AnnualCorporate Data

As of March 31, 2005

Date of Establishment

October 19, 1895

Head office

23, Tohriyoko-cho, Numazu,
Shizuoka, Japan

Number of Branches and offices

Domestic: 119

Paid-in Capital

30,043 million yen

The Greater Tokyo Area

Mt. Fuji

Kanagawa

Shizuoka
Numazu(Head Office)

Major markets
Shizuoka Prefecture
Kanagawa Prefecture
The Greater Tokyo Area

Message from the President

Throughout our history, now, andinto the future, keeping pace withthe times, Suruga Bank pursues
originality in its “concierge”
services for life and business.

Suruga Bank celebrates its 110th anniversary
this year. During the past 110 years since thebank was founded, we have placed the highest
priority on contributing to the community andmeeting the needs of our customers.
Social demands on corporations change overtime, and in the future, we believe it will benecessary to take a broader perspective in fulfilling our social responsibilities, above andbeyond the needs of the community.
Our most basic social responsibility is tocontinuously provide high-quality, uniquelyvaluable services. If Suruga Bank cannot provide
anything unique that is unavailable anywhere
else, we will lose our raison d’être in the eyes ofsociety.
In order to provide unique value, our firsttask is to meet the social demands which apply
to any bank. These include compliance, ethicalstandards of conduct, accountability, andcorporate governance. We believe that anothervital task is to benefit society by contributing to
the community and practicing corporate
philanthropy.

We are confident that we can fulfill our social
responsibilities and meet the expectations of all
our stakeholders, including customers, shareholders and the community, by continuing toprovide customer values and remaining in existence as a company while meeting thoseconditions.
We will continue to sustain an innovative
approach, developing our corporate activities
around the core goal of creating real differences,
not just incremental distinctions. In all of our“concierge” services for life and business, ourmission is to help our customers to make their
dreams a reality and draw up clear timelines for
attaining their goals. Suruga Bank continues topour every effort into the creation of value insociety.
May 19, 2005

Mitsuyoshi Okano
President and Chief Executive Officer

1Review of Operations (Non-consolidated)
The Company’s results for this period are shown below.

Gross Operating Income

Gross Operating Income

58.5

58.5

02/3

03/3

68.2

68.0

04/3

05/3

（Billions of yen）

Expenses & OHR (Overhead Ratio)

The gross operating income indicates the Bank’s
earnings from basic banking operations. This figure
comprises three elements: “Net Interest Income,”
which is based on interest payments on loans; “Net
Fees and Commissions”; and “Other Operating
Income,” which includes proceeds from foreigntransactions. Net interest income and net fees andcommissions both rose year on year on strong
growth in consumer loans and sales of mutual funds
and other products. Overall, gross operating income
decreased ¥0.1 billion to ¥68.0 billion, reflecting the
non-repetition of a ¥3.5 billion gain on the sale ofhousing loans in the previous term.

Total 39.6
1.9
67.7
21.9

Total 36.7
1.7

Total 36.0

1.8

2.0

20.4

20.3

20.7
62.7

15.7

Total 36.4

14.2

13.6

53.4

52.9

14.1

(Billions of yen)

02/3

03/3

04/3

05/3

Expenses & OHR (Overhead Ratio)
The OHR (overhead ratio), an efficiency indicator,
improved 0.5 point year on year to 52.9%, on theincrease in gross operating income and the reduction
in expenses.

OHR (Overhead Ratio) = Expenses / Gross operating income
Personnel expenses
Non-personnel expenses
Taxes
OHR (%)Net Operating Income & Core Net Operating Income
35.7

34.6
30.2

31.3

24.2
21.8
18.1

4.5
(Billions of yen)

02/3

03/3

04/3

05/3

Net operating income = Gross operating income - Expenses - Transfer to general reserve for possible loan losses
Core net operating income = Net operating income (before transfer to general reserve for possible loan losses)- Proceeds from bonds, including JGBs (5 accounts)
Net operating income
Core net operating income

2

Net Operating Income & Core Net
Operating Income
Net operating income refers to what is referred to“Operating profit” in the financial statements ofordinary companies. Core net operating income isnet operating income plus the general reserve forpossible loan losses, after deduction of net proceedsfrom bond-related transactions.
Core net operating income rose ¥1.1 billion year on
year on a ¥700 million increase in core gross operating income and a ¥400 million decrease in expenses.
The core net operating income increased. Net operating income decreased ¥1.0 billion year on year due toa fall in reversal of the general reserve for loan losses
and a decline in proceeds from bond transactions.

Ordinary Profit & Net Income

Ordinary Profit & Net Income
18.3

17.4

10.4
8.6

7.4

8.7

(21.9) (22.8)

Ordinary profit increased ¥800 million year on year,
as a ¥1.0 billion decline in net operating income wasoffset by a ¥1.8 billion fall in the costs of disposal of
non-performing loans. Net income for the period
increased ¥1.6 billion, reflecting a ¥800 million
increase in ordinary profit and ¥1.2 billion in extraordinary loss.

(Billions of yen)

02/3

03/3

04/3

05/3

Ordinary profit (loss)
Net income (loss)

Loan Balance & Yield on Outstanding Domestic Loans
2,004.9

2,034.1

2,072.8

2,129.6
3.19

3.17

3.11

3.06

Loan Balance & Yield on Outstanding
Domestic Loans
As a result of our sales push targeted at individuals
and small-to-medium-sized enterprises, the Bank’s
term-end loan balance increased by 56.8 billion yen
to 2,129.6 billion yen. Likewise, the yield on outstanding domestic loans also increased 0.02% overthe previous year, to 3.19%.

(Billions of yen)

02/3

03/3

04/3

05/3

Loan balance
Yield on outstanding domestic loans (%)

Consumer Loans

Consumer Loans
1,472.7
1,299.5
1,180.2

1,127.4

1,377.8

1,303.6

1,207.9
69.1

995.1

The term-end balance of consumer loans increasedby 94.8 billion yen to 1,472.7 billion yen. The proportion of consumer loans as a percentage of allloans was up 2.7 percentage points at 69.1%.

66.4
63.8

58.8
(Billions of yen)

02/2

03/3

04/3

05/3

Consumer loans (represents proportion of mortgage loans)
Yield on consumer loans (%)

3

Review of Operations

Deposits & Yield on Domestic Deposits

Deposits & Yield on Domestic Deposits

2,664.8

2,673.3

2,702.9

2,767.6

0.14
1,873.7

1,819.7

1,748.8

0.08

1,934.8

0.07
0.05

The balance of deposits rose ¥64.7 billion year on
year to ¥2,767.6 billion, due chiefly to an increase indeposits from individuals. The balance of deposits
from individuals rose ¥61.1 billion to ¥1,934.8 billion. The increase was posted despite unfavorable
business conditions ahead of the official lifting of
remaining unlimited deposit guarantees.

