Presentation Materials

FY2007 Interim Consolidated Financial ResultsSony Financial Holdings Inc.
November 16, 20070

Disclaimers:
These presentation materials contain statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Holdings Group (the “SFH Group”). Any statements contained herein that pertain to future operating performance andthat are not historic facts are forward-looking statements. Forward-looking statements may include—but are not limited to—words
such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” “possibility” and similar words that describe
future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or written, arebased on judgments made by the management of the SFH Group, based on information that is currently available to it. As such,these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary substantiallyfrom the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue
reliance on forward-looking statements. The SFH Group disclaims any obligation to revise forward-looking statements in light of new
information, future events or other findings. The information contained in this presentation does not constitute or form part of any
offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any partof it form the basis of or be relied on in connection with any contract or commitment whatsoever. Any decision to invest in or acquire
securities of Sony Financial Holdings must be based wholly on the information contained in the preliminary offering circular issued
or to be issued by Sony Financial Holdings in connection with any such offer and not on the contents hereof.

1

Disclaimer

1Highlights of Group Consolidated Operating
Performance for 1H FY2007

Ordinary
revenues(Billions of yen) 1H FY2006 1H FY2007

Ordinary profit

Ordinary

Life insurance
revenues
business
Ordinary profit
Ordinary
Non-life
revenues
insurance
Ordinary profit
business

404.6
354.7

Bankingbusiness

27.5

SFH

17.8

SFH Group,
consolidated(Billions ofyen)

1H FY2006

Ordinary
revenues
Ordinary profit
Ordinary
revenues
Ordinary profit
Ordinary
revenues
Ordinary profit

319.9
16.3
25.6
0.9
9.6
0.5
6.8
6.5
354.7
17.8

365.7
24.0
27.7
2.0
11.5
1.4
6.9
6.5
404.6
27.5

Change

+45.8
+7.7
+2.1
+1.0
+1.9
+0.8
+0.0
+0.0
+49.9
+9.6

+14%
+47%
+8%
+116%
+20%
+151%
+1%
+0%
+14%
+54%

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

1H FY2007

2

Consolidated ordinary revenues for the Sony Financial Holdings Groupgrew 14% compared to the first half of the previous fiscal year, to ¥404.6
billion, owing to performance increases in all businesses: life insurance,
non-life insurance and banking.
Consolidated ordinary profit also increased ¥9.6 billion compared to thefirst half of the previous fiscal year, to ¥27.5 billion, in line with increases
in all businesses.
Consolidated net income grew ¥5.7 billion compared to the first half of theprevious fiscal year, to ¥16.7 billion.

2

Highlights of Group Consolidated Operating
Performance for 1H FY2007
 In the life insurance business, both the policy amount in force and new

insurance sales (individual life insurance + individual annuities) remained firm,
and general account investment income increased. As a result, ordinary
revenues and ordinary profit both increased.
 In the non-life insurance business, a steady rise in the number of policies,

chiefly for automobile insurance, boosted net premiums written. By
appropriately controlling operating expenses, the net expense ratio improved.
Ordinary revenues and ordinary profit both increased.
 In the banking business, owing to the steady expansion of operations thebalance of customer assets (total deposits + total investment trusts) exceeded¥1 trillion. Interest income increased in line with expanded operations, andordinary revenues and ordinary profit both increased.
 For Sony Financial Holdings Inc., consolidated ordinary revenues grew 14%

compared with the first half of the prior fiscal year, to ¥404.6 billion. Ordinary
profit increased ¥9.6 billion yen, or 54% to ¥27.5 billion, and net income grew
¥5.7 billion yen, or 52% to ¥16.7 billion.
3

3

Highlights of Operating Performance:
Sony Life (Non-Consolidated)
Ordinary
revenues(Billions of yen)

Ordinary profit+14%

Ordinary revenues

365.6

Income from insurance
premiums

319.7

+48%

24.0

16.2
(Billionsof yen)1H FY2006

1H FY2007

Sony Life
 Revenues and profit up compared to 1H FY2006
 New insurance sales up 11% compared to 1H FY2006
 Income from insurance premiums increased, in line withrobust growth in policy amount in force
 General account investment income rose
 Core profit came to ¥13.9 billion
 Lapse and surrender rate increased 0.2 percentage
points to 3.01%

1H
FY20061H
FY2007

319.7

365.6

+45.9

+14%

290.2

318.5

+28.2

+10%

ChangeInvestment income

28.7

44.7

+16.0

+56%

Ordinary expenses

303.5

341.5

+38.0

+13%

Insurance claims andother payments

101.7

117.4

+15.7

+15%

Provision for policy
reserve and others

153.3

164.6

+11.3

+7%

Investment expenses

2.0

9.0

+7.0 +349%

Operating expenses

41.8

45.6

+3.7

+9%

16.2

24.0

+7.8

+48%

Net income

9.9

13.0

+3.0

+31%

Core profit

13.3

13.9

+0.6

+5%

Securities

2,143.6

2,410.9 +267.2+12%

Policy reserve

2,892.2

3,253.5 +361.3+12%

Total net assets/
total net worth

201.8

Ordinary profit

Total assets

3,204.3

228.9

+27.0

+13%

3,607.1 +402.7+13%

Note: The figures above are on a non-consolidated basis. Line item amounts aretruncated below ¥100 million; percentage change figures are rounded.

