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January 30, 2012
FY20FY201111 33rdrd QuarterQuarter Financial ResultsFinancial Results
((((((((April 1April 1 -- December 31, 20December 31, 201111))))))))
いつもいつもいつもいつも、、、、あおぞらをあおぞらをあおぞらをあおぞらを。。。。いつもいつもいつもいつも、、、、あおぞらをあおぞらをあおぞらをあおぞらを。。。。
Always AozoraAlways Aozora
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
1
� Net income of 31.7 billion yen for the first nine months of FY2011, an increase of 12.0 billion yen, or 60.8%, year on year
� 11th consecutive quarterly profit
� Steady progress of 70% towards the revised full-year forecast of 45.0 billion yen
� Included the negative effect on deferred tax assets of approximately 2.5 billion yen resulting from the recent revision of the corporate tax rate for the next fiscal year
� Net interest income was 34.2 billion yen, representing the first year on year increase of a fiscal year to date result in five quarters
� Continued disciplined balance sheet management
� Continued improvement of the net interest margin; 10bps expansion year on year
� Reduced G&A expenses by 1.4 billion yen, or 4.6%, year on year, to 28.8 billion yen. OHR was 48.4%
� Credit-related expenses were a net profit of 2.0 billion yen, compared with a net expense of 9.4 billion yen in the first nine months of FY2010
� Conservatively strengthened specific reserves, mainly for existing overseas credit
� Reversal of the loan loss reserve, reflecting preventative measures taken by the Bank to date, including the conservative allocation of reserves
� Domestic loans increased 24.4 billion yen from end-March 2011
� Stable base of retail funding
� Percentage of retail funding to total core funding remained high at 68.1%
� Sufficient level of liquidity reserves at approx. 600 billion yen
� Capital ratios among the highest in the Japanese banking industry
� Capital adequacy ratio and Tier 1 ratio are both expected to remain high(These ratios will be announced mid-February)
I. Financial highlights
(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
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
2
ⅡⅡⅡⅡ. PL: Summary
(100 million yen, %)
3 months
Oct.-Dec.
9 months
Apr.-Dec. A
3 months
Oct.-Dec.
9 months
Apr.-Dec. BAmount % Page
Net revenue 185 606 199 595 -11 -1.9% 810 73.4%
Net interest income 107 342 110 342 +0 +0.1% - - 3
Net interest margin 0.89% 0.95% 1.02% 1.05% +0.10% - - - 3
Net fees & commissions 21 74 20 63 -11 -15.3% - - 4
Net trading revenues 16 74 13 53 -21 -27.8% - - 4
Gains/losses on bond transactions 36 110 37 99 -11 -10.3% - - 5
5 6 21 38 +32 +522.0% - - 5
General & administrative expenses -99 -302 -96 -288 +14 -4.6% -395 72.9% 6
Business profit 86 304 104 307 +2 +0.8% 415 73.9%
Ordinary profit 43 196 90 295 +99 +50.3% 400 73.8%
Net income 55 197 91 317 +120 +60.8% 450 70.4%
-31 -94 -6 20 +114 - 26 - 7
Taxes 2 -2 0 21 +23 - - -
Net income before minority interests 56 198 91 317 +119 +60.4%
Other comprehensive income -60 -6 -22 18 +24 -
Comprehensive income -4 192 70 335 +143 +74.8%
FY2010 FY2011 FY2011
full-year
forecast
Progress
Change B-A
Credit-related expenses incl. recoveries of written-
off claims
Net other ordinary income
excl. gains/losses on bond transactions
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
3
ⅡⅡⅡⅡ. PL: Net interest income
� Net interest income was 34.2 billion yen, representing the first year on year increase of a fiscal year to date result in five quarters
