15 and 26, 2015, the Bank repurchased and
canceled all Class A Series 4 preferred stock and Class C
Series 5 preferred stock on June 29, 2015, for a lump-sum
payment of public funds. And based on the resolution of the
Board of Directors’ meeting held on May 15, 2015, the Bank
canceled a majority of treasury shares (common stock) on
June 29, 2015. As a result, there were changes in share-
holders’ equity for the first six months of the fiscal year
ended March 31, 2016, as below:
1. In the first six months of the fiscal year ended March 31,
2016, the Bank repurchased all Class A Series 4 preferred
stock (24,072 thousand shares) and Class C Series 5 pre-
ferred stock (214,579 thousand shares), for a lump-sum
payment of public funds, from the Deposit Insurance
Corporation of Japan and the Resolution and Collection
Corporation, respectively, in accordance with the Bank’s
Articles of Incorporation pursuant to Paragraph 1, Article
459 of the Companies Act. This resulted in the increase in
treasury shares by 143,429 million yen. The Bank subse-
quently canceled all the repurchased preferred stocks
pursuant to Article 178 of the Companies Act. As a result,
Changes in the number of issued shares of common stock, preferred stock and treasury stock of the six-month periods ended
September 30, 2016 and 2015, consisted of the following:
Thousands
Number of shares
As of April 1, 2016 Increase Decrease
As of September 30, 2016
Issued stock Common stock . . . . . . . . . . . . . . . . . . . . . 1,182,894 — — 1,182,894
Treasury stock Common stock (Note 1) . . . . . . . . . . . . . . . . . . 16,501 1 7 16,495
Notes: 1. The increase is due to buybacks of shares constituting less than one trade unit, and the decrease is due to disposal by exercise of subscription rights
to shares.
2. The decrease is due to the cancellation of a majority of treasury shares (common stock) pursuant to Article 178 of the Companies Act. The increase is
due to buybacks of shares constituting less than one trade unit.
3. The increase is due to the repurchase of all Class A Series 4 preferred stock and Class C Series 5 preferred stock, for a lump-sum repayment of public
funds, from the Deposit Insurance Corporation of Japan and the Resolution and Collection Corporation, respectively, in accordance with the Bank’s
Articles of Incorporation pursuant to Paragraph 1, Article 459 of the Companies Act.
4. The decrease is due to the cancellation of all the repurchased preferred stocks pursuant to Article 178 of the Companies Act.
capital surplus decreased by 143,429 million yen and
treasury shares decreased by the same amount.
2. In the first six months of the fiscal year ended March 31,
2016, the Bank canceled a majority of treasury shares
(467,253 thousand shares of common stock) pursuant to
Article 178 of the Companies Act. As a result, capital sur-
plus decreased by 95,945 million yen, and treasury shares
decreased by the same amount.
3. As other capital surplus became a negative amount after
the cancellation of treasury shares, the Bank netted out
the negative amount of other capital surplus against other
retained earnings, in accordance with ‘Accounting
Standard for Treasury Shares and Reduction of Legal
Reserves’ (ASBJ Statement No. 1, August 11, 2006). As
a result, capital surplus increased by 57,502 million yen
and retained earnings decreased by the same amount.
Authorized numbers of common shares was 3,304,746
thousand as of September 30 and authorized numbers of
common shares, Class A Series 4 preferred shares and
Class C Series 5 preferred shares were 3,772,000 thousand,
24,072 thousand and 214,579 thousand as of March 31,
2015, respectively.
Thousands
Number of shares
As of April 1, 2015 Increase Decrease
As of September 30, 2015
Issued stock Common stock (Note 2) . . . . . . . . . . . . . . . . . . 1,650,147 — 467,253 1,182,894 Class A Series 4 preferred stock (Note 4) . . . . . 24,072 — 24,072 — Class C Series 5 preferred stock (Note 4) . . . . . 214,579 — 214,579 —
Treasury stock Common stock (Note 2) 483,753 0 467,253 16,500 Class A Series 4 preferred stock (Notes 3, 4) . . . — 24,072 24,072 — Class C Series 5 preferred stock (Notes 3, 4) . . . — 214,579 214,579 —
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Millions of Yen YenThousands ofU.S. Dollars U.S. Dollars
Total amounts Per share Total amounts Per share
September 30, 2016 (Record date: June 30, 2016) (Note 1)
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 4,665 ¥ 4.00 $46,148 $0.04
(Record date: March 31, 2016) (Note 2)
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 6,531 ¥ 5.60 $64,607 $0.06
September 30, 2015 (Record date: June 30, 2015) (Note 3)
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 4,665 ¥ 4.00
(Record date: March 31, 2015) (Note 4)
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 5,715 ¥ 4.90 Class A Series 4 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.00 Class C Series 5 preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . 319 1.488 Class C Series 5 preferred stock—super preferred dividends . . . . . 20,490 (Note 5)
Cash dividends
Cash dividends paid during the six-month period ended September 30, 2016 and 2015, were as follows:
17. Stock OptionsExpenses for stock options as of September 30, 2016 and 2015, were as follows:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
General and administrative expenses . . . . . . . . . . . . . . . . . . . ¥117 ¥100 $1,161
The outline of stock options was as follows:
Stock options for FY2016 Stock options for FY2015
Title and number of eligible persons 4 directors of the Bank18 executive officers of the Bank
4 directors of the Bank16 executive officers of the Bank
Number of stock options by share class (Note 1) 343,300 shares of common stock 229,700 shares of common stock
Grant date July 15, 2016 July 14, 2015
Condition for vesting None None
Requisite service period None None
Exercise period From July 16, 2016 to July 15, 2046 From July 15, 2015 to July 14, 2045
Exercise price (Note 2) ¥1 ($0.01) ¥1
Fair value on grant date (Note 2) ¥342 ($3.38) ¥438
Notes: 1. Shown in number of shares
2. Shown in per share
Subscription rights to sharesSubscription rights to shares as of September 30, 2016 and 2015, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Subscription rights to shares as stock options . . . . . . . . . . . . ¥296 ¥182 $2,934
Notes: 1. Cash dividends applicable to the three-month period ended June 30, 2016 were approved at the Board of Directors’ meeting held on August 1, 2016.
2. Year-end cash dividends applicable to the fiscal year ended March 31, 2016 were approved at the Board of Directors’ meeting held on May 16, 2016.
3. Cash dividends applicable to the three-month period ended June 30, 2015 were approved at the Board of Directors’ meeting held on July 31, 2015.
4. Year-end cash dividends applicable to the fiscal year ended March 31, 2015 were approved at the Board of Directors’ meeting held on May 15, 2015.
5. Dividend per share is calculated by dividing total dividends of ¥20,490 million ($202,670 thousand) by 214,579 thousand shares of Class C Series 5
preferred stock as of the fiscal year end, which were paid from capital surplus.
6. Apart from ‘Class C Series 5 preferred stock—super preferred dividends,’ the cash dividends were paid from retained earnings.
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18. Other Ordinary IncomeOther ordinary income for the six-month periods ended September 30, 2016 and 2015, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Gains on sales of bonds and other securities . . . . . . . . . . . . . . . . . . . . . . ¥ 5,068 ¥ 4,846 $ 50,132 Gains on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 — 4,201 Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,599 8,001 75,169
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥13,092 ¥12,847 $129,502
* The ‘Other’ category primarily includes gains from investments in partnerships.
19. Other IncomeOther income for the six-month periods ended September 30, 2016 and 2015, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Gains on sales of stocks and other securities . . . . . . . . . . . . . . . . . . . . . . . ¥ 417 ¥ 81 $ 4,132 Gains on investments in money held in trust . . . . . . . . . . . . . . . . . . . . . . . . 330 214 3,270 Recoveries of written-off claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771 2,216 7,635 Reversal of allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,148 — 31,142 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510 654 5,054
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥5,179 ¥3,166 $51,233
20. Other Ordinary ExpensesOther ordinary expenses for the six-month periods ended September 30, 2016 and 2015, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Amortization of debenture and bond issuance costs . . . . . . . . . . . . . . . . . . ¥ 53 ¥ 34 $ 525 Losses on foreign exchange transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 2,559 1,491 25,316 Losses on sales of bonds and other securities . . . . . . . . . . . . . . . . . . . . . . 258 359 2,562 Losses on devaluation of bonds and other securities . . . . . . . . . . . . . . . . . 500 0 4,949 Losses on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 53 —Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 697 8,385
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,219 ¥2,636 $41,737
* The ‘Other’ category primarily includes losses from investments in partnerships.
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21. General and Administrative Expenses General and administrative expenses for the six-month periods ended September 30, 2016 and 2015, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Salaries and related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 8,552 ¥ 8,372 $ 84,594 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,368 10,691 132,233
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥21,921 ¥19,063 $216,827
22. Other ExpensesOther expenses for the six-month periods ended September 30, 2016 and 2015, consisted of the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Provision of allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ — ¥ 43 $ —Provision of allowance for credit losses on off-balance-sheet instruments . . 71 247 705 Write-off of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 40 323 Losses on disposal of noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 —Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,641 592 16,235
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,745 ¥926 $17,265
23. Lease TransactionsFinance lease transactions
The Group leases certain fixed assets, such as system-related equipment.
Operating lease transactions
The minimum rental commitments under non-cancelable operating leases as of September 30 and March 31, 2016, were as follows:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥119 ¥166 $1,184 Due after one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 197 1,323
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥253 ¥364 $2,507
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24. Financial Instruments and Related DisclosuresCarrying amounts, fair values and their differences of financial instruments as of September 30 and March 31, 2016 are shown
below. Immaterial accounts on the consolidated balance sheets are not included in the table below. Some instruments, such as
unlisted stocks, whose fair value cannot be reliably determined, are not included in the table below (see Note 2).
Millions of Yen Thousands of U.S. Dollars
Sep. 30, 2016 Sep. 30, 2016
CarryingAmount
Fair Value Difference
CarryingAmount
Fair Value Difference
Cash and due from banks . . . . . . . . . . . . . . . . ¥ 595,347 ¥ 595,347 ¥ (0) $ 5,888,704 $ 5,888,701 $ (3)
Monetary claims bought *1 . . . . . . . . . . . . . . . . 34,984 43,939 8,955 346,036 434,613 88,577
Trading assets
Trading securities . . . . . . . . . . . . . . . . . . . . . 15,231 15,231 — 150,662 150,662 —
Money held in trust . . . . . . . . . . . . . . . . . . . . . . 26,881 31,553 4,671 265,893 312,098 46,205
Securities
Available-for-sale securities *2 . . . . . . . . . . . . 847,598 847,598 — 8,383,762 8,383,762 —
Loans and bills discounted . . . . . . . . . . . . . . . . 2,475,431 24,484,983
Less allowance for loan losses *1 . . . . . . . . . (55,671) (550,661)
Net loans and bills discounted . . . . . . . . . . . . . 2,419,760 2,502,771 83,011 23,934,322 24,755,401 821,079
Assets total . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,939,804 ¥4,036,441 ¥96,637 $38,969,379 $39,925,237 $955,858
Deposits (excluding negotiable certificates of deposit) . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,739,967 ¥2,748,131 ¥ 8,164 $27,101,555 $27,182,307 $ 80,752
Negotiable certificates of deposit . . . . . . . . . . . 136,875 136,875 — 1,353,857 1,353,857 —
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 170,025 565 1,676,162 1,681,757 5,595
Call money and bills sold . . . . . . . . . . . . . . . . . 83,763 83,763 — 828,524 828,524 —
Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 269,317 269,317 — 2,663,870 2,663,870 —
Borrowed money . . . . . . . . . . . . . . . . . . . . . . . 224,364 226,595 2,231 2,219,230 2,241,303 22,073
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 66,093 93 652,819 653,739 920
Liabilities total . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,689,747 ¥3,700,801 ¥11,054 $36,496,017 $36,605,357 $109,340
Derivatives *3
For which hedge accounting is not applied . . ¥ 31,076 ¥ 31,076 ¥ — $ 307,383 $ 307,383 $ —
For which hedge accounting is applied . . . . . 65,211 65,211 — 645,015 645,015 —
Derivatives total . . . . . . . . . . . . . . . . . . . . . . . . ¥ 96,287 ¥ 96,287 ¥ — $ 952,399 $ 952,399 $ —
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Millions of Yen
Mar. 31, 2016
CarryingAmount
Fair Value Difference
Cash and due from banks . . . . . . . . . . . . . . . . ¥ 546,258 ¥ 546,255 ¥ (2)
Call loans and bills bought . . . . . . . . . . . . . . . . 56 56 —
Receivables under securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 67,895 67,895 —
Monetary claims bought *1 . . . . . . . . . . . . . . . . 34,614 43,167 8,552
Trading assets
Trading securities . . . . . . . . . . . . . . . . . . . . . 15,050 15,050 —
Money held in trust . . . . . . . . . . . . . . . . . . . . . . 26,325 31,571 5,245
Securities
Available-for-sale securities *2 . . . . . . . . . . . . 845,529 845,529 —
Loans and bills discounted . . . . . . . . . . . . . . . . 2,511,622
Less allowance for loan losses *1 . . . . . . . . . (60,413)
Net loans and bills discounted . . . . . . . . . . . . . 2,451,208 2,529,220 78,011
Assets total . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,986,939 ¥4,078,746 ¥91,807
Deposits (excluding negotiable certificates of deposit) . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,710,531 ¥2,719,867 ¥ 9,335
Negotiable certificates of deposit . . . . . . . . . . . 221,600 221,600 —
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,465 220,160 694
Call money and bills sold . . . . . . . . . . . . . . . . . 90,268 90,268 —
Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 263,521 263,521 —
Borrowed money . . . . . . . . . . . . . . . . . . . . . . . 208,048 209,540 1,492
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . 40,000 40,116 116
Liabilities total . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,753,435 ¥3,765,074 ¥11,639
Derivatives *3
For which hedge accounting is not applied . . ¥ 29,537 ¥ 29,537 ¥ —
For which hedge accounting is applied . . . . . 32,344 32,344 —
Derivatives total . . . . . . . . . . . . . . . . . . . . . . . . ¥ 61,881 ¥ 61,881 ¥ —
*1 General allowance for loan losses and specific allowance for loan losses provided to ‘Loans and bills discounted’ are separately presented in the above table.
Allowance for loan losses provided to ‘Monetary claims bought’ is directly deducted from the carrying amounts due to immateriality.
*2 Carrying amounts, fair values and their differences of available-for-sale securities do not include those of certain investments in partnerships of which com-
posing assets consist of monetary claims, etc., whose fair value is determinable. As for such investments in partnerships, the carrying amounts were ¥11,953
million ($118,230 thousand) and ¥12,314 million, and the fair value was ¥15,382 million ($152,154 thousand) and ¥15,775 million, which was our share of the
fair value of composing assets such as monetary claims determined by the present value of estimated future cash flows or estimated collectable amount by
collaterals or guarantees as of September 30 and March 31, 2016, respectively. The difference between the fair value and the carrying amounts was ¥3,429
million ($33,924 thousand) and ¥3,461 million as of September 30 and March 31, 2016, respectively.
*3 Derivatives recorded in ‘Trading assets,’ ‘Trading liabilities,’ ‘Other assets’ and ‘Other liabilities’ are aggregated and shown herein in total. Assets and liabilities
attributable to the derivative contracts are totally offset and the net liability position as a consequence of offsetting would be represented with brackets, if any.
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(Note 1) Valuation method of financial instruments
Assets
(1) Cash and due from banks, call loans and bills bought,
and receivables under securities borrowing transactions
Since these instruments are paid on demand, or cancelable
by short notice, or with short maturities, the fair value of
these instruments approximates the carrying amount.
Therefore, the carrying amount of these instruments is
deemed as the fair value. Some due from banks are valued at
prices provided by vendor financial institutions, etc.
(2) Monetary claims bought
Fair value of trust beneficiary rights, recorded as monetary
claims bought, which meet the criteria of securities for the
purpose of accounting treatment, is measured using the
same method as described in (5) Securities, below.
The fair value of monetary claims bought other than the
above is calculated using the same method as described in
(6) Loans and bills discounted, below.
(3) Trading assets
Fair value of trading securities, mainly bonds, is determined
using market prices quoted at exchanges or market prices
announced by certain industry associations or provided by
information vendors.
(4) Money held in trust
Securities held in trust on behalf of the Group are valued
using the same method as described in (5) Securities, below.
Monetary claims held in trust on behalf of the Group are
calculated using the same method as described in (6) Loans
and bills discounted, below.
(5) Securities
Stocks are valued at market prices quoted at exchanges.
Bonds that have a market price announced by certain
industry associations or provided by information vendors are
valued at those prices, in principle. Bonds that do not have
a market price announced by certain industry associations
or provided by information vendors are calculated using the
same method as described in (6) Loans and bills discounted,
below, or valued at a price provided by the brokers or deal-
ers. Investment trust funds are valued at a price provided by
the management company of each fund. Investments in part-
nerships are valued in accordance with the above method or
using the same method as described in (6) Loans and bills
discounted, below, depending on the type of assets which
are held by the partnership.
(6) Loans and bills discounted
Fair value of loans and bills discounted is determined as the
present value of estimated future cash flows, discounted
by the market interest rates, less accrued interest. The
estimated future cash flows are calculated by adjusting con-
tractual payments of principal and interest with credit and
other risks, which are reflected mainly through PD and LGD.
PD is based on the internal credit ratings and LGD is based
on the situations of underlying assets and collateral. Some
loans and bills discounted are valued at prices provided by
vendor financial institutions, etc. Concerning compound
financial instruments to which bifurcation accounting is
applied, the contractual payments of principal and interest
for the calculations are those of the host contracts where
embedded derivatives are bifurcated under bifurcation
accounting.
As for loans to ‘Bankrupt’ borrowers, ‘De facto bankrupt’
borrowers and ‘In danger of bankruptcy’ borrowers, the
collectible amount through the disposal of collateral or the
execution of guarantees, or the present value of estimated
future cash flows, etc., is deemed as the fair value.
As for loans with no maturity due to the feature that the
amount of loans is limited within the collateral amount, and
immaterial loans without concerns about collectability, the
carrying amount is deemed as the fair value.
Liabilities
(1) Deposits (excluding negotiable certificates of deposit)
Fair value of deposits on demand is deemed as the payment
amount payable if demanded on the consolidated balance
sheet date, i.e., ‘carrying amount.’ Fair value of time
deposits is determined as the present value of contractual
payments of principal and interest less accrued interest.
The discount rate is the market interest rate, adjusted with
average funding spreads of the Bank observed within a
specified period preceding the consolidated balance sheet
date. Concerning compound financial instruments to which
bifurcation accounting is applied, the contractual payments
of principal and interest for the calculations are those of the
host contracts where embedded derivatives are bifurcated
under bifurcation accounting.
(2) Negotiable certificates of deposit
Since the contract period is short, fair value approximates the
carrying amount. Therefore, the carrying amount is deemed
as the fair value.
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(3) Debentures
Debentures that have a market price announced by certain
industry associations or provided by information vendors are
valued at those prices. As for debentures that do not have
a market price announced by certain industry associations
or provided by information vendors, the fair value of those
with short maturities approximates the carrying amount.
Therefore, the carrying amount is deemed as the fair value.
On the other hand, the fair value of debentures other than
those above is calculated using the same method as for time
deposits described in (1) Deposits, above.
(4) Call money and bills sold, and payables under securities
lending transactions
Since the contract period is short, fair value approximates the
carrying amount. Therefore, the carrying amount is deemed
as the fair value.
(5) Borrowed money
Fair value of other borrowed money is calculated using the
same method as for time deposits described in (1) Deposits,
above. Concerning the compound financial instruments
to which bifurcation accounting is applied, the contractual
payments of principal and interest for the calculations are
those of the host contracts where embedded derivatives are
bifurcated under bifurcation accounting.
(6) Bonds payable
Fair value is based on the market price announced by certain
industry associations or provided by information vendors.
Derivatives
The valuation method of derivatives is described in the
footnotes to the respective tables in Note 25, ‘Derivatives.’
(Note 2) Financial instruments whose fair value cannot be reliably determined
The following instruments are not included in ‘Securities’ in Assets or ‘Derivatives’ in the above table showing fair value of financial
instruments.
Carrying amount Sep. 30, 2016
Millions of YenThousands ofU.S. Dollars
(1) Unlisted stocks, etc.*1 *3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 6,811 $ 67,378
(2) Investments in partnerships*2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,242 585,981
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥66,054 $653,359
Carrying amount Mar. 31, 2016
Millions of Yen
(1) Unlisted stocks, etc.*1 *3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 6,137
(2) Investments in partnerships*2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,545
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥65,682
*1 Fair value of unlisted stocks, etc., is not disclosed because they do not have a market price and their fair value cannot be reliably determined.
*2 Fair value of investments in partnerships, composed of assets whose fair value cannot be reliably determined, such as unlisted stocks, is not disclosed.
*3 No unlisted stocks were written off for the six-month period ended September 30 and the year ended March 31, 2016.
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25. Derivatives
a. Derivative transactions for which hedge accounting is not applied
The Group had the following derivative contracts, which were listed on exchanges, outstanding as of September 30 and March 31, 2016:
Millions of Yen Thousands of U.S. Dollars
Contract or Notional Amount Fair Value
Valuation Gain/(Loss)
Contract or Notional Amount Fair Value
Valuation Gain/(Loss)
September 30, 2016
Interest rate contracts:
Options written . . . . . . . . . . . . . . . ¥207,255 ¥ (9) ¥ 8 $2,050,000 $ (90) $ 82
Options purchased . . . . . . . . . . . . 141,540 24 (2) 1,400,000 239 (29)
Bond contracts:
Futures sold . . . . . . . . . . . . . . . . . 32,693 (41) (41) 323,381 (409) (409)
Futures bought . . . . . . . . . . . . . . . 7,669 16 16 75,863 167 167
Futures options written . . . . . . . . . 17,065 (22) 4 168,799 (219) 41
Futures options purchased . . . . . . 28,749 55 (11) 284,363 545 (118)
Equity contracts:
Index futures sold . . . . . . . . . . . . . 1,493 12 12 14,770 126 126
Index futures bought . . . . . . . . . . . 16,778 (229) (229) 165,959 (2,273) (2,273)
Index options written . . . . . . . . . . . 129,624 (1,653) 380 1,282,136 (16,357) 3,761
Index options purchased . . . . . . . . 137,466 388 (104) 1,359,705 3,845 (1,035)
March 31, 2016
Bond contracts:
Futures sold . . . . . . . . . . . . . . . . . ¥ 16,607 ¥ 19 ¥ 19
Futures bought . . . . . . . . . . . . . . . 3,124 17 17
Equity contracts:
Index futures sold . . . . . . . . . . . . . 727 2 2
Index futures bought . . . . . . . . . . . 3,649 (46) (46)
Index options written . . . . . . . . . . . 62,859 (235) 209
Index options purchased . . . . . . . . 74,328 201 (257)
Notes: 1. The contracts or notional amounts of derivatives which are shown in the above table do not necessarily represent the amounts exchanged by the
parties and do not measure the exposure of the Group to credit or market risk.