4First, I will explain the highlights of non-consolidated operating
performance of Sony Life (excluding Sony Life Insurance (Philippines)
Corporation).
Sony Life posted a 14% increase in ordinary revenues compared to thefirst half of the previous fiscal year, to ¥365.6 billion, as the amount of
individual insurance in force remained robust, boosting income frominsurance premiums, and general account investment income increased.
Ordinary profit grew ¥7.8 billion compared to the first half of the previous
fiscal year, to ¥24.0 billion, mainly because of improved general accountinvestment profit.
Owing to higher ordinary revenues, net income expanded ¥3.0 billion
compared to the first half of the previous fiscal year, to ¥13.0 billion.
The Company posted extraordinary losses of ¥1.6 billion, owing mainly to
an increase in the provision for reserve for price fluctuations in the life
insurance business.

4Overview of Performance:
Sony Life (Non-Consolidated)(Billions of yen)
1H FY2006
Policy amount in force *1

1H FY2007

Percentage Change

29,674.3

30,878.7+ 4.1%

488.8

517.4

+5.9 %

113.9

120.5

+ 5.8%

Lapse and surrender rate *1 *2

2.81%

3.01%

+ 0.20 pt

New insurance sales *1

1,693.6

1,879.3+ 11.0%

31.5

31.2

(1.0) %

6.8

6.5

(4.2) %

Income from insurance premiums

290.2

318.5

+ 9.7%

Investment profit

26.7

35.7

+ 33.7%

Core profit

13.3

13.9

+ 4.5%

1,582.8%

1,870.0%+287.2 pt

Annualized premiums from insurance in force *1
Of which, third-sector products

Annualized premiums from new insurance sales *1
Of which, third-sector products

Solvency margin ratio

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
Note:*1 Each figure of policy amount in force, annualized premiums from insurance in force, lapse and surrender rate, new insurance
sales and annualized premiums from new policies is calculated as the total of individual life insurance and individual annuities.
*2 The lapse and surrender rate is calculated without offsetting policies that are reinstated.

5

The slide below shows the principal indicators of Sony Life’s financial
performance.
I will provide additional explanation in later slides, along with past trends.

5

Sony Life Operating Performance (１)Insurance in ForceNew Insurance Sales(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)(Trillions of yen)

Policy amount in force
Number of policies in force

40

30

3.39
26.9

(Trillionsof yen)(Millions of policies)

3.55 3.69
27.8 28.3

3.84 3.99
29.0 29.6

54

4.14 4.28
30.2 30.8

4534

Number of new policies (fiscal year)
Number of new policies (first half)
New policy amount (first half)
New policy amount (fiscal year)

517

3.39

3.42

600

500

3.72
3

+4.1%

512

(Thousandsof policies)

400

3

20

2

2
10

254
1.78

255
247
1.64

250
1.69

1.87

200

1

1

0

300

9/30/04

3/31/05

9/30/05

3/31/06

9/30/06

3/31/07

9/30/07

0

100

0

0

FY2004

FY2005

FY2006

FY2007(1H)Line item amounts are truncated below ¥100 million; numbers of new policies are truncated below 10,000 or 1,000 policies; percentage change figures are rounded.

6

Sony Life’s insurance in force grew steadily during the term. As a result,policy amount in force was up 4.1% from September 30, 2006, to ¥30,8
trillion. The number of policies in force rose 7.4% during the term, to 4.28
million policies.
During the first half, the new insurance sales on a policy amount basis
increased 11.0%, to ¥1.8 trillion. By product, sales of family income
insurance and variable life insurance were brisk. The number of newpolicies expanded 1.9%, to 255 thousand policies.

6Sony Life Operating Performance (2)Annualized Premiums from Insurance in Force

Annualized Premiums from New Insurance Sales(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)(Billions of yen)

600

Annualized premiums from new insurance sales (first half)
Of which, third-sector products (first half)
Annualized premiums from new insurance sales (fiscal year)
Of which, third-sector products (fiscal year)(Billionsof yen)70

Annualized premiums from insurance in force
Of which, third-sector products

500
434.9

450.8

461.7

474.2

488.8

504.6

65.5

63.8

517.4

61.7

60
50

400
40
300
30

30.5
200

100

0

29.3

31.5

31.2

20
98.8

102.8

106.2

109.4

113.9

117.4

120.5

16.1

14.5

10

14.4

7.8

7.1

6.8

6.5

FY04.1H

FY05.1H

FY06.1H

FY07.1H

0
9/30/04

3/31/05

9/30/05

3/31/06

9/30/06

3/31/07

9/30/07

Line item amounts are truncated below ¥100 million.