(Billions of yen)

02/3
Deposits (

03/3

04/3

05/3

Deposits from individuals)

Yield on domestic deposits (%)

Interest Margin between Loans and Deposits & Net Interest Margin
1.84
1.77
1.66

1.64

1.59
1.52

1.77

0.99

0.85

1.43

0.78

0.55
(%)

02/3

03/3

04/3

05/3

Interest margin between loans and deposits
Interest margin between loans and deposits (Domestic)
Net interest margin

Owned Capital & Capital Adequacy Ratio (Domestic Standard)
137.4
123.6

146.4

124.1
10.14
9.46

9.53

8.85
8.32
7.70

8.50
7.89

(Billions of yen)

02/3

03/3

04/3

05/3

Capital adequacy ratio = [Owned Capital (Basic items + Supplementary items) /Risk assets] X 100
Tier I capital adequacy ratio = [Owned Capital (Basic items: Tier I) /Risk assets] X 100
Owned capital
Capital adequacy ratio (%)
Tier I capital adequacy ratio (%)

4Interest Margin between Loans andDeposits & Net Interest Margin
The interest margin between loans and deposits is
calculated by subtracting the yield on deposits andthe expense ratio from the yield on outstandingloans. The net interest margin indicates the difference between the yield on total managed funds andtotal procured funds. Due to our promotion of loans
to the retail sector where there is a high interest
margin, especially on consumer loans, the interest
margin between loans and deposits (domestic) saw ayear-on-year increase of 0.07% this period to 1.84%.

Owned Capital & Capital Adequacy Ratio(Domestic Standard)
The Bank’s owned capital comprises the Tier I
capital (including its capital stock, surpluses, andreserves) and Tier II capital (including the generalreserve for possible loan losses). With an increase ininternal reserves, the Bank’s capital adequacy ratio at
the end of this period increased 0.68% over theprevious period to 10.14%. Only the maximum
amount for the reserve for possible loan losses isrecorded as a Tier II item in our statements, withqualifying capital and gains on the revaluation of land
not recorded.

Status of Tier I and Deffered Tax Assets
46.8

137.6
43.2
115.2

114.5

128.6

29.1

53.6

49.8
37.4

28.3

Status of Tier I and Deferred Tax Assets
The ratio of deferred tax assets to Tier I capital fell
8.5 points to 20.6%, showing qualitative improvement in capital adequacy. Tier I capital increased,
and deferred tax assets declined.
A figure is recorded for deferred tax assets that
represents anticipated future returns on taxes already
paid.

20.6
(Billions of yen)

02/3

03/3

04/3

05/3

Tier I
Deferred tax assets
Deferred tax assets/Tier I (%)

Status of Non-Performing Loans
Balance and Ratio of Loans Disclosed
under the Financial Rehabilitation Law
Total 189.9
9.37
27.5

91.1

Total 174.9
23.6
8.52
72.6

Total 142.7

Total 138.0

26.8

25.0

61.6

69.7

6.82
71.3

78.5
54.2

6.42
43.2

（Billions of yen）

02/3

03/3

04/3

05/3

Ratio of loans disclosed under the Financial Rehabilitation Law = Balance of loans disclosed/Total extended credit

Balance and Ratio of Loans Disclosed under
the Financial Rehabilitation Law
Compared to the same time last year, the nonconsolidated balance of loans disclosed in accordance with the disclosure standards provided forunder the Financial Rehabilitation Law was 138.0
billion yen at the end of this year. Of this total,
Bankrupt and substantially bankrupt claims
accounted for 25.0 billion yen, Doubtful claims
accounted for 69.7 billion yen, and Substandard
claims amounted to 43.2 billion yen of the total.

Substandard claims
Doubtful claims
Bankrupt and substantially bankrupt claims
Ratio of loans disclosed under the Financial Rehabilitation Law (%)

Actual Credit Cost
Actual Credit Cost

As a result of the decrease in disposal amounts for
non-performing loans, actual credit costs decreased¥900 million year on year to ¥12.5 billion. The ratioof actual credit costs to the average balance of loans
fell 0.05 point to 0.61%.

39.0
2.00

13.4

12.5

0.66

0.61

04/3

05/3

10.6
0.53
（Billions of yen）

02/3

03/3

Actual credit cost = transfer to general reserve + amount for non-performing loan disposal - collection of claims written off
Ratio of actual credit cost to average loan balance = actual credit cost divided by average loan balance
Actual credit cost
Ratio of actual credit cost to average loan balance (%)

5Status of Non-Performing Loans(As of March 31, 2005)

Disclosure of Problem Assets(Billions of yen)Classification under Self-Assessment
Target: Total balance of extended credit

Legally bankrupt borrowers

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

Borrowers requiring caution

Potentially bankrupt borrowers

25.0

69.7

Target: Loans

Loans to bankrupt borrowers

2.3

Loans past due

89.8

Past due for 3 months or longer

1.3

Restructured

41.9

Total

135.3

100%

69.7

34.7

19.8

78.23%

Substandard Claims

43.2

18.4

7.3

59.61%

Sub-total

138.0

Normal borrowers

1,811.3

Normal assets

2,010.4

Total

2,148.4

Total

2,148.4

Total balance of extended credit: Loans, Customers’ Liabilities for Acceptance and Guarantees, Foreign exchange, Securities loaned, Suspense payments on loans, Accrued loan interests.

Classifications of Borrowers under Self-Assessment
Legally bankrupt borrowers:

Borrowers who have been legally or formally declared bankrupt.

Substantially bankrupt borrowers:

Borrowers who have not been legally or formally declared bankrupt, but
who are suffering from serious management difficulties with no prospectof revitalization, and are therefore substantially bankrupt.

Potentially bankrupt borrowers:

Borrowers who are not bankrupt, but who are suffering from management difficulties, who have not made progress with business improvement plans, and who are found to have a rather high risk of bankruptcy
in the future.

Borrowers requiring caution:

Borrowers with problematic lending conditions such as interest waivers
and the like, borrowers who are having problems fulfilling their obligations and who are already in arrears for repayments of principal or interest, borrowers facing poor or unstable business conditions, andborrowers with a problematic financial status are those that require
future caution.

Borrowers under supervision:

Those borrowers – within the category of borrowers requiring caution –who are three or more months in arrears or have had loans restructured(Borrowers whose loans in part or in full constitute loans requiringsupervision under the Financial Rehabilitation Law.)