2. Derivative transactions shown above are stated at fair value in the accompanying consolidated financial statements.
3. Fair values of the above derivatives are based on quoted market prices, such as those from the Tokyo Financial Exchange, Inc. or the Osaka
Exchange, Inc.
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The Group had the following derivative contracts, which were not listed on exchanges, outstanding as of September 30 and
March 31, 2016:
Millions of Yen Thousands of U.S. Dollars
Contract or Notional Amount Fair Value
Valuation Gain/(Loss)
Contract or Notional Amount Fair Value
Valuation Gain/(Loss)
September 30, 2016Interest rate contracts: Interest rate swaps: Receive fixed and pay floating . . . . ¥10,789,474 ¥ 249,803 ¥ 249,803 $106,720,818 $ 2,470,853 $ 2,470,853 Receive floating and pay fixed . . . . 10,083,468 (206,895) (206,895) 99,737,569 (2,046,446) (2,046,446) Receive floating and pay floating . . 676,970 550 550 6,696,049 5,445 5,445 Other contracts sold . . . . . . . . . . . . . 1,733,048 (18,338) (18,338) 17,141,919 (181,392) (181,392) Other contracts bought . . . . . . . . . . . 739,970 (240) (240) 7,319,189 (2,383) (2,383)Foreign exchange contracts: Currency swaps . . . . . . . . . . . . . . . . 556,091 (393) (393) 5,500,411 (3,897) (3,897) Forward exchange contracts sold . . . 689,063 16,286 16,286 6,815,666 161,097 161,097 Forward exchange contracts bought 212,525 (4,704) (4,704) 2,102,128 (46,535) (46,535) Options written . . . . . . . . . . . . . . . . . 444,947 (25,725) (3,059) 4,401,067 (254,460) (30,261) Options purchased . . . . . . . . . . . . . . 480,283 20,343 1,875 4,750,574 201,218 18,547 Commodity derivatives: Commodity swaps: Receive fixed and pay floating . . . . 19,513 1,906 1,906 193,016 18,858 18,858 Receive floating and pay fixed . . . . 19,079 (1,475) (1,475) 188,718 (14,598) (14,598) Options written . . . . . . . . . . . . . . . 343 (2) (2) 3,397 (27) (27) Options purchased . . . . . . . . . . . . 343 2 2 3,397 27 27 Credit derivatives: CDS sold . . . . . . . . . . . . . . . . . . . . . 142,242 2,456 2,456 1,406,944 24,293 24,293 CDS bought . . . . . . . . . . . . . . . . . . . 151,247 (2,511) (2,511) 1,496,014 (24,840) (24,840)Equity index swaps: Receive equity index and pay short-term floating rate . . . . . . . 17,220 975 975 170,326 9,645 9,645 Internal transactions: Interest rate swaps: Receive floating and pay fixed . . . . 403,050 (196) (196) 3,986,647 (1,948) (1,948) Currency swaps . . . . . . . . . . . . . . . . 600,104 842 842 5,935,747 8,329 8,329
March 31, 2016Interest rate contracts: Interest rate swaps: Receive fixed and pay floating . . . . ¥10,857,669 ¥ 261,962 ¥ 261,962 Receive floating and pay fixed . . . . 10,313,452 (226,934) (226,934) Receive floating and pay floating . . 660,637 726 726 Other contracts sold . . . . . . . . . . . . . 1,406,887 (19,322) (19,322) Other contracts bought . . . . . . . . . . . 740,739 2,166 2,166 Foreign exchange contracts: Currency swaps . . . . . . . . . . . . . . . . 640,152 (640) (640) Forward exchange contracts sold . . . 668,001 11,229 11,229 Forward exchange contracts bought 147,446 2,101 2,101 Options written . . . . . . . . . . . . . . . . . 225,405 (9,253) 5 Options purchased . . . . . . . . . . . . . . 237,576 5,974 (56)Commodity derivatives: Commodity swaps: Receive fixed and pay floating . . . . 23,809 7,402 7,402 Receive floating and pay fixed . . . . 23,424 (7,031) (7,031) Options written . . . . . . . . . . . . . . . 500 (11) (11) Options purchased . . . . . . . . . . . . 500 11 11 Credit derivatives: CDS sold . . . . . . . . . . . . . . . . . . . . . 136,631 1,302 1,302 CDS bought . . . . . . . . . . . . . . . . . . . 139,586 (1,301) (1,301)Equity index swaps: Receive equity index and pay short-term floating rate . . . . . . . 4,836 360 360 Internal transactions: Interest rate swaps: Receive floating and pay fixed . . . . 79,000 (174) (174) Currency swaps . . . . . . . . . . . . . . . . 653,532 1,015 1,015
Notes: 1. The contracts or notional amounts of derivatives which are shown in the above table do not necessarily represent the amounts exchanged by the
parties and do not measure the exposure of the Group to credit or market risk.
2. Derivative transactions shown above are stated at fair value in the accompanying consolidated financial statements.
3. The calculation or quotation of the fair value of the above derivatives are based on the discounted present value method or option pricing models, etc.
4. ‘Sold’ credit derivatives represent credit risk taking. ‘Bought’ credit derivatives represent credit risk transfer.
5. Foreign exchange profit/loss generated from currency exposure with the final principal settlement of currency swaps, amounting to a loss of ¥144
million ($1,430 thousand) and a loss of ¥5 million as of September 30 and March 31, 2016, respectively, are excluded from ‘Fair Value’ and
‘Valuation Gain/(Loss)’ shown above.
6. Other contracts sold and bought of ‘Interest rate contracts’ were mainly swaptions.
7. CDS is the abbreviation for credit default swaps.
8. Commodity derivatives are mainly related to oil and nonferrous metal.
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b. Derivative transactions for which hedge accounting is applied
The Group had the following derivative contracts for which hedge accounting is applied as of September 30 and March 31, 2016:
Millions of Yen Thousands of U.S. Dollars
Contract or Notional Amount Fair Value
Contract or Notional Amount Fair Value
September 30, 2016Equity contracts:
Index futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 34,481 ¥ 930 $ 341,067 $ 9,201Total return swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,270 (475) 269,733 (4,707)
Interest rate contracts:Interest rate swaps:
Receive fixed and pay floating . . . . . . . . . . . . . . . . . . . . . . . . . . 403,050 196 3,986,647 1,948 Foreign exchange contracts:
Currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535,830 (842) 5,300,000 (8,329)Forward exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171,870 1,127 1,700,000 11,155
March 31, 2016Equity contracts:
Index futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 33,522 ¥ (657)Total return swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,388 (39)
Interest rate contracts:Interest rate swaps:
Receive fixed and pay floating . . . . . . . . . . . . . . . . . . . . . . . . . . 79,000 174 Foreign exchange contracts:
Currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619,740 (1,015)Forward exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,340 71
Notes: 1. The contracts or notional amounts of derivatives which are shown in the above table do not necessarily represent the amounts exchanged by the
parties and do not measure the exposure of the Group to credit or market risk.
2. The calculation or quotation of the fair value of the above derivatives are based on the discounted present value method, etc.
3. For the interest rate swaps shown above, deferred hedge accounting is applied in accordance with the JICPA Industry Audit Committee Report No. 24.
4. For the currency swaps shown above, deferred hedge accounting is applied in accordance with the JICPA Industry Audit Committee Report No. 25.
5. The main hedged items for index futures and total return swaps are stock-price-bearing financial assets such as available-for-sale securities.
6. The main hedged items for interest rate swaps are interest-bearing financial liabilities such as deposits, debentures and bonds payable.
7. The main hedged items for currency swaps are foreign-currency-denominated financial assets or liabilities such as loans and securities.
8. Foreign exchange profit/loss generated from currency exposure with the final principal settlement of currency swaps, amounting to a gain of
¥64,274 million ($635,747 thousand) and a gain of ¥33,810 million as of September 30 and March 31, 2016, respectively, are excluded from ‘Fair
Value’ shown above.
9. All of the contracts shown above are internal transactions.
26. Per Share InformationThe reconciliation of the differences between basic and diluted net income per share (EPS) for the six-month periods ended
September 30, 2016 and 2015, was as follows:
Millions of YenThousands of
Shares Yen U.S. Dollars
Net Income Attributable to
Owners of ParentWeighted-Average Number of Shares EPS
Six-month period ended September 30, 2016Basic EPS—Net income available to common stockholders (Net income attributable to owners of parent less preferred dividends other than super preferred dividends) . . . . . . . . . . ¥25,857 1,166,396 ¥22.16 $0.22Effect of dilutive securities—Preferred stocks and Subscription rights to shares . . . . . . . . . . . . . . . . . . . . . — 649
Diluted EPS—Net income for computation and subscription rights to shares . . . . . . . . . . . . . . . . . . . . . ¥25,857 1,167,045 ¥22.15 $0.22
Six-month period ended September 30, 2015Basic EPS—Net income available to common stockholders (Net income attributable to owners of parent less preferred dividends other than super preferred dividends) . . . . . . . . . . ¥24,297 1,166,394 ¥20.83 Effect of dilutive securities—Preferred stocks and Subscription rights to shares . . . . . . . . . . . . . . . . . . . . . — 198,047
Diluted EPS—Net income for computation and subscription rights to shares . . . . . . . . . . . . . . . . . . . . . ¥24,297 1,364,441 ¥17.80
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27. Segment Information1. Segment information
Segment information for the six-month periods ended September 30, 2016 and 2015 was as follows:
sale of financial products, financing through securitization,
privately placed bonds and M&A advisory.
SBG offers financial services that require specialized
expertise such as corporate restructuring finance, real estate
finance and overseas loans and investments.
FMG offers derivatives and foreign exchange products
to customers, trading derivatives and foreign exchange
products, as well as ALM operations.
(2) Methods of measurement for the amounts of
revenues, profit (loss), assets and liabilities by
reportable segments
Revenues, profit (loss), assets and liabilities of reportable
segments are recognized and measured based on substan-
tially the same accounting policies as those described in
2. Summary of Significant Accounting Policies.
The Bank calculates its net interest income from funding
and investing across reportable segments based on i) the
internal transfer rates determined by the average rate of
funding by the currency and by contractual term, and ii) the
allocation ratio determined by the Bank based on the value of
compensation for funding activities.
Fixed assets are not allocated to reportable segments, while
the associated expenses are allocated to specific reportable
segments and included in the segments’ expenses.
Net assets per share of common stock as of September 30 and March 31, 2016, were calculated based on the following:
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥424,674 ¥405,498 $4,200,536
Deductions from total equity:
Non-controlling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,912 772 18,917
Subscription rights to shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 182 2,934
Net assets attributable to common stock at the end of the period . . . . . . . ¥422,464 ¥404,543 $4,178,685
Number of shares of common stock at the end of the period used for the
calculation of net assets per share of common stock
(shares in thousands). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,166,398 1,166,393
(1) Description of reportable segments
(a) Identification of operating segments
The Bank has classified its Group’s business operations into
business groups based upon the nature of the customers
served and products offered: Retail Banking Group (‘RBG’),
Institutional Banking Group (‘IBG’), Specialized Banking
Group (‘SBG’), and Financial Markets Group (‘FMG’).
Financial information for these groups is regularly reported
to the Management Committee, which comprises members
from amongst the Executive Officers who are approved and
appointed by the Board of Directors, and is utilized for man-
agement decisions on the allocation of resources, evaluation
of the performance of each business group, and so on.
The Bank has designated these business groups as operat-
ing segments and reportable segments for the purpose of the
disclosures contained herein.
(b) Services provided by each reportable segment
RBG offers financial services to retail customers. RBG’s major
services are the sale of investment products, including
deposits, investment trusts and insurance, and other financial
services.
IBG offers financial services to corporate customers, public
sector customers and financial institutions. Major services
offered by IBG are loans and deposits, acquisition finance,
Net assets per share of common stock as of September 30 and March 31, 2016, were as follows:
Yen U.S. Dollars
Sep. 30, 2016 Mar. 31, 2016 Sep. 30, 2016
Net assets per share of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥362.19 ¥346.83 $3.58
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Millions of Yen
RBG IBG SBG FMG Total
Consolidated net revenue . . . . . . . . . . . . . . ¥ 4,601 ¥ 13,794 ¥ 16,943 ¥ 11,314 ¥ 46,653
General and administrative expenses . . . . . 4,599 7,449 7,706 1,982 21,737
Segment profit . . . . . . . . . . . . . . . . . . . . . . 1 6,345 9,237 9,331 24,916
Segment assets . . . . . . . . . . . . . . . . . . . . . 10,016 1,197,173 1,542,047 1,720,884 4,470,120
Segment liabilities . . . . . . . . . . . . . . . . . . . . 1,903,528 1,300,973 66,418 732,205 4,003,124
Millions of Yen
RBG IBG SBG FMG Total
Consolidated net revenue . . . . . . . . . . . . . . ¥ 5,945 ¥ 12,976 ¥ 17,530 ¥ 9,962 ¥ 46,414
General and administrative expenses . . . . . 3,630 7,245 6,648 1,883 19,407
Segment profit . . . . . . . . . . . . . . . . . . . . . . 2,315 5,730 10,881 8,078 27,006
Segment assets . . . . . . . . . . . . . . . . . . . . . 14,711 1,258,339 1,606,468 1,662,615 4,542,133
Segment liabilities . . . . . . . . . . . . . . . . . . . . 2,022,626 1,365,960 71,644 680,345 4,140,595
(3) Revenues, profit (loss), assets and liabilities by reportable segment
Thousands of U.S. Dollars
RBG IBG SBG FMG Total
Consolidated net revenue . . . . . . . . . . . . . . $ 45,512 $ 136,440 $ 167,596 $ 111,914 $ 461,462
General and administrative expenses . . . . . 45,498 73,680 76,223 19,610 215,010
Segment profit . . . . . . . . . . . . . . . . . . . . . . 14 62,760 91,373 92,304 246,452
Segment assets . . . . . . . . . . . . . . . . . . . . . 99,070 11,841,474 15,252,690 17,021,602 44,214,837
Segment liabilities . . . . . . . . . . . . . . . . . . . . 18,828,170 12,868,180 656,954 7,242,384 39,595,687
Notes: 1. Due to the nature of the banking business, the Bank uses ‘consolidated net revenue’ as a substitute for ‘sales’ as would be used by non-financial
service companies. Consolidated net revenue represents the total of net interest income, net fees and commissions, net trading income and net
other ordinary income. The Bank oversees its revenue by reportable segment using consolidated net revenue. The Bank offsets interest income
and interest expense for management purposes, therefore, revenue in transactions between reportable segments is not disclosed.
2. Depreciation expenses are included in the general and administrative expenses of each reportable segment but are not disclosed as a separate
item, because in the calculation process of the segment profit (loss), a part of depreciation expenses is allocated to each reportable segment,
aggregated with other general and administrative expenses. Therefore, depreciation expenses by reportable segment are not managed separately.
The amount of depreciation expense for this period is ¥1,625 million.
Six-month period ended September 30, 2016
Six-month period ended September 30, 2015
Notes: 1. Due to the nature of the banking business, the Bank uses ‘consolidated net revenue’ as a substitute for ‘sales’ as would be used by non-financial
service companies. Consolidated net revenue represents the total of net interest income, net fees and commissions, net trading income and net
other ordinary income. The Bank oversees its revenue by reportable segment using consolidated net revenue. The Bank offsets interest income
and interest expense for management purposes, therefore, revenue in transactions between reportable segments is not disclosed.
2. Depreciation expenses are included in the general and administrative expenses of each reportable segment but are not disclosed as a separate
item, because in the calculation process of the segment profit (loss), a part of depreciation expenses is allocated to each reportable segment,
aggregated with other general and administrative expenses. Therefore, depreciation expenses by reportable segment are not managed separately.
The amount of depreciation expense for this period is ¥2,017 million ($19,953 thousand).
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Consolidated Semiannual Financial Statements
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Millions of YenThousands of U.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Total consolidated net revenue of reportable segments . . . . . . . . . . . . . . . . . . . . . ¥46,653 ¥46,414 $461,462
Variances resulting from differences in the basis of revenue and expense recognition and measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (336) 81 (3,330)
Net revenue derived from the consolidated semiannual statement of income . . . . . ¥46,317 ¥46,496 $458,132
(4) Reconciliation between total segment amounts and the consolidated semiannual financial statements
(a) Reconciliation between total consolidated net revenue of reportable segments and the consolidated net revenue in the consolidated
semiannual financial statement of income for the six-month periods ended September 30, 2016 and 2015, was as follows:
Millions of YenThousands of U.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Total segment profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥24,916 ¥27,006 $246,451
Variances resulting from differences in the basis of revenue and expense recognition and measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (815) (384) (8,065)
Amortization of actuarial differences on retirement benefit plans, etc. . . . . . . . . . . . 294 810 2,918
Credit-related expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,343 1,834 33,073
Gains on sales of stocks and other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 81 4,133
Others, including net extraordinary income (losses) . . . . . . . . . . . . . . . . . . . . . . . . (327) 325 (3,238)
Income before income taxes in the consolidated semiannual statement of income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥27,829 ¥29,672 $275,272
(b) Reconciliation between total segment profits and the consolidated semiannual statement of income for the six-month periods
ended September 30, 2016 and 2015, was as follows:
Note: Credit-related expenses, etc., represent the total of write-offs of loans, provision of allowance for loan losses and losses on disposition of non-
performing loans.
Millions of YenThousands of U.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Total segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,470,120 ¥4,542,133 $44,214,837
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,589) (63,450) (559,737)
Assets not allocated to reportable segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161,541 159,650 1,597,841
Total assets on the consolidated semiannual balance sheet . . . . . . . . . . . . . . . . . . ¥4,575,072 ¥4,638,332 $45,252,941
Millions of YenThousands of U.S. Dollars
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2016
Total segment liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,003,124 ¥4,140,595 $39,595,687
Liabilities not allocated to reportable segments . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,274 97,485 1,456,720
Total liabilities on the consolidated semiannual balance sheet . . . . . . . . . . . . . . . . ¥4,150,398 ¥4,238,080 $41,052,407
(c) Reconciliation between total segment assets and total assets on the consolidated semiannual balance sheet as of
September 30, 2016 and 2015, was as follows:
(d) Reconciliation between total segment liabilities and total liabilities on the consolidated semiannual balance sheet as of
September 30, 2016 and 2015, was as follows:
Note: As for the year ended September 30, 2016, assets not allocated to reportable segments include foreign exchange of ¥24,062 million ($238,009 thousand),
other assets of ¥65,267 million ($645,570 thousand), fixed assets of ¥34,545 million ($341,698 thousand) and deferred tax assets of ¥21,114 million
($208,851 thousand). As for the year ended September 30, 2015, assets not allocated to reportable segments include foreign exchange of ¥24,972
million, other assets of ¥60,756 million, fixed assets of ¥31,669 million and deferred tax assets of ¥25,276 million.
Note: As of September 30, 2016, liabilities not allocated to reportable segments include other liabilities of ¥131,512 million ($1,300,814 thousand) and net
defined benefit liability of ¥9,166 million ($90,673 thousand). As of September 30, 2015, liabilities not allocated to reportable segments include other
liabilities of ¥85,008 million and net defined benefit liability of ¥7,910 million.
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2. Related information
For the six-month period ended September 30, 2015
Millions of Yen
Securities Derivatives, Lending investment etc. Others Total
Ordinary income from external customers . . . . . . . . . . . . . . . ¥28,081 ¥21,531 ¥9,016 ¥7,360 ¥65,990
Millions of Yen
Securities Derivatives, Lending investment etc. Others Total
Ordinary income from external customers . . . . . . . . . . . . . . . ¥26,388 ¥20,155 ¥4,144 ¥9,553 ¥60,242
Thousands of U.S. Dollars
Securities Derivatives, Lending investment etc. Others Total
Ordinary income from external customers . . . . . . . . . . . . . . . $277,757 $212,977 $89,185 $72,805 $652,724
Note: Ordinary income is presented instead of sales as would be used by non-financial service companies.
(2) Segment information by geographic region
(a) Ordinary income
The information by geographic region has been omitted as the transaction data on each customer regarding interest income, gains
on sales of securities and income related to derivative transactions, etc., were not available to be segmented by customers’ domicile.
(b) Tangible fixed assets
The information by geographic region has been omitted as the amounts of tangible fixed assets located in Japan exceeded 90% of
the total amount of tangible fixed assets in the consolidated semiannual balance sheets as of September 30, 2016 and 2015.
(3) Segment information by major customer
The information by major customer has been omitted as ordinary income from any particular customer was less than 10% of ordinary
income in the consolidated semiannual statement of income.
3. Segment information on impairment losses on fixed assets by reportable segment
Not applicable.
4. Segment information on amortization and unamortized portion of goodwill by reportable segment
Not applicable.
5. Segment information on profit on negative goodwill by reportable segment
Not applicable.
