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02 10-13 aozora results-q3-2
 

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    02 10-13 aozora results-q3-2 02 10-13 aozora results-q3-2 Presentation Transcript

    • Aozora BankFY2012 3rd Quarter Financial Results (April 1 - December 31, 2012) ) January 31, 2013
    • (Note) Unless otherwise stated, all figures are on a consolidated basis and amounts stated in 100 million yen have been rounded to the nearest 100 million yen I. Financial highlights Financial‘ highlights p. 1 Net income of 30.6 billion yen for the first nine months of FY2012, PL Summary 2 steady progress of 76.6% towards the full-year forecast Net interest 3 Net revenue was 63.9 billion yen, an increase of 4.4 billion yen, or 7.5% year on year. income Net interest income increased steadily year on year. The sale of investment products to retail Net fees and 4 customers continued to increase commissions, etc. G&A expenses were 28.6 billion yen, a reduction of 0.2 billion yen, or 0.7% year on year, Net other ordinary income 5 reflecting the Bank’s continued strict control on costs. The OHR remained low at 44.8% G&A expenses 6 Net income was 30.6 billion yen, representing steady progress of 76.6% towards the full-year forecast of 40.0 billion yen. Quarterly net income represented a 15th consecutive quarterly Credit-related expenses 7 profit BS Summary 8 Loans increased for the second consecutive quarter Funding 9-10 Loans increased 48.8 billion yen from end-September 2012 and 140.0 billion yen from Loans 11 end-June 2012 Overseas loans 12 Maintained strong financial condition Real estate loans 13-14 Stable base of retail funding : the percentage of retail funding to total core funding was 66.4% FRL credit 15 Sufficient level of liquidity reserves : approx. 600 billion yen Securities 16 Dividend Payment 17 Conservative allocation of loan loss reserves : Ratio of loan loss reserves to total loans Forecast outstanding was 2.60%, remaining one of the highest among major Japanese banks Consolidated vs 18 Non-Consolidated Strong capital : Tier 1 and Capital adequacy ratios are expected to remain among the highest CAR 19 in the Japanese banking industry (These ratios will be announced mid-February) Share Status 20 Upward revision of FY2012 full-year dividend payment forecast from 12.38 yen to 12.82 yen per common share Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 1
    • Ⅱ. PL: Summary Financial‘ highlights p. 1 PL Summary 2 (100 million yen, %) Net interest income 3 FY2011 FY2012 Change B-A FY2012 full-year Progress Net fees and 3 months 9 months 3 months 9 months 4 Amount % forecast Page commissions, etc. Oct.-Dec. Apr.-Dec. A Oct.-Dec. Apr.-Dec. B Net other Net revenue 199 595 211 639 +44 +7.5% 830 77.0% ordinary income 5 Net interest income 110 342 108 344 +2 +0.6% - - 3 G&A expenses 6 Net interest margin 1.02% 1.05% 0.98% 1.05% - - - - 3 Credit-related Net fees & commissions 20 63 17 62 -1 -1.6% - - 4 expenses 7 Net trading revenues 13 53 3 44 -9 -17.5% - - 4 BS Summary 8 Gains/losses on bond transactions 37 99 45 124 +25 +25.4% - - 5 Funding 9-10 Net other ordinary income excl. gains/losses on bond transactions 21 38 39 65 +28 +73.3% - - 5 Loans 11 Overseas loans 12 General & administrative expenses -96 -288 -94 -286 +2 -0.7% -390 73.3% 6 Real estate loans 13-14 Business profit 104 307 117 353 +46 +15.1% 440 80.2% FRL credit 15 Ordinary profit 90 295 108 308 +13 +4.2% 390 78.9% Securities 16 Dividend Payment Net income 91 317 98 306 -10 -3.3% 400 76.6% Forecast 17 Consolidated vs Credit-related expenses -6 20 -8 -24 -44 - -30 81.3% 7 Non-Consolidated 18 Taxes 0 21 -9 1 -20 -95.9% - - CAR 19 Share Status 20 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 2