Other borrowers requiring caution: Borrowers requiring caution other than those classified as substandard.

6

5.3

Doubtful Claims

185.6

Normal borrowers:

19.7

Risk-Managed Loans

22.3

Borrowers under supervision 56.6

Other borrowers
requiring caution

Covered byreserves Coverage ratio

2.6
Bankrupt and Substantially
Bankrupt Claims

Substantially bankrupt borrowers

Covered by collateraland guarantees

Borrowers whose business results are favorable and who are found not
to have any particular problems in terms of their financial status.

72.9

32.4

76.35%

Loans disclosed in accordance with the Financial
Rehabilitation Law ... 138.0 billion yen

Risk-managed loans to total loans ...135.3 billion yen

6.42％

76.35％

6.35％

77.29％

Ratio to total balance ofextended credit

Coverage ratio

Ratio of risk-managedloans to total loans

Coverage ratio

Overview of write-offs and reserves under self-assessment
Legally bankrupt borrowers andsubstantially bankrupt borrowers:

The amount remaining after the deduction of the amount of collateralconsidered to be disposable and the amount recoverable under guarantees from the loan balance is either written off or is recorded as a reserve
for bad debt.

Potentially bankrupt borrowers:

A portion of the reserve as deemed necessary is provided based on theamount remaining after deduction of the amount of collateral considered
to be disposable and the amount recoverable under guarantees after giving full consideration to the percentage of actual defaults over a fixed
period in the past.

Borrowers requiring caution(Borrowers under supervision andother borrowers requiring caution):

Based on the predicted loss ratio where any necessary adjustments for
future expectations have been incorporated into an appropriate loan loss
ratio calculated for the average remaining period, the anticipated loss
over the next three years in the case of substandard borrowers, and overthe next one year in the case of other borrowers, are recorded as a general reserve for possible loan losses.

Normal borrowers:

Based on the predicted loss ratio where any necessary adjustments for
future expectations have been incorporated into an appropriate loan loss
ratio calculated for the average remaining period, the anticipated loss
over the next one year is recorded as a general reserve for possible loan
losses.

Topics●Suruga Bank becomes a member ofthe Visa network
In November 2004, Suruga
Bank joined Visa International
Service Association as a principal member, with the right toissue the full range of Visa Card
products and offer Visa services at its branches. For
example, holders of our supplementary (family-use)
cash card can enjoy Visa services, and our cash cardoffers a debit service, as well as a credit function
covered by Visa. Our customers have access to over
22,000,000 retail and other outlets worldwide under
the Visa umbrella. This enables us to offer a broader
range of services to depositors and borrowers than
was possible before.

●Launch of zero-interest ordinary
deposit accounts, ahead of the cappingof deposit guarantees at ¥10 million
In March 2005, we launched a zero-interest ordinary
deposit account in which the full sum is protected
within the Japanese deposit insurance system evenafter the capping of remaining deposit guarantees in
April, 2005. This deposit meets the three conditions
under the Deposit Insurance Law stating that suchproducts must 1. have zero-interest rates, 2. offer pay
on demand features, and 3. be used for settlements.
The product also features an original biosecurity
protection option for cautious customers, with palmvein-recognition (vascular “bar” code reading) technology for maximum security.

●Mortgage Loans for Foreigners●“Balance Package”
In October 2004, we began offering our “Balance Package” productthat combines a mortgage loan withdeposits (yen and foreign-currency
deposits).
We offer preferential loan rates
linked to the value of deposits heldby the customer or their relatives
and friends (within certain limits). The greater thevalue of deposits customers have at the Bank in thisway, the better the interest rate on the loan. Whilebuilding up assets, the customer’s loan repayment
sums decline.

In February 2005, we launched a mortgage loan
product for foreigners. We have
prepared information documents in English, Chinese,
Portuguese, Spanish and Korean,
and offer carefully tailoredsupport with funding issues forforeigners living in Japan who
wish to buy property.

(Reference) Registered foreigners
in Japan155
Unit: 10,000 people

168

177

136
107

Mortgage loan

78

85

Normal interest rateapplies
Asset (examples)Loanbalance
Preferential rateapplies

Ordinary deposit
Time deposit
Foreign currency deposit

Total value of
assets undermanagement

1980 1985 1990 1995 1999 2000 2001
Source: Alien registration statistics(Immigration Bureau, Ministry of Justice)7

Topics●Development of our Biosecurity
Protection Option●“Salon de Concierge” branches openin Shinjuku and Yokohama

On March 1, 2005 we began offering
time deposits, mutual funds, government bonds for individuals and individual pension insurance plans withbiosecurity protection technology based on palmvein recognition. We first launched the biosecurity
deposit service in July 2004, to respond to customer
needs for safer and more secure longer-term asset
management. We have now enhanced the functionality of this technology, making it focus on vein patterns in both hands (dual-recognition). We have also
included unlimited loss compensation provisions in
the event of unlawful withdrawals by third parties.

In December 2004, we launched “salon deconcierge” services at our Shinjuku branch and at the
Yokohama branch in January 2005. As at the “salonde concierge” space opened in July 2004 in Shibuya,
Tokyo, our premium customers received personalized specialist advice on life-plan and financial management after asset formation (real estate and otherasset management).

(Note 1)
Full-sum compensation is compensation payable when somebody otherthan the asset holder illegally makes withdrawals from the account. It is nota guarantee of principal in asset management products.

Salon de Concierge Yokohama
Salon de Concierge Shinjuku

Suruga Bank wins “CRM Best Practice Prize”
In November, Suruga Bank was the only financial institution to win a “CRM Best PracticePrize” for 2004, organized by the CRM Conference. (CRM stands for Customer RelationshipManagement)
The CRM Conference is a private, non-profit organization with membership drawn from CRM
professionals, vendors, academics and others. The awards are made for achievements in use of
IT-based CRM. The Conference invites companies, groups and public bodies to submit CRM
models as case studies, and picks the best.
The CRM system at Suruga Bank, the only financial institution to be so honored, enables thedetails of transactions and dialogs with customers to be shared throughout the Bank. Instead ofrepeatedly asking the same questions, we can provide services closely tailored to the customer’s wishes. Through this fusion of technology and service philosophy, we are determined
to further develop our CRM system to enable us to fulfill our “concierge” role in providing thebest products and services to the customer.

