Consolidated Financial Results of Tokai Bank For the Six Months Ended September 30, 2001 November 22, 2001 today reported the Bank's consolidated financial results for the six months ended September 30, 2001. Total Income for the six months was 456 billion yen, compared with 457 billion yen for the corresponding six months in the previous fiscal year. Net Income for the six months was 9 billion yen, compared with 9 billion for the corresponding six months in the previous fiscal year. FINANCIAL HIGHLIGHTS Millions of yen RESULTS Six months ended September 30, 2001 2000 (Unaudited) Total Income 456,214 457,880 Income before Income Taxes, & Minority Interests 9,288 17,557 Net Income 9,670 9,946 BALANCE SHEET Total Assets 31,242,185 31,934,871 Stockholders' Equity 1,349,845 1,555,057 PER SHARE Net Income 4.29 2.39 Stockholders' Equity 288.56 379.74 Notes: (1) Net Income per Share = Net Income Dividends for Preferred Stock Weighted Average Number of Shares of Common Stock * (2) Stockholders' Equity Stockholders' Equity Number of Shares of Preferred Stock Issue Price per Share Number of Shares of Common Stock * *Excluding treasury stocks and stocks held by subsidiaries (3) Equity in earnings of affiliates as of September 30, 2001 is (1,392) million yen. (4) For Net Income per Share and Stockholders' Equity per Share, the third decimal is omitted. (5) Amounts less than one million yen are omitted. - 1 -
(NOTES) Scope of Consolidation and Application of the Equity Method (1) Consolidated Companies (Consolidated Subsidiaries) 23 Companies Major companies: Tokai Bank Europe plc Tokai Asia Ltd. Tokai Australia Finance Corp. Ltd. P.T. Tokai Lippo Bank Tokai Bank Nederland N.V. Bangkok First Tokai Co., Ltd. The Million Credit Co., Ltd. Concurrent with the establishment of the UFJ Group with The Sanwa Bank, Limited and The Toyo Trust and Banking Company, Limited, consolidation of related companies is being effected. Tokai Bank of California, which had been a consolidated subsidiary, has been excluded from consolidation, and United California Bank has been newly formed coming under the equity method. Further, as a result of a review of capital association, Central Systems Co., Ltd., which had been a consolidated subsidiary, has now changed its name to UFIT Co., Ltd., and now comes under the equity method. (2) Companies accounted for under the Equity Method (Companies accounted for under the equity method) 18 Companies United California Bank UFJ Bank California UFJ Capital Markets Securities Co., Ltd. The Gifu Bank, Limited UFIT Co., Ltd. Million Card Service Co., Ltd. UFJ Asset ManagementCo., Ltd. (Companies excluded) MC Travel Co., Ltd. CS Networks Computer (Singapore) Assets, income and net income of non-consolidated subsidiaries and affiliates which are not accounted for under equity method have no significant impact on the consolidated financials. (3) Matters relating to accounting date for consolidated subsidiaries Accounting dates for the six months of consolidated subsidiaries are as follows. May 31: 3 companies June 30: 13 companies September 30: 7 companies financial statements assuming an accounting date of July 31, while others are reflected using their respective accounting dates. Major occurrences between September 30 and the above accounting dates are reflected in the consolidated financial statements as necessary. - 2 -
CONSOLIDATED BALANCE SHEETS As of September 30, As of March 31, Millions of yen 2001 2000 2001 (Unaudited) (Unaudited) Assets: Cash and Due from Banks 1,673,838 1,178,988 1,110,509 Call Loans 47,303 583,766 250,641 Receivables under resale agreements 680,900 - - Monetary Receivables Bought 4,008 39,806 8,490 Trading Assets 2,278,616 1,435,563 2,745,662 Money Held in Trust 79,241 143,468 106,206 Securities 6,175,340 5,574,261 7,117,266 Loans and Bills Discounted 17,291,218 18,635,649 19,018,415 Foreign Exchanges 258,315 249,146 249,983 Other Assets 1,061,670 2,602,937 2,553,469 Premises and Equipment 269,904 343,042 281,735 Deferred Tax Assets 406,159 298,332 319,436 Customers' Liabilities for Acceptances and Guarantees 1,364,716 1,111,842 1,351,114 Reserve for Possible Loan Losses (348,301) (260,865) (358,331) Reserve for Possible Losses on Securities (749) (1,069) (1,302) Total Assets 31,242,185 31,934,871 34,753,298 Liabilities, Minority Interests and Stockholders' Equity Liabilities: Deposits 18,359,138 19,092,993 20,049,401 Negotiable Certificates of Deposit 2,125,851 1,577,000 1,611,772 Call Money 3,029,606 2,564,623 2,911,578 Payables under repurchase agreements 572,239 - - Commercial Paper 200,000 12,500 368,000 Trading Liabilities 1,452,000 1,464,922 1,432,772 Borrowed Money 461,830 649,480 611,978 Foreign Exchanges 39,451 33,956 25,361 Bonds and Notes 318,105 433,907 446,847 Other Liabilities 1,774,574 3,166,895 4,239,495 Reserve for Retirement Allowances - - - Reserve for bonus 6,369 - - Reserve for Retirement Benefits 364 46,505 2,254 Reserve for Contingent Liabilities Related to Loans Sold 26,669 44,580 47,000 Other Reserves 42 195 256 Deferred Tax Liabilities 868 15 526 Deferred Tax Liabilities Related to Revaluation Reserve for Land 36,434 59,035 37,251 Acceptances and Guarantees 1,364,716 1,111,842 1,351,114 Total Liabilities 29,768,264 30,258,467 33,135,673 Minority Interests 124,075 121,345 140,948 Stockholders' Equity: First Preferred Stock (type 'A') 50,000 50,000 50,000 Second Preferred Stock (type 'B') 150,000 150,000 150,000 Third Preferred Stock (type 'B') 150,000 150,000 150,000 Common Stock 373,138 373,138 373,138 Capital Surplus 649,201 649,201 649,201 Revaluation Reserve for Land, Net of Taxes 54,499 88,369 55,645 Retained Earnings 78,232 122,186 69,373 Unrealized losses on securities (133,329) - - Foreign Currency Translation Adjustments (18,945) (27,612) (20,431) Treasury Stock - (6) (32) Parent Bank Stock Held by Subsidiaries - (219) (219) Total Stockholders' Equity 1,349,845 1,555,057 1,476,676 Total Liabilities, Minority Interests and Stockholders' Equity 31,242,185 31,934,871 34,753,298-3 -
