Semi-Annual Report 2007

Corporate Data

As of October 31, 2007

Date of Establishment

October 19, 1895

Head Office

23, Tohriyoko-cho, Numazu, Shizuoka, Japan

Number of Branches and Offices

Domestic: 124

Paid-in Capital

30,043 million yen

Mt. Fuji

The Greater Tokyo Area

Kanagawa

Shizuoka
Numazu(Head Office)

Major markets
Shizuoka Prefecture
Kanagawa Prefecture
The Greater Tokyo Area

Contents
Review of Operations (Non-consolidated)
Gross Operating Income
Net Operating Income & Core Net Operating Income
Ordinary Profit & Net Income
Per Share Dividend
Capital Adequacy & Capital Ratio (Domestic Standard)
Loan Balance & Yield on Outstanding Domestic Loans
Consumer Loans
Deposit Balance & Yield on Domestic Deposits
Loan/Deposit Interest Margins (Total and Domestic) & Net Interest Margin
Expenses & OHR (Overhead Ratio)
Individuals’ Assets in Custody (Investments)

1

Status of Non-Performing Loans
Balance and Ratio of Loans Disclosed under the Financial Rehabilitation Law
Disclosure of Problem Assets

6

Financial Section (Preliminary Figures)Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statement of Changes in Net Assets
Non-Consolidated Balance Sheets
Non-Consolidated Statements of Income
Non-Consolidated Statement of Changes in Net Assets

8

Net Branches

16

Review of Operations (Non-consolidated)

The Company’s results for this period are shown below.

41.1
36.2

37.8

Gross Operating Income
Gross operating income indicates a bank’s

33.7

earnings from basic banking operations. This figure
comprises three elements: “Net Interest Income,”
which is based on interest on loan, deposits andso on. “Net Fees and Commissions”; and “Other
Operating Income,” which includes proceeds fromforeign transactions. Thanks to an increase inlucrative consumer loans and higher loan interest
rates following the authorities’ raising of the policyrate, the gross operating income of Suruga Bank forthe reporting six-month first-half period recorded an(¥ Billion)

1H 2004

1H 2005

1H 2006

1H 2007 (FY)

increase of ¥3.3 billion year on year.

23.0

Net Operating Income &Core Net Operating Income
21.0
In spite of an increase in expenses, core net

18.5 18.3
14.5

15.3

operating income rose ¥2.7 billion year-on-year due

16.3 16.9

to a rise in gross operating income on core banking
operations. Net operating income increased ¥4.4
billion year-on-year on a nonconsolidated basis as aresult of the rise in core net operating income and adecrease in provisions to the general reserve forpossible loan losses.
Net operating income = Gross operating income – Expenses – Transfer togeneral reserve for possible loan losses(¥ Billion)

1H 2004
Net operating income

1H 2005

1H 2006

Core net operating income

1H 2007 (FY)Core net operating income = Net operating income (before transfer togeneral reserve for possible loan losses)– Proceeds from bonds, including JGBs
(5 accounts)

1

Review of Operations

Ordinary Profit & Net Income

19.1

As a result of the increase (stated above) in net
operating income, which represents a bank’s profits

15.1

on its conventional banking operations, ordinary
profit rose ¥3.9 billion year-on-year.

10.1

10.0

As an increase in ordinary profit more than offset

10.1

a decrease in net extraordinary profits, primarily

7.8

provisions to reserves (owing to changes in

6.7

accounting standards), net income for the reporting

4.6

six-month period increased more than by ¥100
million year-on-year, marking the third consecutive
year-on-year first-half increase, for an all-time high of(¥ Billion)

1H 2004
Ordinary profit

1H 2005

1H 2006

1H 2007 (FY)¥10.1 billion on a nonconsolidated basis.

Net income

12.0 (plan)
11.0

Per Share Dividend
In view of the fact that the Bank’s businessperformance figures for the first half of fiscal 2007

8.0

(ended Sept. 30, 2007) appear to have exceeded

6.0 (plan)

our initial projections, we have decided to increase

6.0

our interim divided payment from our original
estimate of ¥5.5 per share to ¥6 per share. We

5.0

5.0

intend to increase the term-end dividend from ¥5.5
to ¥6, bringing the Bank’s annual dividends per

2.5
5.0

6.0

share to ¥12, up ¥1 over the previous term.