8

CSR

Suruga Bank has steadily evolved from a community banking centered on the Numazu,
Shizuoka and Shonan communities into a personal banking serving the greater Tokyo area
and a direct banking organization serving tocustomers all over Japan. In this process, social
expectations of the Bank have changed, and its
social responsibilities are no longer what they
were.
As a financial institution with a strong awareness of its public role, we naturally meet all
expectations placed in us with regard to compliance, ethical behavior, accountability, andcorporate governance. We are also involved in arange of vital community activities such as
contributions to regional development, support
for the arts and philanthropy. While meetingthese demands, by continuing to deliver superior customer services and maintain our profilein the local economy, we will carry out oursocial responsibilities, meeting the expectationsof shareholders, our community, our employees, and stakeholders.

9

CSR

●Corporate Governance
Basic Policy
To hasten and clarify management strategy-making, Suruga Bank considers more effective
corporate governance to be a priority. By improving our record in compliance, disclosure,accountability and risk management, we are creating a management model that puts customers, shareholders and other stakeholders first.

Auditing System
Suruga Bank has a traditional corporate governance system based on corporate auditors. We
have established an internal audit department separate from the headquarters organization
to further strengthen internal controls. As of March 31, 2005, three of our ten directors,
and two of our four corporate auditors, were external.

●Compliance
Basic Policy
As a bank with a public mission and social responsibilities, we take compliance very seriously. In a financial environment of hastening liberalization and globalization, banks are
expected to operate on a basis of maximum accountability and transparency. In response,
we have positioned compliance as a top management priority and are continuously engagedin efforts to firm up and refine our compliance posture. Our in-house compliance procedures include an ethical code, a code of conduct and compliance regulations. In addition
we have made available our manual of business guidelines in digital format, which featurecase studies to offer an easy-to-understand approach to rules and regulations that must be
observed by all employees, regardless of rank, in the course of their work. These rules canbe accessed by all staff through their computer terminals.

Enhancing Corporate Ethics and Compliance
Basic compliance policies are drawn up at the Boardof Directors and Executive Committee level, and wehave set up a compliance committee as an advisory
body. To strengthen compliance, we have drawn up
an annual compliance program featuring e-learning,
e-newsletters and group training sessions, with
progress reviews. Based on the compliance programand under the supervision of the management planning department’s compliance framework, all compliance managers and internal officers have been
deployed in all of the Bank’s offices and branches,enabling us to respond swiftly and appropriately tocompliance issues as they arise.
10

Ethical Code (abstract)
1. Be aware of the Bank’s public role
Always be aware of the Bank’s
public nature and social mission

2. Observe the law
Observation of all laws andregulations

3. Accountability
Sound management based on
accountability of individual
employees

4 Corporate conduct
Behave in a rigorously correct
and fair way

●Environmental Initiatives
We are committed to developing financial products that considering theenvironment, and to engaging in environment protection activities.
Suruga Bank Environmental Policy
1. By providing environment-friendly financial products and services,
we support those of our customers who are involved in environmental protection activities and contribute to improvement of the local
environment
2. We work to continuously upgrade environment management systems
and prevent environmental pollution
3. We will abide by environmental laws and regulations, and comply
with other environmental requirements which Suruga Bank accepts
4. We have set environmental goals and targets, and regularly review
progress
5. We take every measure to familiarize all our employees, and others
working at the Bank, with these basic policies, and to operate in anenvironment-friendly way
6. We publicly disclose details of these policies(compiled June 1, 2005)

Environmental Management System (EMS)
Suruga Bank is proactively engaged in environmental protection. In 2000, the Bank’s Suruga
Daira headquarters acquired ISO14001 certification. To effectively harness the benefits ofthis standards, we have set up an environmental management system headed by the CEO
and operated under the guidance of the ISO office. Environmental measures undertaken
under this program include reduction of volumes of copying paper used and cuts in electricity consumption.

●Customer Relationships Based on Reliable Service
To contribute to the rehabilitation of struggling smaller firms and the revitalization of theregion, we offer startup support, management consultation, and corporate rehabilitation services to SMEs and customers who are sole proprietors. We have also improved our asset assessment and risk management systems, to create a more stable operating base and raise profitability.
By providing high-quality comprehensive financial services, we are determined to meet our
obligations as a regional financial institution to fulfill our social mission and responsibilities.
11

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)
Providing access to leading Internet-based financial services

Softbank Branch
http://www.surugabank.co.jp/softbank/(24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-708-807
Telephone reception hours 9:00 am - 7:00 pm Monday - Friday(excluding holidays)

9:00 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 - 7:00 pm Monday - Friday(excluding holidays)

9:00 am - 5:00 pm Saturday

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

Japan’s first direct branchDream 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(excluding holidays)

10:00 am - 5:00 pm Saturday

Providing access to high value-added business loan 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 - 8:00 pm Monday - Friday(excluding holidays)
Catering to B-to-B and B-to-C needs

NetBank Branch
http://www.surugabank.co.jp/sofmap/(24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-89-5189
Telephone reception hours 9:00 am - 5:00 pm Monday - Friday(excluding holidays)
http://www.surugabank.co.jp/axa-direct/(24 hours a day, 365 days a year)
Toll free (from within Japan only): 0120-788-017
Telephone reception hours 9:00 am - 7:00 pm Monday - Friday(excluding holidays)

12

9:00 am - 5:00 pm SaturdayFinancial Section
Consolidated Balance Sheets

14

Consolidated Statements of Income

15

Consolidated Statements of Stockholders’ Equity

16

Consolidated Statements of Cash Flows17

Notes to Consolidated Financial Statements

18

Report of Independent Auditors

26

Non-Consolidated Balance Sheets

27

Non-Consolidated Statements of Income

28

Non-Consolidated Statements of Stockholders’ Equity

29

Notes to Non-Consolidated Financial Statements

30

Report of Independent Auditors

32

13

Consolidated Balance Sheets
Suruga Bank Ltd. and consolidated subsidiaries
Thousands of
U.S. dollars(Note 2)Millions of yen

2005

2004

Change from
2004

2005

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
Premises and Equipment
Deferred Tax Assets
Customers’ Liabilities for Acceptances and Guarantees
Reserve for Possible Loan Losses

71,620217,982
404
500
1,868
464,330
2,123,505
705
27,336
51,59928,9799,002(43,686)

66,577141,0069
43
1,028
513,662
2,066,868
677
29,00551,53938,153
10,036(41,918)

5,043
76,976395
457
840(49,332)
56,63728(1,669)60(9,174)(1,034)(1,768)

666,915
2,029,818
3,768
4,655
17,401
4,323,773
19,773,772
6,571
254,555
480,490
269,850
83,833(406,806)

Total Assets

2,954,148

2,876,690

77,45827,508,600

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS’ EQUITY:
Liabilities
Deposits
2,766,312
Negotiable Certificates of Deposit—
Borrowed Money
9,248
Foreign Exchanges
7
Other Liabilities
26,171
Reserve for Employees’ Bonus
518
Reserve for Employee Retirement Benefits
487
Reserves under Special Laws
0
Acceptances and Guarantees
9,002