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 non-consolidated subsidiaries and affiliates which are not accounted for under the equity method are carried at the 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) As regards the valuation of securities held in independently operated Money Held in Trust mainly for securities investment, securities are stated at market value. (4) Derivatives transactions, excluding those for trading purposes, are valued at fair value method. (5) As regards the depreciation of Premises and Equipment, buildings acquired after April 1, 1998 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, 2001. As a result of this change, the interim income before income taxes increased by 821 million yen, when compared with the method used hitherto. (6) 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, 2001. The amount of the charge-off was 358,705 million yen for the six months. The consolidated subsidiaries provide the Reserve for Possible Loan Losses as the amount deemed necessary to cover such losses, principally based on past experience and management's assessment of the loan portfolio. (7) 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. - 4 -
(8) 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. (9) 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, 2001. The unrecognized net obligation (106,107 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, 2001. (10) 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. (11) 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 deferral and fair value method of hedge accounting. The deferral method for hedge accounting is also applied to certain assets or liabilities other than the abobe. Other hedging of the Bank's domestic consolidated subsidiaries adopt the deferral method for hedge accounting. (12) As at September 30, 2001 Loans to Bankrupt Companies and Other Delinquent Loans were 69,150 million yen and 464,826 million yen, respectively. (13) As at September 30, 2001 Loans Past Due 3 Months or More, other than Loans to Bankrupt Companies and Other Delinquent Loans, were 45,082 million yen. (14) As at September 30, 2001 Restructured Loans were 439,732 million yen. (15) 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 109,273 million yen and 130,744 million yen, respectively. - 5 -
(16) 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 1,440,001 million yen Net profits/ losses reflected in the Statements of Income for the six months ended September 30, 2001 (2,850) million yen Available-for-sale securities with market value As of September 30, 2001 Profits/Losses (Millions of Yen) Book value Market value Net Profits Losses Japanese Equities 1,949,239 1,743,606 (205,632) 84,072 289,705 Japanese Bonds 3,129,297 3,137,075 7,778 14,915 7,137 Japanese NationalGovernment Bonds 3,060,333 3,065,516 5,182 12,298 7,115 Japanese Local Government Bonds 33,499 34,929 1,430 1,443 13 Japanese Corporate Bonds and Financial Debentures 35,464 36,629 1,165 1,173 7 Others 703,998 679,392 (24,605) 10,336 34,942 Total 5,782,535 5,560,075 (222,460) 109,324 331,784 Net Unrealized Profits/ Losses on Available-for-sale Securities, Net of Taxes, as of September 30, 2001, is 133,328 million yen: net unrealized profits/ losses on available-for-sale securities shown in the above table of (222,460) million yen, plus deferred tax assets of 89,255 million yen, less minority interests equivalent of 433 million yen, plus parent bank's interest of 308 million in net unrealized profit/ loss of available-for-sale securities held by affiliates accounted for under the equity method. (17) The Bank sold avaliable-for-sale securities during the six months ended September 30, 2001 as follows: Book value 6,924,637 million yen Profits on sale 106,489 million yen Losses on sale 26,775 million yen (18) Available-for-sale securities whose market value is not readily determinable As of September 30, 2001 (Millions of Yen) Book value Unlisted domestic bonds 492,595 Unlisted domestic stocks (excluding over-the-counter stocks) 96,366 Unlisted foreign bonds 7,605 Unlisted foreign stocks 1,849 Investments in venture capital 2,216 Negotiable certificates of deposit 46,312 (19) All bonds in "Held-to-maturity debt securities" of 784,006 million yen are recorded in "Available-for-sale securities" as from the six months ended September 30, 2001. - 6 -