3.0

2.5
(¥)

2004
Interim

2

2005
Term end

2006

2007

(FY)

New standards

184.7
168.3
152.8
141.3

10.99%

Regulatory capital comprises the basic componentsof Tier I, i.e. capital, capital surplus, and retained
earnings, in addition to supplementary items (Tier II),

10.32%
10.37%

9.75%

11.09%

Capital Adequacy & Capital Ratio(Domestic Standard)

10.55%

notably the general reserve for possible loan losses.
The capital ratio has been calculated according to

9.70%

new standards (Basel II) with effect from the previous

9.14%

term-end. For the reporting first-half period, as a resultof the increase in retained earnings (thanks toaccumulation of past profits), the capital ratio increased
by 0.10 of a percentage point compared with the end(¥ Billion)

1H 2004

1H 2005

1H 2006

Owned capital

Capital adequacy ratio

Tier I ratio

1H 2007 (FY)of the previous first half, to 11.09%. For the Tier II
items, we have posted only the amount of the reservefor possible loan losses. Neither subordinated debt nor
land revaluation gains have been posted.
Capital adequacy ratio = [Owned Capital (Basic items + Supplementary
items) / Risk assets] X 100
Tier I ratio = [Owned Capital (Basic items: Tier I) / Risk assets] X 100

2,275.2
2,221.1

Loan Balance & Yield on Outstanding
Domestic Loans
As a result of strong growth in consumer loans,

2,151.4
2,092.6

the Bank’s loan balance as of the first-half term-end
increased by ¥54.1 billion year-on-year to ¥2,275.2

3.60%

billion. Likewise, the yield on outstanding domesticloans also rose 0.35 of a percentage point over thecorresponding period of the previous year, to 3.60%

3.25%

on a nonconsolidated basis, as a result of an

3.20%

increase in profitable consumer loans and higher

3.17%

interest rates on loans stemming from the BOJ’s
hike in the policy rate in February 2007.

(¥ Billion)

1H 2004
Loan balance

1H 2005

1H 2006

1H 2007 (FY)

Yield on outstanding domestic loans

3Review of Operations

1,524.8
1,418.7

1,343.6

1,251.2

1,616.0
1,405.3

1,700.1
1,469.7
74.7%

Consumer Loans
The term-end balance of consumer loans grew
¥84.1 billion year-on-year, to ¥1,700.1 billion. This
increase came in spite of a deterioration in themortgage loan market resulting from such factors as

72.7%

the steep fall in housing construction starts, which

70.8%

was caused by the implementation of stricter

67.8%

inspections for conformity with mandatory building
standards following a scandal relating to falsificationof the earthquake resistance of a number ofcondominium buildings.
The balance of mortgage loans at the end of the(¥ Billion)

1H 2004

1H 2005

Consumer loans (1H 2006

1H 2007 (FY)

Represents proportion of mortgage loans)first-half period increased by ¥64.3 billion to¥1,469.7 billion year-on-year. The proportion of

Yield on Consumer loans

consumer loans as a percentage of all loans was up
2.0 percentage points at 74.7%.

2,774.3

2,703.8

2,802.6

2,864.1

Deposit Balance & Yield on Domestic
Deposits
The first-half period-end balance of deposits rose
¥61.5 billion year-on-year, to ¥2,864.1 billion on anonconsolidated basis. The balance of deposits from1,948.2

1,893.8

1,972.5

1,990.9

individuals rose steadily throughout the six-month
period, ending the period up ¥18.4 billion year-onyear, at ¥1,990.9 billion. The yield on domestic

0.27%

deposits also increased 0.19 of a percentage point
over the previous first half, to 0.27%.