7

Annualized premiums from insurance in force rose 5.9% from September
30, 2006, to ¥517.4 billion. Of this amount, third-sector products rose
5.8%, to ¥120.5 billion.
Annualized premiums from new insurance sales fell 1.0% compared to
the first half of the previous fiscal year, to ¥31.2 billion. For third-sector
products, this amount fell 4.2%, to ¥6.5 billion.

7

Sony Life Operating Performance (3)Income from Insurance Premiums(Billions of yen)(Billions of yen)
Income from insurance premiums (fiscal year)
Income from insurance premiums (first half)

700

600

Ordinary Profit (Non-Consolidated)

580.5

551.6

40

Ordinary profit (non-consolidated, fiscal year)
Ordinary profit (non-consolidated, first half)

605.5
30

500

23.3

24.0

24.3

400

318.5
300

264.3

282.5

20

17.0

290.2

200

10

16.2

14.8

9.6

100
0

0
FY2004

FY2005

FY2006

FY2007(1H)

FY2004

FY2005

FY2006

FY2007(1H)Line item amounts are truncated below ¥100 million.

8

Income from insurance premiums grew 9.7% compared to the first half ofthe previous fiscal year, to ¥318.5 billion, owing to a robust policy amountin force.
Sony Life's non-consolidated ordinary profit increased ¥7.8 billion
compared to the first half of the previous fiscal year, to ¥24.0 billion, owing
to improved general account investment profiit.

8

Sony Life Operating Performance (4)Core Profit

Embedded Value (EV)Core profit (fiscal year)(Billions of yen)

Value of in-force business
Adjusted net worth
Of which, value of new business in the fiscal year

(Billions of yen)Core profit (first half)

1,000

40

900.5
776.1

800

28.5

30

24.3

24.3
600

15.7
13.3
10

539.3
492.0

20

13.9

Adjusted
net worth

400

261.7

9.3

270.7

200

38.9
0

38.1

34.2

36.7

0

FY2004

FY2005

FY2006

Line item amounts are truncated below ¥100 million.

FY2007(1H)

3/31/04

3/31/05

3/31/06

3/31/07

9/30/07

The assumptions upon which EV is calculated at the end of FY2003, FY2004,
FY2005 and FY2006 differ. For details regarding calculation methods, pleaserefer to the press releases for each of these years.

9

Core profit came to ¥13.9 billion, up ¥0.6 billion compared to the first half ofthe previous fiscal year.
The Company discloses its embedded value at the end of each fiscal year.
At this stage, I will say that as of September 30, 2007, adjusted net worth,which is one of the figures used in this calculation, was ¥270.7 billion, up¥9.0 billion from March 31, 2007.

9

Sony Life Operating Performance (5)Lapse and Surrender Rate*

Solvency Margin Ratio(Individual Life Insurance + Individual Annuities)
(%)

(%)

Lapse and surrender rate (fiscal year)

10

2,000

1,852.0

Lapse and surrender rate (first half)
1,576.0

8

6.32

1,500

5.84

6

1,547.0

1,870.0

1,582.8

1,440.2
1,317.1

5.79
1,000

4

3.16

2.89

2.81

3.01
500

2

0

0
FY2004Note:

FY2005

FY2006

FY2007

9/30/04

3/31/05

9/30/05

3/31/06

9/30/06

3/31/07

9/30/07

The lapse and surrender rate is calculated without offsetting
policies that are reinstated.

10

The lapse and surrender rate was up 0.20 percentage points compared to
the first half of the previous fiscal year, to 3.01%. That is still a very low
level compared with other companies in the same industry.
The solvency margin ratio remained high at 1,870.0%.

10Sony Life Operating Performance (6)Breakdown
Breakdown ofof General
General Account
Account Assets
Assets (September(September 30,
30, 2007,
2007, vs.
vs. March
March 31,
31, 2007)
2007)
2.6%
2.8%
3.1%

2.6%
2.6%
3.1%

23.0%

24.4%

3.2% 0.7%
7.8%

4.3% 0.7%

Other securities
Real estate
Policyholder loans, including commercial loans
Monetary trusts
Foreign stocks
Foreign government and corporate bonds
Japanese stocks
Japanese government and corporate bonds (incl. CBs)
Cash and call loans

7.6%
Notes:
CBs account for slightly more than 10% of general account assets (CBs withingovernment and corporate bonds and CBs within monetary trusts).
Stocks account for slightly less than 10% of general account assets, including
stocks in monetary trusts.