(20) The following is the Money Held in Trust Money Held in Trust for trading purpose Book value as of September 30, 2001 Net profits/losses reflected in the Statements of Income for the six months ended September 30, 2001 79,241 million yen 4,044 million yen (21) Pursuant to overdraft agreements and commitments to provide loans, the Bank may provide loans with customers up to certain limits. Among such limits, 9,525,079 million yen remains unused of which 9,160,759 million yen is based on contracts to be terminated within a year or revocable for the Bank at any time without any conditions. ( 22 ) Concurrent with the adoption of accounting standard for financial instruments, the following are adopted as from the six months ended September 30, 2001. (1) The net unrealized profits or losses from the marked-to-market valuation of available-for-sale securities and money held in trust, 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 222,460million yen, and (133,328) 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 non accrued dividend amount based on the forecast dividend per share announced for each stock is estimated and recorded. Due to this change, the non accrued income and other assets under 'Other Assets' increased 5,255 million yen and 1,313 million yen respectively, and income before income taxes increased 6,569 million, when compared with the method hitherto. (23) Amounts less than one million yen are omitted. - 7 -
CONSOLIDATED STATEMENTS OF INCOME Six months ended September 30, Year ended 2001 2000 March 31, 2001 Millions of yen (Unaudited) (Unaudited) Income: Interest Income 268,814 298,864 569,557 Interest on Loans and Discounts 181,780 197,723 417,803 Interest on and Dividends from Securities 54,715 43,041 88,082 Fees and Commissions 38,771 38,197 80,455 Trading Revenue 23,118 22,733 39,267 Other Operating Income 36,179 17,797 83,809 Other Income 89,329 80,289 203,160 Total Income 456,214 457,880 976,249 Expenses: Interest Expenses 92,982 130,919 250,639 Interest on Deposits 54,004 61,934 149,092 Fees and Commissions 7,138 4,766 10,937 Trading Expenses - 10,046 32,179 Other Operating Expenses 12,571 2,526 11,208 General and Administrative Expenses 130,822 115,410 237,491 Other Expenses 203,411 176,654 526,301 Total Expenses 446,926 440,321 1,068,757 Income (Loss) before Income Taxes & Minority Interests 9,288 17,557 (92,508) Provision for Income Taxes (445) 3,209 7,288 Deferred Income Taxes 373 4,690 (37,850) Minority Interests in Net Income (310) (289) 259 Net Income (Loss) 9,670 9,946 (62,206) - 8 -
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, 2001. 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, 2001. (2) Other Expenses for the six months ended September 30, 2001 includes transfer to Reserve for Possible Loan Losses of 3,849 million yen, Write-off of Loans of 54,303million yen, and Revaluation Losses of Stocks and Other Equity Securities of 101,194 million yen. Also, expenses for amortization of unrecognized net pension obligation of 10,525 million yen, pursuant to a change in accounting policy, is included. (3) Amounts less than one million yen are omitted. - 9 -
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS Six months ended Sep. 30, Year ended 2001 2000 Mar. 31, 2001 Millions of yen (Unaudited) (Unaudited) Balance at Beginning of the Fiscal Year 69,373 123,834 123,834 Additions: 807 959 32,750 Increase Resulted from Reversal of Revaluation Reserve for Land 807 959 32,750 Increase Resulted from Exclusion of Subsidiaries Previously Included in Consolidated Statements - - - Increase Resulted from Mergers Deductions: 4,571 12,554 25,004 Cash Dividends 4,568 12,451 24,899 Directors' Remuneration 3 4 4 Decrease Resulted from Newly Consolidated Subsidiaries - - - Decrease Resulted from Exclusion of Consolidated Subsidiaries - - 1 Decrease Resulted from Exclusion of Affiliated Companies (non consolidated subsidiaries) Previously - 99 98 Accounted for by Equity Method Net Income (Loss) for the six months 9,670 9,947 (62,206) Balance at End of interim period 75,280 122,186 69,373 Note : Amounts less than one million yen are omitted. - 10 -
CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended September 30, Year ended 2001 2000 March 31, 2001 Millions of yen (Unaudited) (Unaudited) (Unaudited) Cash Flows from Operating Activities Income Before Income Taxes, & Minority Interests 9,288 17,557 (92,508) Depreciation 6,071 10,382 15,130 Amortization of Goodwill (61) (1) 328 Equity in Earnings of Affiliates 1,413 (77) 276 Net Increase (Decrease) in Reserve for Possible Loan Losses (6,021) (25,693) 70,825 Net Increase (Decrease) in Reserve for Possible Losses on Securities (301) (1,363) (1,130) Net Increase (Decrease) in Reserve for Contingent Liabilities Related to Loans Sold (20,330) (10,875) (8,455) Net Increase (Decrease) in Reserve for Bonus 1,032-1,032 Net Increase (Decrease) in Reserve for Retirement Allowances - (36,034) (36,034) Net Increase (Decrease) in Reserve for Retirement Benefits (246) 46,505 2,224 Net Increase (Decrease) in Other Reserves 0 6 46 Interest Income (268,814) (298,864) (569,557) Interest Expenses 92,982 130,919 250,639 Net (Gain) Loss on Securities 23,047 (54,666) (95,360) Net (Gain) Loss on Money Held in Trust (1,689) 6,863 9,379 Net (Gain) Loss on Foreign Exchange Transactions 10,232 (5,902) (33,289) Net (Gain) Loss on Sales of Premises and Equipment 987 1,845 20,492 Net (Gain) Loss on Establishment of