0.05%

0.04%

0.08%

(¥ Billion)

1H 2004
Deposits (1H 2005
Deposits from individuals)

Yield on domestic Deposits

4

1H 2006

1H 2007 (FY)Loan/Deposit Interest Margins (Total andDomestic) & Net Interest Margin
The loan/deposit interest margin expresses the

1.80

1.89

1.86

1.92
1.92

1.83

reflects the difference between the yield on fund

1.19
0.96

procurement costs (interest paid on funds procured
plus relevant expenses). The net interest margin

1.81

1.70

difference between interest received on loans andhigh proportion of floating rate loans to total loans,

1.05

1.01

investments and total procurement costs. Due to thethe increase in the interest received on loans morethan offset the combination of the rise in interest paidon deposits and the rise in expenses required, mainly(%)

1H 2004
Interest margin between
loans and deposits

1H 2006

1H 2007 (FY)for strengthened marketing capabilities. As a result,Interest margin between
loans and deposits (Domestic)

Net interest margin

the domestic loan/deposit interest margin registered a

1H 2005

year-on-year increase of 0.11 of a percentage point,
to 1.92%.

18.3
1.2

18.9
1.3

18.5
1.2

20.0
1.3

Expenses & OHR (Overhead Ratio)
Due to an increase in investments aimed atstrengthening the Bank’s marketing capabilities,
such as the opening of new branches, expenses

10.1

10.8

10.4

11.7

increased by ¥1.0 billion year-on-year. The OHR(overhead ratio), which indicates business efficiency,
declined by 1.4 percentage points year-on-year, to54.3%

48.7%, thanks to a rise in gross operating income

51.1%
6.9

(see Page 1).

50.1%

6.8

6.8

1H 2004

1H 2005

1H 2006

Personnel expenses

Non-personnel expenses

48.7%
6.9

(¥ Billion)
Taxes

OHR (Overhead Ratio (%)) = Expenses / Gross operating income X 100

1H 2007 (FY)OHR

5

Review of Operations

335.8

Individuals’ Assets in Custody (Investments)
The balance of assets in custody (investment
vehicles) at the first-half term-end rose ¥81.2 billion

125.8

254.5

year-on-year to ¥335.8 billion, due mainly to an
expansion in the product line-up (chiefly investment

100.5

184.9

fund trusts held by individuals and personal pension
insurance) and enhanced marketing capabilities.

75.2
153.3

106.9
104.1

(¥ Billion)

46.7

68.1

35.6
18.8 5.6

35.2 6.3

44.4

1H 2004

1H 2005

1H 2006

Foreign-currency
deposits

JBGs in custody

Mutual funds

4.4 49.3 4.1
0.9*
3.1*

Personal
pension funds

1H 2007 (FY)
Single premium
life insurance*

Status of Non-Performing Loans
Balance and Ratio of Loans Disclosed under
the Financial Rehabilitation Law

152.8
28.5

During the six-month period under review, with

118.1
7.23%
19.1
71.1

the goal of creating a sounder loan asset portfolio,

102.6
15.2

48.8
5.44%

the Bank made efforts to speed up its final disposal

83.1
15.0

46.8
4.57%

34.5

of nonperforming loans and pursue corporate
rehabilitation programs for borrowers. As a result,the non-consolidated balance of claims disclosed inaccordance with the standards stipulated under the
Financial Rehabilitation Law decreased ¥19.5 billion

53.0

50.1

40.5

(¥ Billion)

3.62%
33.5

1H 2004

1H 2005

1H 2006

Substandard claims

Doubtful claims

Bankrupt and substantially bankrupt claims

1H 2007 (FY)

year-on-year, to ¥83.1 billion at the end of the sixmonth reporting period. The ratio of claims disclosed
under the Financial Rehabilitation Law to total claims
improved 0.95 of a percentage point to 3.62%.

Ratio of loans disclosed under the Financial Rehabilitation Law

Ratio of loans disclosed under the Financial Rehabilitation Law (%)= Balance of loans disclosed / Total extended credit X 100

6

Status of Non-Performing Loans

Disclosure of Problem Assets(As of September 30, 2007)(¥ Billion)

Problem Assets Based on the Financial Rehabilitation Law
Target: Total balance of extended credit, except substandard claims (only loans are counted in.)Ratio to total balance of extended credit

Bankrupt and Substantially
Bankrupt Claims
Doubtful Claims
Substandard Claims
Sub-total
Normal assets
Total