    • Ⅱ. PL: Net interest income Financial‘ highlights p. 1 Net interest income was 34.4 billion yen, representing a steady year on year PL Summary 2 increase Net interest income 3 Funding costs were reduced 9 bps from 0.60% to 0.51% Net fees and 4 The net loan margin expanded 4 bps to 1.38%. The net interest margin was commissions, etc. 1.05% Net other ordinary income 5 Net interest incom e ( 100 million yen, %) FY2011 FY2012 Change C-A Change D-B G&A expenses 6 3 m onths 9 m onths 3 m onths 9 m onths Am ount % Am ount % O ct.-Dec. A Apr.-Dec. B Oct.-Dec. C Apr.-Dec. D Credit-related 110 342 108 344 -2 -1.8% +2 +0.6% 7 Net interest incom e expenses Interest incom e 165 517 154 489 -11 -6.7% -28 -5.4% BS Summary 8 Interest on loans and discounts 126 387 117 354 -9 -7.3% -33 -8.5% Interest and dividends on securities 29 97 30 109 +1 +3.3% +12 +12.1% Funding 9-10 O ther interest incom e 4 12 3 14 -0 -4.5% +1 +10.2% Interest on swaps 6 20 3 13 -3 -42.4% -8 -38.2% Loans 11 Interest expenses -55 -175 -46 -145 +9 - +30 - Overseas loans 12 Interest on deposits and NCDs -43 -136 -35 -111 +8 - +25 - Interest on debentures -6 -20 -3 -11 +4 - +9 - Real estate loans 13-14 Interest on borrowings and rediscount -1 -3 -1 -3 -0 - -1 - O ther interest expenses -2 -7 -3 -9 -1 - -2 - FRL credit 15 Interest on swaps -2 -8 -4 -11 -2 - -2 - Dec reases in ex pens es are shown as positive Securities 16 Net interest m argin Dividend Payment FY2011 FY2012 Change Forecast 17 3 m onths 9 m onths 3 m onths 9 m onths C-A D-B Consolidated vs O ct.-Dec. A Apr.-Dec. B Oct.-Dec. C Apr.-Dec. D Non-Consolidated 18 Yield on total investm ents (A) 1.57% 1.65% 1.45% 1.56% -0.12% -0.09% CAR 19 Yield on loans (B) 1.90% 1.94% 1.85% 1.89% -0.05% -0.05% Yield on securities 0.92% 1.01% 0.95% 1.12% +0.03% +0.11% Share Status 20 Yield on funding (C) 0.55% 0.60% 0.47% 0.51% -0.08% -0.09% Net interest m argin (A)-(C) 1.02% 1.05% 0.98% 1.05% -0.04% +0.00% Net loan m argin (B)-(C) 1.35% 1.34% 1.38% 1.38% +0.03% +0.04% Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 3
    • Ⅱ. PL: Net fees and commissions Net trading revenues Financial‘ highlights p. 1 Net fees and commissions were 6.2 billion yen, a decrease of 0.1 billion yen, PL Summary 2 or 1.6% year on year Net interest 3 income Earnings related to the sale of investment trusts, annuity insurance, and structured Net fees and 4 bonds, targeting the needs of our mass affluent retail customers, showed steady commissions, etc. progress, increasing 0.6 billion yen, or 26.6% year on year to 2.7 billion yen Net other 5 ordinary income Net trading revenues were 4.4 billion yen, a decrease of 0.9 billion yen, G&A expenses 6 or 17.5% year on year, reflecting the temporary suspension of sales of Credit-related 7 derivative - embedded time deposits expenses (100 million yen, %) BS Summary 8 FY2011 FY2012 Change C-A Change D-B Funding 9-10 3 months 9 months 3 months 9 months Amount % Amount % Oct.-Dec. A Apr.-Dec. B Oct.-Dec. C Apr.-Dec. D Loans 11 Net fees and commissions 20 63 17 62 -3 -14.6% -1 -1.6% Overseas loans 12 Fees and commissions received 21 68 18 67 -3 -14.3% -1 -1.7% Real estate loans 13-14 Loans, deposits and debentures 14 45 8 37 -6 -40.6% -8 -17.1% Securities 2 7 4 9 +2 +164.9% +2 +34.2% FRL credit 15 Agencies 3 9 3 13 +0 +3.9% +4 +44.6% Securities 16 Other 3 8 3 8 -0 -1.9% +0 +2.0% Dividend Payment Fee and commission payments -2 -5 -2 -5 +0 - +0 - Forecast 17 Earnings from retail related business Consolidated vs Earnings related to the sale of investment trusts, Non-Consolidated 18 7 21 10 27 +3 +40.7% +6 +26.6% annuity insurance, and structured bonds CAR 19 Share Status 20 Net trading revenues 13 53 3 44 -10 -75.9% -9 -17.5% Trading-related financial derivatives 8 42 0 29 -7 -93.6% -13 -32.1% Others 5 11 3 15 -2 -48.6% +4 +36.8% Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 4