(1) Segment information by service
For the six-month period ended September 30, 2016
28. Subsequent EventsAppropriation of Retained Earnings
The following distribution of retained earnings to the stockholders of record as of September 30, 2016 was approved at the
Board of Directors’ meeting held on November 15, 2016:
Millions of YenThousands of U.S. Dollars
Dividends for the three-month period ended September 30, 2016:
Common stock, ¥4.00 ($0.03) per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,665 $46,148
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,665 $46,148
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Interest-Earning Assets and Interest-Bearing LiabilitiesFor the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of Yen, %)
Average balance Interest income/expenses Return/rates
Sep. 2016 Sep. 2015 Mar. 2016 Sep. 2016 Sep. 2015 Mar. 2016 Sep. 2016 Sep. 2015 Mar. 2016
Interest-earning assets . . . . . 3,580,022 3,948,397 3,853,632 31,912 32,541 65,223 1.77 1.64 1.69 Due from banks . . . . . . . . . 66,813 62,293 61,986 100 46 131 0.29 0.14 0.21 Call loans and bills bought . 7,351 20,306 17,250 (1) 13 23 (0.03) 0.13 0.13 Receivables under securities borrowing transactions . . . 7,074 24,115 31,414 0 4 8 0.01 0.03 0.02 Securities . . . . . . . . . . . . . . 896,149 1,021,173 996,537 10,649 9,557 20,058 2.37 1.86 2.01 Loans and bills discounted . 2,500,704 2,720,217 2,651,904 20,686 21,785 43,413 1.64 1.59 1.63
Interest-bearing liabilities . . . 3,757,094 3,989,683 3,963,564 9,484 7,137 15,403 0.50 0.35 0.38 Deposits . . . . . . . . . . . . . . . 2,742,733 2,764,618 2,746,197 3,348 4,066 8,031 0.24 0.29 0.29 Negotiable certificates of deposit . . . . . . . . . . . . . . . 150,866 324,756 305,995 20 170 310 0.02 0.10 0.10 Debentures . . . . . . . . . . . . . 199,100 247,151 240,557 254 308 603 0.25 0.24 0.25 Call money and bills sold . . . 86,286 166,660 154,936 300 238 483 0.69 0.28 0.31 Payables under securities lending transactions . . . . . 249,901 276,389 284,267 716 352 938 0.57 0.25 0.33 Borrowed money . . . . . . . . 212,601 190,174 194,889 425 430 896 0.39 0.45 0.46 Bonds payable . . . . . . . . . . 49,590 1,092 10,997 31 1 21 0.12 0.20 0.19
Note: Interest expenses are shown after deduction of amounts of assumed cost of funding money held in trust.
Fees and Commissions For the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Net fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,940 5,766 11,464 Fees and commissions income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,512 6,246 12,512
Deposits, debentures and loan operations . . . . . . . . . . . . . . . . . . . . 2,800 2,524 5,047 Foreign exchange operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 95 199 Securities-related operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,427 1,386 2,567 Agency services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387 1,567 2,996 Safekeeping and safe deposit box services . . . . . . . . . . . . . . . . . . . — — — Guarantee operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 76 154
Fees and commissions expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 571 480 1,048 Foreign exchange operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 56 107
Other Ordinary IncomeFor the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Net other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,873 10,211 17,926 Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,092 12,847 25,472
Gains on foreign exchange transactions . . . . . . . . . . . . . . . . . . . . . . . — — — Gains on sales of bonds and other securities . . . . . . . . . . . . . . . . . . . 5,068 4,846 10,153 Gains on redemption of bonds and other securities . . . . . . . . . . . . . . — — — Gains on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 — — Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,599 8,001 15,318
Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,219 2,636 7,545 Losses on foreign exchange transactions . . . . . . . . . . . . . . . . . . . . . . 2,559 1,491 3,273 Losses on sales of bonds and other securities . . . . . . . . . . . . . . . . . . 258 359 1,491 Losses on redemption of bonds and other securities . . . . . . . . . . . . . 500 — 528 Losses on devaluation of bonds and other securities . . . . . . . . . . . . . — 0 6 Amortization of debenture and bond issuance costs . . . . . . . . . . . . . . 53 34 92 Losses on derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 53 100 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 697 2,053
Trading RevenuesFor the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Net trading revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,084 5,121 12,208 Trading income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,293 5,440 12,907
Gains on trading account securities transactions . . . . . . . . . . . . . . . . . 1,363 1,448 2,807 Income from securities and derivatives related to trading transactions . — — — Income from trading-related financial derivatives transactions . . . . . . . 8,929 3,991 10,099 Other trading income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Trading expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 318 698 Expenses on trading securities and derivatives . . . . . . . . . . . . . . . . . . — — — Expenses on securities and derivatives related to trading transactions . 208 318 698 Expenses on trading-related financial derivatives transactions . . . . . . . — — — Other trading expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
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Non-Consolidated Financial HighlightsFor the six-month periods ended September 30, 2016, 2015 and 2014, and the years ended March 31, 2016 and 2015
(Millions of Yen)
Sep. 30, 2016 Sep. 30, 2015 Sep. 30, 2014 Mar. 31, 2016 Mar. 31, 2015
Ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,877 57,475 65,861 118,975 123,520
Ordinary profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,473 28,894 36,644 54,460 57,851
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,462 23,779 28,165 42,631 48,316
Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000 100,000 100,000 100,000
Number of issued shares (in thousands) Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . 1,182,894 1,182,894 1,650,147 1,182,894 1,650,147Class A Series 4 preferred stock (Note 4) . . . . . . . . . — — 24,072 — 24,072Class C Series 5 preferred stock (Note 4) . . . . . . . . . — — 214,579 — 214,579
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418,467 387,231 509,311 397,742 554,266
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,574,642 4,622,256 5,041,077 4,589,699 4,912,933
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 241,386 228,886 219,465 246,112
Deposits (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,891,906 3,047,264 3,090,490 2,945,374 2,996,931
Loans and bills discounted . . . . . . . . . . . . . . . . . . . 2,491,916 2,616,611 2,721,623 2,515,868 2,781,445
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 999,810 1,001,390 1,264,381 987,411 1,034,306
Total equity per share (yen) (Note 2) . . . . . . . . . . . . . . . 358.51 331.83 305.25 340.84 326.22
Common stockDividends per share (yen) . . . . . . . . . . . . . . . . . . 8.00 8.00 6.00 18.60 14.90
1st quarter end . . . . . . . . . . . . . . . . . . . . . . . . (4.00) (4.00) (3.00) (4.00) (3.00)2nd quarter end . . . . . . . . . . . . . . . . . . . . . . . (4.00) (4.00) (3.00) (4.00) (3.00)3rd quarter end . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (—) (5.00) (4.00)Year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (—) (5.60) (4.90)
Class A Series 4 preferred stockDividends per share (yen) (Note 4) . . . . . . . . . . . . . . — — 4.00 — 8.00
1st quarter end . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (2.00) (—) (2.00)2nd quarter end . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (2.00) (—) (2.00)3rd quarter end . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (—) (—) (2.00)Year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (—) (—) (2.00)
Class C Series 5 preferred stockDividends per share (yen) (Note 3) (Note 4) . . . . . . . . . . . — — 2.976 — 5.952
1st quarter end . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (1.488) (—) (1.488)2nd quarter end . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (1.488) (—) (1.488)3rd quarter end . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (—) (—) (1.488)Year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (—) (—) (—) (—) (1.488)
Basic net income per share (yen) (Note 2) . . . . . . . . . . . 22.68 20.38 23.51 36.55 40.16
Diluted net income per share (yen) (Note 2) . . . . . . . . . . 22.67 17.42 17.90 33.68 30.71
Dividend payout ratio (%) . . . . . . . . . . . . . . . . . . . . . 35.26 39.23 25.51 50.88 37.09
Capital adequacy ratio (domestic standard) (%) (Note 5) . . . . . . . . . . . . . . . . . 11.16 10.79 14.75 10.83 14.23
Number of employees (Note 6) . . . . . . . . . . . . . . . . . . . 1,753 1,690 1,616 1,695 1,639
Notes: 1. Deposits include negotiable certificates of deposit (NCDs).
2. Total equity per share, basic net income per share and diluted net income per share are calculated by applying ‘Accounting Standard for Earnings Per
Share’ (Financial Accounting Standard No. 2, September 13, 2013) and ‘Implementation Guidance for Accounting Standard for Earnings Per Share’
(Financial Accounting Standard Implementation Guidance No. 4, September 13, 2013).
3. In addition to the existing preferred dividend of ¥5.952 per share for ‘Dividends per share,’ the Bank paid a ¥20,490 million super preferred dividend
from other capital surplus on the remaining Class C Series 5 preferred stock for the year ended March 31, 2015.
Dividend per share of the super preferred dividend is calculated by dividing total dividends of ¥20,490 million by 214,579 thousand shares of
Class C Series 5 preferred stock as of March 31, 2015.
4. The Bank fully repaid the remaining public funds on June 29, 2015 through a buyback of Class A Series 4 preferred stock and Class C Series 5
preferred stock, for cancellation. Therefore, for the first quarter of FY2015 and thereafter, there will be no dividend payment on those preferred shares.
5. Capital adequacy ratio (domestic standard) is calculated based on Basel III.
6. Number of employees includes executive officers and locally hired overseas staff, but excludes the Bank’s employees seconded to other firms.
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Non-Consolidated Business Results
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Non-Consolidated Semiannual Financial Statements
Non-Consolidated Semiannual Balance Sheet (Unaudited)Aozora Bank, Ltd.
September 30, 2016
Millions of YenThousands ofU.S. Dollars
Assets Sep. 30, 2016 Sep. 30, 2015 Mar. 31, 2016 Sep. 30, 2016
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 511,726 ¥ 505,987 ¥ 488,635 $ 5,061,584 Due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,208 33,737 37,231 407,601 Call loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 20,059 56 — Receivables under securities borrowing transactions . . . . . . . . . . . . . — 14,861 67,895 — Monetary claims bought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,893 4,586 6,716 58,295 Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356,304 296,632 337,373 3,524,277 Money held in trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,055 4,684 4,505 79,681 Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 999,810 1,001,390 987,411 9,889,318 Loans and bills discounted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,491,916 2,616,611 2,515,868 24,648,033 Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,062 24,972 24,221 238,008 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,825 78,033 96,239 1,056,635 Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,957 21,782 21,759 217,189 Intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,251 9,540 11,031 121,186 Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 737 — — 7,298 Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,463 26,776 21,025 212,299 Customers’ liabilities for acceptances and guarantees . . . . . . . . . . . . 29,362 26,307 30,389 290,434 Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55,980) (62,182) (60,185) (553,711)Allowance for investment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (953) (1,527) (476) (9,436)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,574,642 ¥4,622,256 ¥4,589,699 $45,248,691
Millions of YenThousands ofU.S. Dollars
Liabilities and Equity Sep. 30, 2016 Sep. 30, 2015 Mar. 31, 2016 Sep. 30, 2016
Liabilities:Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,891,906 ¥3,047,264 ¥2,945,374 $28,604,411 Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 241,386 219,465 1,676,162 Call money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,763 137,499 90,268 828,524 Payables under securities lending transactions . . . . . . . . . . . . . . . . . 269,317 256,612 263,521 2,663,870 Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252,769 230,028 269,869 2,500,191 Borrowed money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223,457 185,340 206,320 2,210,261 Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 10,000 40,000 652,819 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,223 89,641 117,237 1,584,806 Provision for retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,458 8,962 8,110 83,667 Provision for credit losses on off-balance-sheet instruments . . . . . . . . 1,456 1,983 1,399 14,402 Acceptances and guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,362 26,307 30,389 290,434
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,156,175 4,235,025 4,191,956 41,109,547
Equity:Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000 100,000 989,119Capital surplus:
Legal capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,313 87,313 87,313 863,634 Other capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — — 17
Retained earnings:Legal retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,686 12,686 12,686 125,488 Other retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195,690 172,070 180,425 1,935,617
Treasury stock—at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,387) (3,388) (3,388) (33,507)Valuation difference on available-for-sale securities . . . . . . . . . . . . . . . 24,034 16,158 16,084 237,732 Deferred gains or losses on hedges . . . . . . . . . . . . . . . . . . . . . . . . . . 1,830 2,207 4,438 18,110 Subscription rights to shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 182 182 2,934
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418,467 387,231 397,742 4,139,144
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,574,642 ¥4,622,256 ¥4,589,699 $45,248,691
Note: The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has been
made at the rate of ¥101.10 to $1.00, the approximate rate of exchange at September 30, 2016.
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Non-Consolidated Semiannual Statement of Income (Unaudited)Aozora Bank, Ltd.
For the six-month period ended September 30, 2016
Millions of YenThousands ofU.S. Dollars
Sep. 30, 2016(6 months)
Sep. 30, 2015(6 months)
Mar. 31, 2016(1 year)
Sep. 30, 2016(6 months)
Income:Interest income:
Interest on loans and discounts . . . . . . . . . . . . . . . . . . . . . . . . . ¥20,082 ¥20,961 ¥ 41,544 $198,639
Interest and dividends on securities . . . . . . . . . . . . . . . . . . . . . . 10,622 9,516 19,958 105,066
Interest on due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 33 102 879
Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 1,138 1,595 4,714
Fees and commissions income . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,757 6,528 12,942 56,947
Trading income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,485 3,991 10,452 93,821
Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,811 12,627 24,684 126,717
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,553 2,678 7,696 45,042
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,877 57,475 118,975 631,825
Expenses:Interest expenses:
Interest on deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,370 4,237 8,342 33,338
Interest on debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 308 603 2,522
Interest on borrowings and rediscounts . . . . . . . . . . . . . . . . . . . 718 637 1,319 7,106
Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,141 1,930 5,093 50,858
Fees and commissions expenses . . . . . . . . . . . . . . . . . . . . . . . . . 1,216 503 1,399 12,029
Trading expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 318 698 2,067
Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,188 2,651 7,714 41,427
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . 20,094 17,374 37,607 198,754
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,211 621 1,739 11,982
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,404 28,582 64,518 360,083
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,473 28,892 54,456 271,742
Income taxes:Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,989 122 894 39,461
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,979) 4,990 10,930 (29,466)
Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,010 5,112 11,824 9,995
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥26,462 ¥23,779 ¥ 42,631 $261,747
Note: The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has been
made at the rate of ¥101.10 to $1.00, the approximate rate of exchange at September 30, 2016.
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Non-Consolidated Semiannual Financial Statements
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Non-Consolidated Semiannual Statement of Changes in Equity (Unaudited)Aozora Bank, Ltd.
For the six-month period ended September 30, 2016
Millions of Yen
Capital stock
Capital surplus Retained earnings
Treasury stock-at cost
Valuation difference on
available-for-sale
securities
Deferred gains or
losses on hedges
Subscription rights to shares Total equity
Legal capitalsurplus
Other capitalsurplus
Legal retained earnings
Other retained earnings
Balance, April 1, 2015 . . . . . . . . . . ¥100,000 ¥87,313 ¥ 202,362 ¥12,686 ¥216,542 ¥ (99,333) ¥ 34,758 ¥ (145) ¥ 81 ¥ 554,266
Net income . . . . . . . . . . . . . . . . . . . 42,631 42,631
Dividends paid— other capital surplus . . . . . . . . . . . (20,490) (20,490)
Dividends paid— other retained earnings . . . . . . . . . (21,245) (21,245)
Purchase of treasury stock . . . . . . . (143,430) (143,430)
Retirement of treasury stock . . . . . . (239,375) 239,375 —
Transfer to capital surplus from retained earnings . . . . . . . . . 57,502 (57,502) —
Net changes of items during the year . . . . . . . . . . . . . . . (18,673) 4,583 100 (13,989)
Balance, March 31, 2016 . . . . . . . . ¥100,000 ¥87,313 ¥ — ¥12,686 ¥180,425 ¥ (3,388) ¥ 16,084 ¥ 4,438 ¥182 ¥ 397,742
Net income . . . . . . . . . . . . . . . . . . . 26,462 26,462
Dividends paid— other retained earnings . . . . . . . . . (11,197) (11,197)
Purchase of treasury stock . . . . . . . (0) (0)
Disposal of treasury stock . . . . . . . . 1 1 3
Net changes of items during the period . . . . . . . . . . . . . 7,949 (2,607) 114 5,456
Balance, September 30, 2016 . . . . ¥100,000 ¥87,313 ¥ 1 ¥12,686 ¥195,690 ¥ (3,387) ¥ 24,034 ¥ 1,830 ¥296 ¥ 418,467
Thousands of U.S. Dollars (Note)
Capital stock
Capital surplus Retained earnings
Treasury stock-at cost
Valuation difference on
available-for-sale
securities
Deferred gains or
losses on hedges
Subscription rights to shares Total equity
Legal capitalsurplus
Other capitalsurplus
Legal retained earnings
Other retained earnings
Balance, March 31, 2016 . . . . . . . . $989,119 $863,634 $— $125,488 $1,784,625 $(33,516) $159,097 $ 43,901 $1,805 $3,934,153
Net income . . . . . . . . . . . . . . . . . . . 261,747 261,747
Dividends paid— other retained earnings . . . . . . . . . (110,755) (110,755)
Purchase of treasury stock . . . . . . . (6) (6)
Disposal of treasury stock . . . . . . . . 17 15 32
Net changes of items during the period . . . . . . . . . . . . . 78,635 (25,791) 1,129 53,973
Balance, September 30, 2016 . . . . $989,119 $863,634 $17 $125,488 $1,935,617 $(33,507) $237,732 $ 18,110 $2,934 $4,139,144
Note: The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has been
made at the rate of ¥101.10 to $1.00, the approximate rate of exchange at September 30, 2016.
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Income Analysis (Non-Consolidated)
Net Revenue, Business Profit For the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Net interest income . . . . . . . . . 21,792 8,223 13,569 24,544 10,370 14,173 47,855 19,943 27,912 Interest income . . . . . . . . . . . . 31,270 12,087 20,810 31,649 15,249 18,175 63,200 29,566 37,265
[1,627] [1,775] [3,631]Interest expenses . . . . . . . . . . 9,477 3,864 7,240 7,105 4,879 4,001 15,344 9,622 9,353
[1,627] [1,775] [3,631]Net fees and commissions . . . . 4,541 4,095 445 6,025 5,332 693 11,542 10,380 1,162
Fees and commissions (income) . . . . . . . . . . . . . . . . 5,757 4,927 830 6,528 5,535 993 12,942 10,998 1,944 Fees and commissions (expenses) . . . . . . . . . . . . . . 1,216 832 384 503 202 300 1,399 618 781
Net trading revenues . . . . . . . . 9,276 10,753 (1,477) 3,672 2,935 737 9,753 13,649 (3,896)Trading income . . . . . . . . . . . . 9,485 10,824 (1,339) 3,991 3,223 767 10,452 14,411 (3,958)Trading expenses . . . . . . . . . . 208 70 138 318 288 29 698 761 (62)
Net other ordinary income . . . . 8,622 5,006 3,615 9,975 7,872 2,102 16,969 13,937 3,032 Other ordinary income . . . . . . 12,811 5,946 6,864 12,627 8,248 4,378 24,684 15,379 9,304 Other ordinary expenses . . . . . 4,188 939 3,248 2,651 375 2,275 7,714 1,442 6,272
Net revenue . . . . . . . . . . . . . . . 44,233 28,078 16,154 44,217 26,510 17,706 86,121 57,910 28,211 Net revenue ratio (%) . . . . . . . . 2.44 1.71 1.98 2.23 1.50 2.16 2.22 1.66 1.71 Business profit . . . . . . . . . . . . . 23,786 — — 26,368 — — 46,847 — —
Yield on Interest-Earning Assets, Interest Rate on Interest-Bearing Liabilities, Net Yield/Interest RateFor the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(%)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Yield on interest-earning assets . . 1.72 0.73 2.56 1.59 0.86 2.21 1.63 0.85 2.26
Interest rate on interest-bearing liabilities . . . . . . . . . . . . . . . . . . 1.57 1.29 1.13 1.26 1.17 0.71 1.37 1.24 0.80 Net yield/interest rate . . . . . . . . . 0.15 (0.56) 1.43 0.33 (0.31) 1.50 0.26 (0.39) 1.46
RatiosFor the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(%)
Sep. 2016 Sep. 2015 Mar. 2016
Ordinary profit to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30 1.25 1.20 Ordinary profit to equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.42 12.27 11.44 Net income to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25 1.03 0.94 Net income to equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.93 10.10 8.95
Notes: 1. Domestic operations include yen-denominated transactions by domestic offices, while international operations include foreign currency-denominated
transactions by domestic offices and transactions by overseas offices. Yen-denominated nonresident transactions and Japan offshore banking
accounts are included under international operations.
2. Interest expenses are shown after deduction of amounts equivalent to interest expenses on money held in trust (¥8 million for the six-month period
ended September 30, 2016, ¥7 million for the six-month period ended September 30, 2015 and ¥14 million for the year ended March 31, 2016)
3. Figures in brackets [ ] indicate interest received/paid as a result of interdepartmental lending and borrowing activities between domestic and
international operations.
4. Net revenue ratio is calculated as follows:
net revenue*
Net revenue ratio =
average balance of interest-bearing assets X 100
*As for the six-month periods ended on September 30, the numerator is annualized.
5. Business profit is calculated by deducting the net provision to general allowance for loan losses and general and administrative expenses from net
revenue.
Notes: 1. Return on assets, as calculated ordinary profit or net income*
using ordinary profit or net income =
(average balance of total assets — customers’ liabilities for acceptances and guarantees) X 100
2. Return on equity, as calculated ordinary profit or net income*
using ordinary profit or net income =
(equity, beginning of period + equity, end of period) ÷ 2 X 100
* As for the six-month periods ended on September 30, the numerator is annualized.