3.62%

15.0
34.5
33.5
83.1
2,212.6
2,295.7

Covered bycollateral andguarantees

Covered byreserves

Coverage
ratio

10.2
20.9
17.0
48.1

4.8
11.6
6.5
22.9

100.00%94.32%
70.21%
85.62%

85.62%
Coverage ratio(¥ Billion)

Risk-Managed Loans
Target: Loans

Ratio of risk-managed loans to total loans

3.63%

Loans to bankrupt borrowers
Loans past due
Past due for3 months or longer
Restructured loans
Total
Loan balance(¥ Billion)

Classification under Self-Assessment

1.8
47.3
1.3
32.1
82.7
2,275.2

Target: Total balance of extended credit

Legally bankrupt borrowers
Substantially bankrupt borrowers
Potentially bankrupt borrowers
Borrowers requiring caution:
Borrowers under supervision
Other borrowers requiring caution
Normal borrowers
Total

1.8
13.1
34.5
52.8
210.3
1,982.9
2,295.7

85.91%
Coverage ratio
Total balance of extended credit: Loans, Customers’ Liabilities for Acceptances and Guarantees, Foreign exchange, Securities loaned, Suspense
payments on loans, Accrued loan interests, Private bonds with a guarantee of the Bank.

7

Consolidated Balance Sheets (Unaudited)
Suruga Bank Ltd. and consolidated subsidiaries

Thousands of
U.S. dollars

Millions of yen
As of September 30,

2007

2006

Change from
2006

2007

ASSETS:Cash and Due from Banks
Call Loans and Bills Bought
Monetary Claims Bought
Trading Account Securities
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchanges
Other Assets
Tangible Fixed Assets
Intangible Fixed Assets
Deferred Tax Assets
Customers’ Liabilities for Acceptances and Guarantees
Reserve for Possible Loan Losses

61,88355,040179,651
180,967
396
396
110
237
2,253
2,122
493,791
479,471
2,271,399 2,216,793
3,541
3,313
33,806
31,42642,05042,457
11,917
11,303
18,21418,704
6,303
7,568(36,954)(38,293)

6,843(1,316)
(0)
(127)
131
14,32054,606
228
2,380
(407)
614
(490)
(1,265)
1,339

536,110
1,556,363
3,430
953
19,526
4,277,842
19,677,720
30,683292,870
364,296103,246
157,794
54,607(320,147)

Total Assets

3,088,364 3,011,510

76,85426,755,301

LIABILITIES, MINORITY INTEREST AND NET ASSETS:
Liabilities
Deposits
Call Money and Bills Sold
Borrowed Money
Foreign Exchanges
Other Liabilities
Reserve for Employees’ Bonus
Reserve for Employee Retirement Benefits
Reserve for Retirement Allowances to Directors and Auditors
Reserve for Possible Losses on Repayment of Sleeping Accounts
Reserves under Special Laws
Acceptances and Guarantees

2,861,898 2,801,755
2,308
2,358
6,844
9,117
17
21
23,13822,861
575
547
142
222
2,472
—
285
—
0
0
6,303
7,568

60,143(50)(2,273)
(4)
277
28
(80)
2,472
285
—
(1,265)

24,793,365
20,00059,295
149
200,451
4,983
1,235
21,4172,474
054,607

Total Liabilities

2,903,985 2,844,452

59,53325,157,979

Net Assets
Common Stock
Capital Surplus
Retained Earnings
Treasury Stock

30,043
19,488131,248(1,995)30,04318,640114,699(3,746)—848
16,5491,751

260,272
168,834
1,137,040(17,288)

Total Stockholders’ Equity

178,784

159,637

19,147

1,548,858

4,549
30
4,579
138
876

7,055
3
7,058
17
344

(2,506)27(2,479)121532

39,409262
39,672
1,196
7,593

184,378

167,057

17,321

1,597,321

3,088,364 3,011,510

76,85426,755,301

Net Unrealized Gains (Losses) on Securities, Net of Taxes
Net Deferred Gains (Losses) on Hedging Instruments, Net of Taxes
Total Valuation and Translation Adjustments
Subscription Rights to Shares
Minority Interests
Total Net Assets
Total Liabilities and Net Assets

Notes: 1. Figures less than 1 million yen are omitted.
2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥115.43 per 1 U.S. dollar,
the rate prevailing at September 30, 2007.