49.2%

50.8%

7.6%

4.0%

3/31/07

9/30/07

11

This is a breakdown of Sony Life’s general account assets as of
September 30, 2007, compared with March 31, 2007.
Looking in real terms at convertible bonds included within Japanesestocks and Japanese government and corporate bonds, as well asJapanese stocks and convertible bonds included within monetary trusts
and convertible bonds, Japanese stocks make up slightly under 10% ofgeneral account assets, while convertible bonds account for slightly morethan 10%.

11

Highlights of Operating Performance:
Sony Assurance
Ordinary
revenues

25.6

Ordinary profit(Billions of yen)

1H FY2006 1H FY2007

27.7

ChangeOrdinary revenues

+8%

25.6

27.7

+2.1

Underwriting income

25.4

27.4

+2.0

+8%

Investment income

0.2

0.2

+0.0

+20%

Ordinary expenses

+8%

24.7

25.7

+1.0

+4%

Underwriting expenses

18.6

19.2

+0.6

+3%

Investment expenses

0.3

0.3

+0.0

+4%

Operating, general andadministrative expenses

6.1

6.5

+0.3

+6%

Ordinary profit

0.9

2.0

+1.0

+116%

Net income

0.7

1.9

+1.2

+162%

Sony Assurance

Securities

49.1

56.9

+7.7

+16%

 Revenues and profit up compared to 1H FY2006

Policy reserves

33.7

39.6

+5.9

+18%

 Underwriting income of ¥27.4 billion, owing toincrease in number of policies for mainstay
automobile insurance

Total net assets/
total net worth

12.4

15.2

+2.8

+23%

Total assets

61.2

73.4

+12.1

+20%

 Stable loss ratio, net expense ratio improved,
pushing ordinary profit up to ¥2.0 billion

Line item amounts are truncated below ¥100 million; percentage change figures
are rounded.

+116%

2.0

0.9
(Billions of yen)

1H FY2006

1H FY2007

 Combined ratio improved 0.7 percentage points,
to 76.4%

12

Next, I will explain the highlights of Sony Assurance’s operating
performance.
Sony Assurance posted an 8% increase in ordinary revenues compared to
the first half of the previous fiscal year, to ¥27.7 billion, owing chiefly tofavorable performance in automobile insurance, which raised net
premiums written.
Ordinary profit rose ¥1.0 billion compared to the first half of the previous
fiscal year, to ¥2.0 billion. In addition to the increase in ordinary revenues,
this increase in ordinary profit was also due to the net loss ratio remaining
on a par with the preceding term and an improvement in the net expense
ratio.
Net income rose ¥1.2 billion compared to the first half of the previous
fiscal year, to ¥1.9 billion.

12

Overview of Performance:
Sony Assurance(Billions of yen)
1H FY2006

1H FY2007

Percentage Change

Direct premiums written

25.1

27.3

+9%

Net premiums written

25.3

27.4

+8%

Net losses paid

11.5

12.4

+8%

Net loss ratio

51.2%

51.1%

0.1 pt improvement

Net expense ratio

25.9%

25.3%

0.6 pt improvement

Combined ratio

77.1%

76.4%

0.7 pt improvement

Solvency margin ratio

971.9%

1,067.7%+95.8pt

890 thousand

980 thousand+10%

Number of policies in force

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
Net expense ratio = Operating expenses related to underwriting ÷ net premiums written
Net loss ratio = (Net losses paid + expenses incurred in surveying damages) ÷ net premiums written
The number of policies in force is the total of automobile insurance and medical and cancer insurance,
which accounts for 99% of net premiums written. These numbers are rounded below 10,000.

13

The slide below shows the principal indicators of Sony Assurance’s
financial performance.
I will provide additional explanation in later slides, along with past trends.

13

Sony Assurance Operating Performance (1)Net Premiums Written andNumber of Policies in Force(Billionsof yen)Other
Personal accident insurance
Automobile insurance
Number of policies in force60

Net expense ratio(Thousandsof policies)

1,500 100

81.6

45.2
930

670

890
25.3

78.8

82.5

49.2

52.3

29.6

30.3

9/30/05

3/31/06

77.1

79.9

76.4

51.2

53.6

51.1

25.9

26.3

25.3

9/30/06

3/31/07

9/30/07

980
1,000

820
30

86.5

80

37.8

Net loss ratio

(%)

50.4

50

40

Combined Ratio

27.4

20

60

48.5

51.9

40
500
20

33.1

34.6

10
0
9/30/04
1H FY2006

0
FY2004

FY2005

1H FY2007

3/31/05

0

FY2006

The number of policies in force is the total of automobile insurance and medical
and cancer insurance, which accounts for 99% of net premiums written.
Most personal accident insurance is medical and cancer insurance.
Line item amounts are truncated below ¥100 million for net premiums written
and rounded below 10,000 for the number of policies in force; percentagechange figures are rounded.