    • Ⅱ. PL: Net other ordinary income Financial‘ highlights p. 1 Gains/losses on bond transactions increased 2.5 billion yen, or 25.4% PL Summary 2 year on year to 12.4 billion yen Net interest 3 income Net other ordinary income, excluding gains/losses on bond transactions, Net fees and commissions, etc. 4 increased 2.8 billion yen, or 73.3% year on year to 6.5 billion yen Net other 5 Mainly due to profit from limited partnerships including venture capital ordinary income (100 million yen, %) G&A expenses 6 FY2011 FY2012 Change C-A Change D-B Credit-related 3 months 9 months 3 months 9 months expenses 7 Amount % Amount % Oct.-Dec. A Apr.-Dec. B Oct.-Dec. C Apr.-Dec. D BS Summary 8 Net other ordinary income 58 136 83 189 +26 +44.7% +53 +38.6% Funding 9-10 Gains/losses on bond transactions 37 99 45 124 +8 +20.6% +25 +25.4% Japanese government bonds (JGB) 16 38 11 28 -5 -31.4% -11 -27.4% Loans 11 Foreign government bonds & mortgage-backed securities 36 89 22 71 -15 -40.3% -18 -20.5% Others -14 -29 13 25 +27 - +54 - Overseas loans 12 Hedge fund investments (AFS) 1 6 0 2 -1 -89.5% -4 -62.1% Real estate loans 13-14 Others* -15 -34 12 23 +28 - +57 - Net other ordinary income excl. gains/losses on bond transactions 21 38 39 65 +18 +88.0% +28 +73.3% FRL credit 15 Gains/losses on foreign currency transactions 1 -19 12 1 +11 - +20 - Securities 16 Gains/losses on derivatives other than trading, net -0 -1 -2 -4 -2 - -4 - Profit from limited partnerships 0 23 23 42 +23 - +19 +82.4% Dividend Payment Forecast 17 Real estate related 5 16 4 11 -0 -7.8% -6 -34.3% Distressed loan related 3 12 4 13 +1 +41.3% +2 +15.3% Consolidated vs Other (venture capital, etc.) -7 -5 15 18 +22 - +23 - Non-Consolidated 18 Gains on distressed loans (Aozora Loan Services) 4 16 5 15 +1 +23.4% -1 -7.3% CAR 19 Debenture issue cost -0 -0 -0 -0 +0 - +0 - Others 16 18 1 12 -15 -93.9% -7 -37.5% Share Status 20 * The accounting treatment related to the impairment of securitized products including CMBS changed in the fourth quarter (Jan.-Mar.) of FY2011. Gains/losses on bond transactions in FY2011 do not reflect this change. If we reflect this change in accounting treatment on the first nine months of FY2011 (Apr.-Dec. 2011), losses of 2.8 billion yen included in Others would be reclassified mainly into credit-related expenses Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 5
    • Ⅱ. PL: G&A expenses Financial‘ highlights p. 1 G&A expenses were 28.6 billion yen, a reduction of 0.2 billion yen, or 0.7% PL Summary 2 year on year, as a result of the Bank’s continued strict control on costs Net interest 3 income The OHR was 44.8%, remaining one of the lowest among major Japanese banks Net fees and 4 commissions, etc. Net other ordinary income 5 G&A expenses 6 Credit-related expenses 7 BS Summary 8 Funding 9-10 Loans 11 Overseas loans 12 Real estate loans 13-14 FRL credit 15 Securities 16 Dividend Payment Forecast 17 Consolidated vs Non-Consolidated 18 CAR 19 Share Status 20 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 6
    • Ⅱ. PL: Credit-related expenses Financial‘ highlights p. 1 Credit-related expenses were a net expense of 2.4 billion yen PL Summary 2 The credit cost ratio (credit-related expenses as a percentage of loan balance as of Net interest income 3 end-December 2012) remained low at 0.12% Net fees and (100 million yen) 4 commissions, etc. FY2011 FY2012 Change Net other 3 months 9 months 3 months 9 months ordinary income 5 C-A D-B Oct.-Dec. A Apr.-Dec. B Oct.-Dec. C Apr.