8

Consolidated Statements of Income (Unaudited)
Suruga Bank Ltd. and consolidated subsidiaries

Thousands of
U.S. dollars

Millions of yen
For the Six Months Ended September 30,

2007

2006

Change from
2006

2007

Ordinary Income
Interest Income
Interest on Loans and Discounts
Interest and Dividends on Securities
Fees and Commissions
Other Operating Income
Other Income

59,76846,651
41,979
3,160
7,694
3,194
2,228

51,07639,92837,377
1,691
6,943
3,521
682

8,692
6,723
4,602
1,469
751
(327)
1,546

517,793404,154363,679
27,383
66,661
27,67019,307

Ordinary Expenses
Interest Expenses
Interest on Deposits
Fees and Commissions
Other Operating Expenses
General and Administrative Expenses
Other Expenses

41,611
7,434
4,937
4,183
2,655
20,8096,528

35,505
4,732
1,815
3,549
2,533
19,506
5,183

6,106
2,702
3,122
634
122
1,303
1,345

360,487
64,404
42,771
36,24523,002
180,281
56,554

Ordinary Profits

18,157

15,571

2,586

157,305

Extraordinary Profits
Extraordinary Losses

893
2,845

1,388
82

(495)
2,763

7,741
24,654

Income before Income Taxes and Others
Provision for Income Taxes and Others
Deferred Income Taxes
Minority Interest

16,2056,249
716
0

16,877
6,955
(343)
88

(672)
(706)
1,059
(88)

140,393
54,1436,208
6

Net Income

9,238

10,176(938)

80,034

Notes: 1. Figures less than 1 million yen are omitted.
2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥115.43 per 1 U.S. dollar,
the rate prevailing at September 30, 2007.

9

Consolidated Statement of Changes in Net Assets (Unaudited)
Suruga Bank Ltd. and consolidated subsidiaries

Balance at March 31, 2007

CapitalStock

CapitalSurplusMillions of yen
Stockholders’ Equity
Retained
Earnings

30,04318,640123,571

Treasury
Stock

Total
Stockholders’ Equity(3,699)168,555

Changes of Items During the Period
Dividends from Surplus(1,561)(1,561)Net Income

9,238

9,238

Repurchase of Treasury Stock
Disposal of Treasury Stock

847

(97)

(97)

1,802

2,649

Net Changes of Items Other than
Stockholders’ Equity
Total
Balance at September 30, 2007

—

847

7,677

1,704

10,22830,043

19,488131,248(1,995)

178,784

Millions of yen
Valuation and Translation Adjustments
Subscription
Net Deferred
Net Unrealized
Total Valuation
Rights to
Gains (Losses) on
Gains onand Translation
SharesHedging Instruments,
Other Securities
Adjustments
Net of Taxes

Balance at March 31, 2007

8,169

55

8,224

68

Minority
Interests

Total
Net Assets

366

177,215

Changes of Items During the Period
Dividends from Surplus(1,561)Net Income

9,238

Repurchase of Treasury Stock(97)

Disposal of Treasury Stock
Net Changes of Items Other than
Stockholders’ Equity

2,649(3,620)(25)(3,645)

Total(3,620)(25)(3,645)

69

510

7,163

Balance at September 30, 2007

4,549

30

4,579

138

876

184,378

Note: Figures less than 1 million yen are omitted.

10

69

510

(3,065)

Balance at March 31, 2007

CapitalStock

CapitalSurplusThousands of U.S. dollars
Stockholders’ Equity
Retained
Earnings

260,272

161,489

1,070,532

Treasury
Stock

Total
Stockholders’ Equity(32,052)

1,460,242

Changes of Items During the Period
Dividends from Surplus(13,526)(13,526)

Net Income

80,03480,034

Repurchase of Treasury Stock
Disposal of Treasury Stock

7,344

(848)

(848)

15,612

22,957

Net Changes of Items Other than
Stockholders’ Equity
Total
Balance at September 30, 2007

—

7,344

66,507

14,76388,616260,272

168,834

1,137,040(17,288)1,548,858

Thousands of U.S. dollars
Valuation and Translation Adjustments
Subscription
Net Deferred
Net Unrealized
Total Valuation
Rights to
Gains (Losses) on
Gains onand Translation
SharesHedging Instruments,
Other Securities
Adjustments
Net of Taxes