� Net interest margin expanded while the average balance of interest earning assets declined year on year
� Funding costs were reduced 19 bps to 0.60%, from 0.79% in the first nine months of FY2010
� The net interest margin expanded to 1.05%, and the loan margin expanded to 1.34%
Net interest income (100 million yen, %)3 months
Oct.-Dec. A
9 months
Apr.-Dec. B
3 months
Oct.-Dec. C
9 months
Apr.-Dec. DAmount % Amount %
Net interest income 107 342 110 342 +2 +2.3% +0 +0.1%
Interest income 180 579 165 517 -15 -8.6% -63 -10.8%
Interest on loans and discounts 138 436 126 387 -12 -8.8% -49 -11.1%
Interest and dividends on securities 27 101 29 97 +2 +6.7% -4 -4.4%
Other interest income 6 12 4 12 -2 -36.0% +0 +1.5%
Interest on swaps 9 30 6 20 -3 -33.8% -10 -32.5%
Interest expenses -73 -238 -55 -175 +18 - +63 -
Interest on deposits and NCDs -55 -174 -43 -136 +11 - +38 -
Interest on debentures -9 -34 -6 -20 +2 - +14 -
Interest on borrowings and rediscount -1 -4 -1 -3 +0 - +1 -
Other interest expenses -6 -16 -2 -7 +3 - +9 -
Interest on swaps -3 -10 -2 -8 +1 - +2 -Increases in expenses are shown as negative
Net interest margin
3 months
Oct.-Dec. A
9 months
Apr.-Dec. B
3 months
Oct.-Dec. C
9 months
Apr.-Dec. DC-A D-B
Yield on total investments (A) 1.63% 1.74% 1.57% 1.65% -0.06% -0.09%
Yield on loans (B) 1.98% 2.00% 1.90% 1.94% -0.08% -0.06%
Yield on securities 0.82% 1.08% 0.92% 1.01% +0.10% -0.07%
Yield on funding (C) 0.74% 0.79% 0.55% 0.60% -0.19% -0.19%
Net interest margin (A)-(C) 0.89% 0.95% 1.02% 1.05% +0.13% +0.10%
Net loan margin (B)-(C) 1.24% 1.21% 1.35% 1.34% +0.11% +0.13%
Change D-BChange C-A
ChangeFY2010 FY2011
FY2010 FY2011
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
4
ⅡⅡⅡⅡ. PL: Net fees and commissionsNet trading revenues
� Net fees and commissions were 6.3 billion yen, a decrease of 1.1 billion yen or 15.3%, year on year
� The sale of investment products to mass affluent retail customers showed steady progress
� Net trading revenues were 5.3 billion yen, a decrease of 2.1 billion yen or
27.8% year on year
�Earnings from sales of derivative-embedded products decreased, mainly due to changes in the market environment (100 million yen, %)
3 months
Oct.-Dec. A
9 months
Apr.-Dec. B
3 months
Oct.-Dec. C
9 months
Apr.-Dec. DAmount % Amount %
Net fees and commissions 21 74 20 63 -2 -7.6% -11 -15.3%
Fees and commissions received 23 81 21 68 -2 -7.4% -12 -15.4%
Loans, Deposits, Debentures 16 55 14 45 -2 -15.2% -10 -18.6%
Securities 2 9 2 7 -1 -35.5% -2 -20.3%
Agencies 1 7 3 9 +3 +295.3% +2 +28.8%
Other 4 10 3 8 -1 -26.0% -3 -24.1%
Fee and commission payments -2 -6 -2 -5 +0 - +1 -
3 10 5 15 +2 +62.6% +5 +50.0%
Net trading revenues 16 74 13 53 -3 -20.8% -21 -27.8%
Trading-related financial derivatives (net) 12 69 8 42 -4 -36.9% -27 -38.9%
Others 4 5 5 11 +1 +31.2% +6 +122.8%
Of which, fees from investment trusts and
annuity insurance
Change D-BFY2010 FY2011 Change C-A
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
5
ⅡⅡⅡⅡ. PL: Net other ordinary income
� Gains/losses on bond transactions decreased 1.1 billion yen, or 10.3%, to
9.9 billion yen year on year
� Net other ordinary income, excluding gains/losses on bond transactions, improved 3.2 billion yen to 3.8 billion yen year on year
� Mainly due to profit from limited partnerships
� Income of 1.6 billion yen, recorded in ‘Others’ in the third quarter (Oct.-Dec.), was mainly due to overseas investments