-Dec. D G&A expenses 6 Credit-related expenses -6 20 -8 -24 -2 -44 Credit-related expenses 7 W rite-off of loans -3 -10 3 -8 +5 +3 BS Summary 8 Loss on disposition of loans 0 -2 -19 -55 -19 -53 Funding 9-10 Specific allowance for loan losses -100 -135 -28 -142 +72 -7 Loans 11 General allowance for loan losses 90 158 36 166 -54 +8 Overseas loans 12 Reserve for credit losses on 5 -1 -1 1 -6 +1 off-balance-sheet instruments Real estate loans 13-14 Recoveries of written-off claims 2 9 2 13 -0 +4 FRL credit 15 Securities 16 Ratio of loan loss reserves to loan balance was 2.60% remaining one of the Dividend Payment highest among major Japanese banks Forecast 17 (100 million yen, %) Consolidated vs 18 End-Mar. End-Sep. End-Dec. Non-Consolidated 2012 2012 2012 CAR 19 Allowance for loan losses A 770 684 679 Share Status 20 Loan balance B 26,722 25,656 26,145 A/B 2.88% 2.67% 2.60% Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 7
    • Ⅲ. Balance Sheet: Summary Financial‘ highlights p. 1 Total assets were 5,082.5 billion yen, a decrease of 15.0 billion yen, or 0.3%, PL Summary 2 compared to end-March 2012 Net interest income 3 Total liabilities increased 50.0 billion yen, or 1.1% to 4,539.9 billion yen as compared to end-March 2012 Net fees and 4 commissions, etc. Total net assets were 542.6 billion yen, representing a decrease of 65.0 billion Net other 5 yen, or 10.7%, in comparison with end-March 2012 ordinary income Mainly due to the repurchase and retirement of a part of the Series 5 preferred shares G&A expenses 6 and the repurchase of common shares based on the comprehensive recapitalization plan Credit-related 7 (100 million yen, %) expenses End-Mar. End-Sep. End-Dec. Change B-A BS Summary 8 2012 A 2012 2012 B Amount % Page Total assets 50,974 51,301 50,825 -150 -0.3% Funding 9-10 Loans and bills discounted 26,722 25,656 26,145 -577 -2.2% 11-14 Loans 11 Securities 13,223 12,700 12,534 -689 -5.2% 16 Cash and due from banks 2,604 3,799 3,791 +1,188 +45.6% Overseas loans 12 Trading assets 4,776 5,118 4,680 -96 -2.0% Others 3,650 4,028 3,674 +25 +0.7% Real estate loans 13-14 Total liabilities 44,898 45,136 45,399 +500 +1.1% 9 FRL credit Deposits 27,197 27,285 27,290 +94 +0.3% 15 Negotiable certificates of deposit 2,098 2,198 2,537 +439 +20.9% Securities 16 Debentures 2,231 1,845 1,747 -485 -21.7% Borrowed money 2,150 2,448 2,170 +20 +0.9% Dividend Payment Trading liabilities 3,088 3,627 3,823 +735 +23.8% Forecast 17 Others 8,134 7,734 7,832 -302 -3.7% Consolidated vs Total net assets 6,076 6,165 5,426 -650 -10.7% Non-Consolidated 18 Capital stock 4,198 4,198 1,000 -3,198 -76.2% Capital surplus 336 336 3,307 +2,971 +884.8% CAR 19 Retained earnings 1,735 1,788 1,886 +150 +8.7% Share Status 20 Valuation difference on available-for-sale securities 33 77 68 +35 +103.5% Treasury stock -154 -154 -764 -610 - Others -72 -79 -70 +2 - Total liabilities and net assets 50,974 51,301 50,825 -150 -0.3% Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 8
    • Ⅲ. Balance Sheet: Funding Financial‘ highlights p. 1 The percentage of retail funding to total core funding was stable at 66.4% PL Summary 2 Net interest Maintained sufficient liquidity reserves of approximately 600 billion yen income 3 Net fees and Funding sources 4 commissions, etc. Net other ordinary income 5 G&A expenses 6 Credit-related expenses 7 BS Summary 8 Funding 9-10 Loans 11 Overseas loans 12 Real estate loans 13-14 FRL credit 15 Securities 16 Dividend Payment Forecast 17 Consolidated vs Non-Consolidated 18 CAR 19 Share Status 20 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 9
    • Ⅲ. Balance Sheet: Funding rate Financial‘ highlights p. 1 The Bank’s overall yield on funding has steadily declined, reflecting its PL Summary 2 ongoing effort to reduce funding costs Net interest income 3 Net fees and 4 commissions, etc. Net other ordinary income 5 G&A expenses 6 Credit-related expenses 7 BS Summary 8 Funding 9-10 Loans 11 Overseas loans 12 Real estate loans 13-14 FRL credit 15 Securities 16 Dividend Payment Forecast 17 Consolidated vs Non-Consolidated 18 CAR 19 Share Status 20 *Yield on funding = Interest expenses / Average balance of interest-bearing liabilities Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 10
