KYOTO CHUO SHINKIN BANK ANNUAL REPORT 2011

Transcription

1 KYOTO CHUO SHINKIN BANK ANNUAL REPORT 2011 Company profile for the Kyoto Chuo Shinkin Bank Customer deposits (Fund procurement in the community) Deposits the Bank received from individual and corporate customers in its operating areas reached 4,022.9 billion yen in the fiscal year ended March 31, The Bank offers various types of deposit products in line with the respective demands of customers so that customers can manage their valuable assets safely and securely. Loans to customers (Supply of funds to the community) The Bank returns the deposits entrusted by customers to the community by supplying funds in response to wide-ranging needs in order to assist the development of the community and people s daily lives. The Bank s loan balance at the end of March 2011 was 2,169.7 billion yen, and the ratio of loans to deposits (loan: deposit ratio) stood at 53.93%. Customers/ members Number of members: 255,271 Capital: 22.6 billion yen (Year ended March 2011) Deposits Capital The Kyoto Chuo Shinkin Bank Head office: 91 Kankoboko-cho, Shijo-dori, Muromachi Higashi-iru, Shimogyo-ku, Kyoto City, Kyoto Prefecture Established: June 18, 1940 Deposit balance: 4,022.9 billion yen Loan balance: 2,169.7 billion yen Number of employees: 2,625 Number of branches: 128 (Year ended March 2011) Loans Support services Customers/ members Fund management (Circumstances concerning the management of funds other than loans) The Bank strove to ensure sound and stable profits in fund management with credit trends in mind in FY2010 and increase fund management capabilities. Summary of financial results for the term of business ended March 2011 The Bank posted 19.3 billion yen in net business profit, 15.6 billion yen in ordinary profit and 11.6 billion yen in current net profit. Capital adequacy ratio The capital adequacy ratio was 11.0%, far higher than the standard level indicating financial health for financial institutions (Japanese domestic standard of 4.0%). The Bank promotes the facilitation of financial services taking regional regrowth and invigoration as its mission. The Bank also focuses on fostering small and medium sized companies and venture companies. The Bank is a cooperative financial institution that operates in Kyoto City and parts of Kyoto, Shiga, Osaka and Nara prefectures based on the mutual philosophy of prosperity for the various small and medium sized companies and individuals of the region. For the continuous development of regional economies and businesses, deposits that the Bank receives from customers are loaned to other customers who need funds, including venture companies. In addition, the Bank has formed strong, community-based networks by utilizing its extensive branch network, and provides help for better lives by providing products and services in line with customer demands. Furthermore, the Bank is supporting the development of the community in many ways beyond financial services. For example, the Bank is actively engaged in the fostering of human resources and support activities for the preservation and dissemination of nature, scenery and traditional culture, etc., as represented by Kyoto, a city of international culture and tourism. The Bank is working positively on new social contribution activities out of appreciation to the community. Unlike city banks and other financial institutions that can operate nationwide, the business of shinkin banks (credit associates) is limited to specific areas. Therefore, shinkin banks cannot evolve without the development of their communities. The Bank has contributed to the prosperity of the community through its business activities as a financial institution as well as working positively on environmental issues as a financial institution located in the area where the Kyoto Protocol was put into effect, and also continuously undertakes various social contribution activities out of appreciation to the community. 1

2 Fund procurement Deposit performance in FY2010 Total deposits reached 4,022.9 billion yen at the end of the fiscal year due to both individual and corporate deposits increasing steadily. Individual deposits grew steadily in particular and finished at 3,081.9 billion yen (an increase of billion yen during the term). Deposit balances by account type Deposit balances by depositor Fund management The policy of loan management The Bank s basic attitude is to respond positively to the business activities of small and medium sized companies in the region and the consumption needs of individual customers, including consultation work from the customer s perspective, under the advertising slogan On Your Side. We are providing high quality financial services to everybody in the region and working under the motto of contributing to the development of regional society and the prosperity of our customers. Overall loan management centers on small-scale finance and housing loans, and we are striving for the refinement of assets with the construction of a balanced portfolio under the enhancement and strengthening of risk management systems. Loan performance in FY2010 While demand for funds stagnated due to the deterioration of the economic environment, the Bank focused on the exhibition of its financial mediation function as a regional financial institution. As a result of making positive efforts to supply funds to the region, the overall loan balance increased 1.3 billion yen from the previous year to reach 2,169.7 billion yen at the end of the current year. The breakdown of the loan balance is as follows. Reflecting the severe economic environment, business loans decreased by 20.4 billion yen in comparison to the previous year, with a term end balance of 1,172.4 billion yen. Consumer loans increased by 21.8 billion yen in comparison to the previous year due to factors such as the positive handling of housing loans, etc., with a term end balance of billion yen. Loan balances by account 2

