Unique Growing Speed & Action. About Shinsei Bank FY2014

Transcription

1 Unique Growing Speed & Action About Shinsei Bank FY2014

2 Message 社長メッセージ from the President We seek to create a Bank that efficiently supplies funds to those with genuine need, whether they are institutions or individuals, is willing to engage in the dialogues necessary to achieve this, and that understands its customers. We want to provide true value and solutions to our customers. Through this, we seek to become a Bank that truly stands above the rest. In order to realize this goal, we are working tirelessly to differentiate ourselves from other banks by providing totally new values and perspectives through the leveraging of the strengths of both our people and our organization. We will engage new market entrants, new markets and new products that will grow and develop in the future and we, with myself first as President, will endeavour to grow and develop ourselves in order to create and to deliver to society a new commercial banking model. President & CEO Shinsei Bank, Limited Management Principles To become a banking group that is sought out by customers, and contributes to the development of both domestic and international industrial economies, while maintaining stable profitability. To become a banking group that values diverse talents and cultures and is constantly taking on new challenges presented by change, based on its experiences and history. To become a banking group that strives for highly transparent management and values that is trusted by all stakeholders including customers, investors, and employees. 2

3 A home mortgage that looks after your sick children. A home mortgage that does your chores. In January 2014, we launched a new home mortgage product that supports dualearner families and families with children by providing the borrowers with coupons for free sick child care and homemaker services. Unique Differentiating ourselves through our values and approaches A financial institution that can accomplish more. We formed Shinsei Principal Investments (PI) Group in July 2013 as a professional financial group that offers one-stop solutions for venture investments, buyout investments, and investments in claims. 3

4 Venture Banking Initiatives (VBI) a new banking model pursued by Shinsei Bank. We look to work with and face challenges together with our customers, providing comprehensive support to them and their innovations. We look to be partners that walk together with our customers as they blaze new paths. Growing Growing together with customers and markets Contributing to the creation of a healthy unsecured card loan market for individual customers. We have launched Shinsei Bank Card Loan Lake, a true unsecured card loan for individual borrowers operated by the Bank, in October

5 Utilizing the Group s capabilities to their fullest We offer our institutional customers solutions such as securities, trusts, leases and asset management utilizing all functions of the Shinsei Bank Group. Additionally, for our individual customers, we provide services that make use of all of the functions of the Group including shopping credit, installment credit and unsecured loans in order to grow our core customer base to 5 million. Speed and Action Building capability and moving forward New Retail Project A project initiated in 2012, the New Retail Project mainly involves young employees, including employees of the Group member companies, and challenges them to analyse our operations, products and services, identify issues and to propose improvements. 5

6 Overview of Shinsei Bank Group Businesses Consumer finance Shinsei Financial SHINKI Credit guarantee Shinsei Financial Shopping credit/credit card APLUS Individual Group Securities Shinsei Securities Loan secured by real estate Shinsei Property Finance Shinsei Bank Investment banking Shinsei PI Group Institutional Group Global Markets Group Asset management Shinsei Investment Management Lease Showa Leasing Trust Shinsei Trust 6

7 Second Medium-Term Management Plan (FY2013-FY2015): Basic Strategy Individual Business: Implement a new retail banking model to grow our core customer base to 5 million Institutional Business: Support the growth of companies, industries and regions through business participation and the enhancement and application of our expertise Implement a new retail banking model Provide products and services with a high level of customer satisfaction Strengthen consulting capabilities Promote cross-selling Individual Business Expand/develop the loan business Expand housing loan product offerings Establish a position in the unsecured card loan market as a trusted lender Expand unsecured card loan guarantee business Integrated Group management Pursue differentiation in key industries/fields Medical and healthcare Renewable energy New business/corporate rehabilitation support Institutional Business Further promote areas of expertise Rebuild the real estate portfolio Expand corporate revitalization business Leverage the Bank s network with regional financial institutions Strengthen competency of capital market solutions, including sourcing function 7