    • Ⅲ. Balance Sheet: Loans - By Industry Financial‘ highlights p. 1 Loans were 2,614.5 billion yen, a decrease of 57.7 billion yen, or 2.2% from PL Summary 2 end-March 2012 Net interest income 3 Loans increased from end-September, 2012 by 48.8 billion yen, representing an Net fees and increase for the second consecutive quarter 4 commissions, etc. (100 million yen, %) End M 12 ar. End-Sep. 12 End-Dec. 12 Net other Loans and bills discounted Change B-A 5 A B ordinary income by industry Balance % Balance % Balance % Amount % G&A expenses 6 Loans by domestic offices Credit-related (excluding Japan offshore market accounts) 25,461 95.3% 24,572 95.8% 25,042 95.8% -420 -1.6% expenses 7 Manufacturing 2,729 10.2% 2,641 10.3% 2,732 10.4% +3 +0.1% Agriculture, forestry and fisheries 34 0.1% 29 0.1% 23 0.1% -11 -32.8% BS Summary 8 Mining, quarry, gravel extraction 31 0.1% 28 0.1% 26 0.1% -5 -15.5% Funding 9-10 Construction 436 1.6% 369 1.4% 415 1.6% -21 -4.8% Electricity, gas, heat supply and water 62 0.2% 58 0.2% 55 0.2% -7 -11.8% Loans 11 Information and communications 451 1.7% 538 2.1% 522 2.0% +72 +15.9% Transport, postal services 1,525 5.7% 1,427 5.6% 1,613 6.2% +88 +5.7% Overseas loans 12 Wholesale and retail sale 1,328 5.0% 1,104 4.3% 1,111 4.3% -217 -16.3% Real estate loans 13-14 Financial and insurance 4,147 15.5% 4,426 17.3% 4,477 17.1% +331 +8.0% Real estate 8,920 33.4% 8,287 32.3% 8,128 31.1% -792 -8.9% FRL credit 15 Non-recourse loans 5,906 66.2% 5,416 65.4% 5,289 65.1% -617 -10.4% (Ratio is % of Real estate loans) Securities Leasing 613 2.3% 612 2.4% 631 2.4% +18 +2.9% 16 Other services 1,721 6.4% 1,708 6.7% 1,673 6.4% -48 -2.8% Dividend Payment Local governments 640 2.4% 727 2.8% 609 2.3% -31 -4.9% Forecast 17 Others 2,823 10.6% 2,620 10.2% 3,026 11.6% +203 +7.2% Consolidated vs Overseas (Headquarters booked) A 2,242 8.4% 2,044 8.0% 2,450 9.4% +208 +9.3% Non-Consolidated 18 Loans by overseas offices incl. Japan offshore market accounts B 1,260 4.7% 1,085 4.2% 1,103 4.2% -157 -12.5% CAR 19 Total 26,722 100.0% 25,656 100.0% 26,145 100.0% -577 -2.2% Share Status 20 Domestic loans 23,219 86.9% 22,528 87.8% 22,591 86.4% -628 -2.7% Overseas loans (A+B) ) 3,503 13.1% 3,128 12.2% 3,554 13.6% +51 +1.5% Overseas loans with no final risk residing in Japan 3,036 11.4% 2,702 10.5% 3,136 12.0% +100 +3.3% Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 11
    • Ⅲ. Balance Sheet: Loans - Overseas Financial‘ highlights p. 1 Portfolio well diversified by industry PL Summary 2 The percentage of overseas loans* to total loans was 12% Net interest 3 income Overseas loans as of end-December 2012 (313.6 billion yen) * Net fees and 4 commissions, etc. <By industry> <By region> Net other Local ordinary income 5 governments 3% Manufacturing Europe 17% 11% G&A expenses 6 Other services Mining, quarry, 15% gravel extraction Oceania Credit-related 3% 6% expenses 7 Leasing Construction Others BS Summary 8 1% 1% 7% Funding 9-10 Electricity, gas, heat supply and Real estate water Loans 11 14% 7% North America Overseas loans 12 59% Asia Information and Real estate loans 13-14 Financial and 17% communications insurance 13% FRL credit 15 10% Wholesale and Transport, postal Securities 16 retail trade service * Overseas loans with no final risk residing in Japan 2% 14% Dividend Payment Forecast 17 <Proportion of overseas loans and overseas LBO loans> (100 million yen,%) Consolidated vs Non-Consolidated 18 End-Mar. 2012 End-Sep. 12 End-Dec. 12 CAR 19 Total loans A 26,722 25,656 26,145 Share Status 20 Overseas loans B 3,036 2,702 3,136 B/A 11.4% 10.5% 12.0% Overseas LBO loans ( Based on FSB ) 1,209 937 882 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 12