Balance at March 31, 2007

70,773479

71,253593

Minority
Interests

Total
Net Assets

3,172

1,535,261

Changes of Items During the Period
Dividends from Surplus(13,526)

Net Income

80,034

Repurchase of Treasury Stock(848)

Disposal of Treasury Stock
Net Changes of Items Other than
Stockholders’ Equity

22,957(31,363)(216)(31,580)

602

4,421

Total

(31,363)(216)

Balance at September 30, 2007

39,409262(26,556)(31,580)

602

4,421

62,06039,672

1,196

7,593

1,597,321

Notes: 1. Figures less than 1 million yen are omitted.
2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥115.43 per 1 U.S. dollar,
the rate prevailing at September 30, 2007.

11

Non-Consolidated Balance Sheets (Unaudited)
Suruga Bank Ltd.

Thousands of
U.S. dollars

Millions of yen
As of September 30,

2007

2006

Change from
2006

2007

ASSETS:Cash and Due from Banks
Call Loans
Monetary Claims Bought
Trading Account Securities
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchanges
Other Assets
Tangible Fixed Assets
Intangible Fixed Assets
Deferred Tax Assets
Customers’ Liabilities for Acceptances and Guarantees
Reserve for Possible Loan Losses

60,65154,796
179,651
180,967
396
396
110
237
2,253
2,122
494,114478,787
2,275,273 2,221,138
3,541
3,313
25,38623,14233,32833,261
10,687
10,08017,23918,044
6,309
7,574(33,516)(36,074)

5,855(1,316)
(0)
(127)
131
15,32754,135
228
2,244
67
607
(805)
(1,265)
2,558

525,438
1,556,363
3,430
953
19,5264,280,638
19,711,282
30,683219,925
288,730
92,589149,354
54,659(290,360)

Total Assets

3,075,426 2,997,788

77,63826,643,216

LIABILITIES AND NET ASSETS:
Liabilities
Deposits
Call Money
Foreign Exchanges
Other Liabilities
Reserve for Employees’ Bonus
Reserve for Employee Retirement Benefits
Reserve for Retirement Allowances to Directors and Auditors
Reserve for Possible Losses on Repayment of Sleeping Accounts
Reserves under Special Laws
Acceptances and Guarantees

2,864,119 2,802,610
2,308
2,358
17
21
17,093
17,274
524
499
—
79
2,468
—
285
—
0
0
6,309
7,574

61,509
(50)
(4)
(181)
25
(79)
2,468
285
—
(1,265)

24,812,613
20,000149
148,081
4,544—
21,3822,474
054,659Total Liabilities

2,893,126 2,830,419

62,70725,063,904

Net Assets
Common Stock
Capital Surplus
Capital Surplus Reserve
Other Capital Surplus
Retained Earnings
Earned Surplus Reserve
Other Retained Earnings
Reserve for Employee Retirement Benefits
Other Reserve
Balance of Profit to be Carried Forward
Treasury Stock
Total Stockholders’ Equity
Net Unrealized Gains (Losses) on Securities, Net of Taxes
Net Deferred Gains (Losses) on Hedging Instruments, Net of Taxes
Total Valuation and Translation Adjustments
Subscription Rights to Shares

30,043
18,587
18,585
1
130,969
30,043
100,926840
86,532
13,553(1,978)
177,621
4,508
31
4,540
138

30,043
18,585
18,585—
113,638
30,04383,595840
70,032
12,723(1,960)160,307
6,996
48
7,045
17

—
2
—
1
17,331—
17,331—
16,500830(18)17,314(2,488)(17)(2,505)
121

260,272
161,026
161,01312
1,134,621
260,272
874,348
7,277
749,650
117,420(17,136)
1,538,784
39,058273
39,331
1,196

Total Net Assets

182,299

167,369

14,9301,579,311

3,075,426 2,997,788

77,63826,643,216

Total Liabilities and Net Assets

Notes: 1. Figures less than 1 million yen are omitted.
2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥115.43 per 1 U.S. dollar,
the rate prevailing at September 30, 2007.