Pension Trust - - (43,667) Net (Increase) Decrease in Trading Assets 26,158 (562,106) (1,800,596) Net Increase (Decrease) in Trading Liabilities 381,490 492,348 388,050 Net (Increase) Decrease in Loans and Bills Discounted 1,518,992 14,134 (325,796) Net Increase (Decrease) in Deposits (1,584,846) 490,003 1,276,799 Net Increase (Decrease) in Negotiable Certificates of Deposit 528,344 (454,036) (423,291) Net Increase (Decrease) in Borrowed Money Excluding Subordinated Debt (24,054) 32,400 36,838 Net (Increase) Decrease in Due from Banks Excluding Due from Bank Of Japan (490,354) (44,227) 7,251 Net (Increase) Decrease in Call Loans and Monetary Receivables Bought (480,285) (216,440) 154,300 Net (Increase) Decrease in Collateral Deposits on Securities Borrowed (112,664) (409,698) (225,991) Net Increase (Decrease) in Call Money and Other Fundings Related to Operating Activities 738,712 382,690 700,187 Net Increase (Decrease) in Commercial Paper (168,000) (362,500) (7,000) Net Increase (Decrease) in Collateral Deposits on Securities Lent (607,768) 779,555 1,438,718 Net (Increase) Decrease in Foreign Exchanges (Assets) (8,332) 58,541 75,913 Net Increase (Decrease) in Bonds and Notes Resulted from Issuance, Redemption and Repurchase (3,525) 2,822 10,140 Net Increase (Decrease) in Due to Trust Accounts - (50,472) 3,234 Interest Received 292,713 297,317 553,713 Interest Paid (117,161) (131,976) (249,326) Others, Net (187,143) (148,463) 254,318 Sub-total (436,043) (65,675) 1,332,537 Income Taxes Paid (3,783) (1,903) (3,555) Net Cash Provided by (Used in) Operating Activities (439,826) (67,579) 1,328,981-11 -
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Six Months Ended September 30, Year ended 2001 2000 March 31, 2001 Millions of yen (Unaudited) (Unaudited) (Unaudited) Cash Flows from Investing Activities Purchases of Securities (11,618,247) (8,938,926) (20,341,976) Proceeds from Sales of Securities 6,974,719 5,169,074 10,599,615 Proceeds from Maturities of Securities 5,381,632 3,758,266 8,230,109 Increase in Money Held in Trust (6,010) (50,000) (55,000) Decrease in Money Held in Trust 34,188 7,019 52,313 Expenditures for Premises and Equipment (8,561) (8,071) (21,567) Proceeds from Sales of Premises and Equipment 5,691 3,816 56,819 Expenditures for Purchases of Consolidated Subsidiaries (1,512) - 318 Proceeds from Sales of Consolidated Subsidiaries 1,106-33 Net Cash Provided by (Used in) Investing Activities 763,008 (58,821) (1,479,334) Cash Flows from Financing Activities Expenditures for Repayment of Subordinated Debt (128,000) (115,000) (115,000) Proceeds from Issuance of Subordinated Bonds 20,000-8,300 Redemption and Repurchase of Subordinated Bonds (145,000) - (6,500) Dividends Paid (4,568) (12,450) (24,899) Dividends Paid to Minority Shareholders (3) (125) (117) Expenditures for Purchase of Treasury Stock - (75) (246) Proceeds from Sales of Treasury Stock - 73 220 Net Cash Provided by (Used in) Financing Activities (257,572) (127,577) (138,243) Effect of Exchange Rate Changes on Cash and Cash Equivalents (351) 47 1,538 Net Increase (Decrease) in Cash and Cash Equivalents 65,257 (253,930) (287,057) Cash and Cash Equivalents at Beginning of Fiscal Year 504,065 791,122 791,122 Decrease in Cash and Cash Equivalents 4,795 - - due to Change in definition of Cash and Cash Equivalents Decrease in Cash and Cash Equivalents Caused by Exclusion from Scope of Consolidation (3,154) - - Cash and Cash Equivalents, end of interim period 570,962 537,192 504,065 Notes: (1) Amounts less than one million yen are omitted. (2) For the purpose of the consolidated statements of cash flows, "Cash and Cash Equivalents" is "Cash and Due from Banks" in the consolidated balance sheets. - 12 -
SEGMENT INFORMATION 1.Segment Information by Type of Business Although some subsidiaries conduct such businesses as security trading, trust banking, or leasing besides banking business, the ratio of these businesses in all segments is small. Therefore, segment information by type of business is not shown here. 2.Segment Information by Location Six Months ended Elimination and September 30, 2001 Japan The Americas Europe Asia/Oceania Total Corporate Assets Consolidated I Ordinary Income 401,103 38,653 34,771 69,447 543,976 (88,404) 455,571 (1)Ordinary Income from Outside Customers 371,457 25,350 32,551 26,212 455,571-455,571 (2)Internal Ordinary Income between Segments 29,645 13,302 2,220 43,235 88,404 (88,404) - II Ordinary Expense 393,727 37,166 29,399 60,950 521,244 (86,006) 435,237 III Ordinary Profit (I-II) 7,376 1,486 5,371 8,497 22,731 (2,397) 20,334 Six Months ended Elimination and September 30, 2000 Japan The Americas Europe Asia/Oceania Total Corporate Assets Consolidated I Ordinary Income 407,915 40,391 28,893 93,525 570,726 (113,237) 457,488 (1)Ordinary Income from Outside Customers 364,397 24,764 25,955 42,372 457,488-457,488 (2)Internal Ordinary Income between Segments 43,518 15,626 2,938 51,153 113,237 (113,237) - II Ordinary Expense 390,237 37,175 27,112 85,711 540,237 (113,237) 426,999 III Ordinary Profit (I-II) 17,678 3,215 1,780 7,814 30,489-30,489 Fiscal Year Ended Elimination and March 31, 2001 Japan The Americas Europe Asia/Oceania Total Corporate Assets Consolidated I Ordinary Income 812,701 87,982 64,175 157,739 1,122,599 (190,821) 931,777 (1) Ordinary Income from Outside Customers 749,161 60,655 54,251 67,708 931,777-931,777 (2) Internal Ordinary Income between Segments 63,539 27,327 9,923 90,030 190,821 (190,821) - II Ordinary Expense 937,996 78,863 58,085 139,425 1,214,371 (190,821) 1,023,549 III Ordinary Profit (I-II) (125,295) 9,119 6,089 18,314 (91,771) - (91,771) - 13 -