3 Breakdown of loan balances by business type Fund management and securities business Average balance by type of securities held International business Foreign exchange transactions in FY2010 The Bank developed foreign exchange business positively at its foreign exchange-handling branches (3 in total). The balance of trade transactions increased by 16.84% in comparison to the previous year to US$252 million. Transactions in export and import trade Foreign currency denominated assets balance The table below indicates the balance of foreign currency funds under management such as impact loans, import usance, foreign securities, deposits and call loans, etc. 3

4 Capital adequacy Capital structure 4

5 5 Consolidated balance sheet KYOTO CHUO SHINKIN BANK ANNUAL REPORT 2011 Consolidated Financial Statements

6 Consolidated Financial Statements Consolidated statement of income Consolidated statement of retained earnings Segment information by business type Some consolidated companies conduct credit guarantee business, etc., in addition to credit association business, but because the ratio of these business activities to all segments is minimal, segment information by business type is not included here. 6

7 Non-Performing Loans Self-assessment,depreciationandallowancefor non-performing loans The Bank has established standards in accordance with the financial inspections manual to ensure the health of assets, and has rigorously implemented self-assessment to scrutinize its own assets individually and depreciation and allowance to process non-performing loans properly. In self-assessment, the Bank assesses borrowers repayment capacity based on their financial condition, cash position and profitability, and classifies them into the 5 groups of Normal entities, Entities requiring caution, Potentially bankrupt entities, Entities bankrupt in substance and Bankrupt entities according to the assessment. Then, the Bank classifies each individual loan into the 4 groups of Unclassified, Classification II, Classification III and Classification IV based on the degree of risk of collection or the risk of damage to the value of the loan. The Bank has fully established regulations, for depreciation and allowance, and processes all possible non-performing loans based on the classification of borrowers and loans. Self-assessment, disclosed loans, and recovery conditions (non-consolidated basis) * *3.6 billion yen of Classification IV loans have been fully depreciated and removed from the balance sheet. *The value of Disclosure based on the Financial Reconstruction Law includes the value of privately placed bonds that the Bank guarantees. In addition, Recovery conditions shows ratios in proportion to the values shown under Disclosure based on the Financial Reconstruction Law. Explanation of terms 7

8 Disclosure of non-performing loans The disclosure of Disclosed claims based on the Financial Reconstruction Law and Risk management loans based on the Shinkin Bank Law is required with regard to non-performing loans. One difference between disclosed claims based on the Financial Reconstruction Law and risk management loans lies in the fact that the former includes claims other than loans and bills discounted such as customers liabilities for acceptances and guarantees, while the latter includes only loans and bills discounted. Under the continuing severe economic conditions, the value of non-performing loans based on the Financial Reconstruction Law increased 10.4 billion yen in comparison to the previous year to billion yen, and the overall ratio of non-performing loans increased 0.48 points in comparison to the previous year to 6.96%. In addition, although there were also concerns over the future effects of the Great East Japan Earthquake, the Bank has a total coverage ratio of 75.62% in combination with collateral, guarantees and reserves for non-performing loans, and continues to maintain a sufficient level of reserves. The Bank believes that contributing to the development and support of the region while establishing sufficient reserves and securing the soundness of management is the mission of the Bank. Disclosed claims and reserve and recovery conditions under the Financial Reconstruction Law (Disclosure criteria specified in Article 6 and Article 7 of the Law concerning Emergency Measures for the Reconstruction of the Functions of the Financial System) * * Reserve and recovery conditions of risk management loans (Disclosure criteria specified in Article 89 of the Shinkin Bank Law) The balance of risk management loans on a consolidated accounting basis for the year ended March 31, 2011 is the same as above. * * * * 1. The recovery rate indicates the coverage ratio of loans overall and is calculated using the following formula. Recovery rate = (estimated amounts collectible by collateral/guarantee, etc. + reserve for possible loan loss prepared for unrecoverable amounts) / claim amounts * 2. The reserve rate indicates the reserve rate for unsecured balances. * 3. The ratio of risk management loans shows the ratio of such loans against loans overall. 8