2,702,336
6,000
9,166
15
18,893579
331
010,036

63,976(6,000)
82
(8)
7,278
(61)
156
—
(1,034)25,759,497—
86,124
66
243,705
4,824
4,539
0
83,833

Total Liabilities

2,811,748

2,747,360

64,38826,182,592

287

238

49

2,674

Stockholders’ Equity
Common Stock
Capital Surplus
Retained Earnings
Net Unrealized Gains (Losses) on Securities, Net of Taxes
Treasury Stock

30,043
18,585
93,136
4,935(4,587)30,043
18,586
83,735
1,354(4,627)

—
(1)
9,401
3,581
40

279,758
173,068
867,271
45,954(42,719)

Total Stockholders’ Equity

142,112129,091

13,021

1,323,334

2,954,148

2,876,690

77,45827,508,600

As of March 31,

Minority Interest

Total Liabilities, Minority Interest and Stockholders’ Equity
See notes to consolidated financial statements.

14

Consolidated Statements of Income
Suruga Bank Ltd. and consolidated subsidiaries
Thousands of
U.S. dollars(Note 2)Millions of yen

For the Years Ended March 31,

2005

2004

Change from
2004

2005

Ordinary Income
Interest Income
Interest on Loans and Discounts
Interest and Dividends on Securities
Interest on Call Loans and Bills BoughtInterest on Receivables Under Resale Agreements
Interest on Deposits with Banks
Other Interest Income
Fees and Commissions
Other Operating Income
Other Income

90,39069,931
66,718
3,076
49
0
1
85
11,025
7,605
1,828

89,546
66,32564,457
1,776
35
1
0
53
10,325
11,688
1,207

844
3,606
2,261
1,300
14
(1)
1
32
700
(4,083)621

841,701
651,194621,275
28,643462
5
9796
102,666
70,81817,022

Ordinary Expenses
Interest Expenses
Interest on Deposits
Interest on Negotiable Certificates of Deposit
Interest on Call Money and Bills Sold
Interest on Borrowings and Rediscount
Other Interest Expenses
Fees and Commissions
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Transfer to Reserve for Possible Loan Losses
Losses on Write-offs of Loans
Others71,353
4,400
1,461
1
0
157
2,780
6,511
5,659
37,273
17,507
7,638
6,750
3,118

71,580
4,362
1,953
5
0
190
2,213
6,098
5,687
37,54817,883
1,533
13,549
2,801

(227)
38
(492)
(4)
0
(33)
567
413
(28)
(275)
(376)
6,105
(6,799)317

664,429
40,977
13,60612
0
1,467
25,89060,63752,702
347,087
163,025
71,13162,85629,037

Ordinary Profits

19,037

17,965

1,072

177,272

Extraordinary Profits
Gains on Dispositions of Premises and Equipment
Recoveries of Written-off Claims
Other Extraordinary Profits
Extraordinary Losses
Losses on Dispositions of Premises and Equipment
Other Extraordinary Losses

1,403
337
1,044
20
1,469
630
839

1,251
244
686
321
2,227
1,386
840

152
93
358
(301)
(758)
(756)
(1)

13,066
3,144
9,728
193
13,685
5,867
7,817

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

18,970
1,369
6,740
125

16,990
523
7,134
137

1,980
846
(394)
(12)

176,653
12,74862,762
1,172

Net Income

10,735

9,194

1,541

99,970See notes to consolidated financial statements.

15

Consolidated Statements of Stockholders’ Equity
Suruga Bank Ltd. and consolidated subsidiaries
Thousands of
U.S. dollars(Note 2)Millions of yen

Change from2004

For the Years Ended March 31,

2005

2004

Capital Surplus
Balance of Capital Surplus at Beginning of Year
Increase
Gains on Sales of Treasury Stock
Decrease
Losses on Sales of Treasury Stock

18,586——00

18,585
0
0
—
—

1
(0)
(0)
0
0

173,070——2
2

Balance of Capital Surplus at End of Year

18,585

18,586(1)

173,068

Retained Earnings
Balance of Retained Earnings at Beginning of Year
Increase
Net Income
Decrease
Dividends
Bonus for Directors and Corporate Auditors
Losses on Sales of Treasury Stock

83,735
10,735
10,735
1,334
1,295
30
8

75,867
9,194
9,194
1,326
1,296
30
—

7,868
1,541
1,541
8
(1)
—
8

779,729
99,97099,97012,427
12,066279
81

Balance of Retained Earnings at End of Year93,136

83,7359,401

867,271

See notes to consolidated financial statements.

16

2005

Consolidated Statements of Cash Flows
Suruga Bank Ltd. and consolidated subsidiaries
Thousands of
U.S. dollars(Note 2)Millions of yen

For the Years Ended March 31,

Change from
2004

2005

2004

18,970
7,282
1,768
—
(61)
972
(20)
(30)
(69,931)
4,400
(911)
(66)
292

16,9908,084(2,813)
(220)
(40)
1,595
—
(30)
(66,325)
4,362(2,355)
(54)
1,142

1,980
(802)
4,581
220
(21)
(623)
(20)
—
(3,606)
38
1,444
(12)
(850)

176,653
67,812
16,467
—
(570)
9,057
(193)
(279)
(651,194)
40,977(8,486)
(621)
2,722

(456)
(56,637)
63,975(6,000)82(1,668)(77,370)(28)(8)
69,690(3,984)
7,892

445(39,950)
29,7076,000(1,692)(2,467)49,27082
766,118(4,611)(4,044)(901)(16,687)
34,268(12,000)
1,774
799(126,640)
(110)
(15)
3,572
627
11,936(4,252)(527,397)
595,730(55,871)770(15,536)(720,464)
(266)
(79)
648,949(37,106)
73,496(41,848)

59,204(101,052)(389,684)

(893)

(104)

(789)

(8,321)Net Cash Provided by (Used in) Operating Activities(42,741)

59,099(101,840)(398,005)

Cash Flows from Investing Activities
Purchase of Securities
Proceeds from Sales of Securities
Proceeds from Redemption of Securities
Increase in Money Trusts
Decrease in Money Trusts
Purchase of Premises and Equipment
Proceeds from Sales of Premises and Equipment(768,256)
81,013
743,473(773)—(8,621)644(852,488)
32,577
750,539—
16(9,243)899

84,232
48,436(7,066)
(773)
(16)
622
(255)

(7,153,892)
754,387
6,923,115(7,204)—(80,279)
6,002

Net Cash Provided by (Used in) Investing Activities

47,480(77,698)

