Non-Consolidated Financial Results of Toyo Trust & Banking

Transcription

1 November 22, 2001 Non-Consolidated Financial Results of Toyo Trust & Banking For the Six Months Ended September 30, 2001, a subsidiary of UFJ Holdings, Inc., today announced that the board of directors of the Bank approved and resolved at the board meeting held on November 22, 2001, the Bank's non-consolidated financial results for the six months ended September 30, Total income for the fiscal year was 163 billion yen, compared with 182 billion yen for the six months ended September 30, Net income for the fiscal year was (28) billion yen, compared with 22 billion for the previous half year. Net income per share was (31.14) yen, compared with yen for the previous half year. FINANCIAL HIGHLIGHTS For the six months Ended September 30, Millions of yen (Unaudited) (Unaudited) Results Total Income 163, ,085 Income before Income Taxes (50,231) 34,598 Net Income (28,835) 22,558 Balance Sheet Total Assets (Banking Account) 8,092,150 7,726,587 Cash and Due from Banks 417, ,341 Stockholders' Equity 437, ,082 Total Assets (Trust Account) 37,371,005 34,634,372 Employable Funds (Major Items): Money Trusts 8,923,936 8,380,261 Pension Trusts 4,508,080 4,469,785 Loan Trusts 2,747,327 3,562,096 Investment Trusts 15,500,500 14,033,815 Money in Trusts Other than Money Trusts 1,359,699 1,443,383 Securities in Trust 1,120, ,700 Money Claims in Trust 1,338, ,744 Per Share (yen) Net Income (31.14) Stockholders' Equity Capital Ratio (%) (Preliminary Announcement) Consolidated % % Non-consolidated % % * Capital Ratios are calculated by the domestic standard

2 Notes: (1) As of September 30, Number of Common Stock 925,968, ,968,901 First Series Preferred Stock 80,000,000 80,000,000 Second Series Preferred Stock 200,000, ,000,000 (2) Net Income per Share = Net Income Dividends for Preferred Stock Weighted Average Number of Shares of Common Stock (3) For the six months ended September 30, Weighted Average Number of Shares of Common Stock 925,968, ,885,636 First Series Preferred Stock 80,000,000 80,000,000 Second Series Preferred Stock 200,000, ,000,000 (4) Stockholders' Equity Stockholders' Equity Number of Shares of Preferred Stock Issue Price per Share Number of Shares of Common Stock (5) For Net Income per Share and Stockholders' Equity per Share, the third decimal is omitted. (6) Amounts less than one million yen are omitted

3 Non-Consolidated Balance Sheets (Banking Account) As of Sept. 30, As of Mar. 31, Millions of yen Assets: Cash and Due from Banks 417, , ,102 Call Loans - 30,000 10,000 Bills Purchased 50,000-10,300 Monetary Receivables Bought 66,572 18,228 33,730 Trading Assets 100,982 83, ,604 Securities 2,803,292 2,333,376 2,766,701 Loans 3,998,546 4,091,006 3,886,196 Foreign Exchanges 3,696 5,844 3,544 Other Assets 175, , ,157 Premises and Equipment 62,366 92,256 88,666 Deferred Tax Assets 239, , , Customers' Liabilities for Acceptances and Guarantees 270, , ,285 Reserve for Possible Loan Losses (97,488) (104,086) (90,146) Reserve for Possible Losses on Securities - (81) (183) Total Assets 8,092,150 7,726,587 8,008,956 Liabilities: Deposits 2,970,862 3,536,920 2,939,319 Negotiable Certificates of Deposit 1,128, , ,610 Call Money 66,965 80,486 75,958 Payables under Repurchase Agreements 4, Bills Sold 340,800 40, ,500 Trading Liabilities 18,861 6,513 17,752 Borrowed Money 198, , ,049 Foreign Exchanges Bonds and Notes 88,900 70,500 78,900 Convertible Bonds - 24,196 19,140 Borrowed Money from Trust Account 2,474,250 2,186,388 2,736,497 Other Liabilities 88, , ,149 Reserve for Bonus 1, Reserve for Retirement Benefits 391 3, Reserve for Contingent Liabilities Related to Loans Sold 2,039 3,868 3,944 Reserve for Supporting Specific Borrowers - 14, Deferred Tax Liabilities Related to Revaluation Reserve for Land - 6,950 7,265 Acceptances and Guarantees 270, , ,285 Total Liabilities 7,654,839 7,126,505 7,434,097 Stockholders' Equity: First Class, First Series Preferred Stock 40,000 40,000 40,000 First Class, Second Series Preferred Stock 100, , ,000 Common Stock 140, , ,536 Legal Reserve 276, , ,130 Revaluation Reserve for Land, Net of Taxes (1,533) 10,870 11,364 Retained Earnings (10,743) 33,280 6,828 Voluntary Reserve ,721 10,721 Unappropriated Profit (Undisposed Loss) (10,880) 22,558 (3,892) Net Income (Loss) (28,835) 17,870 (3,735) Net Unrealized Losses, Net of Taxes (107,350) - - Total Stockholders' Equity 437, , ,859 Total Liabilities and Stockholders' Equity 8,092,150 7,726,587 8,008,