8 Second Medium-Term Management Plan: Targets Establish a unique business base Increase revenue and further improve financial fundamentals Build a financial group that is appreciated by customers and needed by society and markets FY2012 Financial Results FY2015 Financial Targets under 2 nd MTMP Growth Profitability Financial stability Consolidated net income Cash basis consolidated net income 1 51 billion yen 60.4 billion yen RORA 2 - Expense-to-revenue ratio 64.6% ROE 8.6% Common Equity Tier 1 Ratio 3 - NPL ratio (nonconsolidated) 5.32% We seek to concurrently achieve the following objectives: an absolute level of net income a high level of profitability enhanced financial stability 70 billion yen 76 billion yen Appx. 1.0% 50% level Appx. 10% Appx. 7.5% 2% level 1 Cash-basis figures are calculated by excluding amortization of goodwill and other intangible assets following corporate consolidation and subsequent reversal of deferred tax liabilities from net income 2 Return on risk assets (RORA) is calculated as net income divided by fiscal year end risk assets 3 Basel III fully loaded basis 8

9 Financial Highlights Consolidated net income declined in fiscal years 2011 and 2013 mainly due to the additional provisioning of reserves for losses on interest repayment. The Bank s capital adequacy ratio of 13.58% (Basel III, fully loaded, Domestic Standard) is significantly higher than the level required by regulation of 4%. Consolidated net income (billions of yen) Consolidated ROE % 8.60% 6.50% % Consolidated total assets (trillions of yen) Capital adequacy ratio (Basel II and Basel III) % 10.27% 12.24% 13.58% ( ) ( ) Core capital ratio (under Basel III domestic standards)

10 Individual Business: Business Overview Individual Customers The Shinsei Bank Group provides unique products that are not offered by any other bank Retail Banking Comprehensive account PowerFlex Enables the use of all transactions available at Shinsei Bank including yen deposits, foreign currency deposits, mutual funds and insurance. Extensive foreign currency related services offering transactions in 13 currencies and updating of foreign exchange rates every five minutes on weekdays* Free ATM withdrawals/deposits 24 hours a day, 7 days a week at approximately 96,000 ATMs in various locations throughout Japan, including major convenience stores Up to 10 free online deposits a month Cash cards in 32 colors Home mortgages PowerSmart Home Mortgage No charge for partial prepayments No guarantee fees Anshin Pack W that combines nursing care insurance, FlexiRepayment Service, child care support and home care support Consumer finance Unsecured personal loans Lake-brand card loan provided by the Bank Two no-interest loans: a no interest for 180 days for loans up to 50,000 yen and a 30-day no-interest loan The No Loan product offered by Shinki charges no interest for the first week of the loan period for every loan. Shopping credit/credit cards Shinsei APLUS Card Earn T-points with: Shopping credit Auto loan Rent service Shinsei Bank Card Loan Lake & SHINKI Loans secured by real estate APLUS Shinsei Property Finance Investment Trust NISA Plus NISA Plus* *For further details regarding foreign currency deposit and NISA, please refer to Shinsei Bank s website or call the call center. (Shinsei Powercall (call center):

11 Individual Business: Basic Strategy Implement a new retail banking model to grow our core customer base to 5 million Individual Group Customers (Current) Expand our core customer base by providing services that leverage all functions of the Shinsei Bank Group Group customers: 10 million Shinsei Retail Banking SHINKI 2.5 million core customers Shinsei Financial APLUS Financial Focus on growing our core customer base Housing loans Investment trusts/ structured bonds Unsecured card loans Retail deposits Installment sales Settlement services Credit cards Annuities 11

12 Individual Business: Networks Continue Operational Framework Improvement and Shift to Expanding Customer Base 2013 Oct. ATM Services to be Available at VIEW ALTTE ATM Corners of East Japan Railway Company Stations Oct. Expanding ATM Partnerships in Major Convenience Store Chains such as LAWSON and Family Mart 2014 Jan. Shinsei Bank to Launch PowerSmart Home Mortgage Anshin Pack W with Child Care Support and House Care upport Feb. Shinsei Bank Starts to provide services on Smartphones Mar. Shinsei Bank Launches Account Opening Application for Smartphones May Shinsei Bank Starts NISA plus, an Investment Trust Program Oct. Home Mortgage Campaign to Support Reconstruction Efforts following the Great East Japan Earthquake Oct. Shinsei Bank to Reduce Currency Exchange Fees for Foreign Currency Deposits *For further details regarding NISA Plus, please refer to Shinsei Bank s website or call the call center. (Shinsei Powercall (call center): *39 Shinsei Bank outlets in the left map include the Head Office, Branches and annexes. 12