125,178

442,129

Cash Flows from Financing Activities
Dividends Paid
Purchase of Treasury Stock
Proceeds from Sales of Treasury Stock(1,295)(173)
104(1,296)
(229)
2

1
56
102

(12,066)(1,620)970

Net Cash Used in Financing Activities(1,365)(1,524)

159(12,716)

Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year

1
3,374
56,446(15)(20,138)
76,58416
23,512(20,138)

15
31,423525,619

Cash and Cash Equivalents at End of Period

59,82056,4463,374

557,042

Cash Flows from Operating Activities
Income before Income Taxes and Others
Depreciation and Amortization
Increase (Decrease) in Reserve for Possible Loan Losses
Increase in Reserve for Possible Losses on Sales of Loans
Increase in Reserve for Employees’ Bonus
Increase in Reserve for Employee Retirement Benefits
Gain on Contribution of Securities to Employee Retirement Benefit Trusts
Bonus for Directors and Corporate Auditors
Interest Income
Interest Expenses
Loss (Gain) on Investment Securities, Net
Loss (Gain) on Money Trusts, Net
Loss (Gain) on Sales of Premises and Equipment
Changes in Operating Assets and Liabilities:
Trading Securities
Loans
Deposits
Negotiable Certificates of Deposit
Borrowings Excluding Subordinated Debt
Due from Banks Other Than BOJ
Call Loans
Foreign Exchange Assets
Foreign Exchange Liabilities
Interest Received
Interest Paid
Other, Net
Subtotal
Income Taxes Paid2005

See notes to consolidated financial statements.

17

Notes to Consolidated Financial Statements
Suruga Bank Ltd. and consolidated subsidiaries

1. Summary of Significant Accounting Policies(f) Derivatives(a) Basis of preparation

Derivatives positions are stated at their market value as of the fiscal
year-end.

The accompanying consolidated financial statements of Suruga Bank
Ltd. (the “Bank”) and consolidated subsidiaries are prepared on thebasis of accounting principles generally accepted in Japan, which are
different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards, and arecompiled from the consolidated financial statements prepared by theCompany as required by the Securities and Exchange Law of Japan.
For the convenience of readers outside Japan, certain items presented in the original statements have been reclassified andrearranged.
Certain reclassifications of the prior year’s consolidated financial
statements and the related footnote amounts have been made to conform with the presentation in the current year.

(b) Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Bank and its significant subsidiaries and certain affiliates, which are as follows:
Suruga Business Service Co., Ltd.
Suruga Staff Service Co., Ltd.
A.P.I. Co., Ltd.
Suruga Capital Co., Ltd.
Suruga Computer Service Co., Ltd.
Suruga Card Co., Ltd.
Suruga Credit Service Co., Ltd.
All significant intercompany accounts and transactions have been
eliminated in consolidation.

(c) Trading account securities
Trading account securities are stated at their market value as of the
fiscal year end.

(d) Investment securities
Debt securities being held to maturity are stated at amortized costcomputed by the moving-average method.
Other securities (available-for-sale securities) whose current value
can be estimated are stated at their market value as of the fiscal year
end and other non-marketable securities are stated at cost or amortizedcost computed by the moving-average method.
Unrealized gain or loss on available-for-sale securities areincluded in shareholders’ equity, net of income taxes.

(g) Premises and equipment
Depreciation of premises and equipment of the Bank is computedby the declining-balance method at rates principally based on thefollowing estimated useful lives:
Buildings

15 years to 50 years

Equipment and furniture

4 years to 20 years

Costs of software developed or obtained for internal use are amortized by the straight-line method over an estimated useful life of 5 years.
Certain subsidiaries apply the straight-line method for the depreciation of premises and equipment.

(h) Reserve for possible loan losses
The reserve for possible loan losses of the Bank is provided in accordance with the policies regarding write-offs and reserve standards stipulated in “Auditing of Write-offs and Loan Loss Provisions” issued as partof the “Fourth Report by the Auditing Subcommittee for Banks andOther Financial Institutions” by the Japanese Institute of Certified
Public Accountants. The reserve for loans to borrowers who are classified as substantially bankrupt or who are bankrupt in the formal legal
sense is provided based on the amount remaining after deduction of theamount of their collateral considered to be disposable and of the amountrecoverable under guarantees.
In addition, a reserve is provided for loans to borrowers who,
although not actually bankrupt in the legal sense, are experiencing serious management difficulties and whose failure is imminent. In suchcases, a portion of the reserve is provided based on the amount remaining after deduction of the amount of their collateral considered to be disposed and of the amount recoverable under guarantees, and the balanceof this reserve is provided after giving full consideration to the amountthe borrower is capable of repaying. In the case of all other loans, thereserve is based on the percentage of actual defaults over a fixed period.
For claims of “substantial bankruptcy” and “legal bankruptcy,” anamount exceeding the estimated value of the collateral or of the guarantees deemed uncollectible is charged off. For the years ended March 31,
2005 and 2004, the amounts deducted were ¥11,331 million(US$105,513 thousand) and ¥16,885 million, respectively.
Provisions for possible loan losses at the consolidated subsidiaries
have been made as deemed necessary with reference to the historicalloan loss experience of these companies.

(i) Reserve for employees’ bonuses(e) Securities in money trusts
Securities included in money trusts are stated by the same method as
those described in (c) and (d) above.

18

The reserve for employees’ bonuses is provided for the payment ofbonuses to employees, an estimate of which is determined as of thebalance sheet date.

(j) Reserve for possible losses on sales of loans(l) Hedge accounting

The reserve for possible losses on sales of loans provides for contingent losses arising from any decline in the market value of the collateral posted on corporate mortgage loans sold to the Cooperative Credit
Purchasing Company, Ltd.

The Bank applies the deferred method to account for its derivative
instruments which hedge the interest rate risk on various financial
assets and liabilities in accordance with the general provisions of“Accounting and Auditing Treatment of Accounting Standards for
Financial Instruments in the Banking Industry” (JICPA Industry Audit
Committee Report No.24). Effective the year ended March, 2005, thegeneral provisions of JICPA Industry Audit Committee Report No.24
are applied. Under the general provisions, the effectiveness of a fairvalue hedge is assessed by each of identified (i) group of hedge
deposits, loans and similar instruments and (ii) corresponding group ofhedging instruments such as interest rate swaps in the same maturity
bucket. Also, under the general provisions, the effectiveness of a cash
flow hedge is assessed based on the correlation between a base interest
rate index of the hedged cash flow and that of the hedging instrument.