4 Notes: (1) The Bank applies the following standard to assess the Trading Assets and the Trading Liabilities. Transactions for "trading purposes" are those seeking to capture gains arising from short-term market changes or from differences between markets for interest rates, currency exchange rates or securities. Such transactions are reported as Trading Assets and Trading Liabilities in the consolidated balance sheets for the six months ended September 30, 2001, on a trade date basis. Trading account securities and monetary receivables, etc. held for trading purposes are stated at market value at the end of the six months. Trading-related financial derivatives such as swaps, futures and options, etc. are valued on the assumption that they were settled at the end of the six months. (2) Investments in subsidiaries and affiliates are valued at cost method based on moving average cost, available-for-sale securities with market value are carried at market value (cost of securities sold is determined by the moving average method), and available-for-sale securities with no market value are carried at cost or amortized cost, as determined by the moving average method. Net unrealized profits or losses on available-for-sale securities are directly reflected in the stockholders' equity. (3) Derivatives transactions, excluding those for trading purposes, are valued at fair value method. (4) As regards the depreciation of Premises and Equipment, buildings are depreciated using the straight line method and equipments are depreciated using the declining-balance method. The depreciation method hitherto for buildings has been changed from the declining-balance method to the straight line method as from the six months ended September 30, As a result of this change, the interim loss before income taxes decreased by 300 million yen, when compared with the method used hitherto. (5) Reserve for Possible Loan Losses is provided as follows in accordance with internal criteria regarding write-offs and reserves : (a) The reserve for claims on debtors who are legally or substantially bankrupt (Non-performing or Quasi Non-performing) is provided based on the remaining amount of the claims after the charge-off described below and the deductions of the amount expected to be collected through the disposal of collateral or the execution of guarantees. (b) The reserve for claims on debtors who are not currently legally bankrupt but are likely to become bankrupt is provided based on the amount necessary, given the overall solvency assessment of the debtors after deducting the amount expected to be collected through the the disposal of collateral or the execution of guarantees. (c) The reserve for claims on debtors other than the above is provided primarily based on the default rate, calculated by the actual defaults during a certain period in the past. (d) The Specific reserve for loans to certain refinancing countries is provided based on the expected loss amount considering the political and economic situations of such countries. With respect to the claims with collateral or guarantees on debtors who are legally or substantially bankrupt (Non-performing or Quasi Non-performing), the remaining amount of the claims after deduction of the amount which is deemed collectible through the disposal of collateral or the execution of guarantees was charged-off against the respective claims for the six months ended September 30, The amount of the charge-off was 144,266 million yen for the six months. (6) Reserve for Possible Losses on Securities is provided for possible losses on securities and other investments based on the amount necessary, considering the financial condition of the issuing companies