13 Individual Business: Main Business Assets (Consolidated; billions of yen) Home Mortgages 1,600 1, ,091.6 Loan Balance 1, Consumer Finance Customers (Including Shinsei Bank Card Loan Lake) Balance of Other Business Claims APLUS Financial (shopping credit & credit cards) Total Balance of Deposited Assets Credit cards Shopping credit Shinsei Financial Shinsei Bank Card Loan Lake 8,000 Other 5,825.4 APLUS Financial SHINKI 6,000 4,000 2, , Retail bonds Structured bonds Mutual funds/ annuities Retail deposits 13

14 Individual Business: FY2013 Financial Results Individual Group (Consolidated; billions of yen) Total Revenue FY FY % Billions of yen Retail banking Shinsei Financial and SHINKI APLUS FINANCIAL Others in the Shinsei Bank Card Individual Group Loan Lake 14

15 Institutional Business: Overview Institutional Customers We offer financial solutions (e.g. funding and equity capital) that fully utilize the Group s functions Asset management We offer deposits containing derivatives on interest rates, exchange rates, shares and credit markets, privately-offered mutual funds, and other products according to the asset management needs of our customers. Balance sheet improvement We provide custom-made solutions to improve our customers balance sheets, including fundraising utilizing NRLs, purchase of loans and monetary claims utilizing credit trading, and corporate revitalization advisory services. Structured deposits Credit trading Investment trusts M&A advisory Fundraising We offer loans using the optimum scheme for the diversified fundraising needs of our customers, leveraging our extensive experience and track record in the business finance field. In addition to normal loans, we offer various other types of loans such as syndicated loans and NRLs. Syndicated loans Real estate nonrecourse finance Project finance Rehabilitation finance Corporate loans Acquisition finance Healthcare finance Ship finance Private equity Lease Risk hedging In addition to basic services such as forward exchange contracts and overseas remittances, our highly experienced customer dealers directly offer appropriate market information and various hedging ideas. Utilizing the flexibility of derivatives, we create custom-made schemes that satisfy our customers needs in order to achieve stability in their business. Foreign exchange Derivatives Financial Institution Customers We have created broad transactional relationships over a long period of time with financial institution customers in all business sectors throughout Japan. We will further enhance our collaboration with regional financial institutions and work to provide solutions to a wide range of issues utilizing the functions and strengths of the Shinsei Bank Group member companies while maintaining a focus on risk sharing and local production & local consumption in an effort to contribute to the development of regional communities. 15

16 Institutional Business: Venture Banking Initiative (VBI) A New Banking Model Pursued by Shinsei Bank Shinsei Bank contributes to maximizing the growth of our customers by providing venture companies that have innovative technologies or potential for growth with custom-made financial solutions according to the current life-stage of their business as well as provide management solutions such as human resources, supplementary functions, business strategy planning and implementation support. Start-up support Shinsei Bank supports regional companies by enhancing cooperation between customers of our Branches, regional financial institutions, industries and academia, and by providing financial and management solutions to regional companies entering into different business sectors, starting new businesses or developing business overseas. Regional development is a new value upheld by Shinsei Bank. In addition to our traditional financial services, we provide management solutions, addressing our customers problems concerning growth strategy or overall business strategy as our own challenges in order to contribute to the growth of our customers, economy, society, and regional communities. New areas Shinsei Bank provides cash flow finance primarily through the arrangement of project financing to businesses considering entering the of renewable energy power generation business, and projects related to such power generation initiatives. Overseas business development Shinsei Bank supports our customers needs in developing their business overseas, utilizing our networks with overseas tie-up financial institutions. 16