(100 million yen, %)
3 months
Oct.-Dec. A
9 months
Apr.-Dec. B
3 months
Oct.-Dec. C
9 months
Apr.-Dec. DAmount % Amount %
Net other ordinary income 41 116 58 136 +17 +40.8% +20 +17.3%
Gains/losses on bond transactions 36 110 37 99 +2 +4.3% -11 -10.3%
Japanese government bonds (JGB) 16 65 16 38 -0 -1.3% -26 -40.8%
Foreign government bonds & mortgage-backed securities 5 48 36 89 +31 +610.5% +42 +87.7%
Others 15 -2 -14 -29 -29 - -27 -
Hedge fund investments (AFS) 0 25 1 6 +0 +103.6% -19 -76.7%
Others 14 -27 -15 -34 -29 - -7 -
Net other ordinary income excl. gains/losses on bond transactions 5 6 21 38 +15 +282.6% +32 +522.0%
Gains/losses on foreign currency transactions -17 -41 1 -19 +18 - +22 -
Gains/losses on derivatives other than trading, net 5 4 -0 -1 -5 - -5 -
Profit from limited partnerships 9 16 0 23 -9 -96.6% +7 +42.2%
Real estate related 3 2 5 16 +2 +60.8% +14 +591.0%
Distressed loan related 6 16 3 12 -3 -50.9% -4 -27.2%
Other (venture capital, etc.) 1 -2 -7 -5 -8 - -3 -
Gains on distressed loans (Aozora Loan Services) 7 22 4 16 -3 -42.3% -6 -26.3%
Debenture issue cost -0 -0 -0 -0 +0 - +0 -
Others 2 5 16 18 +14 +707.6% +13 +249.4%
Change C-A Change D-BFY2010 FY2011
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
6
ⅡⅡⅡⅡ. PL: G&A Expenses
� G&A expenses were reduced 1.4 billion yen, or 4.6%, year on year to 28.8
billion yen
� Continued strict control on costs including the implementation of a Bank-wide cost review
� OHR was 48.4%, well within the Bank's mid-term target of 50% or below
323302 288
126
107107
448
409395
59.6%
49.8%48.4%
100
200
300
400
500
FY2009 FY2010 FY2011
Jan. - Mar.
Apr. - Dec.
OHR (Apr.-Dec.)
(100 million yen)
Forecast (Revised)
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
7
ⅡⅡⅡⅡ. PL: Credit-related expenses
� Credit-related expenses were a net profit of 2.0 billion yen, compared with a
net expense of 9.4 billion yen in the first nine months of FY2010
� Conservatively strengthened specific reserves mainly for existing overseas credit
� Reversal of the loan loss reserve, reflecting both the absence of significant credit events and preventative measures taken by the Bank to date including the conservative allocation of reserves
� The ratio of loan loss reserves to total loans outstanding was 3.42%,
remaining one of the highest among major Japanese banks (100 million yen, %)
End-Mar.
2011
End-Sep.
2011
End-Dec.
2011
Allowance for loan losses ① 1,002 941 911
27,296 27,016 26,667
3.67% 3.48% 3.42%① / ②Loans outstanding ②
(100 million yen, %)
3 months
Oct.-Dec. A
9 months
Apr.-Dec. B
3 months
Oct.-Dec. C
9 months
Apr.-Dec. D
Write-off/loss on disposal of loans ① -41 -108 2 -13 +43 +95
Write-off of loans -0 -19 -3 -10 -3 +9
Provision of specific allowance for loan losses -54 -88 - - +54 +88
Provision of general allowance for loan losses * 14 -4 5 -1 -9 +4
Gains/losses on disposition of loans -1 3 0 -2 +1 -5
Reversal of allowance for loan losses ② - - -10 23 -10 +23
Reversal of general allowance for loan losses - - 90 158 +90 +158
Reversal of specific allowance for loan losses - - -100 -135 -100 -135
Reversal of reserve for credit losses on off-balance-sheet instruments ③ 9 9 - - -9 -9
Recoveries of written-off claims ④ 2 5 2 9 -0 +4
-31 -94 -6 20 +25 +114
* Including provision for reserve for credit losses on off-balance sheet instruments
Credit-related expenses