Net expense ratio = Operating expenses related to underwriting ÷ net premiums
written
Net loss ratio = (Net losses paid + expenses incurred in surveying damages) ÷net premiums written

14

In terms of insurance underwriting, as you see here the number of policies
in force increased steadily. The number of policies in force as of
September 30, 2007—the total number of automobile insurance andmedical and cancer insurance policies—was up 10% compared with
September 30, 2006, to 980 thousand policies. Net premiums written grew
8% compared to the first half of the previous fiscal year, to ¥27.4 billion.
The net loss ratio improved 0.1 percentage points compared to the first halfof the previous fiscal year, to 51.1%.
The net expense ratio improved 0.6 percentage points, to 25.3%.
As a result, the combined ratio, which is the sum of the net loss ratio andthe net expense ratio, improved 0.7 percentage points, to 76.4%.

14

Sony Assurance Operating Performance (2)Ordinary Profit (Loss)

Solvency Margin Ratio(Billions of yen)First half

5(%)

Fiscal year

1,500
4

1,224.83

2.0

2

1,095.2

2.0

1,030.6

1,000

1067.7
976.1

971.9

1,009.7

0.9

1

(0.1)

0
FY2004-1

FY2005

FY2006

(0.7)

(1.1)

1H FY2007

500

-2
-3

(2.8)
0

-4

9/30/04 3/31/05 9/30/05 3/31/06 9/30/06 3/31/07 9/30/07-5Line item amounts are truncated below ¥100 million.

15

The steady increase in the number of policies that I mentioned earlier, as
well as appropriate control of operating expenses, enabled Sony
Assurance to continue improving its profitability after having moved into
the black the previous fiscal year.
Owing to a change in the method of calculating the policy reserve for
medical and cancer insurance during the first half, the provision forunderwriting reserve within ordinary expenses decreased. As a result,ordinary profit for the first half of this fiscal year was equal to ordinary
profit entire previous fiscal year, at ¥2.0 billion.
The solvency margin ratio remained at a sound level, amounting to
1,067.7% as of September 30, 2007.

15

Highlights of Operating Performance:
Sony Bank
Ordinary
revenues

Ordinary profit(Billions of yen)

11.5

+20%
9.6

+168%

1.5

0.5
1H FY2006(Billions of yen)

1H FY2007

Sony Bank Revenues and profit both up compared to 1H FY2006
 Interest income increased, as interest on loans rosedue to a higher mortgage loan balance.
 Owing to an increase in deferred income taxes, net
income expanded substantially, to ¥2.0 billion.
 Gross operating profit totaled ¥5.4 billion; the sum of
net interest income of ¥2.4 billion, net fees andcommissions of ¥0.3 billion and net other operating
income of ¥2.6 billion. General and administrative
expenses remained even, at ¥3.8 billion.
 Customer assets were up ¥157.1 billion, comparedwith March 31, 2007 (the largest increase ever on ahalf-year basis), to ¥1,006.0 billion.

1H
FY2006

1H FY2007
ChangeOrdinary revenues

9.6

11.5

+1.9

+20%

Gross operating profit

4.5

5.4

+0.9

+21%

Net interest income

2.0

2.4

+0.4

+24%

Net fees andcommissions

0.1

0.3

+0.1

+144%

Net other operating
income

2.3

2.6

+0.3

+13%

General and administrative
expenses

3.8

3.8

0

0%

Ordinary profit

0.5

1.5

+0.9

+168%

Net income億(円
Securities )

0.1

2.0

+1.8

+1,110
%

391.0

348.3

(42.6)

(11)%

Loans

249.1

319.1

+69.9

+28%

Deposits

682.7

888.4 +205.7+30%

Customer assets

762.7

1,006.0 +243.3+32%

Total net assets/
total net worth

36.1

38.2

+2.1

+6%

Total assets

751.0

966.1 +215.0+29%Line item amounts are truncated below ¥100 million; percentage change figures
are rounded.

16

Sony Bank delivered a 20% rise in ordinary revenues compared to the firsthalf of the previous fiscal year, to ¥11.5 billion. As interest on loans
increased in line with a higher mortgage loan balance, interest income
grew.
Owing to the rise in gross operating profit, ordinary profit increased ¥0.9
billion compared to the first half of the previous fiscal year, to ¥1.5 billion.
In part due to an increase in deferred income tax assets, the company’s
net income expanded substantially, to ¥2.0 billion.