17 Institutional Business: Achievements of the past Year Increasing initiatives in key focus areas Diversification of renewable energy initiatives (e.g. wind power, new schemes) Establishing frameworks to increase undertakings in overseas expansion support and corporate revitalization initiatives Approach Business Participation Business Strategy Creation Marketing/Management Support Nontraditional Finance Equity Finance Cash Flow Finance March 2014 (Overseas Expansion Support) Entered alliance with Forval (a telecom consulting firm providing business management support) to Support SME Entry into ASEAN Countries March 2014 (Incorporation/Corporate Rehabilitation Support) Participated in Business Revitalization Support Project Using a Debt-Equity Swap by Japan Finance Corporation January 2014 (Incorporation/Corporate Rehabilitation Support) Shinsei Corporate Investment establishd Cell Innovation Partners together with ReproCELL, a Biotechnology Company,, L.P. April 2014 (Medical/Healthcare) Established REIT Asset Management Company Aimed at Founding Healthcare REIT April 2014 (Renewable Energy) Extended New Line of Credit to Wind Power Plant Operation Project in Sakata, Yamagata Prefecture March 2014 (Overseas Expansion Support) Entered business alliance with Military Commercial Joint-Stock Bank, a major commercial bank in Vietnam March 2014(Incorporation/Corporate Rehabilitation Support) Entered Business Partnership Agreement on Business Succession Support with Shinkin Central Bank February 2014 (Renewable Energy) Arranges Project Financing for Mega Solar Business in Kokonoe-machi, Kusu-gun, Oita Prefecture December 2013 (Renewable Energy) Arranged Project Financing for Mega Solar Business in Kikugawa City, Shizuoka Prefecture 17 July 2014 (Renewable Energy) Arranged Project Finance for construction of Mega Solar Plants in Atsuma-cho, Hokkaido Prefecture and Nasushiobarashi, Tochigi Prefecture1 April 2014 (Renewable Energy) Arranged Project Financing for Mega Solar Projects in Seven Locations in Japan Utilizing Trust Schemes Current Key Focus Industries/Businesses Medical/Healthcare Renewable Energy Incorporation/ Corporate Rehabilitation Support

18 Institutional Business: Main Business Assets (Consolidated; billions of yen) Loan Balance Balance of Other Business Claims Institutional Business 1,600 1, , ,479.9 Principal Transactions Equity Investment Overseas Claims Investment Domestic Claims Investment Specialty Finance Global Markets Real Estate Finance Lease receivables and leased investment assets Real estate nonrecourse finance (e.g., privatelyoffered bonds) Real Estate Nonrecourse loans Lending to real estate companies/reits

19 Institutional Business: FY2013 Financial Results (Consolidated; billions of yen) Total revenue Institutional Group FY2012 FY Other Institutional Business Structured Finance Principal Transactions Showa Leasing -0.1 Total revenue Global Markets Group FY2012 年度 FY2013 年度 Financial Institutions Market Operations Other 19

20 Corporate Governance Creation of a corporate governance framework as a company with the Board of Statutory Auditors We aim to establish a framework with sufficient organizational check functions by 1 consolidating business execution authorities and responsibilities in the Board of Directors and 2 assigning the duties of auditing and monitoring the Board of Directors to the Audit & Supervisory Board and its members that are independent from business execution and the Board of Directors. A structure in which outside Directors make up the majority of the Board members enables Shinsei Bank to operate its business with an emphasis on the supervisory function of outside Directors. Corporate governance framework chart (As of June 8, 2014) General Meeting of Shareholders Develop Management Strategy; Supervise Business Execution Implement Management Strategy; Execute Business Executive Officers Directors/Board of Directors (4 out of the 6 Directors are outside Directors) Business Execution President & CEO Business Group Internal Audit Division Executive Committee Audit & Supervisory Board Members/ Audit & Supervisory Board (2 out of the 3 members are outside members) Structure of Board of Directors Executive Directors(2) President Shigeki Toma Deputy President Yukio Nakamura Outside Directors(4) J. Christopher Flowers Ernest M. Higa Shigeru Kani Jun Makihara Audit & Supervisory Board Members Board Member(1) Shinya Nagata Outside Board Members(2) Kozue Shiga Ryuichi Tomimura Group Member Companies Important Committees Accounting Auditors 20