5 (7) Reserve for Bonuses is provided for payment of bonuses to employees. Within the estimated amount payable to employees, the amount corresponding to the six months ended September 30, 2001, is recorded. This had hitherto been recorded under Other Liabilities. (8) Reserve for Retirement Benefit is provided for future pension payments to employees. The reserve is recorded based on the projected benefit obligation and pension plan asset amount at the end of the six months ended September 30, The unrecognized net obligation (13,257 million yen) is amortized pro rata over 5 years, and 6 /12 multiplied by the pro rata amount is recorded for the six months ended September 30, (9) Reserve for Contingent Liabilities Related to Loans Sold of the Bank is provided based on the estimated liabilities of future losses for the loans sold, considering the fair value of collateral of loans sold to the Cooperative Credit Purchasing Company, Limited. (10) The Bank adopts a macro hedging methodology using derivatives to manage the overall interest rate risk arising from various financial assets and liabilities held, such as loans and deposits. This macro hedging methodology is a risk management method stipulated as a "Risk Adjusted Approach" in "Tentative Accounting and Auditing Treatment relating to Adoption of 'Accounting for Financial Instruments' for Banks" (Japanese Institute of Certified Public Accountants. Industry Audit Committee Report No.15). Accordingly hedging items are accounted for using the deferral method of hedge accounting. Hedge effectiveness is assessed by checking (i) whether the total risk in relation to derivatives instruments, used as hedging instruments, is within established risk limits as set out in the risk management policy and (ii) whether the interest rate risk arising on hedged items has been reduced. Hedging against risks of forex fluctuations on foreign currency securities (other than bonds) is accounted for using the fair value method of hedge accounting. The deferral method for hedge accounting is also applied to certain assets or liabilities other than the above. Other hedging of the Bank's domestic consolidated subsidiaries adopt the deferral method for hedge accounting. (11) As at September 30, 2001 Loans to Bankrupt Companies and Other Delinquent Loans were 11,106 million yen and 105,780 million yen, respectively. (12) As at September 30, 2001 Loans Past Due 3 Months or More, other than Loans to Bankrupt Companies and Other Delinquent Loans, were 550 million yen. (13) As at September 30, 2001 Restructured Loans were 236,893 million yen. (14) The net realized and unrealized profits and losses arising on hedging instruments are included in Other Liabilities as deferred hedge profits. The gross amounts of deferred hedge profits and losses are 39,452 million yen and 41,582 million yen, respectively

6 (15) Market value, net unrealized profits/ losses and other information regarding securities are as follows. In addition to "Securities", trading account securities, negotiable due from banks and commercial paper under "Trading Assets", negotiable due from banks under "Cash and Due from Banks" and commodity funds under "Monetary Receivables Bought" are included. Trading Securities Book value as of September 30, 2001 Net profits/ losses reflected in the Statements of Income for the six months ended September 30, ,138 million yen 10 million yen Available-for-sale securities with market value As of September 30, 2001 Profits/Losses (Millions of Yen) Cost Book value Net Profits Losses Stocks 808, ,391 (154,630) 17, ,842 Bonds 1,726,241 1,726, ,113 2,432 Japanese Government Bonds 1,600,667 1,599,125 (1,542) 772 2,314 Local Government Bonds 3,250 3, Bonds and Financial Debentures 122, ,303 1,980 2, Others 350, ,086 (22,036) ,303 Total 2,884,385 2,708,401 (175,984) 20, ,578 Net Unrealized Profits/ Losses on Available-for-sale Securities, Net of Taxes, (107,350) million yen as of September 30, 2001: net unrealized profits/ losses on available-for-sale securities shown in the above table of (175,984) million yen, less deferred tax liabilities of 68,633 million yen. (16) The Bank sold available-for-sale securities during the six months ended September 30, 2001 as follows: Book value 1,508,405 million yen Profits on sale 49,155 million yen Losses on sale 10,205 million yen (17) Securities whose market value is not readily determined As of September 30, 2001 (Millions of Yen) Book value Investments in subsidiaries and affiliates Subsidiaries 30,992 Affiliates 7,673 Available-for-sale securities Beneficiary certificates of Loan Trusts 204,846 Unlisted stocks (excluding over-the-counter stocks) 37,702 Unlisted bonds 29,