(k) Pension and severance costs
Accrued pension and severance costs is provided for the future paymentof employees’ retirement benefits based on estimated amounts of theactuarially calculated retirement benefit obligation and the pension plan
assets. Prior service cost is amortized by the straight-line method over 5
years. Net actuarial gain (loss) is amortized by the declining-balancemethod over 13 years commencing the year following the year in which
the gain or loss is incurred. The unrecognized net retirement benefit
obligation at April 1, 2000, the date on which the new accounting standard was adopted is being amortized by the straight-line method over a
period of 5 years.
Based on the approval received from the Ministry of Health,
Labor and Welfare on March 1, 2004 with respect to its application
for an exemption from the obligation for retirement benefits related topast employee services, the Bank paid an amount equivalent to theminimum pension liabilities to the Government on August 27, 2004 to
be released from paying the remaining substitutional portion of thebenefits to the pension plan beneficiaries.
(Changes in accounting policies)
Until the fiscal year ended March 31, 2004, the excess fair value ofthe plan assets over the benefit liabilities of the pension plan(“Unrecognized plan assets”), which resulted from actuarial gains
such an excess of actual return over expected return on plan assets or again on plan amendment due to reduction of plan benefits, had notbeen recognized as an asset or a gain in accordance with Note 1 (1) tothe “Accounting Standards for Retirement Benefits” (BusinessAccounting Deliberation Council dated June 16, 1998). On March 16,
2005, the Accounting Standards for Retirement Benefits was amended
and recognition of the former unrecognized plan assets as an asset or again was permitted effective the fiscal year ended March 31, 2005 asan early adoption. Effective the year ended March 31, 2005,“Guidelines on Interpretation of Amendment of Accounting Standards
for Retirement Benefits”(ASBJ Guidelines No.7, dated March 16,2005) was adopted, and the former unrecognized plan assets allocatedto actuarial gains were recognized as reduction from expenses. As aresult, the reserve for employee retirement benefits decreased by ¥111
million and income before income taxes increased by ¥111 million.

In addition, deferred hedge gains and losses on the macro hedges
recognized in the previous periods are amortized as interest income or
expenses over the remaining maturity (5 years of the hedging instruments in accordance with the regulations set out in the “Accounting
and Auditing Treatment of Preliminary Accounting Standards for
Financial Instruments in the Banking Industry” (JICPA Industry Audit
Committee Report No. 15).
“Macro hedge” refers to the management of interest rate risk inwhich overall interest rate risks inherent in loans, deposits, and otherinterest earning assets and interest-bearing liabilities are managed on a
net basis using derivatives. The unamortized amounts of GrossDeferred Hedge Losses and Gains on the macro-hedge method at
March 31, 2005 were ¥409 million and ¥218 million, respectively.
The deferred method of hedge accounting is applied to transactions to hedge against the foreign exchange fluctuation risks associated with monetary claims and liabilities denominated in foreign
currencies, in accordance with the regulations set out in the“Accounting and Auditing Treatment of Accounting Standards for
Foreign Currency Transactions in the Banking Industry” (JICPA
Industry Audit Committee Report No. 25). The effectiveness of currency swap and foreign exchange swap transactions is assessed bycomparing foreign currency position of the hedged assets or liabilities
with that of the hedging instruments.

(m) Consumption tax
Consumption tax and local consumption tax of the Bank and its
domestic consolidated subsidiaries are excluded from the transaction
amounts presented. The portions of consumption tax and local consumption tax paid on the purchases of premises and equipment which
are not deductible as tax credits have been included in other assets andare being amortized over a five-year period.

19

(n) External-based taxation
Effective the year ended March 31, 2005, with the implementation of“Revised local taxes” (March 2003, Law No. 9) on March 31, 2003,
corporate enterprise taxes, which were previously levied solely on thebasis of earnings, are now also levied partially on the basis of valueadded and capital amount. Accordingly, the value-added input andcapital input portions of enterprise tax for the year ended March 31,
2005 were treated as general and administrative expenses in accordance with Practical Guidance Report No.12, “Practical Treatment for
Presentation of External Based-Corporate Enterprise Taxes in theStatement of Operations” issued by the Accounting Standard Board ofJapan. The related enterprise taxes for the year ended March 31, 2005
were ¥218 million.

2. Japanese Yen and U.S. Dollar Amounts
The Japanese yen amounts in the accompanying consolidated financial
statements are presented in millions, with fractions omitted.
Amounts stated in U.S. dollars are translated from Japanese yenamounts, solely for convenience, at ¥107.39 = U.S.$1.00, theexchange rate prevailing on March 31, 2005. The translation should
not be construed as a representation that Japanese yen could be converted into U.S. dollars at the above or any other rate.

3. Loans and Bills Discounted(1) Loans and bills discounted at March 31, 2005 and 2004 included
the following:
Millions of yen
2005
2004

...............................................

Loans to companies underbankruptcy procedures¥

Delinquent loans
Loans past due 3 months or more
Restructured loans
Total

90,970 84,863
1,390
1,453
41,900 52,855¥ 136,753 ¥ 143,612

Thousands of
U.S. dollars
2005

Loans past due for 3 months or more are classified as such when 3months or more have elapsed since the due date without the paymentof principal or interest. Loans to companies under bankruptcy procedures and delinquent loans are not included in this category.
Restructured loans include loans whose repayment conditions havebeen renegotiated, (such as by reducing the rate of interest or by providing a grace period for the payment of principal/interest, etc.) to support the rehabilitation of certain borrowers who are encountering
financial difficulties, with the intention of ensuring the recovery of theloans. Excluded from this category are loans to companies under bankruptcy procedures, delinquent loans and loans past due for 3 months or
more.
(2) Bills discounted is accounted for as financial transactions on thebasis of “Accounting and Auditing Treatment of Accounting Standard
for Financial Instruments in Banking Industry” (JICPA Industry Audit
Committee Report No. 24). The Bank has rights to sell or pledge certain commercial bills and foreign exchange bills discounted. The principal amount of these bills amounted to ¥5,897 million (US$54,919
thousand).

4. Accumulated Depreciation
Accumulated depreciation on premises and equipment at March 31,
2005 and 2004 totaled ¥51,475 million (US$479,335 thousand) and¥53,173 million, respectively.

5. Assets Pledged
2,493 ¥

4,441$

23,214

847,099
12,943
390,166$1,273,423

Loans to companies under bankruptcy procedures consist of nonaccrual loans on which the payment of principal or interest is well pastdue or there is no prospect of recovery of the principal or interest fromthe borrower or from a third party guaranteeing the loan (the balancedoes not include any written-down portion of the loan). These loans
hereafter are referred to as “non-accrual loans.” This category also
includes the loans cited in Article 96-1-3 and 1-4 of the Corporation
Tax Law (Government Ordinance No. 97 of 1965).