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Income Analysis (Non-Consolidated)
Average Balance of Interest-Earning Assets and Interest-Bearing Liabilities(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Balance of interest- earning assets
Average balance 3,607,947 3,258,595 1,620,627 3,960,963 3,533,370 1,637,836 3,868,640 3,477,300 1,646,399 [1,271,275] [1,210,243] [1,255,059]
Interest income/expense 31,270 12,087 20,810 31,649 15,249 18,175 63,200 29,566 37,265 [1,627] [1,775] [3,631]Return/rates (%) 1.72 0.73 2.56 1.59 0.86 2.21 1.63 0.85 2.26
Cash and due from Average balance 41,566 1,097 40,469 41,156 211 40,945 41,506 108 41,398 banks Interest income/expense 88 0 88 33 0 33 102 0 102
Return/rates (%) 0.42 0.00 0.43 0.16 0.05 0.16 0.24 0.05 0.24
Call loans Average balance 7,351 7,295 56 20,306 20,245 60 17,250 17,117 132 Interest income/expense (1) (1) 0 13 13 0 23 22 0 Return/rates (%) (0.03) (0.03) 0.77 0.13 0.13 0.63 0.13 0.13 0.60
Receivables under Average balance 7,074 7,074 — 24,115 24,115 — 31,414 31,414 — securities borrowing Interest income/expense 0 0 — 4 4 — 8 8 — transactions Return/rates (%) 0.01 0.01 — 0.03 0.03 — 0.02 0.02 —
Securities Average balance 966,963 324,708 642,255 1,072,602 453,014 619,587 1,050,729 424,088 626,640 Interest income/expense 10,622 1,970 8,651 9,516 2,132 7,383 19,958 4,925 15,033 Return/rates (%) 2.19 1.21 2.68 1.77 0.94 2.38 1.89 1.16 2.39
Loans and bills Average balance 2,512,545 1,623,688 888,856 2,728,019 1,804,273 923,746 2,659,050 1,732,993 926,056 discounted Interest income/expense 20,083 8,080 12,002 20,947 10,259 10,687 41,520 19,522 21,998
Return/rates (%) 1.59 0.99 2.69 1.53 1.13 2.31 1.56 1.12 2.37
Balance of interest- bearing liabilities
Average balance 3,768,856 3,431,820 1,608,311 3,997,967 3,633,771 1,574,439 3,973,053 3,621,087 1,607,026 [1,271,275] [1,210,243] [1,255,059]Interest income/expense 9,477 3,864 7,240 7,105 4,879 4,001 15,344 9,622 9,353
[1,627] [1,775] [3,631]Return/rates (%) 0.50 0.22 0.89 0.35 0.26 0.50 0.38 0.26 0.58
Deposits Average balance 2,755,777 2,741,739 14,037 2,777,468 2,732,884 44,584 2,759,813 2,728,219 31,593 Interest income/expense 3,349 3,260 89 4,067 4,002 65 8,032 7,886 146 Return/rates (%) 0.24 0.23 1.26 0.29 0.29 0.29 0.29 0.28 0.46
Negotiable certificates Average balance 150,866 150,866 — 324,756 324,756 — 305,995 305,995 — of deposit Interest income/expense 20 20 — 170 170 — 310 310 —
Return/rates (%) 0.02 0.02 — 0.10 0.10 — 0.10 0.10 —
Debentures Average balance 199,100 199,100 — 247,151 247,151 — 240,557 240,557 — Interest income/expense 254 254 — 308 308 — 603 603 — Return/rates (%) 0.25 0.25 — 0.24 0.24 — 0.25 0.25 —
Call money Average balance 86,286 33,580 52,705 166,660 103,756 62,904 154,936 99,879 55,057 Interest income/expense 300 (1) 302 238 43 195 483 78 405 Return/rates (%) 0.69 (0.01) 1.14 0.28 0.08 0.62 0.31 0.07 0.73
Payables under Average balance 249,901 40,562 209,339 276,389 66,519 209,869 284,267 71,901 212,366 securities lending Interest income/expense 716 (1) 717 352 18 334 938 33 905 transactions Return/rates (%) 0.57 (0.00) 0.68 0.25 0.05 0.31 0.33 0.04 0.42
Borrowed money Average balance 211,320 184,977 26,342 185,607 154,828 30,779 190,762 160,412 30,349 Interest income/expense 417 305 112 398 338 59 836 693 142 Return/rates (%) 0.39 0.32 0.84 0.42 0.43 0.38 0.43 0.43 0.47
Bonds payable Average balance 49,590 49,590 — 1,092 1,092 — 10,997 10,997 — Interest income/expense 31 31 — 1 1 — 21 21 — Return/rates (%) 0.12 0.12 — 0.21 0.21 — 0.19 0.19 —
Notes: 1. Interest-earning assets are shown after deduction of the average balance of non-interest-earning deposits. Interest-bearing liabilities are shown
after deduction of amounts equivalent to the average balance of money held in trust and corresponding interest.
2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and international
operations and corresponding interest income/expenses.
052
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Inco
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nalysis (N
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Analysis of Interest Income and Interest Expenses(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Interest income Volume-related increase (decrease) (2,828) (1,189) (191) (586) (371) 3,365 (3,277) (1,574) 4,745 Rate-related increase (decrease) 2,448 (1,973) 2,826 1,966 (1,599) 199 4,700 (2,349) 967
Net increase (decrease) (379) (3,162) 2,635 1,379 (1,970) 3,565 1,422 (3,923) 5,713
Cash and due Volume-related increase (decrease) 0 0 (0) 4 0 4 7 0 7 from banks Rate-related increase (decrease) 54 (0) 55 7 (0) 7 46 (0) 46
Net increase (decrease) 55 (0) 55 12 0 11 53 0 53
Call loans Volume-related increase (decrease) (8) (8) (0) (1) (1) (0) (6) (6) 0 Rate-related increase (decrease) (6) (6) 0 (1) (1) 0 (1) (2) 0 Net increase (decrease) (14) (14) 0 (3) (3) 0 (7) (8) 0
Receivables under Volume-related increase (decrease) (2) (2) — (2) (2) — (4) (4) — securities borrowing Rate-related increase (decrease) (0) (0) — (0) (0) — (1) (1) — transactions Net increase (decrease) (3) (3) — (2) (2) — (6) (6) —
Securities Volume-related increase (decrease) (939) (605) 270 (1,569) (1,014) 423 (2,886) (1,493) 702 Rate-related increase (decrease) 2,045 443 997 1,923 364 580 5,256 2,257 903
Net increase (decrease) 1,105 (162) 1,268 353 (650) 1,003 2,370 764 1,605
Loans and bills Volume-related increase (decrease) (1,659) (1,029) (404) 850 (787) 2,800 (290) (2,227) 3,841 discounted Rate-related increase (decrease) 795 (1,149) 1,719 (155) (1,038) (279) 380 (1,704) 180
Net increase (decrease) (864) (2,178) 1,314 695 (1,825) 2,521 90 (3,931) 4,022
Interest expenses Volume-related increase (decrease) (408) (271) 86 148 169 610 160 191 1,078 Rate-related increase (decrease) 2,779 (743) 3,152 293 (747) 624 1,862 (1,105) 2,225 Net increase (decrease) 2,371 (1,015) 3,238 441 (577) 1,234 2,023 (913) 3,303
Deposits Volume-related increase (decrease) (31) 13 (44) 77 28 89 93 47 79 Rate-related increase (decrease) (685) (754) 68 (713) (679) (74) (1,077) (1,077) (32)Net increase (decrease) (717) (741) 24 (635) (650) 15 (983) (1,029) 46
Negotiable Volume-related increase (decrease) (91) (91) — 35 35 — 32 32 — certificates Rate-related increase (decrease) (57) (57) — (17) (17) — (28) (28) — of deposit Net increase (decrease) (149) (149) — 18 18 — 3 3 —
Debentures Volume-related increase (decrease) (60) (60) — 58 58 — 63 63 — Rate-related increase (decrease) 6 6 — (21) (21) — (23) (23) — Net increase (decrease) (53) (53) — 36 36 — 40 40 —
Call money Volume-related increase (decrease) (115) (29) (31) 1 (5) 22 (53) (18) (27)Rate-related increase (decrease) 177 (15) 138 59 (19) 63 119 (28) 139
Net increase (decrease) 61 (44) 106 60 (25) 85 65 (47) 112
Payables under Volume-related increase (decrease) (33) (7) (0) (41) 1 (53) (74) (3) (78) securities lending Rate-related increase (decrease) 397 (12) 384 97 (6) 112 418 (11) 437 transactions Net increase (decrease) 363 (19) 383 55 (4) 59 343 (15) 358
Borrowed money Volume-related increase (decrease) 55 66 (8) 2 (18) 18 47 26 19 Rate-related increase (decrease) (36) (99) 61 73 64 10 123 82 43
Net increase (decrease) 19 (33) 52 75 46 28 171 108 62
Bonds payable Volume-related increase (decrease) 51 51 — — — — — — — Rate-related increase (decrease) (20) (20) — 1 1 — 21 21 —
Net increase (decrease) 30 30 — 1 1 — 21 21 —
Note: Changes due to a combination of volume- and rate-related increases (decreases) have been included in rate-related increase (decrease).
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Income Analysis (Non-Consolidated)
Inco
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Fees and Commissions (Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Net fees and commissions . . . . 4,541 4,095 445 6,025 5,332 693 11,542 10,380 1,162
Fees and commissions income . . . . . . . . . . . . . . . . 5,757 4,927 830 6,528 5,535 993 12,942 10,998 1,944
Deposits, debentures and loan operations . . . . . . . . 2,585 2,157 427 2,336 1,760 576 4,686 3,620 1,066
Foreign exchange operations . . . . . . . . . . . . 86 72 13 95 68 27 200 137 62
Securities-related operations . . . . . . . . . . . . 1,082 1,082 — 1,000 1,000 — 1,845 1,845 —
Agency services . . . . . . . . . 1,585 1,210 374 2,732 2,367 364 5,239 4,477 761
Safekeeping and safe deposit box services . . . . — — — — — — — — —
Guarantee operations . . . . . 52 44 7 76 52 24 154 103 51
Other . . . . . . . . . . . . . . . . . 366 360 5 286 285 1 816 813 2
Fees and commissions expenses . . . . . . . . . . . . . . 1,216 832 384 503 202 300 1,399 618 781
Foreign exchange operations . . . . . . . . . . . . 45 36 8 56 45 11 107 85 21
Other . . . . . . . . . . . . . . . . . 1,170 795 375 446 157 289 1,292 532 760
Trading Revenues(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Net trading revenues . . . . . . . . . . 9,276 10,753 (1,477) 3,672 2,935 737 9,753 13,649 (3,896)
Trading income . . . . . . . . . . . . 9,485 10,824 (1,339) 3,991 3,223 767 10,452 14,411 (3,958)Gains on trading account securities transactions . . . . . 555 623 (67) — — — 352 363 (11)
Income from securities and derivatives related to trading transactions . . . . . . . . . . . . . — — — — — — — — —
Income from trading-related financial derivatives transactions . . . . . . . . . . . . . 8,929 10,201 (1,271) 3,991 3,223 767 10,099 14,047 (3,947)
Other trading income . . . . . . . — — — — — — — — —
Trading expenses . . . . . . . . . . 208 70 138 318 288 29 698 761 (62)Expenses on trading securities and derivatives . . . — — — — — — — — —
Expenses on securities and derivatives related to trading transactions . . . . . . . . . . . . . 208 70 138 318 288 29 698 761 (62)
Expenses on trading-related financial derivatives transactions . . . . . . . . . . . . . — — — — — — — — —
Other trading expenses . . . . . — — — — — — — — —
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Other Ordinary Income(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Net other ordinary income . . . . 8,622 5,006 3,615 9,975 7,872 2,102 16,969 13,937 3,032
Other ordinary income . . . . . 12,811 5,946 6,864 12,627 8,248 4,378 24,684 15,379 9,304 Gains on foreign exchange transactions . . . — — — — — — — — —
Gains on sales of bonds and other securities . . . . . 5,068 939 4,128 4,846 1,474 3,371 10,153 4,719 5,433
Gains on redemption of bonds and other securities . . . . . . . . . . . . . — — — — — — — — —
Gains on derivatives . . . . . 424 — 424 — — — — — —
Other . . . . . . . . . . . . . . . . . 7,318 5,007 2,311 7,780 6,773 1,006 14,530 10,659 3,870
Other ordinary expenses . . . 4,188 939 3,248 2,651 375 2,275 7,714 1,442 6,272 Losses on foreign exchange transactions . . . 2,447 — 2,447 1,473 — 1,473 3,285 — 3,285
Losses on sales of bonds and other securities . . . . . 258 64 194 359 0 358 1,491 1 1,489
Losses on redemption of bonds and other securities . . . . . . . . . . . . . 500 — 500 — — — 528 528 —
Losses on devaluation of bonds and other securities . . . . . . . . . . . . . — — — 0 — 0 6 — 6
Amortization of debenture and bond issuance costs . . . . . . . . . . . . . . . 63 63 — 34 34 — 97 97 —
Losses on derivatives . . . . — — — 53 — 53 100 — 100
Other . . . . . . . . . . . . . . . . . 918 811 106 731 340 390 2,206 815 1,390
General and Administrative Expenses(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . 20,094 17,374 37,607Salaries and related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,541 7,414 15,610
Retirement benefit expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 (356) (784)
Welfare expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 255 496
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,951 1,568 3,222
Rent and lease expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,533 3,099
Building and maintenance expenses . . . . . . . . . . . . . . . . . . . . . . . 7 24 122
Supplies expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 103 323
Water, lighting and heating expenses . . . . . . . . . . . . . . . . . . . . . . . 217 256 481
Travel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 154 314
Communication expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 277 610
Publicity and advertising expenses . . . . . . . . . . . . . . . . . . . . . . . . 107 165 865
Taxes, other than income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,767 1,069 2,691
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,055 4,906 10,552
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Dep
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Deposit Operations (Non-Consolidated)
Balance by Deposit Account(Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
DepositsLiquid deposits Average balance 423,475 423,475 — 413,983 413,983 — 403,661 403,661 —
(%) (15.37) (15.45) — (14.91) (15.15) — (14.63) (14.80) — Term-end balance 473,891 473,891 — 413,704 413,704 — 405,946 405,946 — (%) (17.20) (17.28) — (15.05) (15.14) — (14.90) (14.98) —
Interest-bearing Average balance 401,244 401,244 — 393,841 393,841 — 383,647 383,647 — deposits (%) (14.56) (14.63) — (14.18) (14.41) — (13.90) (14.06) —
Term-end balance 452,304 452,304 — 390,653 390,653 — 385,388 385,388 — (%) (16.42) (16.49) — (14.21) (14.30) — (14.15) (14.22) —
Time deposits Average balance 2,314,793 2,314,793 — 2,314,146 2,314,146 — 2,320,782 2,320,782 — (in general) (%) (84.00) (84.43) — (83.32) (84.68) — (84.09) (85.07) —
Term-end balance 2,265,744 2,265,744 — 2,314,726 2,314,726 — 2,300,654 2,300,654 — (%) (82.24) (82.61) — (84.22) (84.73) — (84.47) (84.88) —
Deregulated Average balance 1,870,063 1,870,063 — 1,880,807 1,880,807 — 1,881,895 1,881,895 — interest rate (%) (67.86) (68.21) — (67.72) (68.82) — (68.19) (68.98) — time deposits Term-end balance 1,802,150 1,802,150 — 1,874,281 1,874,281 — 1,859,347 1,859,347 — (fixed) (%) (65.41) (65.71) — (68.19) (68.61) — (68.26) (68.59) —
Deregulated Average balance 444,730 444,730 — 433,339 433,339 — 438,886 438,886 — interest rate (%) (16.14) (16.22) — (15.60) (15.86) — (15.90) (16.09) — time deposits Term-end balance 463,594 463,594 — 440,445 440,445 — 441,306 441,306 — (floating) (%) (16.83) (16.90) — (16.02) (16.12) — (16.20) (16.28) —
Others Average balance 17,507 3,470 14,037 49,338 4,753 44,584 35,369 3,775 31,593 (%) (0.63) (0.12) (100.00) (1.77) (0.17) (100.00) (1.28) (0.13) (100.00)Term-end balance 15,394 2,908 12,486 20,132 3,381 16,751 17,174 4,017 13,156 (%) (0.56) (0.11) (100.00) (0.73) (0.13) (100.00) (0.63) (0.14) (100.00)
Subtotal Average balance 2,755,777 2,741,739 14,037 2,777,468 2,732,884 44,584 2,759,813 2,728,219 31,593 (%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)Term-end balance 2,755,031 2,742,545 12,486 2,748,564 2,731,813 16,751 2,723,774 2,710,618 13,156 (%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)
Negotiable certificates Average balance 150,866 150,866 — 324,756 324,756 — 305,995 305,995 — of deposit Term-end balance 136,875 136,875 — 298,700 298,700 — 221,600 221,600 —
Total Average balance 2,906,643 2,892,605 14,037 3,102,224 3,057,640 44,584 3,065,808 3,034,215 31,593 Term-end balance 2,891,906 2,879,420 12,486 3,047,264 3,030,513 16,751 2,945,374 2,932,218 13,156
Notes: 1. Liquid deposits = Current deposits + ordinary deposits + deposits at notice
2. Time deposits (in general) = Time deposits
Deregulated interest rate time deposits (fixed) = Deregulated interest rate time deposits for which the interest up to the due date is determined
when the deposits are made.
Deregulated interest rate time deposits (floating) = Deregulated interest rate time deposits for which the interest varies according to changes in
market interest rates during the period of deposit.
Balance of Time Deposits by Residual Period(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Total
Deregulated interest rate
(fixed)
Deregulated interest rate
(floating) Total
Deregulated interest rate
(fixed)
Deregulated interest rate
(floating) Total
Deregulated interest rate
(fixed)
Deregulated interest rate
(floating)
Less than 3 months . . . . . . . 465,618 435,968 29,650 427,103 410,003 17,100 413,256 388,306 24,950
3–6 months. . . . . . . . . . . . . . 263,324 249,524 13,800 270,297 253,447 16,850 347,224 328,974 18,250
6 months–1 year . . . . . . . . . . 488,812 484,462 4,350 502,599 500,799 1,800 456,523 450,623 5,900
1–2 years . . . . . . . . . . . . . . . 296,418 287,081 9,337 287,284 276,784 10,500 289,737 281,537 8,200
2–3 years . . . . . . . . . . . . . . . 256,611 232,753 23,858 213,081 205,281 7,800 242,660 223,636 19,024
More than 3 years . . . . . . . . . 494,958 112,360 382,598 614,360 227,964 386,395 551,252 186,269 364,982
Total . . . . . . . . . . . . . . . . . . 2,265,744 1,802,150 463,594 2,314,726 1,874,281 440,445 2,300,654 1,859,347 441,306
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Dep
osit O
pera
tions (N
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Deposits per Office(Number of Offices, Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices
Number of offices . . . . . . . . . 20 20 — 20 20 — 20 20 —
Deposits per office . . . . . . . . 144,595 144,595 — 152,363 152,363 — 147,268 147,268 —
Notes: 1. Deposits include negotiable certificates of deposit.
2. Number of offices does not include domestic sub-branches and overseas representative offices.
Deposits per Employee(Number of Employees, Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices
Number of employees . . . . . . 1,753 1,753 — 1,681 1,681 — 1,688 1,688 —
Deposits per employee . . . . . 1,649 1,649 — 1,812 1,812 — 1,744 1,744 —
Notes: 1. Deposits include negotiable certificates of deposit.
2. Number of employees represents the average number of employees in each fiscal year. The number of employees in domestic offices includes
head office staff.
Outstanding Balance by Depositor(Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
Balance Share Balance Share Balance Share
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . 499,968 18.15 382,594 13.92 376,405 13.82
Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,881,258 68.28 2,000,761 72.79 1,970,241 72.34
Public sector . . . . . . . . . . . . . . . . . . . . . . . 108,175 3.93 37,271 1.36 45,034 1.65
Financial institutions . . . . . . . . . . . . . . . . . 265,629 9.64 327,936 11.93 332,093 12.19
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,755,031 100.00 2,748,564 100.00 2,723,774 100.00
Note: The above balance does not include negotiable certificates of deposit in offshore market accounts.
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Debenture Operations (Non-Consolidated)
Deb
entu
re O
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tions (N
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ate
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Outstanding and Average Balance of Debentures(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Term-end balance
Average balance
Term-end balance
Average balance
Term-end balance
Average balance
Aozora debentures . . . . . . . . . . . . . . . . . . 169,460 199,100 241,386 247,151 219,465 240,557
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 199,100 241,386 247,151 219,465 240,557
Note: Debentures do not include debenture subscriptions.
Balance by Residual Period (Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalAozora
debentures TotalAozora
debentures TotalAozora
debentures
Less than 1 year . . . . . . . . . . . . . . . . . . . . 80,050 80,050 96,806 96,806 98,805 98,805
1–3 years . . . . . . . . . . . . . . . . . . . . . . . . . 38,050 38,050 118,100 118,100 69,300 69,300
3–5 years . . . . . . . . . . . . . . . . . . . . . . . . . 51,360 51,360 26,480 26,480 51,360 51,360
5–7 years . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Over 7 years . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,460 169,460 241,386 241,386 219,465 219,465
Outstanding Balance of Debentures per Office(Number of Offices, Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices
Number of offices . . . . . . . . . 20 20 — 20 20 — 20 20 —
Outstanding balance of
debentures per office . . . . . 8,473 8,473 — 12,069 12,069 — 10,973 10,973 —
Note: Number of offices does not include domestic sub-branches and overseas representative offices.
Outstanding Balance of Debentures per Employee(Number of Employees, Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices
Number of employees . . . . . . 1,753 1,753 — 1,681 1,681 — 1,688 1,688 —
Outstanding balance of
debentures per employee . . 96 96 — 143 143 — 130 130 —
Note: Number of employees represents the average number of employees in each fiscal year. The number of employees in domestic offices includes head
office staff.
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Loan Operations (Non-Consolidated)Lo
an O
pera
tions (N
on-C
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d)
Outstanding Balance of Loans For the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Loans on deeds Average balance 2,309,266 1,421,296 887,970 2,469,616 1,548,772 920,843 2,418,172 1,494,822 923,349 Term-end balance 2,302,816 1,438,598 864,218 2,377,289 1,442,887 934,401 2,309,190 1,391,504 917,686
Loans on bills Average balance 28,453 28,139 314 41,011 39,239 1,772 38,558 36,866 1,692 Term-end balance 28,975 28,720 254 40,597 38,890 1,706 29,350 28,952 398
Overdrafts Average balance 174,802 174,230 572 216,963 215,833 1,130 202,054 201,039 1,015 Term-end balance 160,121 159,600 520 198,646 197,297 1,348 177,298 176,737 560
Bills discounted Average balance 22 22 — 427 427 — 264 264 — Term-end balance 1 1 — 79 79 — 28 28 —
Total Average balance 2,512,545 1,623,688 888,856 2,728,019 1,804,273 923,746 2,659,050 1,732,993 926,056 Term-end balance 2,491,916 1,626,921 864,994 2,616,611 1,679,155 937,456 2,515,868 1,597,222 918,645
Note: The Bank carries out partial and direct write-off of loans. This also applies to the table shown below.