21 Risk Management Risk Management Framework We have identified risk management as one of our most important management issues and have undertaken various measures to strengthen risk management frameworks. These include improvements of our various committees, further empowerment of their functions, and the establishment of a system of checks and balances by the Risk Management Group, which is fully independent of other Groups in the Bank. We will continue to further strengthen our risk management frameworks in order to improve our risk taking capabilities in line with our business expansion, enhance our risk management methods and frameworks, and further develop our risk culture. Risk Management Framework Chart (As of June 18, 2014) 21

22 Securing and Developing Human Resources, and Corporate Social Responsibility (CSR) A personnel system in line with our management principles In April 2012, we revised our personnel system, establishing a highly transparent personnel system and incorporating a grade system, an evaluation system, and a compensation system in order to improve employee motivation and loyalty. Leveraging diversity We routinely hire new graduates in addition to mid-career hires, enabling us to continue to preserve the strengths of our diverse corporate culture. As a result of active support of female employees through the introduction of systems such as child-care leave and flexible working hours, the proportion of female managers* at Shinsei Bank was at 26% as of March 31, *Ratio of female employees at or above the level of Manager among all employees To achieve management principles and strategy <Differentiated solutions/stable profit-generating abilities/respect for diversity/cooperation among Groups/taking on changes and opportunities > Themes of our social activities We prioritize activities centered on the themes of nurturing the next generation and the environment in order to create a sustainable society. In addition, we continue to provide support to relief activities following the Great East Japan Earthquake as one of our important social activities. We will continue engaging in social action activities that have been strongly supported by our employees such as charity runs organized by the Shinsei Bank Group. Volunteers helped prepare agricultural land in Minamisanrikucho (July 2013) Improve employee motivation, satisfaction and loyalty Implement Pay for Performance Bank-wide use of personnel Consolidation and synergies of different expertise Purpose of Personnel system Highly transparent personnel system incorporating a grade system, evaluation system and compensation system Integrated personnel deployment with attention to the characteristics of each Group s operations Financial literacy education program MoneyConnection Christmas concert at Higashimatsushima, Miyagi (December 2013) 22

23 Shinsei Bank Overview: Organization Chart Shinsei Bank s organization chart Board of Directors Audit & Supervisory Board Members CEO Audit & Supervisory Board Office of Corporate Secretary Executive Committee Internal Audit Div. Office of Audit & Supervisory Board Members Banking Infrastructure Group Individual Group Finance Group Global Markets Group Risk Management Group Institutional Group Corporate Staff Group Retail Banking Sub-Group Consumer Finance Sub-Group Asset Management Sub-Group Financial Centers (27 locations including the Head Office) Consulting Spots (4 in Tokyo metropolitan areas and 5 in Kansai region) Home Mortgage Centers (Kawasaki and Osaka) Markets Sub-Group Financial Institutions Sub-Group Institutional Business Sub-Group Sapporo, Sendai, Kanazawa, Nagoya, Osaka, Hiroshima, Takamatsu and Fukuoka Branches Principal Transactions Sub-Group VBI Promotion Div. Overseas Banking Div. Corporate Advisory Div. Asset Backed Investment Div. 23