Notes: (1) In place of Net Sales and Operating Profit for non-financial companies, the tables on the above show Ordinary Income and Ordinary Profit of the Bank and its consolidated subsidiaries, respectively. Ordinary Income and Ordinary Profit are divided into Japan and other areas according to the degrees of geographic adjacency, similarity of economic activities, and relationships of business operations. (2) The Americas includes, but not limited to, United States and Canada. Europe includes, but not limited to, United Kingdom and Germany. Asia/ Oceania includes, but not limited to, People's Republic of China and Singapore. (3) The Bank began to apply accounting standard for depreciation of buildings from the six months ended Sept. 30, 2001. As a result, compared with the figures under the previous accounting rules, Ordinary Expense decreased by 800 million yen and Ordinary Loss decreased by the same amount in Japan; Ordinary Expense decreased by 7 million yen and Ordinary Profit increased by the same amount in the Americas; Ordinary Expense decreased by 5 million yen and Ordinary Profit increased by the same amount in Europe; and Ordinary Expense decreased by 8 million yen and Ordinary Profit increased by the same amount in Asia/Oceania. The Bank also began to apply accounting standard for foreign currency denominated transactions after revision ('opinion relating to revision of accounting standards for foreign currency denominated transactions (issued by corporate accounting council October 22, 1999)), excluding application of 'accounting and auditing implementation guide for adoption of accounting standards for foreign currency denominated transactions in banking industry (notification 20 of auditing committee statement by industry of Japanese Institute of Certified Public Accountants)'. As a result, compared with the figures under the previous accounting rules, Ordinary Income increased by 34 million yen, Ordinary Expense increased by 1,033 million yen and Ordinary Profit decreased by 999 million yen in Japan; Ordinary Income increased by 167 million yen, Ordinary Expense increased by 167 million yen and Ordinary Profit increased by 0 million yen in Europe; and Ordinary Income increased by 188 million yen, Ordinary Expense increased by 141 million yen and Ordinary Profit increased by 46 million yen in Asia/Oceania. In addition, regarding dividends on stocks with market prices, these had hitherto been accounted for under earnings in the fiscal year that there was a shareholders' meeting and Board of Directors' meeting of the issuing company. But as from the six months ended Sept. 30, 2001, these are accounted for as non accrued dividends based on the forecast dividend per share announced by the company, concurrent with the implementation of marked-to-market valuation of available-for-sale securities. Ordinary Income increased by 6,569 million yen and Ordinary Profit increased by the same amount in Japan. - 14 -
3. Ordinary Income from Overseas Operations Ordinary Income Consolidated Ratio of Ordinary Income from Overseas Ordinary from Overseas Operations Operations Income over Consolidated Ordinary Income Six Months Ended Sept. 30, 2001 84,114 455,571 18.4% Six Months Ended Sept. 30, 2000 93,091 457,488 20.3% Year Ended March 31, 2001 182,615 931,777 19.5% Notes: (1) Ordinary Income from Overseas Operation is shown, instead of Overseas Sales Amount for non-financial companies. (2) Ordinary Income from Overseas Operations primarily includes income from transactions of the Bank's overseas branches, and income from transactions of the overseas consolidated subsidiaries (excluding Internal Ordinary Income between consolidated entities). Segment Information by Location on Ordinary Income from Overseas Operations is not shown here since Ordinary Income from Overseas Operations is not classified by the domicile of obligators. - 15 -
MARKET VALUE INFORMATION ON SECURITIES AND MONEY HELD IN TRUST (End of September 30, 2001) The following includes Securities, "negotiable due from banks," contained in Cash and Due from Banks, and "commodity funds," contained in Monetary Receivables Bought. Amounts less than one million yen are omitted. A. SECURITIES 1. Held-to-Maturity Bonds with Market Value There is no Held-to-Maturity Money Held in Trust. 2. Available-for-Sale Securities with Market Value As of September 30, 2001 Book Market Unrealized Profit/Loss Type Value Value Net Profit Loss Stocks 1,949,239 1,743,606 (205,632) 84,072 289,705 Bonds 3,129,297 3,137,075 7,778 14,915 7,137 Japanese Government Bonds 3,060,333 3,065,516 5,182 12,298 7,115 Municipal Bonds 33,499 34,929 1,430 1,443 13 Corporate Bonds and Notes 35,464 36,629 1,165 1,173 7 Other Securities 703,998 679,392 (24,605) 10,336 34,942 Total 5,782,535 5,560,075 (222,460) 109,324 331,784 Market Value: Stocks: Average market value over one month period prior to the closing of the interim accounting period. Others: Market value at the end of the interim accounting period. 3. Securities without Market Value As of September 30, 2001 Type Book Value Available-for-Sale Securities 646,944 Unlisted Domestic Bonds 492,595 Unlisted Domestic Stocks (excluding over-the-counter stocks) 96,366 Unlisted Foreign Bonds 7,605 Unlisted Foreign Stocks 1,849 Investments in Venture Capital 2,216 Negotiable Certificates of Deposit 46,312-16 -