16

Overview of Performance:
Sony Bank(Billions of yen)
1H FY2006

1H FY2007

Percentage change

Gross operating profit

4.5

5.4

+ 22%

General and administrative expenses

3.8

3.8

0%

Net operating profit

0.6

1.5

+ 157%

Ordinary profit

0.5

1.5

+ 168%

Customer assets
Of which, first-half increase

762.7

1,006.0

+ 32%

87.6

157.1

+ 79%

Loans

249.1

319.1

+ 28%

9.6

34.4

+ 256%+ 0.42pt

Of which, first-half increase
Capital adequacy ratio (domestic criteria)
Number of accounts
Of which, first-half increase

10.52%

10.94%

458 thousand

532 thousand+ 16%

28 thousand

41 thousand+ 12 thousandLine item amounts are truncated below ¥100 million; percentage change figures are rounded.

17

The slide below shows the principal indicators of Sony Bank’s financial
performance.
I will provide additional explanation in later slides, along with past trends.

17

Sony Bank Operating Performance (1)Customer Assets (Deposits + Investment Trusts)
and Number of Accounts(Billionsof yen)532

Number of accounts (thousands)
Investment trusts

1,000

1,006.0

Foreign-currency deposits
Yen deposits

900

430

491
458

848.8

401
367

800

762.7
638.2

(Billions of yen)
400

OthersMortgage loans

675.1

319.1
300

284.7

576.3

600
500

Investment
trusts:¥117.6 bn
Foreigncurrency
deposits:¥179.6 bn

313
700

Loans

239.4
471.4

249.1

Mortgageloans:¥311.4bn

Yen deposits:¥708.7 bn
200

172.1

400

Others:¥7.6 bn

126.3

300
100
200

74.2

100
0

0
9/30/04

3/31/05

9/30/05

3/31/06

9/30/06

3/31/07

9/30/07

9/30/04

3/31/05

9/30/05

3/31/06

9/30/06

3/31/07

9/30/07

Amounts are truncated below ¥100 million.

18

As of September 30, 2007, owing to an increase in business, the balanceof customer assets (the total of deposits and investment trusts) exceeded¥1 trillion, largely due to the contribution of increased yen time deposits.
The balance amounted to ¥1,006.0 billion, up ¥157.1 billion (or 18.5%),
from March 31, 2007.
Total yen and foreign currency deposits grew ¥136.0 billion, or 18.1%, to¥888.4 billion.
Investment trusts were up ¥21.0 billion compared with March 31, 2007, or
21.8%, to ¥117.6 billion, and loans were up ¥34.4 billion, or 12.1%, to¥319.1 billion.
On September 30, 2007, accounts numbered 532 thousand, up 41
thousand from March 31, 2007.

18

Sony Bank Operating Performance (2)Gross Operating Profit, General and
Administrative Expenses, Ordinary Profit(Billionsof yen)10

Ordinary profit (fiscal year)
Gross operating profit (fiscal year)
General and administrative
expenses (fiscal year)

Ordinary profit (first half)
Gross operating profit (first half)
General and administrative
expenses (first half)

9.4

Capital Adequacy Ratio(Domestic Criteria)
(%)

20

9.0
7.6

7.0

6.9

15
5.4

5

5.3

4.5

4.5

3.3

3.3

12.58

11.97

11.49
10.55

3.8

10.94

9.24

10

3.8

10.52

2.2
1.80

1.3

1.1

1.5

0.5

0

5
FY2004

FY2005

FY2006

1H FY2007(1.5) (1.6)
0-5Amounts are truncated below ¥100 million.

9/30/04

3/31/05

9/30/05

3/31/06

9/30/06

3/31/07

9/30/07

Note: Capital adequacy ratios as of March 31, 2007 and September 30, 2007 were
calculated based on the standard stipulated in the Financial Services Agency
Public Announcement No. 19 of 2006. The capital adequacy ratio as of
September 30, 2006 was calculated based on the standard stipulated in theformer public announcement.

19

Looking next at profitability, boosted by such factors as higher net interest
income, gross operating profit grew ¥0.9 billion compared to the first half ofthe previous fiscal year, to ¥5.4 billion.
Breaking down gross operating profit, net interest income increased ¥0.4
billion compared to the first half of the previous fiscal year, to ¥2.4 billion,
as a result of a larger balance of investment assets through the expansionof operations. Net fees and commissions grew ¥0.1 billion, to ¥0.3 billion,
as a larger investment trust balance pushed up brokerage fees andcommissions received. Net other income increased ¥0.3 billion, to ¥2.6
billion, as market investment profit improved.
The Bank’s capital adequacy ratio was 10.94%, a sound level.

19

Consolidated Operating Performance Forecast
for Full Fiscal Year (FY2007)(Billions of yen)
FY2004

FY2006

FY2005

FY2007(Forecast)

PercentagechangeConsolidated ordinary revenues

653.2

758.7

759.2

809.0

+ 6.5%

Consolidated ordinary profit

12.2

25.3

18.3

35.0

+ 90.7%

Consolidated net income

6.3

11.5

10.0

21.0

+ 109.6%

Line item amounts are truncated below ¥100 million; changes are rounded.