24 Shinsei Bank Overview: Company Information and History Company Information Name Address Established Representative Director & President Listed on Code No. of outstanding shares issued No. of employees No. of branches No. of consolidated subsidiaries Capital stock Total assets (consolidated) Major shareholders (*) (Number of shares held and shareholding ratio) Ratings information Contacts Website Shinsei Bank, Limited Nihonbashi Muromachi Nomura Building, 4-3, Nihonbashi-muromachi 2- chome, Chuo-ku, Tokyo, Japan December 1, 1952 CEO & President Shigeki Toma Tokyo Stock Exchange (Listed on February 19, 2004) ,750,346,891 (including treasury shares) (Consolidated basis) 5,064; (Non-consolidated basis) 2, outlets (28 branches including head office and 11 annexes) 184 companies billion yen 9,321.1 billion yen SATURN Ⅳ SUB LP Deposit Insurance Corporation of Japan The Resolution and Collection Corporation SATURN JAPAN ⅢSUB C. V. The Master Trust Bank of Japan, Ltd. Moody's Standard & Poor's (S&P) Japan Credit Rating Agency (JCR) Rating & Investment Information, Inc. (R&I) Individual Institutional Corporate/IR Careers (Thousand) 323, , , , ,867 Long-term Baa3 Long-term BBB+ Long-term BBB+ Long-term BBB+ Shinsei Bank, Limited (Tel: (sw itchboard)) (As of March 31, 2014) (11.76%) (9.78%) (7.27%) (4.01%) (3.95%) Short-term Prime 3 Short-term A-2 Short-term J-2 Short-term a-2 w w.shinseibank.com/english w w.shinseibank.com/institutional/en/ w w.shinseibank.com/corporate/en w w.shinseibank.com/corporate/en/recruit (*)A group of investors, including affiliates of J.C. Flowers & Co. LLC, hold 553,663,517 common shares or 20.86% of Shinsei s outstanding common shares, excluding treasury shares. 24 History December 1952 Established The Long-Term Credit Bank of Japan, Limited (LTCB) under the Long-Term Credit Banking Law November 1996 Established LTCB Trust and Banking Co., Ltd. (currently Shinsei Trust & Banking Co., Ltd.) October 1998 Commenced special public management under the Financial Revitalization Law ; delisted from TSE and OSE March 2000 Special public management ended. Launched a new bank. June 2000 Changed name from The Long-Term Credit Bank of Japan, Limited (LTCB) to Shinsei Bank, Limited May 2001 Commenced operations of Shinsei Securities Co., Ltd. June 2001 Launched PowerFlex comprehensive accounts February 2004 Listed the Bank's common shares on the First Section of the Tokyo Stock Exchange April 2004 Converted the Bank's long-term credit bank charter to an ordinary bank charter September 2004 Acquired a controlling interest in APLUS Co., Ltd. (Changed company name to APLUS Financial Co., Ltd. in April 1, 2010) March 2005 Acquired a controlling interest in Show a Leasing Co., Ltd. December 2007 Acquired a controlling interest in SHINKI Co., Ltd. February 2008 Completed a tender offer bid for the Bank's common shares and a third-party allotment of new common shares of the Bank (in the total value of 50 billion yen) September 2008 Acquired GE Consumer Finance Co., Ltd. (Changed company name to Shinsei Financial Co., Ltd. on April 1, 2009) April 2010 Launched the First Medium-Term Management Plan June 2010 Changed to "Company w ith Board of Statutory Auditors" board model January 2011 Relocated Head Office from Uchisaiw aicho, Chiyoda-ku, Tokyo to Nihonbashimuromachi, Chuo-ku, Tokyo March 2011 Issued 690 million new shares through international common share offering October 2011 Commenced card loan service under the Lake brand in Shinsei Bank April 2013 Launched the Second Medium-Term Management Plan July 2013 Restructured the Principal Transactions Sub-Group and subsidiaries under its umbrella to form Shinsei Principal Investments Group

25 Important Data (Consolidated; billions of yen) Balance Sheet Ratios March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014 FY2010 FY2011 FY2012 FY2013 Loans and bills discounted 4, , , ,319.8 Expense-torevenue ratio 48.9% 63.1% 64.6% 65.4% Securities 3, , , ,557.0 Lease receivables/ leased investment assets Installment receivables Reserve for credit losses Total assets 10, , , ,321.1 Deposits including negotiable certificates of deposits 5, , , ,850.4 Borrowed money 1, Corporate bonds Grey zone reserves Total liabilities 9, , , ,598.5 Shareholders equity Loan-to-deposit ratio 76.5% 77.1% 78.7% 73.8% ROA 0.4% 0.1% 0.6% 0.5% ROE 8.5% 1.2% 8.6% 6.5% Tier I Capital Ratio Capital adequacy ratio Capital adequacy ratio March 31, 2011 March 31, 2012 Per share data March 31, 2013 March 31, % 8.80% 10.41% 9.2% % 10.27% 12.24% 13.58% 2 FY2010 FY2011 FY2012 FY2013 Common equity Basic net income Total net assets Common Equity Tier I Capital Ratio (Basel III, International Standard, fully loaded basis) 2 Core capital adequacy ratio (Basel III, Domestic Standard) 25 Cash basis basic net income