12

Non-Consolidated Statements of Income (Unaudited)
Suruga Bank Ltd.

Thousands of
U.S. dollars

Millions of yen
For the Six Months Ended September 30,

2007

2006

Change from
2006

2007

Ordinary Income
Interest Income
Interest on Loans and Discounts
Interest and Dividends on Securities
Fees and Commissions
Other Operating Income
Other Income

54,76445,73941,071
3,158
7,311
286
1,427

47,214
39,232
36,683
1,688
6,574
726
680

7,550
6,507
4,388
1,470
737
(440)
747

474,436396,251355,815
27,361
63,3372,480
12,366

Operating Expenses
Interest Expenses
Interest on Deposits
Fees and Commissions
Other Operating Expenses
General and Administrative Expenses
Other Expenses

35,628
7,463
4,937
4,547
164
20,176
3,276

32,065
4,766
1,815
3,822
113
18,989
4,374

3,563
2,697
3,122
725
51
1,187
(1,098)308,658
64,65742,77539,393
1,424
174,798
28,384

Ordinary Profits

19,135

15,148

3,987

165,777

Extraordinary Profits
Extraordinary Losses

890
2,845

1,383
81

(493)
2,764

7,711
24,653

Income before Income Taxes and Others
Provision for Income Taxes and Others
Deferred Income Taxes
Net Income

17,1805,744
1,290
10,145

16,4506,854(407)
10,003730(1,110)1,697
142148,836
49,765
11,17587,895

Notes: 1. Figures less than 1 million yen are omitted.
2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥115.43 per 1 U.S. dollar,
the rate prevailing at September 30, 2007.

13

Non-Consolidated Statement of Changes in Net Assets (Unaudited)
Suruga Bank Ltd.

Millions of yen
Stockholders’ Equity
Capital Surplus

Balance at March 31, 2007

CapitalStock

CapitalSurplusReserve

Other
CapitalSurplus

Total
CapitalSurplus

EarnedSurplusReserve

30,043

18,585—

18,58530,043Retained Earnings
Other Capital Surplus
Total
Reserve for
Voluntary Earned Surplus Retained
Retirement
Reserve Brought Forward Earnings
Benefits

840

70,032

21,487

122,402(1,578)(1,578)

10,145

10,145(16,500)—

Changes of Items During the Period
Dividends from Surplus
Net Income
Provision to Voluntary Reserves

16,500

Repurchase of Treasury Stock
Disposal of Treasury Stock

1

1

Net Changes of Items Other
than Stockholders’ Equity
Total
Balance at September 30, 2007

—

—

1

1

—

—

16,500(7,933)8,566

30,043

18,585

1

18,58730,043840

86,532

13,553130,969

Stockholders’ Equity
Treasury
Stock

Balance at March 31, 2007

(1,953)

Total
Stockholders’Equity169,078

Millions of yen
Valuation and Translation Adjustments
Net Unrealized
Net Deferred
Total Valuation
Gains (Losses) on Gains (Losses) on
and
Available-for-sale Hedging Instruments,
Translation
Securities
Net of Taxes
Adjustments

8,080

58

8,138

Subscription
Rights toSharesTotal
Net Assets

68

177,285

Changes of Items During the Period
Dividends from Surplus(1,578)(1,578)Net Income

10,145

10,145——

Provision to Voluntary Reserves
Repurchase of Treasury Stock

(97)

(97)

(97)

Disposal of Treasury Stock

73

74

74

Net Changes of Items Other
than Stockholders’ Equity
Total
Balance at September 30, 2007
Note: Figures less than 1 million yen are omitted.

14(3,571)(26)(3,598)69(3,528)

(24)

8,543

(3,571)(26)(3,598)69

5,014(1,978)

177,621

4,508

31

4,540

138

182,299

Thousands of U.S. dollars
Stockholders’ Equity
Capital Surplus

Balance at March 31, 2007

CapitalStock

CapitalSurplusReserve

Other
CapitalSurplus

Total
CapitalSurplus

EarnedSurplusReserve

260,272

161,013—161,013260,272

Retained Earnings
Other Capital Surplus
Total
Reserve for
Voluntary Earned Surplus Retained
Retirement
Reserve Brought Forward Earnings
Benefits