incl. recoveries of written-off claims ①①①①+②②②②+③③③③+④④④④
FY2010 FY2011Change
C-A
Change
D-B
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
8
ⅢⅢⅢⅢ. Balance Sheet: Summary
� Total assets were 5,032.8 billion yen, an increase of 114.5 billion yen, or 2.3%, compared to end-March 2011
� Total liabilities increased 85.7 billion yen, or 2.0%, to 4,438.8 billion yen as compared to end-March 2011
� Net assets were 594.0 billion yen, representing an increase of 28.8 billion yen, or 5.1%, in comparison with end-March 2011
(100 million yen, %)
Amount %
Total assets 49,184 50,328 +1,145 +2.3% 50,520
Loans and bills discounted 27,296 26,667 -629 -2.3% 27,016 11-14
Securities 13,357 12,047 -1,310 -9.8% 12,939 16
Cash and due from banks 2,720 2,441 -278 -10.2% 1,773
Others 5,812 9,173 +3,361 +57.8% 8,792
Total liabilities 43,532 44,388 +857 +2.0% 44,654 9
Deposits 27,774 27,394 -380 -1.4% 27,754
Negotiable certificates of deposit 1,549 2,086 +537 +34.7% 1,788
Debentures 2,647 2,443 -204 -7.7% 2,676
Bonds payable 912 - -912 -100.0% -
Others 10,649 12,465 +1,816 +17.1% 12,436
Total net assets 5,652 5,940 +288 +5.1% 5,866
Capital stock 4,198 4,198 - - 4,198
Capital surplus 333 336 +2 +0.7% 333
Retained earnings 1,324 1,589 +265 +20.0% 1,498
18 46 +28 +157.4% 66 16
Others -221 -229 -8 - -229
Total liabilities and net assets 49,184 50,328 +1,145 +2.3% 50,520
Page
Valuation difference on available-for-sale securities
End-Sep. 11Change B-AEnd-Mar. 11
A
End-Dec. 11
B
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
9
ⅢⅢⅢⅢ. Balance Sheet: Funding
� The percentage of retail funding to total core funding remained high at
68.1% as of end-December 2011
� Maintained sufficient liquidity reserves of approximately 600 billion yen as
of end-December 2011
Loan-to-deposit ratio incl. CD 99% 93% 90%
Liquidity reserve 8,282 5,832 6,001 (100 million yen)
4,472
3,3332,296
3,322
2,1943,411
37,409
32,883
21,74423,118
23,603
4,209 4,238
6,275
31,924
70.3%68.1%
63.1%
10,000
20,000
30,000
40,000
End-Mar. 10 End-Mar. 11 End-Dec. 11
(100 million yen) Financial Institutions (Deposits, etc.)
Financial Institutions (Debentures)
Corporate and Public Institutions
Retail
Retail Funding Ratio
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
10
ⅢⅢⅢⅢ. Balance Sheet: Funding rate
� The Bank’s overall yield on funding has steadily declined, reflecting its
ongoing effort to reduce funding costs
* Interest expenses / Average balance of interest-bearing liabilities
Jan. 2012
0.35%
0.35%
Coupon / Interest rate
2 year debenture
1 year retail time deposit
0.35%
0.80% 1.10% 0.60% 0.25% 0.35%
1.10% Suspended 1.00% 0.50%
5,000
10,000
15,000
20,000
25,000
End-Mar. 08 End-Mar. 09 End-Mar. 10 End-Mar. 11 End-Dec. 11
0.50%
1.00%
1.50%
Retail deposit Debenture ‘Direct’ deposit rate (1Y) Debenture coupon (2Y) Yield on funding (Overall) *
Debenture issuance
was suspended from
Oct.08 to Aug.09
(100 million yen)
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
11
ⅢⅢⅢⅢ. Balance Sheet: Loans - Overall
� Loans decreased slightly from end-March 2011 by 62.9 billion yen, or 2.3%,
to 2,666.7 billion yen
� While overseas loans were deliberately decreased by 87.3 billion yen or 20.6%, domestic lending increased 24.4 billion yen, or 1.1%
� Continued focus on middle market business showed positive results, including an increase in the number of new clients
(100 million yen, %)
Balance % Balance % Amount % Balance %