    • Ⅲ. Balance Sheet: Loans - Real estate sector(1/2) Financial‘ highlights p. 1 Loans to the real estate sector were 812.8 billion yen of which PL Summary 2 non-recourse loans were 528.9 billion yen Net interest income 3 Net fees and 4 Changes in loans to the real estate sector commissions, etc. Net other ordinary income 5 G&A expenses 6 Credit-related expenses 7 BS Summary 8 Funding 9-10 Loans 11 Overseas loans 12 Real estate loans 13-14 FRL credit 15 Securities 16 Dividend Payment Forecast 17 Consolidated vs Non-Consolidated 18 CAR 19 Share Status 20 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 13
    • Ⅲ. Balance Sheet: Loans - Real estate sector(2/2) Financial‘ highlights p. 1 Tokyo-metro focused. Most non-recourse loans were office or residential PL Summary 2 Net interest Non-recourse loans as of end-December 2012 income 3 <Area> <Sector> Net fees and 4 commissions, etc. Tokyo- Hokkaido Metro 8% Retail Net other 4% Osaka Aichi 14% ordinary income 5 Logistics / 1% 1% Others G&A expenses 6 Fukuoka 1% Credit-related 2% Office 7 43% expenses Hotel Others 3% BS Summary 8 4% Funding 9-10 Loans 11 Overseas loans 12 Residential Tokyo 39% Real estate loans 13-14 80% FRL credit 15 Approx. 90% of the portfolio remained LTV 70% or below Securities 16 LTV Status (As of end-Dec. 2012) Dividend Payment 17 Forecast Cumulative % of portfolio Consolidated vs 18 70% or below 89.5% Non-Consolidated 80% or below 95.0% CAR 19        Legal maturity FY2012 FY2013 FY2014 FY2015 FY2016 or later Share Status 20 Balance Non-recourse loans as of end-Dec. 2012 5% 11% 15% 17% 53% Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 14
    • Ⅲ. Balance Sheet: FRL credit (Non-consolidated) Financial‘ highlights p. 1 Financial Reconstruction Law (FRL) claims were 113.0 billion yen, an increase PL Summary 2 of 3.9 billion yen, or 3.6% from end-March 2012 and the FRL ratio was 4.21% Net interest 3 income The impact on credit-related expenses was limited due to the Bank’s conservative Net fees and 4 allocation of reserves to date commissions, etc. Net other 5 The percentage of FRL claims covered by reserves, collateral and guarantees ordinary income remained high at 91.8% G&A expenses 6 Credit-related 7 (100 million yen) Non-consolidated Bankrupt expenses Doubtful BS Summary 8 5% 4.59% Special attention Funding 9-10 1,500 4.21% 3.99% The FRL Ratio Loans 11 1,275 4% (Ratio of FRL claims to total claims) Overseas loans 12 119 1,091 1,130 47 1,000 75 3% Real estate loans 13-14 FRL credit 15 804 640 2% 877 Securities 16 500 Dividend Payment 1% Forecast 17 352 377 Consolidated vs 206 Non-Consolidated 18 End-Mar. 11 End-Mar. 12 End-Dec. 12 CAR 19 Coverage 1,120 931 1,038 _ Share Status 20 Reserves 354 363 369 Collateral and guarantees 766 568 669 Ratio of coverage by reserves, collateral and guarantees to FRL claims 87.8% 85.3% 91.8% Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 15
    • Ⅲ. Balance Sheet: Securities Financial‘ highlights p. 1 Securities were 1,253.4 billion yen, a decrease of 68.9 billion yen, or 5.2%, PL Summary 2 in comparison with end-March 2012 Net interest income 3 ETFs, particularly US dollar denominated, were increased for the purpose of Net fees and investment portfolio diversification, while JGBs decreased 4 commissions, etc. Net other 5 Total unrealized gains amounted to 10.8 billion yen ordinary income (1 0 0 m illio n ye n, % ) G&A expenses 6 B ook value U nrealiz ed gains / los s es Ch an g e B- A En d - Ma r . En d - Se p . En d- De c . En d- Ma r . En d- Se p . En d- De c . Ch a n g e Credit-related 20 1 2 A 2012 2 0 12 B A mo u nt % 2 0 12 C 2 0 12 2 0 12 D D- C expenses 7 JG B s 6,160 5,446 5,123 -1,037 -16. 8% 58 64 58 -0 TD B o n ly 2,002 2,037 2,026 + 24 + 1. 2% -0 -0 -0 -0 BS Summary 8 1 5 Y flo a tin g ra te o n ly 1,485 1,485 1,488 +3 + 0. 