Consolidated Ordinary Revenues(Billionsof yen)Banking business
Non-life insurance businessLife insurance business

758.7

800

Consolidated Ordinary Profit(Billionsof yen)809.0

Banking business
Non-life insurance businessLife insurance business

40

759.2

35.0

35

653.2

30

600

25.3

25
20

400

18.3
12.2

15
200

10
5

0
FY2004

FY2005

FY2006

FY20070-5FY2004

FY2005

FY2006

FY200720

The Company revised its financial results forecast upward, mainly because
performance during the first half was stronger than initially expected,
principally for ordinary revenues, ordinary profit and net income.
Consequently, we revised our forecast for ordinary revenues upward ¥5.0
billion, to ¥809.0 billion. The ordinary profit forecast was revised upward¥9.0 billion, to ¥35.0 billion. We revised our net income forecast upward¥6.0 billion, to ¥21.0 billion.
In addition to performance increases in all businesses: life insurance, nonlife insurance and banking； general account investment income in the life
insurance segment rose. As a result, though ordinary revenues were
almost as expected, ordinary profit outperformed our forecast released on
October 11 by ¥11.5 billion and net income outperformed this forecast by¥7.7 billion.

20

New Business Progress Update
AEGONSony
SonyLife
LifePlanning
PlanningCo.,
Co.,Ltd.
Ltd.
AEGON
Purposeofofestablishment:
establishment:To
Toestablish
establishananindividual
individualannuities
annuitiesjoint
jointventure
venturewith
withAEGON
AEGONtotosell
selluniqueuniqueindividual
individualPurposeannuitiesvia
viabank
bankteller
tellerwindows
windowsandandLifeplanner
Lifeplannersales
salesemployees.
employees.
annuities

Headoffice:office:9-11,
9-11,Akasaka
Akasaka2-chome,2-chome,Minato-ku,
Minato-ku,Tokyo
Tokyo
HeadEstablished:AugustAugust29,
29,2007
2007
Established:
Commonstock:stock:¥1.0¥1.0billion
billionCommonOwnership:Sony
SonyLife
LifeInsurance
InsuranceCo.,
Co.,Ltd.
Ltd.50%;50%;AEGON
AEGONINTERNATIONALINTERNATIONALN.V.
N.V.50%50%
Ownership:
Presidentand
andRepresentative
RepresentativeDirector:
Director:Shigeru
ShigeruArakawa
ArakawaPresident
Principalbusinesses:
businesses:
Principal(1)Research
Researchandandplanningplanninginvolving
involvingmarket
marketcultivation
cultivationand
andsalessalesininthe
thelifelifeinsurance
insurancebusiness;business;activities
activitiesinvolving
involving(1)
marketresearchresearchandandadvertising
advertisingpromotion
promotionmarket(2)Aiming
Aimingtoward
towardaaFY2008
FY2008start
startofofbusiness,business,prepare
preparefor
forthetheestablishment
establishmentofofaanew
newlifelifeinsurance
insurancecompany
companytoto(2)
developand
andsellsellindividual
individualannuities.
annuities.
develop
SonyBank
BankSecurities
SecuritiesInc.
Inc.
SonyPurposeofofestablishment:
establishment:To
Todevelop
developaalineup
lineupofofsecurities
securitiesproducts
productsincluding
includingstocks
stocksfrom
fromthetheperspective
perspectiveofofmidmid-totoPurpose
long-termasset
assetmanagement
managementfor
forSony
SonyBank
Bankcustomers
customers
long-term
Headoffice:office:17-22,
17-22,Akasaka
Akasaka2-chome,2-chome,Minato-ku,
Minato-ku,Tokyo
Tokyo
HeadEstablished:June
June19,19,2007;2007;operations
operationscommenced
commencedOctober
October11
Established:
Commonstock:stock:¥1.5¥1.5billion
billionCommonOwnership:Sony
SonyBank
BankInc.
Inc.100%
100%
Ownership:
Presidentand
andRepresentative
RepresentativeDirector:
Director:Yasuhiro
YasuhiroSugiura
SugiuraPresident
Principalbusiness:business:Securities
Securitiesbusinessbusiness(online(onlinebrokerage)
brokerage)
Principal（Note）Sony Bank Securities is a consolidated subsidiary, while AEGON Sony Life Planning Co., Ltd. is not included in the scope of
consolidation for the interim consolidated financial results for FY07 as an equity-method affiliate.

21

Sony Life plans to establish a joint venture with AEGON, of theNetherlands, to plan individual annuities. In August, we set up a 50–50
business planning company with AEGON. The planning company isworking toward an operational startup of the new joint venture company inthe upcoming fiscal year.
Also, in June 2007, Sony Bank established a securities company with theaim of offering its clients highly convenient securities investment services.
Sony Bank Securities commenced operations in October.
This concludes the explanation from Sony Financial Holdings.