Loans by domestic offices
(excluding Japan offshore market accounts) 25,350 92.9% 25,378 95.2% +28 +0.1% 25,667 95.0%
Manufacturing 2,436 8.9% 2,810 10.5% +374 +15.4% 2,926 10.8%
Agriculture, forestry and fisheries 39 0.1% 36 0.1% -3 -6.7% 51 0.2%
Mining, quarry, gravel extraction 37 0.1% 33 0.1% -4 -11.0% 33 0.1%
Construction 376 1.4% 453 1.7% +77 +20.6% 380 1.4%
Electricity, gas, heat supply and water 90 0.3% 66 0.2% -25 -27.2% 69 0.3%
Information and communications 664 2.4% 449 1.7% -215 -32.3% 449 1.7%
Transport, postal services 1,748 6.4% 1,597 6.0% -152 -8.7% 1,651 6.1%
Wholesale and retail sale 1,446 5.3% 1,204 4.5% -242 -16.7% 1,306 4.8%
Financial and insurance 3,888 14.2% 4,305 16.1% +418 +10.7% 4,238 15.7%
Real estate 8,936 32.7% 8,727 32.7% -210 -2.3% 8,845 32.7%
5,929 66.3% 5,893 67.5% -36 -0.6% 5,909 66.8%
Leasing 865 3.2% 649 2.4% -215 -24.9% 748 2.8%
Other services 1,566 5.8% 1,728 6.5% +163 +10.4% 1,708 6.3%
Local governments 676 2.5% 659 2.5% -17 -2.5% 663 2.5%
Others 2,585 9.5% 2,662 10.0% +77 +3.0% 2,599 9.6%
2,297 8.4% 2,080 7.8% -217 -9.4% 2,019 7.5%
1,946 7.1% 1,289 4.8% -656 -33.7% 1,349 5.0%
Total 27,296 100.0% 26,667 100.0% -629 -2.3% 27,016 100.0%
Domestic loans 23,053 84.5% 23,297 87.4% +244 +1.1% 23,647 87.5%
Overseas loans ((((A+B)))) 4,243 15.5% 3,370 12.6% -873 -20.6% 3,368 12.5%
Overseas loans with no final risk residing in Japan 3,429 12.6% 2,859 10.7% -570 -16.6% 2,811 10.4%
Non-Recourse loans (Ratio is % in Real estate sector)
Overseas (Headquarters booked) A
Loans and bills discounted
by industry
End-Dec. 11
B
Loans by overseas offices incl. Japan offshore market accounts B
Change B-AEnd-Mar. 11
A
End-Sep. 11
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
12
Overseas loans as of end-December 2011 (285.9 billion yen) *
<By industry> <By region>
� * Overseas loans with no final risk residing in Japan
ⅢⅢⅢⅢ. Balance Sheet: Loans - Overseas
� Portfolio well diversified by industry
� Overseas loans decreased in terms of size and as a proportion of total loans
<Maturity Schedule>
<Proportion of overseas loans and overseas LBO loans>
Loans related to GIIPS
(Billions of yen)
Ireland 3.3
Greece 1.0
Spain 0.3
Total 4.6
Asia
11%
North America
66%
Oceania
4%
Others
2%
European countries
17%
Information and
communications
16%
Financial and
insurance
30%
Real estate
9%
Other services
13%
Mining, quarry,
gravel extraction
2%
Electricity, gas, heat
supply and water
4%
Manufacturing
12%
Wholesale and retail trade
3%
Transport, postal
service
13%
(100 million yen,%)
End-Mar. 11 End-Sep. 11 End-Dec. 11
Loan total A 27,296 27,016 26,667
Overseas loans B 3,429 2,811 2,859
B/A 12.6% 10.4% 10.7%
Overseas LBO loans (Based on FSB) 1,839 1,363 1,238
(100 million yen)
FY2011 FY2012 FY2013 FY2014 FY2015 or later
47 786 447 753 828
Overseas LBO loans (Based on FSB) 8 43 281 586 320
Legal maturity of overseas loans
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
13
� Loans to the real estate sector decreased 21.0 billion yen and non-recourse loans decreased 3.6 billion yen
ⅢⅢⅢⅢ. Balance Sheet: Loans - Real estate sector(1/2)
Changes in loans to the real estate sector
3,007 2,936 2,833
5,929 5,909 5,893
8,936 8,845 8,727
66.3% 66.8% 67.5%
2,500
5,000
7,500
10,000
End-Mar. 11 End-Sep. 11 End-Dec. 11
(100 million yen)
50.0%
100.0%
Non-recourse loans
Others
Ratio of non-recourse loans
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