2% 55 55 58 +3 Funding 9-10 M unic ipal bonds 143 89 80 -62 -43. 7% 1 1 1 -1 C orporate bonds 706 627 623 -83 -11. 8% -2 -4 -3 -1 Loans 11 E quities 267 265 267 -1 -0. 2% -0 1 2 +2 F oreign bonds 4,073 3,717 4,107 + 34 + 0. 8% -13 38 6 + 20 Overseas loans 12 U S Treas ury 2,532 2,416 2,464 -68 -2. 7% -16 8 -5 + 10 MBS 1,037 957 1,200 + 163 + 15. 7% -0 25 4 +4 Real estate loans 13-14 O t hers 504 344 443 -61 -12. 0% 2 5 7 +5 FRL credit CDO 2 2 2 -1 -25. 0% 1 1 1 -0 15 O thers 501 343 441 -60 -12. 0% 2 4 7 +5 Securities 16 O thers 1,874 2,555 2,334 + 460 + 24. 5% 17 25 44 + 27 H edge funds 105 84 91 -13 -12. 8% 15 14 17 +2 Dividend Payment E TF s 232 688 455 + 224 + 96. 6% 1 8 11 + 10 Forecast 17 Inves tm ents in lim ited partners hips 582 543 513 -69 -11. 9% 0 2 3 +2 Consolidated vs R E IT 142 144 155 + 13 + 9. 4% 2 3 14 + 12 Non-Consolidated 18 O t hers 814 1,097 1,120 + 305 + 37. 5% -1 -1 -0 +1 G M A C only 12 11 13 +1 + 5. 3% - - - - CAR 19 M oney m ark et funds 701 1,001 1,001 + 300 + 42. 9% 1 1 1 +0 Share Status 20 Tot al 13,223 12,700 12,534 -689 -5. 2% 60 126 108 + 48 Floating rate JGBs as of December 31, 2012, were valued in the same way as at March 31, 2012, on the basis of internal calculations pursuant to Practical Issues Task Force No.25, ‘Practical Solution on Measurement of Fair Value for Financial Assets’ issued by the Accounting Standards Board of Japan. A portion of beneficial interests in investment trusts within ‘monetary claims bought’ are marked at fair value from March 31, 2010, but the amounts (balance sheet total 9.4 billion yen; valuation loss 0.3 billion yen as of December 31, 2012) are not included in the table above. Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 16
    • Ⅳ. Dividend Payment Forecast Financial‘ highlights p. 1 Revised dividend forecast from 12.38 yen to 12.82 yen per common PL Summary 2 share, reflecting progress in the repurchase of common shares Net interest income 3 Dividend per common share Net fees and 4 commissions, etc. First Half Second Half Full-year Net other ordinary income 5 Current Forecast (FY 2012) 12.82 yen* 12.82 yen* G&A expenses 6 Credit-related Payments in previous term expenses 7 2011) 9.00 yen 9.00 yen (FY BS Summary 8 Funding 9-10 *Calculated by dividing the total dividend payment, which is 40% of consolidated net income Loans 11 forecast for the full year, by the total number of common shares issued excluding treasury stock as of end-December 2012 Overseas loans 12 Based on the comprehensive recapitalization plan, the Bank resolved to make a common share Real estate loans 13-14 buyback of 330 million shares (upper limit) between October 1, 2012 and September 30, 2013. FRL credit 15 Total number of shares repurchased : 249 million common shares as of end-December 2012 Securities 16 The full-year dividend payment per common share is subject to change depending on the level of Dividend Payment 17 consolidated net income and the number of shares repurchased going forward Forecast Consolidated vs Non-Consolidated 18 CAR 19 Share Status 20 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 17
    • Ⅴ. Reference : Consolidated, Non-consolidated Difference Financial‘ highlights p. 1 PL Summary 2 Difference between consolidated and non-consolidated net income Net interest income 3 (100 million yen) Net fees and 4 Consolidated net income 306 commissions, etc. Net other 5 ordinary income Non-consolidated net income 306 G&A expenses 6 Credit-related expenses 7 Difference 0 BS Summary Business group 8 Company name in charge Funding 9-10 * Aozora Investment Co., Ltd. (100%) CBG 0 Loans 11 Aozora Trust Bank, Ltd. (100%) RBBG -0 Overseas loans 12 Real estate loans 13-14 Aozora Securities Co., Ltd. (100%) RBBG 0 FRL credit 15 Aozora Loan Services Co., Ltd. (67.6%) SFG 2 Securities 16 Aozora Asia Pacific Finance Limited (AAPF) (100%) SFG -1 Dividend Payment 17 Forecast AZB CLO 1-4 (100%) SFG -1 Consolidated vs Non-Consolidated 18 AZB Funding (100%) SFG 0 CAR 19 Aozora GMAC (100%) SFG 2 Share Status 20 Consolidation elimination - - -2 *Aozora Investment Co., Ltd. was liquidated as of end-October 2012 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 18