Balance by Residual Period(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalFixed
interestFloating interest Total
Fixed interest
Floating interest Total
Fixed interest
Floating interest
Less than 1 year . . . . . . . . . . 877,273 1,009,849 889,162 1–3 years . . . . . . . . . . . . . . . 647,079 144,008 503,071 559,059 125,269 433,790 675,400 140,174 535,226 3–5 years . . . . . . . . . . . . . . . 608,272 121,498 486,773 723,227 114,795 608,432 596,769 94,010 502,759 5–7 years . . . . . . . . . . . . . . . 163,664 35,482 128,181 156,623 30,200 126,423 160,492 33,767 126,724 Over 7 years . . . . . . . . . . . . . 195,626 38,990 156,636 167,829 57,048 110,781 194,038 61,570 132,468 Indefinite period . . . . . . . . . . — — — 20 — 20 4 — 4
Total . . . . . . . . . . . . . . . . . . 2,491,916 2,616,611 2,515,868
Notes: 1. Maturity is based on scheduled final maturity dates. 2. No distinction has been made between fixed interest and floating interest for loans with a residual period of less than 1 year.
Ratio of Loans and Bills Discounted to Debentures/Deposits(Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Loans and bills discounted (A) . . 2,491,916 1,626,921 864,994 2,616,611 1,679,155 937,456 2,515,868 1,597,222 918,645 Debentures and deposits (B) . . . 3,061,366 3,048,880 12,486 3,288,650 3,271,899 16,751 3,164,840 3,151,684 13,156
Ratio (A)/(B) . . . . . . . . . . . . . . . . 81.39 53.36 6,927.71 79.56 51.32 5,596.37 79.49 50.67 6,982.42Average during the year . . . . . . . 80.89 52.51 6,332.05 81.44 54.59 2,071.89 80.42 52.91 2,931.16
Notes: 1. Debentures do not include debenture subscriptions. 2. Deposits include negotiable certificates of deposit.
Loans per Office(Number of Offices, Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices
Number of offices . . . . . . . . . 20 20 — 20 20 — 20 20 — Loans per office . . . . . . . . . . 124,595 124,595 — 130,830 130,830 — 125,793 125,793 —
Note: Number of offices does not include domestic sub-branches and overseas representative offices.
Loans per Employee(Number of Employees, Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices
Number of employees . . . . . . 1,753 1,753 — 1,681 1,681 — 1,688 1,688 — Loans per employee . . . . . . . 1,421 1,421 — 1,556 1,556 — 1,490 1,490 —
Note: Number of employees represents the average number of employees in each period (year). The number of employees in domestic offices includes head office staff.
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Loan Operations (Non-Consolidated)
Loans to Small and Medium-Sized Enterprises (SMEs)(Number of Borrowers, Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
Number of borrowers Value
Number of borrowers Value
Number of borrowers Value
Total loans and bills discounted (A) . . . . . . 1,491 2,491,916 1,646 2,616,611 1,561 2,515,868
Loans to small and medium-sized enterprises (SMEs) (B) . . . . . . . . . . . . . . . 1,092 1,752,252 1,260 1,835,869 1,155 1,771,132
(B)/(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.23 70.31 76.54 70.16 73.99 70.39
Notes: 1. In this table, the balance of loans and bills discounted does not include offshore banking accounts. 2. SMEs are defined as companies having capital of not more than ¥300 million (¥100 million in wholesale, and ¥50 million in retail, food service and
leasing business categories), or companies with not more than 300 full-time employees (100 in wholesale and leasing, 50 in retail and food service business categories), etc.
Consumer Loans Outstanding(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Consumer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,171 4,031 3,653Housing loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,693 3,518 3,163Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 478 513 489
Note: Consumer loans outstanding includes personal housing loans, as well as personal loans for general spending purposes and tax payments, and does not include business loans to sole proprietorships or their owners.
Breakdown of Loans and Bills Discounted by Industry(Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
Balance of loans Share Balance of loans Share Balance of loans Share
Domestic offices . . . . . . . . . . . . . . . . . . 2,491,916 100.00 2,616,611 100.00 2,515,868 100.00 (excluding Japan offshore market accounts)
Manufacturing . . . . . . . . . . . . . . . . . . . . 206,744 8.30 212,512 8.12 215,294 8.56 Agriculture, forestry and fisheries . . . . . . 3,339 0.13 2,689 0.10 3,774 0.15 Mining, quarry and gravel extraction . . . 150 0.01 1,437 0.06 800 0.03 Construction . . . . . . . . . . . . . . . . . . . . . 18,700 0.75 15,916 0.61 17,795 0.71 Electricity, gas, heat supply and water . . 20,510 0.82 15,271 0.58 18,731 0.75 Information and communications . . . . . 41,893 1.68 33,024 1.26 29,632 1.18 Transport and postal service . . . . . . . . . 59,204 2.38 72,589 2.77 62,743 2.49 Wholesale and retail trade . . . . . . . . . . . 109,411 4.39 115,243 4.41 110,774 4.40 Finance and insurance . . . . . . . . . . . . . 420,792 16.89 389,025 14.87 382,603 15.21 Real estate . . . . . . . . . . . . . . . . . . . . . . 500,767 20.09 569,077 21.75 513,521 20.41 Leasing . . . . . . . . . . . . . . . . . . . . . . . . . 74,690 3.00 98,882 3.78 84,067 3.34 Other services. . . . . . . . . . . . . . . . . . . . 156,382 6.27 144,486 5.52 152,182 6.05 Local government . . . . . . . . . . . . . . . . . 15,107 0.61 24,394 0.93 22,970 0.91 Others . . . . . . . . . . . . . . . . . . . . . . . . . 864,222 34.68 922,061 35.24 900,977 35.81
Overseas offices . . . . . . . . . . . . . . . . . . — — — — — — (including Japan offshore market accounts)
Government . . . . . . . . . . . . . . . . . . . . . — — — — — — Financial institutions . . . . . . . . . . . . . . . — — — — — — Others . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,491,916 2,616,611 2,515,868 Note: Domestic offices refer to the Bank’s head office and branch offices; overseas offices refer to the Bank’s overseas branch offices.
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Risk-Monitored Loans by Industry(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,115 24,983 22,966 (excluding Japan offshore market accounts)
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,595 3,358 3,184 Agriculture, forestry and fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Mining, quarry and gravel extraction . . . . . . . . . . . . . . . . . . . . . . . . — — — Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Electricity, gas, heat supply and water . . . . . . . . . . . . . . . . . . . . . . . — — — Information and communications . . . . . . . . . . . . . . . . . . . . . . . . . . 66 66 66 Transport and postal service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 19 19 Wholesale and retail trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340 620 320 Finance and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 125 Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,284 1,510 1,288 Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 238 — Other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 46 46 Local government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,637 19,123 17,916
Overseas offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (including Japan offshore market accounts)
Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,115 24,983 22,966
Balance of Loans and Bills Discounted, Classified by Purpose(Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
Balance of loans Share Balance of loans Share Balance of loans Share
Funds for capital investment . . . . . . . . . . . 245,553 9.85 227,584 8.70 230,237 9.15Funds for working capital . . . . . . . . . . . . . 2,246,363 90.15 2,389,027 91.30 2,285,630 90.85
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,491,916 100.00 2,616,611 100.00 2,515,868 100.00
Breakdown of Balance of Acceptances and Guarantees (Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Acceptances of bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 2,420 2,420
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,291 23,887 27,969
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,362 26,307 30,389
Breakdown of Loans and Bills Discounted by Collateral(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,086 8,969 8,092
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,988 28,592 26,974
Merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,455 150,609 154,850
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,926 4,699 4,638
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,456 192,871 194,556
Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,371 135,904 106,426
Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,217,088 2,287,836 2,214,884
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,491,916 2,616,611 2,515,868
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Breakdown of Collateral for Customers’ Liabilities for Acceptances and Guarantees(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 122 106
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 122 106
Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,282 2,938 2,130
Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,905 23,247 28,152
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,362 26,307 30,389
Write-Off of Loans(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Write-off of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 83 369
Allowance for Loan Losses For the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Balance at beginning of period Provision
Reduction during period
Balance at end of
period
Balance at beginning of period Provision
Reduction during period
Balance at end of
period
Balance at beginning
of year Provision
Reduction during year
Balance at end of
year
Used for specific purpose Other
Used for specific purpose Other
Used for specific purpose Other
General allowance . . . . . . 51,077 49,577 — 51,077 49,577 53,689 53,061 — 53,689 53,061 53,689 51,077 — 53,689 51,077
Specific allowance . . . . . . (739) (7) (438) 8,368 6,403 654 7,714 6,403 8,658 9,121 312 8,346 9,121 8,227 9,108 496 7,730 9,108
Related to non- (739) (7) (438) residents . . . . . . . . . . 6,706 5,293 654 6,052 5,293 3,381 7,105 — 3,381 7,105 2,949 7,446 — 2,949 7,446
Allowance for loans to restructuring countries . . — — — — — — — — — — — — — — —
Note: Figures in parentheses for balance at beginning of period (year) indicate translation difference due to foreign exchange fluctuations.
Country Risk ReserveNone.
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Loan Operations (Non-Consolidated)
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Disclosed Claims under the Financial Reconstruction Law(Billions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Disclosed claims under the Financial Reconstruction Law Bankrupt and similar credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.3 0.1 Doubtful credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9 20.7 19.0 Special attention credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 4.0 3.8
Subtotal (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1 25.0 23.0 Normal credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,508.8 2,622.2 2,528.2
Total credit (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,525.9 2,647.2 2,551.1
(A/B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.67% 0.94% 0.90%
Risk-Monitored LoansNon-Consolidated
(Billions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Risk-monitored loans: Loans to bankrupt borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Past due loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.0 21.0 19.1 Loans overdue for three months or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 4.0 3.8
Total (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1 25.0 23.0
Year-end balance of total loans (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,491.9 2,616.6 2,515.9
(A/B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.68% 0.95% 0.91%
Reserve Provision Ratios for Each Category of Borrower, Based on Asset-AssessmentsNon-Consolidated
(%)
Definition of Borrower Categories Sep. 2016 Sep. 2015 Mar. 2016
Normal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 1.4 1.4Need attention: Other need attention borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6 7.9 7.5 Special attention borrowers (Ratio of reserve to unsecured) . . . . . . . . . . . . . . . 71.7 43.5 44.6In danger of bankruptcy (Ratio of reserve to unsecured) . . . . . . . . . . . . . . . . . . . 78.8 74.3 79.9De facto bankrupt and bankrupt (Ratio of reserve to unsecured) . . . . . . . . . . . . . 100.0 100.0 100.0
Consolidated
(Billions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
Risk-monitored loans: Loans to bankrupt borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Past due loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.0 21.0 19.3 Loans overdue for three months or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 4.8 4.5
Total (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.4 25.8 23.8
Year-end balance of total loans (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,475.4 2,610.4 2,511.6
(A/B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.70% 0.98% 0.94%
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Loan Operations (Non-Consolidated)
<Definitions of Borrower Categories>Normal Business performance is strong and no special financial
problems exist.
Need attention Borrowers that need to be monitored carefully because of weak business fundamentals, financial problems or problematic lending conditions.
In danger of Borrowers that are not currently bankrupt but are highly bankruptcy likely to become bankrupt.
De facto Borrowers that are substantially bankrupt but are not bankrupt legally or practically bankrupt yet.
Bankrupt Borrowers that are legally or practically bankrupt.
<Definitions of Asset Classifications>Category I Assets that present no particular risk of collectability or
impairment of value.
Category II Assets, including credits, which bear above-average risk of collectability.
Category III Assets that bear substantial risk of final collectability or impairment of value, and are likely to incur losses.
Category IV Assets deemed to be uncollectable or valueless.
<Write-Off and Reserve Provision Rules>Normal and A general allowance is provided by applying the estimated Need attention loan-loss ratio determined based on the historical loan-loss borrowers data over a defined period in the past. However, for borrowers
with large credit exposure, the loan-loss amount estimated by the DCF method is reflected as an addition to the allowance for loan losses calculated based on the estimated loan-loss ratio, if necessary.
In danger of A specific allowance is provided for the loan losses at an bankruptcy amount considered to be necessary based on an overall borrowers solvency assessment of the borrowers and expected collectible
amounts through the disposal of collateral or execution of guarantees, etc. For loans whose future cash flows of principal and interest are reasonably estimated, the difference between the discounted cash flows and the carrying value is accounted for as an allowance for loan losses.
De facto In principle, the full amounts of credits that bear substantial bankrupt and risk of final collectability or impairment of value, and credits Bankrupt deemed to be uncollectable or valueless are written off directly. borrowers
<Definitions of Disclosed Claims under the Financial Reconstruction Law>Bankrupt and Bankrupt and similar credit refers to the credit of borrowers similar credit who have filed for bankruptcy, corporate reorga nization,
composition, etc., as well as those borrowers who are in an equivalent situation.
Doubtful credit Doubtful refers to credit with serious doubt concerning the recovery of principal and receiving of interest as contract provisions, because the borrower’s financial condition and business results have worsened, although they have not reached the point of management collapse.
Special attention Special attention refers to loans in arrears for more than credit three months or with mitigated conditions.
Normal credit Normal credit refers to credit to borrowers whose financial condition and business results have no particular problem and which are not categorized in any of the above categories.
<Risk-Monitored Loans>Loans to Loans to bankrupt borrowers are loans for which interest bankrupt in arrears has not been accrued because recovery or borrowers settlement of principal or interest is unlikely due to the
prolonged delay in payment of principal or interest (which hereafter shall be called ‘non-accrual loans’) and whose borrowers are legally bankrupt (defined below), excluding the amount of write-offs.
1. Borrowers that have applied for commencement of company or financial institution reorganization procedures under the provisions of the Corporate Reorganization Law.
2. Borrowers that have applied for reorganization under the provisions of the Civil Reorganization Law.
3. Borrowers that have applied for bankruptcy under the provisions of the Bankruptcy Law.
4. Borrowers that have applied to commence special liquidation under the provisions of the Company Law.
5. Borrowers with reasons equivalent to 1. to 4. above as defined by Ministry of Finance ordinances.
6. Borrowers who have applied for commencement of legal liquidation procedures under overseas laws, corresponding to those listed above.
Past due loans Past due loans refer to non-accrual loans except those for which concessions on payment of interest were made in order to assist the reorganization of bankrupt borrowers and loans to them.
Loans overdue Loans overdue for three months or more refer to those for three loans, excluding loans to bankrupt borrowers and past months or due loans for which principal or interest remains unpaid more for at least three months.
Restructured Restructured loans refer to those loans, excluding loans loans to bankrupt borrowers, past due loans and loans overdue
for three months or more for which agreement was made to provide reduction or a moratorium on interest payments, or concessions in the borrower’s favor on interest or principal payments or to waive claims for the purpose of assisting the reconstruction of insolvent borrowers.
<Differences Between Disclosed Claims under theFinancial Reconstruction Law and Risk-Monitored Loans>• Disclosed Claims
Disclosure: Loans and other claims equivalent thereof (foreign exchange, acceptances and guarantees, suspense payments, as well as loaned securities that require notation [limited to only those subject to a usage and lending or lending agreement], etc.).
Disclosed: By borrower (by loan for substandard credit)
• Risk-Monitored Loans
Disclosure: Loans only
Disclosed: By loan
Asset-Assessment, Disclosed Claims, Write-Offs, Reserves and Risk-Monitored Loans(After Partial and Direct Write-Offs, Non-Consolidated Basis) as of September 30, 2016
(Billions of Yen)
Borrower categoriesfor self-assessment
Bankrupt borrowers
In danger of bankruptcy borrowers
Normal borrowers
De facto bankrupt borrowers
Disclosed credit under the FRL
Loans Other
Doubtful credit14.9
Special attention credit2.1
Normal credit2,508.8
Bankrupt and similar credit0.1
Disclosed claims under the FRL17.1
Total credit 2,525.9
Reserve and coveragefor claims under the FRL
Total reserve 56.0
Collateral/Guarantee coverage 7.1Reserve 7.8
Estimated collections 2.2
Collateral/Guarantee coverage 0.1Reserve —
Collateral/Guarantee coverage 7.0Reserve 6.3
Estimated collections 1.6
Collateral/Guarantee coverage —Reserve 1.5
Estimated collections 0.6
Reserve and coverage ratiofor claims under the FRL
Reserve to unsecured credit ratio
100.0%
88.7%
71.7%
100.0%
78.8%
71.7%
Risk-monitored loans
Restructured loans2.1
Risk-monitored loans17.1Reserve and
coverage ratio for disclosed claims
under the FRL86.7%
Reserve ratio for disclosed claims
under the FRL77.3%
Loans overdue for three months or more
—
Past due loans15.0
Loans to bankrupt borrowers—
Need attention borrowers
FRL: Financial Reconstruction LawReserve to unsecured credit ratio = Reserve ÷ (Claims – Collateral, guarantees, etc.)Reserve and coverage ratio = (Collateral, guarantees, etc. + Reserve) ÷ Claims
064
Fin
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Securitie
s (No
n-C
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lidate
d)
Securities (Non-Consolidated)
Outstanding and Average Balance of Securities Held (Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Total Average balance 966,963 324,708 642,255 1,072,602 453,014 619,587 1,050,729 424,088 626,640 (%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)Term-end balance 999,810 359,217 640,592 1,001,390 437,507 563,883 987,411 356,001 631,410 (%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)
Japanese Average balance 15,690 15,690 — 191,470 191,470 — 144,760 144,760 — national (%) (1.62) (4.83) — (17.85) (42.27) — (13.77) (34.13) — government Term-end balance 8,020 8,020 — 135,176 135,176 — 28,024 28,024 — bonds (%) (0.80) (2.23) — (13.50) (30.90) — (2.84) (7.87) —
Japanese Average balance 17,897 17,897 — 15,032 15,032 — 15,213 15,213 — local (%) (1.85) (5.51) — (1.40) (3.32) — (1.45) (3.59) — government Term-end balance 20,824 20,824 — 14,983 14,983 — 15,140 15,140 — bonds (%) (2.08) (5.80) — (1.49) (3.42) — (1.53) (4.26) —
Japanese Average balance — — — — — — — — — short-term (%) — — — — — — — — — corporate Term-end balance — — — — — — — — — bonds (%) — — — — — — — — —
Japanese Average balance 31,713 31,713 — 36,849 36,849 — 35,487 35,487 — corporate (%) (3.28) (9.77) — (3.44) (8.13) — (3.38) (8.37) — bonds Term-end balance 34,361 34,361 — 36,920 36,920 — 32,147 32,147 —
(%) (3.44) (9.57) — (3.69) (8.44) — (3.26) (9.03) —
Japanese Average balance 34,215 34,215 — 34,985 34,985 — 33,717 33,717 — stocks (%) (3.54) (10.54) — (3.26) (7.72) — (3.21) (7.95) —
Term-end balance 65,864 65,864 — 55,764 55,764 — 54,654 54,654 — (%) (6.59) (18.33) — (5.57) (12.75) — (5.53) (15.35) —
Others Average balance 867,446 225,190 642,255 794,264 174,676 619,587 821,550 194,909 626,640 (%) (89.71) (69.35) (100.00) (74.05) (38.56) (100.00) (78.19) (45.96) (100.00)Term-end balance 870,740 230,147 640,592 758,545 194,662 563,883 857,445 226,034 631,410 (%) (87.09) (64.07) (100.00) (75.75) (44.49) (100.00) (86.84) (63.49) (100.00)
Note: Total for others is the sum of domestic operations and international operations.
065
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Securitie
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Securities (Non-Consolidated)
Ratio of Securities to Debentures and Deposits(Millions of Yen, %)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
operationsInternational operations Total
Domestic operations
International operations Total
Domestic operations
International operations
Securities (A) . . . . . . . . . . . . . . 999,810 359,217 640,592 1,001,390 437,507 563,883 987,411 356,001 631,410
Debentures and deposits (B) . . 3,061,366 3,048,880 12,486 3,288,650 3,271,899 16,751 3,164,840 3,151,684 13,156
Ratio (A)/(B) . . . . . . . . . . . . . . 32.65 11.78 5,130.48 30.44 13.37 3,366.23 31.19 11.29 4,799.21
Average during the year . . . . . 31.13 10.50 4,575.31 32.02 13.70 1,389.68 31.77 12.95 1,983.44
Notes: 1. Debentures do not include debenture subscriptions.