14
� Tokyo-metro focused. Most non-recourse loans are office or residential
ⅢⅢⅢⅢ. Balance Sheet: Loans - Real estate sector(2/2)
� 90% of the portfolio remains LTV 70% or below
Non-recourse loans as of end-December 2011
<Area> <Sector>
LTV Status (As of end-Dec. 2011)70% or below 90%
80% or below 96%
Cumulative % of portfolio
(100 million yen)
Non-recourse loans
as of end-Dec. 2011 4% 22% 12% 14% 48%
FY2013 Legal maturity
ExposureFY2015 or laterFY2014FY2011 FY2012
Residential
35%
Office
44%
Logistics
1%
Hotel
1%
Others
7%
Retail
12%
Tokyo
82%
Others
1%
Osaka
7%
Hokkaido
1%
Aichi
1%
Fukuoka
1%
Tokyo-
Metro
7%
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
15
ⅢⅢⅢⅢ. Balance Sheet: FRL credit
Non-consolidated
� Financial Reconstruction Law (FRL) claims were 130.5 billion yen, and the FRL Ratio was 4.79%
� Conducted a strict review of internal borrower ratings, mainly overseas borrowers
� Limited impact on credit-related expenses due to the preventative measures taken by the Bank to date including the conservative allocation of reserves
� The percentage of FRL claims covered by reserves, collateral and guarantees remained high at 89.0%
Non-consolidated
Coverage 1,467 1,120 1,161Reserves 403 354 495
Collateral and guarantees 1,064 766 666
85.4% 87.8% 89.0% Ratio of coverage by reserves, collateral
and guarantees to FRL credit
420 352 281
880804 950
418
11974
1,275 1,305
1,718 4.79%4.59%
5.52%
500
1,000
1,500
End-Mar. 10 End-Mar. 11 End-Dec. 11
(100 million yen)
1%
2%
3%
4%
5%
Bankrupt
Doubtful
Special attention
Ratio of coverage by reserves,collateral and guarantees toFRL credit
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
16
ⅢⅢⅢⅢ. Balance Sheet: Securities
� Securities decreased 131.0 billion yen, or 9.8%, to 1,204.7 billion yen from end-March 2011
� JGBs and money market funds decreased
� Total unrealized gains amounted to 8.7 billion yen, reflecting unrealized gains on JGBs and foreign bonds of 6.4 billion yen and 3.0 billion yen, respectively
Floating rate JGBs as of end-December 2011, were valued in the same way as at March 31, 2011, 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 end-March 2010, but the amounts (balance sheet total 13.9 billion yen; valuation loss 0.3 billion yen as of end-December 2011) are not included in the table above.
(100 million yen, %)
amount %
JGBs 6,771 5,926 -845 -12.5% 6,987 57 64 +7 68
TDB only 603 1,258 +655 +108.6% 1,517 -0 -0 -0 -0
15Y floating rate only 1,495 1,486 -9 -0.6% 1,483 65 56 -9 52
Municipal bonds 103 120 +17 +16.1% 90 -0 1 +1 1
Corporate bonds 752 783 +31 +4.2% 698 -1 4 +5 -0
Equities 267 265 -2 -0.8% 265 -2 -3 -1 -2
Foreign bonds 3,404 3,305 -98 -2.9% 3,224 -38 30 +68 50
US Treasury 2,422 1,972 -450 -18.6% 1,775 -27 17 +44 30
MBS 593 786 +193 +32.5% 775 -8 15 +23 24
388 547 +159 +40.9% 674 -3 -2 +1 -3
CDO 3 2 -1 -24.3% 2 1 1 -0 1
Others 385 545 +160 +41.4% 672 -4 -2 +2 -4
Others 2,061 1,648 -413 -20.0% 1,675 28 -9 -37 2
Hedge funds 146 108 -38 -26.2% 113 25 17 -8 19
ETFs (linked to Japanese stock indices) 25 21 -4 -14.8% 22 0 -3 -4 -3
Investments in limited partnerships 681 592 -89 -13.1% 609 3 0 -3 3
REIT 93 120 +27 +29.0% 129 7 -18 -25 -10
Others 1,115 807 -309 -27.7% 802 -7 -4 +3 -8
GMAC only 12 11 -1 -6.5% 11 - - - -
Money market funds 995 697 -298 -30.0% 695 -5 -3 +2 -5
Total 13,357 12,047 -1,310 -9.8% 12,939 44 87 +43 119
Change B-AEnd-Mar.