B. MONEY HELD IN TRUST 1. Held-to-Maturity Money Held in Trust There is no Held-to-Maturity Money Held in Trust. 2. Available-for-Sale Money Held in Trust (other than Held-to-Maturity Money Held in Trust and Investment Money Held in Trust) There is no Available-for-Sale Money Held in Trust (other than Held-to-Maturity Money Held in Trust and Investment Money Held in Trust). C. UNREALIZED GAINS (LOSSES) ON AVAILABLE-FOR-SALE SECURITIES As of September 30, 2001 Type Book Value Net Unrealized Gains (Losses) (222,460) Available-for-Sale Securities (222,460) Less: Deferred Tax Liabilities 89,255 Net Unrealized Gains (Losses), Net of Taxes (133,204) (before minority interests) Less: Minority Interests 433 Parent Bank's Share of Net Unrealized Gains (Losses) on Securities Held by Affiliates Accounted for under Equity Method 308 Net Unrealized Gains, Net of Taxes (133,328) - 17 -
MARKET VALUE INFORMATION ON SECURITIES AND MONEY HELD IN TRUST (End of September 30, 2000) A. SECURITIES 1. Held-to-Maturity Bonds with Market Value As of September 30, 2000 Book Market Unrealized Profit/Loss Type Value Value Net Profit Loss Japanese Government Bonds 278,558 274,287 (4,271) 339 4,610 Municipal Bonds - - - - - Corporate Bonds and Notes - - - - - Other Securities 97,089 91,631 (5,457) 0 5,457 Total 375,647 365,919 (9,728) 339 10,068 Notes: Market Value: Market value at the end of the interim accounting period. Mark to the market method is not applied. 2. Available-for-Sale Securities with Market Value As of September 30, 2000 Book Market Unrealized Profit/Loss Type Value Value Net Profit Loss Stocks 2,402,149 2,674,688 272,539 451,904 179,365 Bonds 1,750,922 1,725,967 (24,955) 2,062 27,018 Japanese Government Bonds 1,655,809 1,629,569 (26,240) 132 26,372 Municipal Bonds 33,437 33,455 17 485 467 Corporate Bonds and Notes 61,675 62,942 1,266 1,444 178 Other Securities 554,101 531,417 (22,683) 6,455 29,138 Total 4,707,172 4,932,073 224,900 460,423 235,522-18 -
3. Securities without Market Value As of September 30, 2000 Type Book Value Held-to-Maturity Bonds 201,540 Unlisted Domestic Bonds 201,540 Available-for-Sale Securities 413,707 Unlisted Domestic Bonds 218,809 Negotiable Certificates of Deposit 99,134 Unlisted Domestic Stocks (excluding over-the-counter stocks) 70,853 Investments in Venture Capital 3,666 Unlisted Foreign Bonds 19,207 Unlisted Foreign Stocks 2,036 B. UNREALIZED GAINS (LOSSES) ON AVAILABLE-FOR-SALE SECURITIES As of September 30, 2000 Type Book Value Net Unrealized Gains (Losses) 224,900 Available-for-Sale Securities 224,900 Less: Deferred Tax Liabilities 90,279 Net Unrealized Gains (Losses), Net of Taxes 134,621 (before minority interests) Less: Minority Interests 2,292 Parent Bank's Share of Net Unrealized Gains (Losses) on Securities Held by Affiliates Accounted for under Equity Method 47 Net Unrealized Gains, Net of Taxes 132,376-19 -
MARKET VALUE INFORMATION ON SECURITIES AND MONEY HELD IN TRUST (End of March 31, 2001) A. SECURITIES The following includes Securities, "trading account securities," " negotiable due from banks," and "commercial paper," contained in Trading Assets, "negotiable due from banks," contained in Cash and Due from Banks, and"commodity funds," contained in Monetary Receivables Bought. 1. Held-to-Maturity Bonds with Market Value As of March 31, 2001 Book Market Unrealized Profit/Loss Type Value Value Net Profit Loss Japanese Government Bonds 671,875 689,238 17,362 17,362 - Municipal Bonds - - - - - Corporate Bonds and Notes - - - - - Other Securities 112,130 109,770 (2,360) 92 2,452 Total 784,006 799,008 15,002 17,454 2,452 Market Value: Market value at the end of the accounting period. Mark to the market method is not applied. 2. Available-for-Sale Securities with Market Value As of March 31, 2001 Book Market Unrealized Profit/Loss Type Value Value Net Profit Loss Stocks 2,234,355 2,355,910 121,554 364,532 242,977 Bonds 2,502,012 2,512,782 10,769 11,457 687 Japanese Government Bonds 2,446,302 2,454,960 8,658 9,307 648 Municipal Bonds 13,228 13,728 500 500 - Corporate Bonds and Notes 42,482 44,092 1,610 1,649 39 Other Securities 926,004 903,598 (22,406) 8,172 30,579 Total 5,662,372 5,772,290 109,917 384,162 274,244-20 -
3. Securities without Market Value As of March 31, 2001 Type Book Value Held-to-Maturity Bonds 240,837 Unlisted Domestic Bonds 212,328 Unlisted Foreign Bonds 28,509 Available-for-Sale Securities 493,644 Unlisted Domestic Bonds 270,640 Unlisted Domestic Stocks (excluding over-the-counter stocks) 99,429 Unlisted Foreign Bonds 43,154 Unlisted Foreign Stocks 4,727 Investments in Venture Capital 3,159 Negotiable Certificates of Deposit 72,533 B. MONEY HELD IN TRUST 1. Held-to-Maturity Money Held in Trust There is no Held-to-Maturity Money Held in Trust. 2. Available-for-Sale Money Held in Trust (other than Held-to-Maturity Money Held in Trust and Investment Money Held in Trust) There is no Available-for-Sale Money Held in Trust (other than Held-to-Maturity Money Held in Trust and Investment Money Held in Trust). C. UNREALIZED GAINS (LOSSES) ON AVAILABLE-FOR-SALE SECURITIES As of March 31, 2001 Type Book Value Net Unrealized Gains (Losses) 109,917 Available-for-Sale Securities 109,917 Less: Deferred Tax Liabilities 44,133 Net Unrealized Gains (Losses), Net of Taxes 65,784 (before minority interests) Less: Minority Interests 1,513 Parent Bank's Share of Net Unrealized Gains (Losses) on Securities Held by Affiliates Accounted 111 for under Equity Method Net Unrealized Gains, Net of Taxes 64,382-21 -