2. Deposits include negotiable certificates of deposit.
Balance of Securities by Residual Period(Millions of Yen)
Sep. 2016
Japanese national government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds Japanese stocks Others
Less than 1 year . . . . — 200 — 20 11,030 1–3 years . . . . . . . . . 8,020 2,744 — 4,676 16,454 3–5 years . . . . . . . . . — 7,123 — 7,727 83,423 5–7 years . . . . . . . . . — 1,189 — 3,561 76,091 7–10 years . . . . . . . . — 9,529 — 4,356 61,422 Over 10 years . . . . . . — 35 — 14,019 127,564 Indefinite period . . . . — — — — 65,864 494,754
Total . . . . . . . . . . . . 8,020 20,824 — 34,361 65,864 870,740
(Millions of Yen)
Sep. 2015
Japanese national government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds Japanese stocks Others
Less than 1 year . . . . 127,100 590 — 2,660 13,072 1–3 years . . . . . . . . . — 1,038 — 5,595 25,346 3–5 years . . . . . . . . . 8,076 6,647 — 2,461 65,531 5–7 years . . . . . . . . . — 1,040 — 15,307 23,916 7–10 years . . . . . . . . — 5,628 — 3,894 115,794 Over 10 years . . . . . . — 37 — 7,001 85,068 Indefinite period . . . . — — — — 55,764 429,816
Total . . . . . . . . . . . . 135,176 14,983 — 36,920 55,764 758,545
(Millions of Yen)
Mar. 2016
Japanese national government bonds
Japanese local government bonds
Japanese short-term corporate bonds
Japanese corporate bonds Japanese stocks Others
Less than 1 year . . . . 20,004 400 — 5,668 15,799 1–3 years . . . . . . . . . 8,020 1,725 — 1,700 22,964 3–5 years . . . . . . . . . — 6,476 — 5,612 141,320 5–7 years . . . . . . . . . — 948 — 4,922 35,944 7–10 years . . . . . . . . — 5,552 — 3,740 60,194 Over 10 years . . . . . . — 36 — 10,503 107,505 Indefinite period . . . . — — — — 54,654 473,716
Total . . . . . . . . . . . . 28,024 15,140 — 32,147 54,654 857,445
066
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ancia
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Securitie
s Busin
ess/
Inte
rnatio
nal O
pera
tions (N
on-C
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lidate
d)
Securities Business (Non-Consolidated)
Underwriting of Public Bonds(Millions of Yen)
Sep. 2016 Sep. 2015
Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Japanese local government bonds and government-guaranteed bonds . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Over-the-Counter Sales of Public Bonds and Securities Investment Trusts(Millions of Yen)
Sep. 2016 Sep. 2015
Japanese national government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Japanese local government bonds and government-guaranteed bonds . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Securities investment trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,964 26,234
Balance of Assets in International Operations(Millions of Yen)
Sep. 2016 Sep. 2015 Mar. 2016
TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices TotalDomestic
officesOverseas
offices
Balance of assets in
international operations . . . . . 1,772,021 1,772,021 — 1,750,244 1,750,244 — 1,841,330 1,841,330 —
Foreign Exchange TransactionsFor the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
(Millions of U.S. Dollars)
Sep. 2016 Sep. 2015 Mar. 2016
Outward exchange: Foreign bills sold . . . . . . . . . . . . . . 2,460 3,232 6,058
Foreign bills bought . . . . . . . . . . . . — — —
Incoming exchange: Foreign bills payable . . . . . . . . . . . 1,043 1,514 3,045
Foreign bills receivable . . . . . . . . . — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,504 4,746 9,103
International Operations (Non-Consolidated)
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Oth
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Other Operations (Non-Consolidated)
Principal Fees and Commissions (As of January 1, 2016)
Automated Installations
Jan. 2016
Automated teller machines (ATMs). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(Millions of Yen, Thousands of Transactions)
Sep. 2016 Sep. 2015 Mar. 2016
Value of transactions
Number of transactions
Value of transactions
Number of transactions
Value of transactions
Number of transactions
Money transfer
Sent . . . . . . . . . . . . . . . . . . . . . 2,135,341 498 1,966,935 507 3,965,427 1,019
Received . . . . . . . . . . . . . . . . . . 1,948,999 303 2,298,021 282 4,311,685 574
Money transfer by check
Sent . . . . . . . . . . . . . . . . . . . . . 3,565 1 9,004 1 14,410 3
Received . . . . . . . . . . . . . . . . . . 3,659 1 7,075 1 12,494 3
To Aozora Bank Head Office/
Branches
To Other Banks
By Wire
Transfers Handled at
the counter
Clients with
accounts at
the Bank
On transfers up to
¥30,000
¥216 ¥540
On transfers exceeding
¥30,000
¥432 ¥756
Clients without
accounts at
the Bank
On transfers up to
¥30,000
¥216
¥1,029On transfers exceeding
¥30,000
¥432
Telephone banking On transfer ¥0 ¥308
Internet banking (retail) On transfer ¥0 ¥154
Collection of
payments
For same-site (local) payment Per item ¥216
For different-site (remote) payment Per item ¥432 Urgent Normal
¥864 ¥648
Checks and notes Checks cost ¥648 for one book of 50 sheets
Notes cost ¥1,080 for one book of 50 sheets
Cashier’s checks ¥540 per check
Document/Card reissuing ¥1,080 to reissue each account book, transaction receipt or
certificate
¥1,080 to reissue each card
Balance verification ¥432 per section each time
Notes: 1. Amounts include 8% consumption tax and regional tax.
2. The account pre-registered by customers who are registered for telephone banking will be used.
3. Transfers by telegraph are no longer provided as of June 1, 2010.
Domestic Exchange TransactionsFor the six-month periods ended September 30, 2016 and 2015, and the year ended March 31, 2016
068
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ancia
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Cap
italiza
tion (N
on-C
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lidate
d)
Capitalization (Non-Consolidated)
History of Capitalization(Millions of Yen)
Month/Year Capital increases
Capital thereafter Remarks
Sep. 2000 66,666 419,781 Compensatory private placement (common stock, 333,334 thousand shares); Issue price ¥300; Transfer to capital ¥200
Oct. 2000 (260,000) 159,781 Non-compensatory reduction of capital• Capital reduction of ¥105,287 million by redemption of the 2nd preferred
stock, 102,000 thousand shares; the 3rd preferred stock, 386,398 thousand shares; and the 4th preferred stock, 71,856 thousand shares
• Capital reduction of ¥154,712 million exceeding face amount of common stock and transferred to capital
Oct. 2000 260,000 419,781 Compensatory private placement (the 5th preferred stock, 866,667 thousand shares); Issue price ¥300; Transfer to capital ¥300
Nov. 2012 (319,781) 100,000 Capital reduction (Change in capital composition)Capital stock was reduced by ¥319,781 million. Of which, ¥53,980 million was transferred to legal capital surplus, and the remaining ¥265,801 million was transferred to other capital surplus.
Major Shareholders(As of September 30, 2016)
Number of shares heldPercentage of
total outstanding shares
The Master Trust Bank of Japan, Ltd. (Trust Account) . . . . . . . . . . . . . 66,790,000 5.65%
Japan Trustee Services Bank, Ltd. (Trust Account) . . . . . . . . . . . . . . . 62,039,000 5.24
Japan Trustee Services Bank, Ltd. (Trust Account 9) . . . . . . . . . . . . . 22,784,000 1.93
STATE STREET BANK WEST CLIENT–TREATY 505234 . . . . . . . . . . . 17,560,160 1.48
Aozora Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,495,300 1.39
Japan Trustee Services Bank, Ltd. (Trust Account 7) . . . . . . . . . . . . . 16,342,000 1.38
ORIX Bank Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,401,000 1.22
Japan Trustee Services Bank, Ltd. (Trust Account 4) . . . . . . . . . . . . . 13,352,000 1.13
GOLDMAN SACHS INTERNATIONAL. . . . . . . . . . . . . . . . . . . . . . . . . 13,167,974 1.11
Japan Trustee Services Bank, Ltd. (Trust Account 1) . . . . . . . . . . . . . 13,133,000 1.11
JP MORGAN CHASE BANK 385151 . . . . . . . . . . . . . . . . . . . . . . . . . 13,008,771 1.10
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 913,820,976 77.26
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,182,894,181 100.00
Notes: 1. The above table was compiled based on the Bank’s Shareholder Registry as of September 30, 2016.
2. Sumitomo Mitsui Trust Bank, Limited submitted a Major Shareholders Report dated July 6, 2015, stating their holdings with joint shareholder
Sumitomo Mitsui Trust Asset Management Co., Ltd. and Nikko Asset Management Co., Ltd. as of June 30, 2015, as follows. They are not included,
however, in the above table of major shareholders as the Bank was unable to confirm the actual number of shares held by the aforementioned
shareholders as of September 30, 2016.
Number of shares held Percentage of shares held
Sumitomo Mitsui Trust Bank, Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,882,900 3.12%
Sumitomo Mitsui Trust Asset Management Co., Ltd. . . . . . . . . . . . . . . . . . . . . . 2,670,000 0.23
Nikko Asset Management Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,732,000 1.84
3. BlackRock Japan Co., Ltd. submitted a Major Shareholders Report dated July 6, 2015, stating their holdings with joint shareholder BlackRock
Investment Management LLC, BlackRock (Luxembourg) S.A., BlackRock Life Limited, BlackRock Asset Management Ireland Limited, BlackRock
Fund Advisors, BlackRock Institutional Trust Company, N.A. and BlackRock Investment Management (UK) Limited as of June 30, 2015, as follows.
They are not included, however, in the above table of major shareholders as the Bank was unable to confirm the actual number of shares held by
the aforementioned shareholders as of September 30, 2016.
Number of shares held Percentage of shares held
BlackRock Japan Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,799,000 1.67%
BlackRock Investment Management LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,305,730 0.11
BlackRock (Luxembourg) S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,913,000 0.25
BlackRock Life Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,997,072 0.25
BlackRock Asset Management Ireland Limited . . . . . . . . . . . . . . . . . . . . . . . . . . 6,362,355 0.54
BlackRock Fund Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,306,000 1.55
BlackRock Institutional Trust Company, N.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,968,408 1.52
BlackRock Investment Management (UK) Limited. . . . . . . . . . . . . . . . . . . . . . . . 3,987,000 0.34
069
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Cap
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tion (N
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Capitalization (Non-Consolidated)
Ownership and Distribution of Shares(As of September 30, 2016)
Classification
Stock Status (1 tangen unit = 1,000 shares)
Fractional shares of common
stock
National and
municipal governments
Financial institutions
Financial instruments
firms
Other domestic
companies
Foreign Investors
Individuals and others Total
Other than individuals Individuals
Number of shareholders . . . — 77 57 733 541 64 70,450 71,922 —
Number of shares held
(tangen) . . . . . . . . . . . . . . — 315,520 23,080 26,947 431,826 655 384,544 1,182,572 322,181
Percentage of total
number of shares . . . . . . — 26.68 1.95 2.28 36.52 0.05 32.52 100.00 —
Notes: 1. Treasury stock of 16,495,300 shares comprises 16,495 tangen units under Individuals and others and 300 shares under Fractional shares of
common stock.
2. In the Other domestic companies column, shares in the name of Japan Securities Depository Center, Incorporated represent one tangen unit.
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Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline
This section describes the information consistent with FSA Notice Number 7, Basel III Pillar III—Market Discipline, based on Article
19-2.1.5.d and 19-3.1.3.c of the Ordinance for the Enforcement of the Banking Act (Ministry of Finance Ordinance Number 10,
1982), issued in 2014.
‘Notice’ in this section refers to FSA Notice Number 19, Basel III Pillar I—Minimum Capital Requirements and Buffers, issued in 2006.
Composition of Capital Disclosure
Composition of Capital Disclosure (Consolidated)(Basel III) (Millions of Yen)
Items Sep. 30, 2016
Amounts excluded under
transitional arrangements Sep. 30, 2015
Amounts excluded under
transitional arrangements
Core capital: instruments and reserves (1)Directly issued qualifying common share capital and preferred share capital with mandatory conversion clause plus related stock surplus and retained earnings . . . . 393,833 370,470
of which: capital and capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,315 187,313
of which: retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214,571 191,211
of which: treasury stock (–). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,387 3,388
of which: national specific regulatory adjustments (earnings to be distributed) (–) . 4,665 4,665
of which: other than above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Accumulated other comprehensive income included in Core capital . . . . . . . . . . . . . (1,880) 2,091
of which: foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . (1,840) 1,168
of which: remeasurements of defined benefit plans . . . . . . . . . . . . . . . . . . . . . . . (39) 922
Subscription rights to common shares and preferred shares with mandatory conversion clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 182
Adjusted non-controlling interests (amount allowed in group Core capital) . . . . . . . . . 8 —
Total of general allowance for loan losses and eligible provisions included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,584 42,983
of which: general allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,584 42,983
of which: eligible provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Eligible non-cumulative perpetual preferred shares subject to transitional arrangements included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Eligible capital instruments, other than non-cumulative perpetual preferred shares, subject to transitional arrangements included in Core capital . . . . . . . . . . . . . . . . . . — —
Capital instruments issued using public capital injection programs included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Amounts equivalent to 45% of land revaluation excess subject to transitional arrangements included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Non-controlling interests subject to transitional arrangements included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,815 768
Core capital: instruments and reserves (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437,657 416,497
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Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline
Core capital: regulatory adjustments (2)Total intangible assets (net of related tax liability, excluding those relating to mortgage servicing rights) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,444 5,166 1,309 5,236
of which: goodwill (including those equivalent) . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: other intangibles other than goodwill and mortgage servicing rights . . . 3,444 5,166 1,309 5,236
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 212 768 3,072
Shortfall of eligible provisions to expected losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Securitization gain on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Gains and losses due to changes in own credit risk on fair valued liabilities . . . . . . . . — — — —
Defined-benefit pension fund net assets (prepaid pension costs) . . . . . . . . . . . . . . . . 332 498 758 3,032
Investments in own shares (excluding those reported in the Net assets section) . . . . 24 36 6 25
Reciprocal cross-holdings in capital instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Investments in the common stock and preferred stock with mandatory conversion clause of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above the 10% threshold) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Amount exceeding the 10% threshold on specified items . . . . . . . . . . . . . . . . . . . . . — — — —
of which: significant investments in the common stock and preferred stock with mandatory conversion clause of financials. . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: mortgage servicing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: deferred tax assets arising from temporary differences (net of related tax liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Amount exceeding the 15% threshold on specified items . . . . . . . . . . . . . . . . . . . — — — —
of which: significant investments in the common stock and preferred stock with mandatory conversion clause of financials. . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: mortgage servicing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: deferred tax assets arising from temporary differences (net of related tax liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Core capital: regulatory adjustments (B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,942 2,841
Regulatory capitalRegulatory capital ((A)–(B)) (C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433,715 413,655
Risk-weighted assets (3)Credit risk assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,486,737 3,438,714
Total of items subject to transitional arrangements included in risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (48,425) (73,078)
of which: intangibles other than goodwill and mortgage servicing rights . . . . . . 5,166 5,236
of which: deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 3,072
of which: defined-benefit pension fund net assets (prepaid pension costs) . . . . 498 3,032
of which: investments in capital instruments of financials . . . . . . . . . . . . . . . . . (54,339) (84,444)
of which: other than above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 25
Risk assets derived from market risk equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181,888 160,032
Risk assets derived from operational risk equivalents. . . . . . . . . . . . . . . . . . . . . . . . . 157,366 152,210
Adjustments to credit risk assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Adjustments to operational risk equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Total risk-weighted assets (D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,825,991 3,750,957
Consolidated capital adequacy ratioConsolidated capital adequacy ratio ((C)/(D)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.33% 11.02%
(Millions of Yen)
Items Sep. 30, 2016
Amounts excluded under
transitional arrangements Sep. 30, 2015
Amounts excluded under
transitional arrangements
Methods used to calculate risk-weighted assets and amounts of required capital for each risk are as follows:(Millions of Yen)
Methods Sep. 30, 2016 Sep. 30, 2015
Total required capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,039 150,038
Credit risk. . . . . . . . . . . . . . . . . . . . . . . Standardized approach 139,469 137,548
Market risk equivalents. . . . . . . . . . . . . Internal models approach and Standardized approach
7,275 6,401
Operational risk equivalents . . . . . . . . . Standardized approach 6,294 6,088
Note: Consolidated capital adequacy ratio is calculated based on the Notice. The Bank uses the domestic standard applicable to Japanese banks without overseas branches or banking subsidiaries.
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Composition of Capital Disclosure (Non-Consolidated)(Basel III) (Millions of Yen)
Items Sep. 30, 2016
Amounts excluded under
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Amounts excluded under
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Core capital: instruments and reserves (1)Directly issued qualifying common share capital and preferred share capital with mandatory conversion clause plus related stock surplus and retained earnings . . . . 387,639 364,017
of which: capital and capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,315 187,313
of which: retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208,377 184,757
of which: treasury stock (–). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,387 3,388
of which: national specific regulatory adjustments (earnings to be distributed) (–) . 4,665 4,665
of which: other than above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Subscription rights to common shares and preferred shares with mandatory conversion clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 182
Total of general allowance for loan losses and eligible provisions included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,849 43,140
of which: general allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,849 43,140
of which: eligible provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Eligible non-cumulative perpetual preferred shares subject to transitional arrangements included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Eligible capital instruments, other than non-cumulative perpetual preferred shares, subject to transitional arrangements included in Core capital . . . . . . . . . . . . . . . . . . — —
Capital instruments issued using public capital injection programs included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Amounts equivalent to 45% of land revaluation excess subject to transitional arrangements included in Core capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Core capital: instruments and reserves (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431,786 407,340
Core capital: regulatory adjustments (2)Total intangible assets (net of related tax liability, excluding those relating to mortgage servicing rights) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,388 5,082 1,277 5,109
of which: goodwill (including those equivalent) . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: other intangibles other than goodwill and mortgage servicing rights . . . 3,388 5,082 1,277 5,109
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 742 2,968
Shortfall of eligible provisions to expected losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Securitization gain on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Gains and losses due to changes in own credit risk on fair valued liabilities . . . . . . . . — — — —
Defined-benefit pension fund net assets (prepaid pension costs) . . . . . . . . . . . . . . . . 204 307 — —
Investments in own shares (excluding those reported in the Net assets section) . . . . 24 36 6 25
Reciprocal cross-holdings in capital instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Investments in the common stock and preferred stock with mandatory conversion clause of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above the 10% threshold) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Amount exceeding the 10% threshold on specified items . . . . . . . . . . . . . . . . . . . . . — — — —
of which: significant investments in the common stock and preferred stock with mandatory conversion clause of financials. . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: mortgage servicing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: deferred tax assets arising from temporary differences (net of related tax liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Amount exceeding the 15% threshold on specified items . . . . . . . . . . . . . . . . . . . — — — —
of which: significant investments in the common stock and preferred stock with mandatory conversion clause of financials. . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: mortgage servicing rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
of which: deferred tax assets arising from temporary differences (net of related tax liability) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Core capital: regulatory adjustments (B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,617 2,025
Regulatory capitalRegulatory capital ((A)–(B)) (C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428,168 405,314
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Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline
Risk-weighted assets (3)Credit risk assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,507,988 3,451,235
Total of items subject to transitional arrangements included in risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (48,913) (76,342)
of which: intangibles other than goodwill and mortgage servicing rights . . . . . . 5,082 5,109
of which: deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,968
of which: defined-benefit pension fund net assets (prepaid pension costs) . . . . 307 —
of which: investments in capital instruments of financials . . . . . . . . . . . . . . . . . (54,339) (84,444)
of which: other than above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 25
Risk assets derived from market risk equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181,323 159,564
Risk assets derived from operational risk equivalents. . . . . . . . . . . . . . . . . . . . . . . . . 146,321 144,980
Adjustments to credit risk assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Adjustments to operational risk equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Total risk-weighted assets (D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,835,633 3,755,780
Non-consolidated capital adequacy ratioNon-consolidated capital adequacy ratio ((C)/(D)). . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.16% 10.79%
Methods used to calculate risk-weighted assets and amounts of required capital for each risk are as follows:(Millions of Yen)
Methods Sep. 30, 2016 Sep. 30, 2015
Total required capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,425 150,231
Credit risk. . . . . . . . . . . . . . . . . . . . . . . Standardized approach 140,319 138,049
Market risk equivalents. . . . . . . . . . . . . Internal models approach and Standardized approach
7,252
6,382
Operational risk equivalents . . . . . . . . . Standardized approach 5,852 5,799
Note: Non-consolidated capital adequacy ratio is calculated based on the Notice. The Bank uses the domestic standard applicable to Japanese banks without overseas branches or banking subsidiaries.