2011 A
End-Dec.
2011 B
End-Dec.
2011 D
End-Mar.
2011 C
Others
Unrealized gains / losses
End-Sep.
2011
End-Sep.
2011
Book value
Change
D-C
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
17
� Capital adequacy ratio and Tier 1 ratio are both expected to remain high
(These ratios will be announced mid-February)
<As of end-September 2011>Core Tier 1 ratio is 17.88%: (Tier 1 capital (excluding preferred securities and non-convertible preferred stock) minus
deferred tax assets (net)) divided by risk-weighted assetsTangible equity ratio is 11.60%: Tangible equity divided by tangible assets
ⅣⅣⅣⅣ.Capital Adequacy Ratio
(As of end-September 2011)
(100 million yen)
29,832
34,776
30,165
4,879 5,109 5,3935,294 5,561 5,781
14.03%
16.93%
18.07%
15.22%
18.43%
19.37%
0
10,000
20,000
30,000
40,000
50,000
End-Mar.10 End-Mar.11 End-Sep.11
0%
5%
10%
15%
Risk-weighted assets Regulatory capital Tier 1 capital Total capital adequacy ratio Tier 1 capital ratio
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
18
ⅤⅤⅤⅤ.Reference : Consolidated, Non-Consolidated Difference
� Difference between consolidated and non-consolidated net income
(100 million yen)
Consolidated net income 317
Non-consolidated net income 307
Difference 10
Business group in charge
Aozora Investment Co., Ltd. (100%) CBG 1
Aozora Trust Bank, Ltd. (100%) FIG -0
Aozora Securities Co., Ltd. (100%) RBBG 0
Aozora Loan Services Co., Ltd. (67.6%) SFG 1
Aozora Asia Pacific Finance Limited (AAPF) (100%) SFG 2
AZB CLO 1-4 (100%) SFG 2
Aozora GMAC (100%) SFG 11
Consolidation elimination - - -7
Company name
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
Real estate loans 13-14
17CAR
18Consolidated vs
Non-Consolidated
7Credit-related
expenses
11Loans
Funding 9-10
19Share Status
15FRL credit
12Overseas loans
2PL Summary
Financial ‘ highlights p. 1
Net interest income
3
Net fees and commissions, etc.
4
Net other ordinary income
5
Expenses 6
BS Summary 8
Securities 16
19
ⅤⅤⅤⅤ. Reference : Share Status
� Common shares
� Preferred shares (Public funds)
1,650
154
1,496
24
@ 1,000
259
@ 600
Total 1,794 -
Accounting book value (100 million yen)
Per share (yen)
Number of shares (Million)
5th preferred stock 1,553
4th preferred stock 241
Common shares
465
Shares outstanding (After deduction of treasury shares)
-
Number of shares issued
Treasury shares
Number of shares
(Million shares)
Conversion price
(yen)
200
-
450~540
Mandatory
conversion
Current number of common
shares equivalent
(Million shares)
120
345
April 2018
October 2012
Copyright © 2012 Aozora Bank, Ltd.All Rights Reserved.
This presentation contains forward-looking statements regarding the Bank’s financial condition and results
of operations. These forward-looking statements, which include the Bank’s views and assumptions with
respect to future events, involve certain risks and uncertainties. Actual results may differ from forecasts
due to changes in economic conditions and other factors including the effects of changes in general
economic conditions, changes in interest rates, stock markets and foreign currency, and any ensuing
decline in the value of our securities portfolio, incurrence of significant credit-related cost and the
effectiveness of our operational, legal and other risk management policies
< Inquiries >
AOZORA BANK, LTD.
Corporate Communication Division
TEL: 03-5212-9253
FAX: 03-3239-8065
URL: http://www.aozorabank.co.jp
Mr. Hiroyuki Kajitani [email protected]
Mr. Richard Roylance [email protected]
Ms. Junko Matsumoto [email protected]
Ms. Ruriko Miura [email protected]
Mr. Yoshinari Shimizu [email protected]