26 Important Data (Consolidated; billions of yen) Institutional Business Sub-Group1 FY2013 Institutional Group Global Markets Group Individual Group Principal Transacti ons Sub- Group Showa Leasing Other Financial Institution s Sub- Group Segment Results Markets Sub- Group Other Retail Banking Sub- Group Consumer Finance Sub-Group Shinsei Financial APLUS Financial Other Management accounts/oth er Treasury Sub- Group Revenue Other Total Net interest income Noninterest income Expenses Net credit costs ー Segment profit (loss) FY2012 Revenue Net interest income Noninterest income Expenses Net credit costs ー Segment profit (loss) The Institutional Business Sub-Group segment includes financial products and services to corporations and public entities, advisory services, real estate finance such as nonrecourse lending, financial products and services to construction and real estate companies, specialty finance (e.g. buyout finance) related financial products and services and the Bankʼs trust business. 2 The Shinsei Financial segment includes the unsecured personal loan business Shinsei Bank Card Loan Lake and SHINKI Co. Ltd. 26

27 Disclaimer The preceding description of Shinseiʼs medium-term management plan contains forward-looking statements regarding the intent, belief and current expectations of our management with respect to our financial condition and future results of operations. These statements reflect our current views with respect to future events that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may vary materially from those we currently anticipate. Potential risks include those described in our annual securities report filed with the Kanto Local Finance Bureau, and you are cautioned not to place undue reliance on forward-looking statements. Unless otherwise noted, the financial data contained in these materials are presented under Japanese GAAP. The Company disclaims any obligation to update or to announce any revision to forward-looking statements to reflect future events or developments. Unless otherwise specified, all the financials are shown on a consolidated basis. Information concerning financial institutions other than the Company and its subsidiaries are based upon publicly available information. These materials do not constitute an invitation or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever. 27

28 Disclaimer of Foreign Currency Deposits As the conversion rates of foreign currencies into yen (foreign exchange rates) fluctuate, foreign exchange deposits carry a risk of loss of yen denominated principal resulting from exchange rate fluctuations when converting foreign currencies back into yen. Foreign exchange fees apply when depositing/withdrawing yen into/out of foreign currency accounts (unconventional currency exchange fees may be applied in the event of drastic foreign exchange rate fluctuations or when major markets are closed. The maximum rate of such one-way exchange fees is 5.5 yen per unit. For a direct non-jpy cross currency exchange, the foreign exchange fees will be 0.02 multiplied by one of the currencies. There is a risk of loss of yen denominated principal due to the application of foreign currency exchange fees and applied interest rates, even if foreign exchange rates do not fluctuate. Preferred rates of Shinsei Step Up program are applied to transactions changing yen to a foreign currency and vice versa. (n.b. Preferred rates are not applicable to transactions between non yen foreign currencies or when the outstanding foreign currencies balance is converted to yen as part of closing an account. Additionally, preferred rates are not applicable in exchanging currencies or paying interest in the PowerSupport Plus program, or purchasing foreign currencies through the PowerBuilder program. Foreign currency deposits are not guaranteed by deposit insurance. In principle, foreign currency denominated time deposits may not be cancelled before maturity. However, in the event that Shinsei Bank recognizes extraordinary circumstances and deems the cancellation of foreign currency denominated time deposits before maturity as unavoidable, only principal amounts will be refunded (interest thereon will not be honored). Shinsei Bank does not accept or offer cash transactions of foreign currencies. Fees will be charged for foreign currency remittances. Before investing in foreign currency deposits customers should carefully read the product description of foreign currency deposits (pre-contract document) that is available in branches and online so that they can fully understand characteristics of the foreign currency deposits. Customers bear full responsibility for their investment decisions, and are encouraged to only invest surplus funds. 28