(Millions of Yen)
Items Sep. 30, 2016
Amounts excluded under
transitional arrangements Sep. 30, 2015
Amounts excluded under
transitional arrangements
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Quantitative Disclosure
1. Names of subsidiaries classified as other financial institutions under the Notice whose capital is short of the regulatory amount required, and total shortfall amount of such subsidiaries(As of September 30, 2016 and 2015)Not applicable
2. Items pertaining to capital adequacy(1) Breakdown by Portfolio (Non-Consolidated)
(100 Million Yen)
Sep. 2016 Sep. 2015
CategoryAmount of exposure
Amount of credit
risk assets
Amount of capital
requirementsAmount of exposure
Amount of credit
risk assets
Amount of capital
requirements
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 — — 112 — — Claims on Japanese government/bank. . . . . . . . . . . . . . . . . . . . . . . . . 5,911 — — 6,998 — — Claims on foreign central government/bank . . . . . . . . . . . . . . . . . . . . . 2,748 36 1 2,643 20 1 Claims on Bank for International Settlements (BIS) . . . . . . . . . . . . . . . . — — — — — — Claims on Japanese local public bodies . . . . . . . . . . . . . . . . . . . . . . . . 357 2 0 400 3 0 Claims on non-central government public sector entities (PSEs) of foreign countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 674 146 6 373 87 3 Claims on multilateral development banks (MDBs) . . . . . . . . . . . . . . . . — — — — — — Claims on Japan Finance Organization for Municipalities (JFM) . . . . . . . 12 0 0 8 0 0 Claims on organs affiliated with the Japanese government . . . . . . . . . . 256 23 1 341 33 1 Claims on three major local public corporations . . . . . . . . . . . . . . . . . . 125 2 0 186 2 0 Claims on financial institutions and Type I financial instruments business operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,547 574 23 3,194 613 25 Claims on corporates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,712 11,986 479 14,425 12,482 499 Claims on SMEs and individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Mortgage-backed housing loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4 0 15 5 0 Claims on projects including acquisition of real estate properties . . . . . 1,993 1,993 80 2,089 2,089 84 Loans overdue for three months or more . . . . . . . . . . . . . . . . . . . . . . . 511 606 24 491 543 22 Cash items in process of collection . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Loans guaranteed by Credit Guarantee Association, etc. . . . . . . . . . . . 0 0 0 0 0 0 Loans guaranteed by Regional Economy Vitalization Corporation of Japan (REVIC), etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Equity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,021 3,021 121 2,808 2,799 112 Securitization (as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Risk weight = 1250%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Securitization (not as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . 5,706 5,970 239 5,903 6,380 255 Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473 255 10 240 136 5 Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,204 5,355 214 5,625 5,761 230 Risk weight = 1250%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 360 14 39 483 19
Fund (look-through approach) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,894 6,646 266 5,218 6,032 241 Risk weight 0% to 20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 0 0 1 0 0 Risk weight > 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 15 1 324 132 5 Risk weight > 50% <= 100% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,661 1,506 60 1,224 1,140 46 Risk weight > 100% <= 150% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,778 4,303 172 3,326 3,735 149 Risk weight > 150% < 1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 813 33 340 983 39 Risk weight = 1250%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8 0 3 43 2
Amount calculated by dividing equivalent CVA risk amount by 8% . . . . — 662 26 — 508 20 Central counterparty-related. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,117 85 3 825 33 1 Total of items included in risk weighted assets subject to phase-out arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 475 19 692 765 31 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,293 2,849 114 1,008 2,118 85 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,429 35,080 1,403 47,730 34,512 1,380 Notes: 1. Amount of exposure • After deducting the amount equivalent to partial direct write-offs. Specific allowance for loan losses and allowance for loans to restructuring countries are not subject to the
deduction. • The amount is equivalent to credit extension set forth in the Notice (after the effect of deducting the amount
equivalent to credit extension under netting agreement). 2. Amount of credit risk • After applying credit risk mitigation effect. 3. Amount of capital requirements • As the Bank is subject to domestic standards, the amount is calculated taking 4% of credit risk assets. 4. Indication method after • The amount is rounded to the nearest whole number. The same applies to the following charts. the decimal point
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Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline
Breakdown by Portfolio (Consolidated)(100 Million Yen)
Sep. 2016 Sep. 2015
CategoryAmount of exposure
Amount of credit
risk assets
Amount of capital
requirementsAmount of exposure
Amount of credit
risk assets
Amount of capital
requirements
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 — — 112 — — Claims on Japanese government/bank. . . . . . . . . . . . . . . . . . . . . . . . . 5,923 — — 7,013 — — Claims on foreign central government/bank . . . . . . . . . . . . . . . . . . . . . 2,748 36 1 2,643 20 1 Claims on Bank for International Settlements (BIS) . . . . . . . . . . . . . . . . — — — — — — Claims on Japanese local public bodies . . . . . . . . . . . . . . . . . . . . . . . . 357 2 0 400 3 0 Claims on non-central government public sector entities (PSEs) of foreign countries 674 146 6 373 87 3 Claims on multilateral development banks (MDBs) . . . . . . . . . . . . . . . . — — — — — — Claims on Japan Finance Organization for Municipalities (JFM) . . . . . . . 12 0 0 8 0 0 Claims on organs affiliated with the Japanese government . . . . . . . . . . 256 23 1 341 33 1 Claims on three major local public corporations . . . . . . . . . . . . . . . . . . 125 2 0 186 2 0 Claims on financial institutions and Type I financial instruments business operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,936 652 26 3,436 661 26 Claims on corporates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,981 15,259 610 17,824 15,890 636 Claims on SMEs and individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Mortgage-backed housing loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4 0 15 5 0 Claims on projects including acquisition of real estate properties . . . . . 2,023 2,023 81 2,125 2,125 85 Loans overdue for three months or more . . . . . . . . . . . . . . . . . . . . . . . 1,434 1,990 80 1,174 1,568 63 Cash items in process of collection . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Loans guaranteed by Credit Guarantee Association, etc. . . . . . . . . . . . 0 0 0 0 0 0 Loans guaranteed by Regional Economy Vitalization Corporation of Japan (REVIC), etc. — — — — — — Equity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,697 2,697 108 2,540 2,540 102 Securitization (as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Risk weight = 1250%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Securitization (not as originating bank) . . . . . . . . . . . . . . . . . . . . . . . . . 6,052 6,128 245 6,077 6,434 257 Rating-based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 770 363 15 389 166 7 Look-through approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,254 5,405 216 5,649 5,785 231 Risk weight = 1250%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 360 14 39 483 19
Fund (look-through approach) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 1,816 73 1,144 1,525 61 Risk weight 0% to 20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 0 0 1 0 0 Risk weight > 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 13 1 323 131 5 Risk weight > 50% <= 100% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 333 13 403 392 16 Risk weight > 100% <= 150% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606 650 26 104 124 5 Risk weight > 150% < 1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 812 32 310 835 33 Risk weight = 1250%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8 0 3 43 2
Amount calculated by dividing equivalent CVA risk amount by 8% . . . . — 662 26 — 508 20 Central counterparty-related. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,117 85 3 825 33 1 Total of items included in risk weighted assets subject to phase-out arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445 480 19 725 798 32 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,314 2,863 115 1,042 2,158 86 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,605 34,867 1,395 48,003 34,387 1,375 Notes: 1. Amount of exposure • After deducting the amount equivalent to partial direct write-offs. Specific allowance for loan losses and allowance for loans to restructuring countries are not subject to the
deduction. • The amount is equivalent to credit extension set forth in the Notice (after the effect of deducting the amount
equivalent to credit extension under netting agreement). 2. Amount of credit risk • After applying credit risk mitigation effect. 3. Amount of capital requirements • As the Bank is subject to domestic standards, the amount is calculated taking 4% of credit risk assets.
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(2) Amount of capital required to cover credit risk related to exposures for which credit risk assets are deemed applicable:
This information is described in Quantitative Disclosure 2. (1).
(Millions of Yen)
Sep. 2016 Sep. 2015
Consolidated Non-consolidated Consolidated Non-consolidated
Internal models approach . . . . . . . . 6,404 6,404 4,971 4,971
Standardized approach . . . . . . . . . 871 848 1,430 1,411Interest rate risk . . . . . . . . . . . . . 166 160 154 154Equity risk . . . . . . . . . . . . . . . . . . 65 65 2 2Foreign exchange risk . . . . . . . . . 17 0 18 0Commodities risk . . . . . . . . . . . . 621 621 1,254 1,254Options transactions . . . . . . . . . . — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . 7,275 7,252 6,401 6,382
Notes: The calculation methods are as follows:
1. Internal models approach
General market risk for the interest rates, foreign exchange (major currencies), equity and CDS trading
2. Standardized approach
General market risk not applicable to the internal model and specific risk for CDS trading, etc.
(4) Amount of capital required to cover operational risk and amounts presented by each method:
This information is described in ‘Composition of Capital Disclosure.’
(5) Total capital requirements:
This information is described in ‘Composition of Capital Disclosure.’
(3) Amount of capital required to cover market risk and amounts presented by each method used:
Breakdown of Exposure by Area (Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Area Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . 26,896 2,343 2,777 32,017 27,026 3,231 1,426 31,684
Overseas . . . . . . . . . . . . . . . . . . . . . . . 9,349 5,889 1,350 16,588 10,062 5,368 889 16,318
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 36,245 8,232 4,127 48,605 37,088 8,599 2,315 48,003
Notes: 1. Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
2. Disclosure of the average balance is not made because there is no significant difference between the average risk position of the exposure for the
term and the balance at the term-end.
3. Items pertaining to credit risk(1) Breakdown of term-end credit risk exposure balance by area, industry and residual period, as well as category:
Breakdown of Exposure by Area (Non-Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Area Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . 26,256 3,096 2,777 32,129 26,497 3,794 1,426 31,717
Overseas . . . . . . . . . . . . . . . . . . . . . . . 8,948 6,001 1,350 16,300 9,675 5,449 889 16,012
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 35,204 9,098 4,127 48,429 36,171 9,243 2,315 47,730
Notes: 1. Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
2. Disclosure of the average balance is not made because there is no significant difference between the average risk position of the exposure for the
term and the balance at the term-end.
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Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline
Breakdown of Exposure by Industry Sector (Non-Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Industry sector Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Sovereign . . . . . . . . . . . . . . . . . . . . . . 6,384 3,700 0 10,084 6,481 4,468 1 10,950 Financial institution . . . . . . . . . . . . . . . 1,519 221 1,976 3,716 1,921 169 1,300 3,390 Manufacturing . . . . . . . . . . . . . . . . . . 2,384 68 52 2,503 2,871 8 30 2,909 Agriculture/forestry/fisheries . . . . . . . . 35 — 1 36 29 — 0 30 Mining . . . . . . . . . . . . . . . . . . . . . . . . 62 20 0 82 140 20 0 160 Construction . . . . . . . . . . . . . . . . . . . . 280 — 5 285 210 — 1 211 Utilities (electric power/gas/ heat supply/water service) . . . . . . . . 728 31 34 794 834 — 17 851 Information & telecommunications . . . . 572 128 0 701 517 91 1 608 Transport . . . . . . . . . . . . . . . . . . . . . . 698 2 47 748 1,099 2 113 1,214 Wholesale/retail . . . . . . . . . . . . . . . . . 1,159 124 66 1,348 1,277 88 19 1,384 Other financial business (moneylending, leasing) . . . . . . . . . . 9,730 3,687 1,901 15,318 9,006 3,402 761 13,169 Real estate . . . . . . . . . . . . . . . . . . . . . 7,559 1,115 28 8,702 7,934 994 20 8,948 Various services (excluding leasing) . . 1,653 1 15 1,669 1,481 2 8 1,492 Others . . . . . . . . . . . . . . . . . . . . . . . . 2,440 — 1 2,440 2,371 — 42 2,414
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 35,204 9,098 4,127 48,429 36,171 9,243 2,315 47,730
Note: Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
Breakdown of Exposure by Industry Sector (Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Industry sector Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Sovereign . . . . . . . . . . . . . . . . . . . . . . 6,395 3,700 0 10,095 6,494 4,470 1 10,965 Financial institution . . . . . . . . . . . . . . . 1,902 58 1,976 3,936 2,145 73 1,300 3,517 Manufacturing . . . . . . . . . . . . . . . . . . 3,808 68 52 3,928 4,479 8 30 4,517 Agriculture/forestry/fisheries . . . . . . . . 56 — 1 56 32 — 0 32 Mining . . . . . . . . . . . . . . . . . . . . . . . . 102 20 0 122 250 20 0 270 Construction . . . . . . . . . . . . . . . . . . . . 280 — 5 285 210 — 1 211 Utilities (electric power/gas/ heat supply/water service) . . . . . . . . 820 31 34 885 951 — 17 968 Information & telecommunications . . . . 1,282 128 0 1,411 1,198 91 1 1,289 Transport . . . . . . . . . . . . . . . . . . . . . . 819 2 47 869 1,311 2 113 1,427 Wholesale/retail . . . . . . . . . . . . . . . . . 1,574 124 66 1,764 1,547 88 19 1,654 Other financial business (moneylending, leasing) . . . . . . . . . . 6,235 2,984 1,901 11,120 5,502 2,822 761 9,086 Real estate . . . . . . . . . . . . . . . . . . . . . 7,576 1,115 28 8,719 7,934 1,024 20 8,978 Various services (excluding leasing) . . 2,514 1 15 2,530 2,260 2 8 2,270 Others . . . . . . . . . . . . . . . . . . . . . . . . 2,882 0 1 2,883 2,776 — 42 2,819
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 36,245 8,232 4,127 48,605 37,088 8,599 2,315 48,003
Note: Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
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(2) Balance of term-end exposures overdue three months or more and breakdown by area and industry:
Breakdown of Exposure by Residual Period (Non-Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Residual period Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
< 1 year . . . . . . . . . . . . . . . . . . . . 9,500 171 266 9,937 10,390 1,278 235 11,903 >= 1 year < 5 years . . . . . . . . . . . . . 11,971 1,172 833 13,975 12,743 1,034 552 14,329 >= 5 years . . . . . . . . . . . . . . . . . . . 13,733 7,754 3,029 24,516 13,038 6,931 1,528 21,498
Total . . . . . . . . . . . . . . . . . . . . . . 35,204 9,098 4,127 48,429 36,171 9,243 2,315 47,730
Notes: 1. Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
2. Exposures with a residual period of => 5 years also include the transactions for which no maturity period is stipulated.
Breakdown of Exposure by Residual Period (Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Residual period Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
< 1 year . . . . . . . . . . . . . . . . . . . . 5,341 171 266 5,778 6,175 1,278 235 7,688 >= 1 year < 5 years . . . . . . . . . . . . . 11,944 1,172 833 13,949 12,721 1,034 552 14,307 >= 5 years . . . . . . . . . . . . . . . . . . . 18,961 6,888 3,029 28,878 18,192 6,287 1,528 26,008
Total . . . . . . . . . . . . . . . . . . . . . . 36,245 8,232 4,127 48,605 37,088 8,599 2,315 48,003
Notes: 1. Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
2. Exposures with a residual period of => 5 years also include the transactions for which no maturity period is stipulated.
Breakdown of Exposure Overdue for Three Months or More by Area (Non-Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Area Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Japan . . . . . . . . . . . . . . . . . . . . . . 304 0 2 306 312 0 3 315
Overseas . . . . . . . . . . . . . . . . . . . 167 38 — 205 176 — — 176
Total . . . . . . . . . . . . . . . . . . . . . . 471 38 2 511 488 0 3 491
Note: Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
Breakdown of Exposure Overdue for Three Months or More by Area (Consolidated) (100 Million Yen)
Sep. 2016 Sep. 2015
Area Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Japan . . . . . . . . . . . . . . . . . . . . . . 724 0 2 726 628 0 3 631
Overseas . . . . . . . . . . . . . . . . . . . 670 38 — 708 543 — — 543
Total . . . . . . . . . . . . . . . . . . . . . . 1,394 38 2 1,434 1,171 0 3 1,174
Note: Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
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Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline
(100 Million Yen)
Sep. 2016 Sep. 2015
Industry sector Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Sovereign . . . . . . . . . . . . . . . . . . . . . . — — — — — — — —
Financial institution . . . . . . . . . . . . . . . — — — — — — — —
Manufacturing . . . . . . . . . . . . . . . . . . 31 — — 31 0 — 0 0
Agriculture/forestry/fisheries . . . . . . . . — — — — — — — —
Mining . . . . . . . . . . . . . . . . . . . . . . . . 41 — — 41 49 — — 49
Construction . . . . . . . . . . . . . . . . . . . . 26 — — 26 26 — — 26
Utilities (electric power/gas/
heat supply/water service) . . . . . . . . — — — — — — — —
Information & telecommunications . . . . — 38 — 38 — — — —
Transport . . . . . . . . . . . . . . . . . . . . . . 97 — — 97 127 — — 127
Wholesale/retail . . . . . . . . . . . . . . . . . — — — — — — — —
Other financial business
(moneylending, leasing) . . . . . . . . . . 232 — 2 234 241 — 3 244
Real estate . . . . . . . . . . . . . . . . . . . . . 44 — — 44 44 — — 44
Various services (excluding leasing) . . — 0 — 0 — 0 — 0
Others . . . . . . . . . . . . . . . . . . . . . . . . — — — — 0 — — 0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 471 38 2 511 488 0 3 491
Note: Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
(100 Million Yen)
Sep. 2016 Sep. 2015
Industry sector Loans, etc. Securities Derivatives Total Loans, etc. Securities Derivatives Total
Sovereign . . . . . . . . . . . . . . . . . . . . . . — — — — — — — —
Financial institution . . . . . . . . . . . . . . . — — — — — — — —
Manufacturing . . . . . . . . . . . . . . . . . . 218 — — 218 161 — 0 161
Agriculture/forestry/fisheries . . . . . . . . 2 — — 2 2 — — 2
Mining . . . . . . . . . . . . . . . . . . . . . . . . 41 — — 41 49 — — 49
Construction . . . . . . . . . . . . . . . . . . . . 26 — — 26 26 — — 26
Utilities (electric power/gas/
heat supply/water service) . . . . . . . . — — — — — — — —
Information & telecommunications . . . . 74 38 — 111 70 — — 70
Transport . . . . . . . . . . . . . . . . . . . . . . 100 — — 100 176 — — 176
Wholesale/retail . . . . . . . . . . . . . . . . . 129 — — 129 51 — — 51
Other financial business
(moneylending, leasing) . . . . . . . . . . 232 — 2 234 241 — 3 244
Real estate . . . . . . . . . . . . . . . . . . . . . 44 — — 44 44 — — 44
Various services (excluding leasing) . . 109 0 — 109 34 0 — 34
Others . . . . . . . . . . . . . . . . . . . . . . . . 420 — — 420 316 — — 316
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 1,394 38 2 1,434 1,171 0 3 1,174
Note: Loans, etc. include on-balance and off-balance sheet exposures such as loans and commitment lines, other than securities and derivatives above.
Breakdown of Exposure Overdue for Three Months or More by Industry Sector (Non-Consolidated)
Breakdown of Exposure Overdue for Three Months or More by Industry Sector (Consolidated)
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(3) Year-end balances and year-on-year changes for general allowance for loan losses, specific allowance for loan losses and country risk allowance:
(100 Million Yen)
Area Sep. 2016 Sep. 2015 Mar. 2016 Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496 531 511 537
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 91 91 87 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 20 17 53 Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 71 74 34
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 622 602 624
(100 Million Yen)
Area Sep. 2016 – Mar. 2016 Sep. 2015 – Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15) (6)
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27) 5 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (33) Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) 37
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42) (2)
Breakdown of Allowance by Area (Non-Consolidated)
(100 Million Yen)
Area Sep. 2016 Sep. 2015 Mar. 2016 Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 543 521 551
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 91 92 87 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 20 17 53 Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 71 76 34
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566 635 614 637
(100 Million Yen)
Area Sep. 2016 – Mar. 2016 Sep. 2015 – Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) (7)
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28) 5 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (33) Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23) 37
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (48) (3)
Breakdown of Allowance by Area (Consolidated)
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(100 Million Yen)
Industry sector Sep. 2016 Sep. 2015 Mar. 2016 Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496 531 511 537
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 91 91 87 Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Financial institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 8 20 17 Agriculture/forestry/fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 33 27 18 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Utilities (electric power/gas/heat supply/water service) . . . . . . . . . — — — — Information & telecommunications . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 38 35 16 Wholesale/retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 6 3 10 Other financial business (moneylending, leasing) . . . . . . . . . . . . . . 1 1 2 2 Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 3 22 Various services (excluding leasing) . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0 0 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0 1
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 622 602 624
(100 Million Yen)
Industry sector Sep. 2016 – Mar. 2016 Sep. 2015 – Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15) (6)
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27) 5 Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Financial institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18) (9) Agriculture/forestry/fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 15 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Utilities (electric power/gas/heat supply/water service) . . . . . . . . . — — Information & telecommunications . . . . . . . . . . . . . . . . . . . . . . . . — — Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 22 Wholesale/retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 (4) Other financial business (moneylending, leasing) . . . . . . . . . . . . . . (0) (0) Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0) (19) Various services (excluding leasing) . . . . . . . . . . . . . . . . . . . . . . . . — — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0) (0)
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42) (2)
Breakdown of Allowance by Industry Sector (Non-Consolidated)
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(100 Million Yen)
Industry sector Sep. 2016 Sep. 2015 Mar. 2016 Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 543 521 551
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 91 92 87 Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Financial institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 8 21 17 Agriculture/forestry/fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 33 27 18 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — Utilities (electric power/gas/heat supply/water service) . . . . . . . . . — — — — Information & telecommunications . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 38 35 16 Wholesale/retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 6 3 10 Other financial business (moneylending, leasing) . . . . . . . . . . . . . . 1 1 2 2 Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 3 22 Various services (excluding leasing) . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0 0 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 0 1
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566 635 614 637
Breakdown of Allowance by Industry Sector (Consolidated)
(100 Million Yen)
Industry sector Sep. 2016 Sep. 2015 Mar. 2016
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Financial institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 — 1 Agriculture/forestry/fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Utilities (electric power/gas/heat supply/water service) . . . . . . . . . . . . . . — — —Information & telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 1 1 Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Wholesale/retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 Other financial business (moneylending, leasing) . . . . . . . . . . . . . . . . . . . — — (0)Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Various services (excluding leasing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1 4
(4) Write-offs by industry sector:
Note: The table shows the breakdown of the write-off of loans in the Statement of Operations.
(100 Million Yen)
Industry sector Sep. 2016 – Mar. 2016 Sep. 2015 – Mar. 2015
General allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) (7)
Specific allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28) 5 Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Financial institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) (9) Agriculture/forestry/fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 15 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Utilities (electric power/gas/heat supply/water service) . . . . . . . . . — — Information & telecommunications . . . . . . . . . . . . . . . . . . . . . . . . — — Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 22 Wholesale/retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 (4) Other financial business (moneylending, leasing) . . . . . . . . . . . . . . (0) (0) Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0) (19) Various services (excluding leasing) . . . . . . . . . . . . . . . . . . . . . . . . — — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0) (0)
Allowance for loans to restructuring countries . . . . . . . . . . . . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (48) (3)
Breakdown of Write-Offs by Industry Sector (Non-Consolidated)
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(100 Million Yen)
Sep. 2016 Sep. 2015
Amount of exposure Amount of exposure
Risk weightApplication of external rating
Application of external rating
0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,617 2,649 10,687 2,596
> 0% <= 10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,398 — 1,190 —
> 10% <= 20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,857 3,838 3,926 3,903
> 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,513 2,412 2,610 2,222
> 50% <= 75% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 15 25 18
> 75% <= 100% . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,976 2,947 23,424 3,221
> 100% <= 150% . . . . . . . . . . . . . . . . . . . . . . . . . . 4,726 301 4,330 242
> 150% < 1250% . . . . . . . . . . . . . . . . . . . . . . . . . 1,415 — 1,084 —
1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 0 42 0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,562 12,161 47,319 12,202
Note: In the ‘Application of external rating’ section, the exposures to which an external rating is applied in the calculation of risk weight are included.
(5) Outstanding exposure after recognizing credit risk mitigations by risk weight (Non-Consolidated)
(100 Million Yen)
Industry sector Sep. 2016 Sep. 2015 Mar. 2016
Sovereign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Financial institution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Agriculture/forestry/fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Utilities (electric power/gas/heat supply/water service) . . . . . . . . . . . . . . — — —Information & telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Wholesale/retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Other financial business (moneylending, leasing) . . . . . . . . . . . . . . . . . . . — — (0)Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Various services (excluding leasing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2
Breakdown of Write-Offs by Industry Sector (Consolidated)
Notes: 1. The table shows the breakdown of the write-off of loans in the Statement of Operations.