MARKET VALUE INFORMATION ON DERIVATIVES TRANSACTIONS (Six Months Ended September 30, 2001) 1. Interest Related Transactions As of September 30, 2001 Standardized Interest Rate Futures 17,874,800 (7,816) (7,816) Interest Rate Options 14,761,410 3,547 7,350 Forward Rate Agreement 3,604,238 (1,372) (1,372) Interest Rate Swaps 71,588,598 37,215 37,215 Others 3,679,460 (840) (840) Total 30,733 34,536 Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded. 2. Currency Related Transactions As of September 30, 2001 Currency Swaps 2,604,843 (23,517) (23,517) Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied and transactions just below are excluded from the above table. Based on 'accounting and auditing implementation guide for adoption of accounting standards for foreign currency denominated transactions in banking industry (notification 20 of auditing committee statement by industry of Japanese Institute of Certified Public Accountants)', currency swap transactions for which profits/ losses are calculated, are excluded from above table. As of September 30, 2001 Currency Swaps 479,174 (9,786) (9,786) Similarly, within foreign exchange forward contracts, revaluation is effected on Sept. 30, and the following are excluded from the above table: profits/ losses recorded on consolidated income statements for six months, those reflected in consolidated balance sheets for instruments attached to foreign currency based receivables/ payables or foreign currency based receivables/ payables - 22 -
As of September 30, 2001 Type Book Value Standardized Currency Futures 17,338 Foreign Exchange Forward Contrancts 3,434,202 Currency Options 1,537,332 3. Equity Related Transactions As of September 30, 2001 Standardized Stock Index Futures 3,456 71 71 Stock Index Options 14,617 68 14 Securities Over-the-counter Options 13,300 (2,953) 1,502 Securities Over-the-counter Index Swaps 6,917 (32) (32) Others 11,260 4,268 4,268 Total 1,422 5,824 Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives Transactions to which hedge accounting is applied are excluded. 4. Bond Related Transactions As of September 30, 2001 Standardized Bond Futures 2,151,013 3,024 3,024 Bond Futures Options 545,808 24 186 Bond Options 146,553 744 22 Total 3,794 3,234 Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded from the above table. 5. Commodity Related Transactions There is no commodity related transactions. - 23 -
6. Credit Derivatives Related Transactions As of September 30, 2001 Over-the-counter Credit Default Swaps 15,925 16 16 Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded from the above table. 7. Other Derivative Transactions As of September 30, 2001 Weather Options 347 - - Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded from the above table. - 24 -
MARKET VALUE INFORMATION ON DERIVATIVES TRANSACTIONS (Six Months Ended September 30, 2000) 1. Interest Related Transactions As of September 30, 2000 Standardized Interest Rate Futures 24,865,820 (1,197) (1,197) Interest Rate Options 9,161,732 (175) 1,046 Forward Rate Agreement 5,098,562 (400) (400) Interest Rate Swaps 64,887,477 (35,412) (35,412) Others 4,501,572 (21,910) (21,910) Total (59,097) (57,875) Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded. 2. Currency Related Transactions As of September 30, 2000 Currency Swaps 1,465,062 (2,148) (2,148) Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied and transactions just below are excluded from the above table. Based on "tentative auditing treatment relating to adoption of 'revised accounting for foreign currency transactions' for banks" (Japanese Institute of Certified Public Accountants, April 10, 1999) currency swap transactions for which profits/ losses are calculated, are excluded from above table. As of September 30, 2000 Currency Swaps 377,311 (1,996) (1,996) Similarly, within foreign exchange forward contracts, revaluation is effected on Sept. 30, and the following are excluded from the above table: profits/ losses recorded on consolidated income statements for six months, those reflected in consolidated balance sheets for instruments attached to foreign currency based receivables/ payables or foreign currency based receivables/ payables eliminated from consolidation. - 25 -