7,277

606,707

186,148 1,060,405

Changes of Items During the Period
Dividends from Surplus(13,679)(13,679)

87,89587,895

142,943 (142,943)—

Net Income
Provision to Voluntary Reserves
Repurchase of Treasury Stock
Disposal of Treasury Stock

1212Net Changes of Items Other
than Stockholders’ Equity
Total
Balance at September 30, 2007

—

—

12

12

—

—

142,943(68,727)

260,272

161,01312

161,026

260,2727,277

749,650

117,420 1,134,621

Stockholders’ Equity

Balance at March 31, 2007

Treasury
Stock

Total
Stockholders’Equity(16,921)1,464,770

Thousands of U.S. dollars
Valuation and Translation Adjustments
Net Unrealized
Net Deferred
Total Valuation
Gains (Losses) on Gains (Losses) on
and
Available-for-sale Hedging Instruments,
Translation
Securities
Net of Taxes
Adjustments

70,001

502

70,504

74,216

Subscription
Rights toSharesTotal
Net Assets

593

1,535,868

Changes of Items During the Period
Dividends from Surplus(13,679)(13,679)

Net Income

87,89587,895——

Provision to Voluntary Reserves
Repurchase of Treasury Stock

(848)

(848)

(848)

Disposal of Treasury Stock

634

646

646

Net Changes of Items Other
than Stockholders’ Equity
Total
Balance at September 30, 2007

(30,943)(229)(31,173)602(30,570)(214)

74,014(30,943)(229)(31,173)602

43,443(17,136)

1,538,784

39,058273

39,331

1,196

1,579,311

Notes: 1. Figures less than 1 million yen are omitted.
2. Figures stated in U.S. dollars in this report are translated from Japanese yen, solely for convenience, at the rate of ¥115.43 per 1 U.S. dollar,
the rate prevailing at September 30, 2007.

15

Net Branches
An all-new mileage + banking service that lets users accrue mileage points through bank transactions.

ANA Branch
http://www.surugabank.co.jp/ana/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-029-589 (From overseas: 055-98-02988)
Telephone reception hours 9:30 am - 5:00 pm Monday - Friday(excluding holidays)
A feature-packed financial services website for OCN subscribers

OCN Branch
http://www.surugabank.co.jp/ocn/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-055-175
Telephone reception hours 9:00 am - 5:00 pm Monday - Friday(excluding holidays)
A banking site tailored to women

So-net Branch
http://www.surugabank.co.jp/so-net/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-50-2189
Telephone reception hours 9:00 am - 7:00 pm Monday - Friday(excluding holidays)
9:00 am - 5:00 pm Saturday
Providing access to leading Internet-based financial services

Directbank Branch
http://www.surugabank.co.jp/directbank/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-708-807
Telephone reception hours 9:00 am - 5:00 pm Monday - Friday(excluding holidays)
Catering to B-to-B and B-to-C needs

NetBank Branch
http://www.surugabank.co.jp/docomo/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-17-2038
Telephone reception hours 9:00 am - 5:00 pm Monday - Friday(excluding holidays)
http://www.surugabank.co.jp/alsok/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-243-053
Telephone reception hours 9:00 am - 5:00 pm Monday - Friday(excluding holidays)
Products with free lottery tickets

Dream Direct Branch
http://www.surugabank.co.jp/dream/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-89-1016
Telephone reception hours 9:00 am - 7:00 pm Monday - Friday(excluding holidays)
9:00 am - 5:00 pm Saturday
Direct banking specializing in loans

Direct One Branch
http://www.surugabank.co.jp/directone/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-60-1616
Telephone reception hours 10:00 am - 8:00 pm Monday - Friday
10:00 am - 5:00 pm Saturday
Branch exclusively for system engineers (SEs)

SE Bank Branch
http://www.surugabank.co.jp/sebank/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-803-689
Telephone reception hours 9:00 am - 5:00 pm Monday - Friday(excluding holidays)
Providing access to high value-added business services

e-Business Direct Branch
http://www.surugabank.co.jp/ebusinessdirect/ (24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-185-285
Telephone reception hours 10:00 am - 7:00 pm Monday - Friday(excluding holidays)

16

Printed in Japan