21

APPENDIX

22

Appendix22

Sony Financial Holdings Group

100%

100%

88%

100%

Sales
channels Consulting sales
 Lifeplanner sales employees Partners (independentagencies) Death protection life insurance

Main products
Targetcustomers
Rankings

Scale1

 Medical insurance, etc.

 Direct sales
 Telephone Internet

 Internet

 Automobile insurance Deposits (yen, foreign currencies) Mortgage loans(risk segmented)
 Medical and cancer insurance

 Investment trusts

 Individuals

 Individuals

 Individuals

 Reliable Insurer: No. 1

 Customer satisfaction,

 Customer satisfaction: No. 3(6/26/07, Weekly Economist)

response to insurance claims:
No. 2 (7/31/07, J.D. Power Asia
Pacific Inc.)

On-line Bank(7/18/07, Gomez)

 Policies in force2： 4.28 mn

 Policies in force: 980 thousand Accounts: 532 thousand Capital3： ¥65.8 bn

 Capital3： ¥40.0 bn

 Capital3： ¥40.0 bn

 Total assets： ¥3,607.1 bn

 Total assets： ¥73.4 bn

 Total assets： ¥966.1 bn

1 As of September 30, 2007, figures for Sony Bank are non-consolidated basis, which does not include those of Sony Bank Securities.
2 Sony Life’s

policies in force are for individual life insurance and individual annuities.

3 The amounts of capital above include capital surplus.

23

Appendix(1)23Key Management Benchmarks (1)Key Management benchmarks¾ Consolidated ordinary revenues, consolidated ordinary profit andconsolidated net income¾ Consolidated (adjusted) ROE
Perspective on consolidated (adjusted) ROE
Sony Financial Holdings GroupSony Life

Sony Assurance

Net increase in EV
plus dividend
Numerator

Denominator

Note: Changes in provision forcontingency reserves and thefuture value of existing policies
are added to net income.

The average of (EV atprevious fiscal yearend minus dividendplus EV at current
fiscal year-end）

Sony Bank

Net income++

Note: The contingency reserveand the future value of existing
policies are added tostockholders’ equity or net
assets.

+ Increase in provision for special
catastrophe reserves (after tax)
+ Increase in reserve for pricefluctuations (after tax)

The average of (netassets + special
catastrophe reserve andreserve for pricefluctuations (after-tax))
as of the previous fiscal
year-end and thecurrent fiscal year-end

Net income++

The average of net
assets as of theprevious fiscal yearend and the current
fiscal year-end

Note: Calculations take dividends and taxes into consideration.

24

Appendix(2)24Key Management Benchmarks (2)(Millions of yen, %)Key Management Benchmarks
 Consolidated ordinary revenues, consolidated ordinary profit

and consolidated net income
 Consolidated adjusted ROESony Life Embedded Value andSony Life Embedded Value andAdjusted ROE
Adjusted ROE

FY2005

FY2006653,259

758,711759, 280

Consolidated ordinary profit

12,26925,377

18 ,354

Consolidated net income

6,375

11,537

10,021

Consolidated adjusted ROE

8.0％

35.1％

15.2％

Sony Assurance Net Income andSony Assurance Net Income andAdjusted ROE
Adjusted ROESony Bank Net Income and ROESony Bank Net Income and ROE

Net Income

Embedded Value
Adjusted ROE（%）

1,000

FY2004

Consolidated ordinary revenues

40%

Net Income

Adjusted ROE（%）
20%

4

ROE(%)

4

20%

900

3

800

3

30%
700

2

10%

2

10%

600
500

20%

1

1

400

0

300

0%

0

0%

10%
200

-1

(1)

100
0

0%
04

05

06
(Fiscal year)

Source: Sony Life
Notes: Calculation of Adjusted ROE
Numerator: Net increase in ＥＶ plus dividend
Denominator: The average of (EV at previous fiscal year-end — dividend +EV at current fiscal year-end）

-2

(10)%
04

05

06
(Fiscal year)

Source: Sony Assurance
Notes: Calculation of Adjusted ROE
Numerator: Net income plus an increase in provision for special
catastrophe reserves (after-tax) and an increase in reserve for pricefluctuations (after-tax)
Denominator: The average of (net assets + special catastrophe reserveand reserve for price fluctuations (after-tax)) as of the previous fiscal yearend and the current fiscal year-end

(2)

(10)%
04

05

06
(Fiscal year)

Source: Sony Bank
Notes：Calculation of ROE:
Numerator: Net income
Denominator: The average of net assets as of the previous fiscal yearend and the current fiscal year-end

25

Appendix(3)25Contacts
Sony Financial
Holdings:

Corporate Communications & Investor Relations Department
Sony Financial Holdings Inc.
TEL： +81-3-5785-1074

26

Contacts

26