As of September 30, 2000 Type Book Value Standardized Currency Futures 33,615 Foreign Exchange Forward Contrancts 2,349,633 Currency Options 5,519,464 Others 106,660 3. Equity Related Transactions As of September 30, 2000 Standardized Stock Index Futures 33,870 436 436 Stock Index Options 284,886 (10) 80 Securities Over-the-counter Options 110,630 7,226 11,991 Securities Over-the-counter Index Swaps 36,332 (3,571) (3,571) Others 10,213 (271) (271) Total 3,809 8,665 Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded. 4. Bond Related Transactions As of September 30, 2000 Standardized Bond Futures 2,162,101 4,492 4,492 Bond Futures Options 407,443 (472) 117 Bond Options 383,966 2,914 1,203 Others 9,988 0 0 Total 6,934 5,814 Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded from the above table. 5. Commodity Related Transactions There is no commodity related transactions. - 26 -
6. Credit Derivatives Related Transactions As of September 30, 2000 Over-the-counter Credit Default Swaps 28,764 14 14 Notes: The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded from the above table. - 27 -
MARKET VALUE INFORMATION ON DERIVATIVES TRANSACTIONS (Fiscal Year Ended March 31,2001) 1. Interest Related Transactions As of March 31, 2001 Over 1 year Standardized Interest Rate Futures Sold 13,516,157 4,324,680 13,591,009 (74,851) Bought 14,278,034 4,551,061 14,376,160 98,125 Interest Rate Options Sold 7,803,798 2,093,435 11,158 (940) Bought 4,810,633 372,611 8,998 4,038 Forward Rate Agreement Sold 2,794,494 940,000 2,963 2,963 Bought 3,398,409 1,501,239 (4,639) (4,639) Interest Rate Swaps Receipts Fixed, Payments Floating 33,018,188 22,619,880 643,888 643,888 Receipts Floating, Payments Fixed 35,571,722 22,994,086 (613,879) (613,879) Receipts Floating, Payments Floating 2,798,916 1,994,689 (280) (280) Receipts Fixed, Payments Fixed 26,844 21,610 (17,414) (17,414) Interest Rate Options Sold - - - - Bought - - - - Others Sold 2,135,303 1,252,814 (10,101) (10,101) Bought 2,463,679 1,287,300 7,431 7,431 Total 27,995,293 34,338 Notes: (1) The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions to which hedge accounting is applied are excluded. (2) In the above Market Value Information on Derivatives, market values of standardized transactions are calculated by using the closing prices at the Tokyo International Financial Futures Exchange and others. Market values of the over-the-counter transactions are based on the discounted present value or the option pricing calculation model. (3) Others include Cap, Floor and Swaption transactions. - 28 -
2. Currency Related Transactions As of March 31, 2001 Type Contractual Value Over 1 year Market Value Profits/Losses Currency Swaps 2,185,352 1,721,638 (23,819) (23,819) Forward Rate Agreement Total (23,819) (23,819) Notes: (1) The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives transactions, to which hedge accounting is applied, and transactions stated in the Note (2) below are excluded. (2) Certain Currency Swaps have been excluded from table 2. above, since such Currency Swaps have been accounted for by using the accrual method of accounting based on "Tentative Auditing Treatment relating to Adoption of 'Revised Accounting for Foreign Currency Transaction' for Banks." (The Japanese Institute of Certified Public Accountants April 10, 1999) The Contractual Value etc. of such Currency Swaps accounted for on an accrual method is as follows: Type As of March 31, 2001 Currency Swaps 433,323 (1,498) 503 (3) Foreign exchange forward contracts, currency options and some other transactions are excluded from the above table, since they are revalued at the end of the fiscal year and their profits and losses are effected to the Consolidated Statements of Income of the Bank or they are attached to foreign currency based receivables/payables, which are reflected to Consolidated Balance Sheets or eliminated in consolidation process. Set forth below are contractual values of foreign exchange related transactions reflected in the Statements of Income by revaluation at the dates i ndicated. As of March 31, 2001 Book Value Standardized Currency Futures Sold 17,458 Bought 5,189 Currency Options Sold - Bought - Foreign Exchange Forward Contracts Sold 1,104,176 Bought 1,598,831 Currency Options Sold 2,374,963 Bought 2,314,941 Others Sold - Bought - - 29 -
3. Equity Related Transactions As of March 31, 2001 Total Over 1 year Standardized Stock Index Futures Sold 55,456-57,378 (1,921) Bought 4,775-4,686 (89) Stock Index Options Sold 656-177 (54) Bought 3,635-441 97 Securities Over-the-counter Options Sold 22,891 11,507 11,516 (2,976) Bought 24,708 16,024 18,279 16,913 Securities Over-the-counter Index Swaps Receipts Equity Index Return/ Payments Short-term Floating-rate Interest - - - - Receipts Short-term Floating-rate Interest/ Payments Equity Index Return - - - - Dividend Amount Receipts/ Payments Fixed-rate Interest 14,778 4,029 (3,011) 9,994 Receipts Fixed-rate Interest/ Dividend Amount Payments 13,050 6,887 (1,780) (3,207) Receipts Linked to Market Price of Reference Shares/ Payments Fixed-rate Interest 8,701 2,601 2,537 2,449 Others Sold - - - - Bought - - - - Total 90,225 21,205 Notes: (1) The above Profits/Losses are stated on the Consolidated Statements of Income. Derivatives Transactions to which hedge accounting is applied are excluded. (2) In the above Market Value Information on Derivatives, market values of standardized transactions are calculated by using the closing prices at the Tokyo Stock Exchange and others. Market values of the over-the-counter transactions are based on the discounted present value or the option pricing calculation model. - 30 -