7 (18) The following is the redemption schedule of available-for-sale securities with maturity. (Millions of Yen / Year) 1 or less over 1 to 5 over 5 to 10 over 10 Bonds 90,098 1,111, , ,981 Japanese Government Bonds 42,001 1,010, , ,400 Local Government Bonds - 1,770 1, Corporate Bonds and Financial Debentures 48,097 98,928 6,902 0 Others 444,694 16,530 44,805 1 Total 534,792 1,127, , ,982 (19) Pursuant to overdraft agreements and commitments to provide loans, the Bank may provide loans with customers up to certain limits. Among such limits, 921,284 million yen remains unused of which 874,487million yen is based on contracts to be terminated within a year or revocable for the Bank at any time without any conditions. (20) Concurrent with the adoption of accounting standard for financial instruments, the following are adopted as from the six months ended September 30, (1) The net unrealized profits or losses from the marked-to-market valuation of available-for-sale securities, after taking deferred tax effects into account, are recorded as Net Unrealized Profits/ Losses on Available-for-sale Securities, Net of Taxes. As a result, 'Securities' decreased 175,982 million yen, and (107,350) million yen in 'Net Unrealized Profits/ Losses on Available-for-sale Securities, Net of Taxes' was recorded. (2) For dividends of stocks with market prices, these had hitherto been recorded as income for the fiscal year in which there was a resolution on the dividends at the shareholders' meeting or Board of Directors' meeting of the issuing company. But as from the six months ended September 30, 2001, concurrent with the marked-to-market valuation of available-for-sale securities, the accrued dividend amount based on the forecast dividend per share announced for each stock is estimated and recorded. Due to this change, the accrued income under 'Other Assets' increased 2,630 million yen and loss before income taxes decreased 2,630 million, when compared with the method hitherto. (21) Amounts less than one million yen are omitted

8 Non-Consolidated Statements of Income Six Months ended Sept. 30, Year ended Mar. 31, 2001 Millions of yen (Unaudited) (Unaudited) Income: Trust Fees 32,146 19,213 56,111 Interest Income 50,631 60, ,242 previointerest on Loans and Discounts 28,630 33,870 68,710 Interest on and Dividends from Securities 19,727 14,498 24,818 Fees and Commissions 22,047 23,564 44,573 Trading Revenue Other Operating Income 6,550 3,510 12,310 Other Income 51,963 74, ,086 Total Income 163, , ,211 Expenses: Interest Expenses 24,209 38,191 63,619 Interest on Deposits 9,270 11,233 23,676 Fees and Commissions 1,879 2,077 3,796 Trading Expenses Other Operating Expenses 1,798 1,161 1,772 General and Administrative Expenses 45,357 45,349 90,309 Other Expenses 140,782 59, ,232 Total Expenses 214, , ,205 Income (Loss) before Income Taxes (50,231) 34,598 (993) Less: Income Taxes (Current) Adjustment to Income Taxes Paid in Past Year 1, Less: Income Taxes (Deferred) (19,500) 16,738 2,641 Net Income (Loss) (28,835) 17,810 (3,735) Profit Brought forward from Previous Term 5,057 4,748 4,748 Reversal of Revaluation Reserve for Land 12,898 - (493) Less: Interim Cash Dividends - - 3,676 Less: Transfer to Legal Reserve Unappropriated Profit (Undisposed Loss) at End of Year (10,880) 22,558 (3,892) - 8 -

9 Notes: (1) Profits and losses on transactions for trading purposes are shown as "Trading Revenue" or "Trading Expenses" on the Statements of Income on a trade date basis. In the case of securities and monetary receivables, etc. held for trading purposes, Trading Revenue/Expenses includes the interest received/paid during the six months ended September 30, 2001 and the increase/decrease of the valuation profits/losses at the end of the six months ended September 30, 2001 from those at the end of the fiscal year ended March 31, In the case of trading-related financial derivatives, Trading Revenue/Expenses includes the interest received/paid during the six months ended September 30, 2001 and the increase/ decrease of the amounts of profits/losses based on the assumption that transactions were settled at the end of the six months ended September 30, 2001 from the fiscal year ended March 31, (2) Other Expenses for the six months ended September 30, 2001 includes transfer to Reserve for Possible Loan Losses of 15,156 million yen, Write-off of Loans of 9,411 million yen, Losses on Sales of Stocks and Other Equity Securities of 9,562 million yen, Write-down of Stocks and Other Equity Securities of 98,562 million yen and 4,016 million yen loss for the indemnified amount for principal indemnified trust accounts. Also, expenses for amortization of unrecognized net pension obligation of 1,325 million yen, pursuant to a change in accounting policy, is included. (3) Other Income for the six months ended September 30, 2001 includes 4,381 million yen for gains on sales of premises and equipments and 2,078 million yen for gain on the establishment of a retirement benefit trust. (4) Amounts less than one million yen are omitted