2. The ‘Write-offs’ include write-offs made by AOZORA Loan Services Co., Ltd., which are shown on the ‘Others’ line.
(100 Million Yen)
Sep. 2016 Sep. 2015
Amount of exposure Amount of exposure
Risk weightApplication of external rating
Application of external rating
0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,628 2,649 10,703 2,596
> 0% <= 10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,398 — 1,190 —
> 10% <= 20% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,558 4,539 4,372 4,349
> 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,508 2,412 2,609 2,222
> 50% <= 75% . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 15 23 18
> 75% <= 100% . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,593 5,235 25,701 5,544
> 100% <= 150% . . . . . . . . . . . . . . . . . . . . . . . . . . 2,569 795 1,894 601
> 150% < 1250% . . . . . . . . . . . . . . . . . . . . . . . . . 1,424 15 1,057 —
1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 0 42 0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,737 15,660 47,592 15,331
Note: In the ‘Application of external rating’ section, the exposures to which an external rating is applied in the calculation of risk weight are included.
Outstanding exposure after recognizing credit risk mitigations by risk weight (Consolidated)
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Breakdown of Exposure for Which Credit Risk Mitigations Are Applied (Non-Consolidated) (100 Million Yen)
Credit risk mitigation Sep. 2016 Sep. 2015
Eligible financial collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829 402
Cash and deposits at Aozora . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618 317
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 68
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 17
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Guarantees and credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 752 944
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 752 944
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,581 1,346
Note: The exposure above does not include the amount for which a credit risk mitigation is recognized through netting between loans and deposits at the
Bank under the netting agreement (Provision 117 of the Notice), repo transactions, etc.
Breakdown of Exposure for Which Credit Risk Mitigations Are Applied (Consolidated) (100 Million Yen)
Credit risk mitigation Sep. 2016 Sep. 2015
Eligible financial collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829 402
Cash and deposits at Aozora . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618 317
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 68
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 17
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Guarantees and credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782 999
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782 999
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,611 1,401
Note: The exposure above does not include the amount for which a credit risk mitigation is recognized through netting between loans and deposits at the
Bank under the netting agreement (Provision 117 of the Notice), repo transactions, etc.
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Disclosure Based on Basel III Capital Accord Pillar III—Market Discipline
5. Items pertaining to counterparty risk on derivative transactions and long-settlement transactions
Breakdown of Derivative Transactions and Long-Settlement Transactions (Non-Consolidated) (100 Million Yen)
Type of transaction
Sep. 2016 Sep. 2015
Gross replacement
costGross
add-on
Credit-equivalent
amount
Gross replacement
costGross
add-on
Credit-equivalent
amount
Gross credit-equivalent amount
(before credit risk mitigating effect is recognized) . . . . . 3,853 2,074 5,927 2,490 1,913 4,404
Derivative transactions . . . . . . . . . . . . . . . . . . . . . . . . 3,853 2,074 5,927 2,490 1,913 4,404
Forex and gold-related . . . . . . . . . . . . . . . . . . . . . . 1,086 361 1,448 191 221 412
Interest rate-related . . . . . . . . . . . . . . . . . . . . . . . . . 2,686 1,368 4,054 2,183 1,416 3,598
Equity-related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 150 173 13 77 90
Precious metal-related (excluding gold-related) . . . . — — — — — —
Other commodity-related . . . . . . . . . . . . . . . . . . . . . 33 43 76 88 73 161
Credit derivatives (counterparty risk) . . . . . . . . . . . . 25 152 177 15 127 142
Long-settlement transactions . . . . . . . . . . . . . . . . . . . — — — — — —
Credit-equivalent amount reduction effect through
close-out netting agreement . . . . . . . . . . . . . . . . . . . . . (1,415) (385) (1,800) (1,535) (553) (2,088)
Net credit-equivalent amount
(before credit risk mitigating effect is recognized) . . . . . 4,127 2,315
Eligible financial collateral associated . . . . . . . . . . . . . . . 787 351
Cash and deposits at Aozora . . . . . . . . . . . . . . . . . . . 598 293
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 58
Net credit-equivalent amount (after credit risk mitigating effect is recognized) . . . . 3,341 1,964
Note: The credit-equivalent amount is calculated by applying the current-exposure method.
Breakdown of Derivative Transactions and Long-Settlement Transactions (Consolidated) (100 Million Yen)
Type of transaction
Sep. 2016 Sep. 2015
Gross replacement
costGross
add-on
Credit-equivalent
amount
Gross replacement
costGross
add-on
Credit-equivalent
amount
Gross credit-equivalent amount
(before credit risk mitigating effect is recognized) . . . . . 3,853 2,074 5,927 2,490 1,913 4,404
Derivative transactions . . . . . . . . . . . . . . . . . . . . . . . . 3,853 2,074 5,927 2,490 1,913 4,404
Forex and gold-related . . . . . . . . . . . . . . . . . . . . . . 1,086 361 1,448 191 221 412
Interest rate-related . . . . . . . . . . . . . . . . . . . . . . . . . 2,686 1,368 4,054 2,183 1,416 3,598
Equity-related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 150 173 13 77 90
Precious metal-related (excluding gold-related) . . . . — — — — — —
Other commodity-related . . . . . . . . . . . . . . . . . . . . . 33 43 76 88 73 161
Credit derivatives (counterparty risk) . . . . . . . . . . . . 25 152 177 15 127 142
Long-settlement transactions . . . . . . . . . . . . . . . . . . . — — — — — —
Credit-equivalent amount reduction effect through
close-out netting agreement . . . . . . . . . . . . . . . . . . . . . (1,415) (385) (1,800) (1,535) (553) (2,088)
Net credit-equivalent amount
(before credit risk mitigating effect is recognized) . . . . . 4,127 2,315
Eligible financial collateral associated . . . . . . . . . . . . . . . 787 351
Cash and deposits at Aozora . . . . . . . . . . . . . . . . . . . 598 293
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 58
Net credit-equivalent amount (after credit risk mitigating effect is recognized) . . . . 3,341 1,964
Note: The credit-equivalent amount is calculated by applying the current-exposure method.
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Breakdown of Credit Derivative Transactions (Non-Consolidated) (100 Million Yen)
Type of transactionPurchase or supply
of guarantee
Sep. 2016 Sep. 2015
Notional principal Notional principal
Transactions subject to the calculation of credit equivalent amount . . . . . . . 2,935 2,448 Credit derivatives (credit reference asset of single organization) . . . . . . . . Purchase 1,512 1,223
Supply 1,422 1,225 First-to-default type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — —
Supply — — Second-to-default type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — —
Supply — — Transactions not subject to the calculation of credit-equivalent amount . . . Purchase — —
Note: The amount used in order to recognize the effect of a credit risk mitigation is provided in the transactions not subject to the calculation of credit-
equivalent amount.
Breakdown of Credit Derivative Transactions (Consolidated) (100 Million Yen)
Type of transactionPurchase or supply
of guarantee
Sep. 2016 Sep. 2015
Notional principal Notional principal
Transactions subject to the calculation of credit equivalent amount . . . . . . . 2,935 2,448 Credit derivatives (credit reference asset of single organization) . . . . . . . . Purchase 1,512 1,223
Supply 1,422 1,225 First-to-default type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — —
Supply — — Second-to-default type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase — —
Supply — — Transactions not subject to the calculation of credit-equivalent amount . . . Purchase — —
Note: The amount used in order to recognize the effect of a credit risk mitigation is provided in the transactions not subject to the calculation of credit-
equivalent amount.
6. Items pertaining to securitization transactions
(1) Securitization transactions originated by the Aozora Group As of September 30, 2016 and 2015, there were no securitization transactions originated by the Aozora Group.
(2) Securitization transactions in which the Aozora Group invests
(100 Million Yen)
Category of underlying assets
Sep. 2016
Securitization exposure Resecuritization exposure Total
On-Balance Off-Balance On-Balance Off-Balance On-Balance Off-Balance
Project finance . . . . . . . . . . . . . . . . . . . . . . . . 479 228 — — 479 228 Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Claims on corporations . . . . . . . . . . . . . . . . . . — — 0 — 0 — Residential loan receivables . . . . . . . . . . . . . . 4 59 — — 4 59 Ships/aircraft . . . . . . . . . . . . . . . . . . . . . . . . . 33 — — — 33 — Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,731 88 — — 3,731 88 Non-performing loans . . . . . . . . . . . . . . . . . . . 419 13 86 — 506 13 Lease receivables . . . . . . . . . . . . . . . . . . . . . . 110 — — — 110 — Consumer loan receivables . . . . . . . . . . . . . . . 405 — — — 405 — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 — 0 — 49 —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,231 388 86 — 5,317 388
Securitization Exposure Held by the Group (Non-Consolidated)
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(100 Million Yen)
Category of underlying assets
Sep. 2015
Securitization exposure Resecuritization exposure Total
On-Balance Off-Balance On-Balance Off-Balance On-Balance Off-Balance
Project finance . . . . . . . . . . . . . . . . . . . . . . . . 506 267 — — 506 267 Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 — — — 233 — Claims on corporations . . . . . . . . . . . . . . . . . . 9 34 0 — 9 34 Residential loan receivables . . . . . . . . . . . . . . 6 59 — — 6 59 Ships/aircraft . . . . . . . . . . . . . . . . . . . . . . . . . 45 — — — 45 — Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,857 77 0 — 3,857 77 Non-performing loans . . . . . . . . . . . . . . . . . . . 449 2 143 — 592 2 Lease receivables . . . . . . . . . . . . . . . . . . . . . . 42 — — — 42 — Consumer loan receivables . . . . . . . . . . . . . . . 127 40 — — 127 40 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 — 0 — 7 —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,281 480 143 — 5,424 480
(100 Million Yen)
Category of underlying assets
Sep. 2016
Securitization exposure Resecuritization exposure Total
On-Balance Off-Balance On-Balance Off-Balance On-Balance Off-Balance
Project finance . . . . . . . . . . . . . . . . . . . . . . . . 506 266 — — 506 266 Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — Claims on corporations . . . . . . . . . . . . . . . . . . 282 — 0 — 282 — Residential loan receivables . . . . . . . . . . . . . . 4 59 — — 4 59 Ships/aircraft . . . . . . . . . . . . . . . . . . . . . . . . . 33 — — — 33 — Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,731 88 — — 3,731 88 Non-performing loans . . . . . . . . . . . . . . . . . . . 419 13 86 — 506 13 Lease receivables . . . . . . . . . . . . . . . . . . . . . . 110 — — — 110 — Consumer loan receivables . . . . . . . . . . . . . . . 405 — — — 405 — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 — 0 — 49 —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,540 426 86 — 5,626 426
Securitization Exposure Held by the Group (Consolidated)
(100 Million Yen)
Category of underlying assets
Sep. 2015
Securitization exposure Resecuritization exposure Total
On-Balance Off-Balance On-Balance Off-Balance On-Balance Off-Balance
Project finance . . . . . . . . . . . . . . . . . . . . . . . . 506 291 — — 506 291 Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233 — — — 233 — Claims on corporations . . . . . . . . . . . . . . . . . . 129 34 0 — 129 34 Residential loan receivables . . . . . . . . . . . . . . 6 59 — — 6 59 Ships/aircraft . . . . . . . . . . . . . . . . . . . . . . . . . 45 — — — 45 — Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,887 77 0 — 3,887 77 Non-performing loans . . . . . . . . . . . . . . . . . . . 449 2 143 — 592 2 Lease receivables . . . . . . . . . . . . . . . . . . . . . . 42 — — — 42 — Consumer loan receivables . . . . . . . . . . . . . . . 127 40 — — 127 40 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 — 0 — 7 —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,430 504 143 — 5,573 504
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Risk weight
Sep. 2016
Securitization exposure Resecuritization exposure
On-Balance Off-Balance On-Balance Off-Balance
OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement
0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — > 0% <= 20% . . . . . . . . . . . . . . . . . . . . . . . . 439 4 58 0 — — — — > 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . 352 7 — — — — — — > 50% <= 100% . . . . . . . . . . . . . . . . . . . . . . 4,234 169 355 14 — — — — > 100% <= 350% . . . . . . . . . . . . . . . . . . . . . 471 28 13 1 86 5 — — > 350% < 1250% . . . . . . . . . . . . . . . . . . . . . 15 2 — — — — — — 1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 14 — — 0 0 — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,540 224 426 15 86 5 — —
(100 Million Yen)
Risk weight
Sep. 2015
Securitization exposure Resecuritization exposure
On-Balance Off-Balance On-Balance Off-Balance
OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement
0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — > 0% <= 20% . . . . . . . . . . . . . . . . . . . . . . . . 300 2 108 1 — — — — > 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . 60 1 40 1 — — — — > 50% <= 100% . . . . . . . . . . . . . . . . . . . . . . 4,578 183 353 14 — — — — > 100% <= 350% . . . . . . . . . . . . . . . . . . . . . 453 27 2 0 143 9 — — > 350% < 1250% . . . . . . . . . . . . . . . . . . . . . — — — — — — — — 1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 19 — — 0 0 — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,430 233 504 16 143 9 — —
Outstanding Securitization Exposure by Risk Weight and Capital Requirement Thereof (Consolidated)
(100 Million Yen)
Risk weight
Sep. 2016
Securitization exposure Resecuritization exposure
On-Balance Off-Balance On-Balance Off-Balance
OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement
0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — > 0% <= 20% . . . . . . . . . . . . . . . . . . . . . . . . 157 1 58 0 — — — — > 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . 352 7 — — — — — — > 50% <= 100% . . . . . . . . . . . . . . . . . . . . . . 4,222 169 317 13 — — — — > 100% <= 350% . . . . . . . . . . . . . . . . . . . . . 471 28 13 1 86 5 — — > 350% < 1250% . . . . . . . . . . . . . . . . . . . . . — — — — — — — — 1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 14 — — 0 0 — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,231 220 388 14 86 5 — —
(100 Million Yen)
Risk weight
Sep. 2015
Securitization exposure Resecuritization exposure
On-Balance Off-Balance On-Balance Off-Balance
OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement OutstandingCapital
requirement
0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — > 0% <= 20% . . . . . . . . . . . . . . . . . . . . . . . . 151 1 108 1 — — — — > 20% <= 50% . . . . . . . . . . . . . . . . . . . . . . . 60 1 40 1 — — — — > 50% <= 100% . . . . . . . . . . . . . . . . . . . . . . 4,578 183 329 13 — — — — > 100% <= 350% . . . . . . . . . . . . . . . . . . . . . 453 27 2 0 143 9 — — > 350% < 1250% . . . . . . . . . . . . . . . . . . . . . — — — — — — — — 1250% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 19 — — 0 0 — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,281 232 480 15 143 9 — —
Outstanding Securitization Exposure by Risk Weight and Capital Requirement Thereof (Non-Consolidated)
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(100 Million Yen)
Category of underlying assetsSep. 2016 Sep. 2015
Amount of exposure Amount of exposure
Project finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Claims on corporations . . . . . . . . . . . . . . . . . . . . . . . 0 0 Residential loan receivables . . . . . . . . . . . . . . . . . . . — — Ships/aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 39 Non-performing loans . . . . . . . . . . . . . . . . . . . . . . . . — — Lease receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Consumer loan receivables . . . . . . . . . . . . . . . . . . . . — — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 39
(100 Million Yen)
Category of underlying assetsSep. 2016 Sep. 2015
Amount of exposure Amount of exposure
Project finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Claims on corporations . . . . . . . . . . . . . . . . . . . . . . . 0 0 Residential loan receivables . . . . . . . . . . . . . . . . . . . — — Ships/aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 39 Non-performing loans . . . . . . . . . . . . . . . . . . . . . . . . — — Lease receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Consumer loan receivables . . . . . . . . . . . . . . . . . . . . — — Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 39
Securitization Exposure Calculated by Risk Weight of 1250% (Non-Consolidated)
Securitization Exposure Calculated by Risk Weight of 1250% (Consolidated)
Presence/Absence of Method Applied to Reduce Credit Risk to Resecuritization Exposures in Which the Aozora Group Invests and Breakdown of Risk-Weight Categories Applied to GuarantorsAs of September 30, 2016 and 2015 there were no resecuritization exposures to which methods to reduce credit risk have been
applied.
(3) Securitization exposure in which the Aozora Group invests that is subject to the calculation of the market risk amount
There was no securitization exposure in which the Aozora Group invests that was subject to the calculation of the market risk
amount as of September 30, 2016 and 2015.
(4) Securitization exposure originated by the Aozora Group that is subject to the calculation of the market risk amount
There was no securitization exposure originated by the Aozora Group that was subject to the calculation of the market risk
amount as of September 30, 2016 and 2015.
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(100 Million Yen)
Sep. 2016
Average Maximum Minimum As of Sep. 2016
Trading . . . . . . . . . . . . . 5 8 3 4Banking . . . . . . . . . . . . 52 60 45 54
(100 Million Yen)
Sep. 2015
Average Maximum Minimum As of Sep. 2015
Trading . . . . . . . . . . . . . 3 4 1 2Banking . . . . . . . . . . . . 54 63 45 48
2. The highest, lowest and average VaR number during the disclosure period
(100 Million Yen)
Sep. 2016
Average Maximum Minimum As of Sep. 2016
11 21 6 10
(100 Million Yen)
Sep. 2015
Average Maximum Minimum As of Sep. 2015
8 12 3 4
(2) The stressed Value at Risk (stressed VaR) number at term-end and the highest, lowest and average stressed VaR number during the disclosure period
(3) Amount of required capital for additional and comprehensive risk at term-end and the highest, lowest and average capital requirements during the disclosure period
There was no applicable required capital amount as of September 30, 2016 and 2015.
(100 Million Yen)
Sep. 2016
Interest rate Equity Forex Others Total
Trading . . . . . . . . . . . 1 2 0 0 4Banking . . . . . . . . . . 41 28 1 24 54
Total . . . . . . . . . . . . 42 30 1 24 58
(100 Million Yen)
Sep. 2015
Interest rate Equity Forex Others Total
Trading . . . . . . . . . . . 1 0 0 0 2Banking . . . . . . . . . . 34 19 3 19 48
Total . . . . . . . . . . . . 35 19 3 19 49
1. The Value at Risk (VaR ) number at term-endMarket risk for the entire bank
Notes: 1. ‘Others’ includes hedge funds and credit derivatives, etc.
2. The above figures are based on a 1-day holding period and a 99% confidence level.
3. The figures for total VaR do not represent the sum of individual components, due to correlations.
7. Items pertaining to market risk(1) The Value at Risk (VaR) number at term-end as well as the highest, lowest and average VaR numbers during
the disclosure period
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(4) Back-testing results and explanations in the event actual losses strayed significantly downward from VaR numbers
The following graph represents the results of the back testing for trading businesses with internal models over the 245 business
days from October 1, 2015 to September 30, 2016. As a result of the back testing, by comparing 1-day holding VaR to daily
hypothetical P/L, the daily losses exceeded daily VaR on two business days. This result supports the reliability of the Bank’s VaR.
(1) Balance sheet amount (Millions of Yen)
Sep. 30, 2016 Sep. 30, 2015
Non-consolidated Consolidated Non-consolidated Consolidated
Balance sheet amount . . . . . . . . . . . . . . . . . . . . . 350,535 318,077 299,682 272,872Listed stock exposures . . . . . . . . . . . . . . . . . . . 317,574 317,574 272,368 272,369Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,961 503 27,313 503
(2) Gains and losses on sales, and write-offs of equity exposure (Millions of Yen)
1H of FY2016 1H of FY2015
Non-consolidated Consolidated Non-consolidated Consolidated
Gains on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,764 1,764 636 636
Losses on sales . . . . . . . . . . . . . . . . . . . . . . . . . . 64 64 — —
Write-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
8. Items pertaining to equity exposures in the banking book
(Millions of Yen)
Sep. 30, 2016 Sep. 30, 2015
Non-consolidated Consolidated Non-consolidated Consolidated
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . 32,616 32,616 21,213 21,213
(3) Unrealized gains/losses recognized on the balance sheet but not recognized on the statement of income
(4) Unrealized gains/losses not recognized on the balance sheet or the statement of income(As of September 30, 2016 and 2015)
Consolidated: Not applicable
Non-consolidated: Not applicable
(PL: JPY 100 Million)
(VaR: JPY 100 Million)
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(100 Million Yen, %)
Sep. 2016 Sep. 2015
P/L impact of interest rate shock . . . . . . . . . . . . . . . 215 202Outlier ratio (ratio to regulatory capital) . . . . . . . . . . . 5.0 5.0
Note: Interest rate shock is defined as the figure of 99th percentiles on the interest rate movement distribution based on a 1-year holding period observed
during the past five years
Interest rate risk in the banking book
10. Losses on interest rate shocks based on internal measures for interest rate risk related to the banking book, and changes in economic prices
9. Amount of exposures held in fundsThis item is described in Quantitative Disclosure 2. (1) above.
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Share Procedure Information
● Fiscal year From April 1 to March 31
● Ordinary General Shareholders’ Meeting Held in June
● Record date for determination of dividends March 31, June 30, September 30 and December 31
● Record date Ordinary General Shareholders’ Meeting: March 31 (also to be held in
other cases as deemed necessary, whereby the record date will be set
and advance notice given).
● Public notifications Electronic public notice via the Internet. In the event that public notice
cannot be made via the Internet, the Nihon Keizai Shimbun will be used.
● Listed on The First Section of the Tokyo Stock Exchange
● Securities code 8304
● Number of shares 1,000 shares
constituting one unit (tangen)
● Manager of register of shareholders Sumitomo Mitsui Trust Bank, Limited
and administrator of the ‘special account’ 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo
● Manager of register of shareholders’ location Stock Transfer Agency Business Planning Dept.,
Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo
(Mailing address) Stock Transfer Agency Business Planning Dept.,
Sumitomo Mitsui Trust Bank, Limited
8-4, Izumi 2-chome, Suginami-ku, Tokyo, 168-0063
(Contact number) 0120-782-031 (toll free only if calling from Japan)
● Inquiries regarding shares and notification of changesWe ask that shareholders direct all inquiries, including change of address, to their securities company. For those
shareholders who do not have an account with a securities firm, inquiries should be directed to the agent above.
● Regarding the ‘special account’Prior to the implementation of the electronic share certificate system in Japan, an account was established with
Sumitomo Mitsui Trust Bank, Limited, for shareholders who did not use JASDEC’s hofuri system. Such shareholders
should direct all matters related to change of address and other inquiries to the agent above.
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