    • Ⅴ. Reference : Capital Adequacy Ratio (As of end-September 2012) Financial‘ highlights p. 1 Tier 1 and capital adequacy ratios are expected to remain among the highest PL Summary 2 in the Japanese banking industry (To be announced mid-February) Net interest 3 income These ratios are expected to decline compared to end-September 2012 due to Net fees and 4 the implementation of the comprehensive recapitalization plan commissions, etc. Net other Risk-weighted assets Regulatory capital Tier 1 capital Capital adequacy ratio Tier 1 capital ratio ordinary income 5 G&A expenses 6 (100 million yen) 50,000 20.43% Credit-related 19.37% 20% expenses 7 18.43% 19.16% BS Summary 8 17.86% Funding 9-10 40,000 16.93% 15% Loans 11 Overseas loans 12 30,000 Real estate loans 13-14 FRL credit 15 10% Securities 16 20,000 Dividend Payment Forecast 17 30,165 30,310 29,743 Consolidated vs 5% Non-Consolidated 18 10,000 CAR 19 Share Status 20 5,561 5,414 5,873 5,701 6,077 5,109 0 0% End-Mar.11 End-Mar.12 End-Sep.12 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 19
    • Ⅴ. Reference : Share Status Financial‘ highlights p. 1 Common shares PL Summary 2 (as of end-Dec. 2012) Net interest Number of shares income 3 (million shares) Net fees and Number of shares issued commissions, etc. 4 1,650 Common shares Treasury stock 403 Net other ordinary income 5 Shares outstanding (After deduction of treasury stock) 1,248 G&A expenses 6 *Based on the comprehensive recapitalization plan, common share buybacks have been conducted since October 1, 2012 Credit-related expenses 7 As of end-Dec. 2012, Total number of shares repurchased:249 million shares (upper limit:330 million shares) BS Summary 8 Funding 9-10 Preferred shares (Public funds) Loans 11 (as of end-Dec. 2012) Overseas loans 12 Accounting book value (100 million yen) Current number of common Conversion price shares equivalent M andatory Real estate loans 13-14 Num of shares (million) ber (yen) (million shares) conversion Per share (yen) FRL credit 15 th 24 Securities 16 4 preferred shares 241 200 120 June 2022 @ 1,000 Dividend Payment Forecast 17 th 215 Consolidated vs 5 preferred shares 1,287 450~540 286 June 2022 Non-Consolidated 18 @ 600 CAR 19 Total 1,528 - - 406 - Share Status 20 Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved. 20
    • < Inquiries >AOZORA BANK, LTD.Corporate Communication DivisionTEL: 03-5212-9253FAX: 03-3239-8065URL: http://www.aozorabank.co.jp/english/Mr. Hiroyuki Kajitani h.kajitani@aozorabank.co.jpMr. Richard Roylance r.roylance@aozorabank.co.jpMs. Junko Matsumoto j.matsumoto@aozorabank.co.jpMr. Yasunari Shimizu y4.shimizu@aozorabank.co.jpMs. Yasuko Fukai y1.fukai@aozorabank.co.jpThis presentation contains forward-looking statements regarding the Bank’s financial condition and resultsof operations. These forward-looking statements, which include the Bank’s views and assumptions withrespect to future events, involve certain risks and uncertainties. Actual results may differ from forecastsdue to changes in economic conditions and other factors including the effects of changes in generaleconomic conditions, changes in interest rates, stock markets and foreign currency, and any ensuingdecline in the value of our securities portfolio, incurrence of significant credit-related cost and theeffectiveness of our operational, legal and other risk management policies Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.