20

Delinquent loans are defined as loans which are past due and notaccruing interest, but which are categorized neither as “Loans to companies under bankruptcy procedures” nor as “Restructured loans” asdefined below.

Assets pledged as collateral at March 31, 2005 and 2004 were as
follows:...............................................

Investment securities
Treasury stock (common stock
held by subsidiaries)
Customers’ notes and others

Millions of yen
2005
2004

Thousands of
U.S. dollars
2005¥28,046¥ 8,117$261,161

1,788
10,395

1,788
11,967

16,65096,801

Liabilities related to the above pledged assets were as follows:...............................................

Borrowed money

Millions of yen
2005
2004

¥1,612¥8,406

Thousands of
U.S. dollars
2005$15,010

In addition, investment securities totaling ¥147,149 million(US$1,370,232 thousand) and ¥142,556 million at March 31, 2005 and2004, respectively, were pledged as collateral for the settlement of
exchange, treasury transactions or in lieu of margin money.

6. Loan Commitments
Contracts for overdraft facilities and loan commitments refer to contracts under which the Bank and its consolidated subsidiaries lend totheir customers funds up to certain prescribed limits in response to
their customers’ loan applications as long as there is no violation of
any of the conditions stipulated in the contracts. The unused portion
within the set limits of such contracts totaled ¥924,721 million(US$8,610,875 thousand) and ¥887,310 million at March 31, 2005
and 2004, respectively.
Since many of these commitments expire without the available
line of credit being fully utilized, the unused amount does not necessarily represent a future commitment. Most of these contracts specify
terms and conditions permitting the Bank and its consolidated subsidiaries to refuse customers’ loan applications or decrease their credit
limits for appropriate reasons (e.g., a change in their financial situation, a deterioration in their creditworthiness, etc.). At the inception of
the contracts, the Bank and its consolidated subsidiaries obtain realestate and securities, etc. as collateral if deemed necessary.
Subsequently, the Bank and its consolidated subsidiaries perform periodic reviews of the customers’ business results based on their internal
rules, and take the necessary measures to reconsider the conditions stipulated in the contracts and/or require additional collateral and guarantees.

7. Employees’ Retirement Benefits
The funded status and amounts recognized in the consolidatedbalance sheets as of March 31, 2005 and 2004 were as follows:...............................................

Projected benefit obligation
Fair value of plan assets
Projected benefit obligationin excess of plan assets
Unrecognized net obligation at transition
Unrecognized net actuarial loss
Unrecognized plan assets
Net liability recognizedPrepaid pension costAccrued pension and severance costs

Millions of yen
2005
2004

Thousands of
U.S. dollars
2005

March 31

2005

Yen
2004

U.S. dollars
2005

Net income
Net assets
Diluted net income¥ 41.24547.1641.21¥ 35.28497.1535.28$0.384
5.095
0.383

Diluted net income per share is no presented for the year ended March
31, 2004, since the Bank did not have any potentially dilutive stock.

9. Other Income and Expenses
Other income and expenses for the years ended March 31, 2005 and2004 were as follows:...............................................

Millions of yen
2005
2004

Other income:Gain on sales of stocks and othersecurities¥ 931
Gain on disposition of premises andEquipment337
Collection of claims written-off
1,044
Gain on change in interest in subsidiaries
—
Other
917
Total
¥ 3,231
Other expenses:
Provision for possible loan losses
Loss on devaluation of stocks andother securities
Write-offs of loans
Loss on disposition of premises andequipment
Loss on sales of stocks and othersecurities
Cost of amortization ofdifferences resulting fromchanges in accounting standards
Other
Total

Thousands of
U.S. dollars
2005

708

$ 8,676

244
686
282
537
¥ 2,459

3,144
9,728
—
8,539
$ 30,089¥ 7,638¥ 1,533$ 71,131

640
6,750

115
13,5495,961
62,856

630

1,386

5,867

0

0

0

839
2,478
¥18,976

839
2,687¥20,111

7,817
23,076$176,710¥¥(17,813) ¥(18,389) $(165,880)
15,47816,039144,132(2,350)(21,747)(2,335)
—
839
—
2,553
3,365
23,774
—
(684)
—
217
1,169
2,027
705
1,501
6,567
¥ (487) ¥ (331) $ (4,539)

8. Amounts per Share
The computation of basic net income per share is based on theweighted average number of shares of common stock outstanding during each year, less treasury stock.
Amounts per share of net assets are computed based on the number ofshares of common stock outstanding at each balance sheet date, less treasury stock and shares of common stock of the Bank held by the subsidiaries.

21

10. Income Taxes(1) Major components of deferred tax assets and liabilities at March
31, 2005 and 2004 are summarized as follows:...............................................

Deferred tax assets:
Reserve for possible loan losses
Depreciation
Accrued pension and severance
costs and other
Loss on write-offs of securities
Tax loss carryforwards
Other
Deferred tax assets
Less: valuation allowance
Deferred tax liabilities:
Gain on Establishment ofRetirement Benefit Trusts
Net Unrealized Gains on Securities
Net deferred tax assets

Millions of yen
2005
2004

Thousands of
U.S. dollars
2005¥28,973 ¥34,421
533
557$269,797
4,965

5,006
496
—
1,374
36,384(1,365)

4,504
565
1,190
1,349
42,588(827)

46,621
4,625—
12,794
338,804(12,719)

2,707
2,698
3,331
909
¥28,979 ¥38,153

25,20731,026$269,850(2) Income taxes applicable to the Bank comprises corporation, enterprise and inhabitants’ taxes which, in the aggregate, resulted in astatutory tax rate of approximately 40.2% for the years ended March
31, 2005. The difference between the statutory tax rate and the effective tax rates for the year ended March 31, 2005 was as follows:
March 31, 2005

Statutory tax rate

40.2%

Adjustments:
Non-deductible expenses
Non-taxable dividend income
Inhabitants’ per capital taxes
Other
Effective tax rate

0.9
(1.0)
0.3
2.3
42.7%

11. Leases(Lessor side)
The pro forma information such as acquisition costs, accumulated
depreciation and obligations on property leased under finance leases
currently accounted for as operating leases is summarized as follows:...............................................

Millions of yen
2005
2004

Thousands of
U.S. dollars
2005

Acquisition cost
MovablesOthersTotal¥ 25,539 ¥30,545
2,957
3,480
¥ 28,496 ¥34,025$237,815
27,544$265,359

Accumulated depreciation expenses
MovablesOthersTotal¥ 17,649 ¥20,744
2,044
2,363
¥ 19,694 ¥23,108$164,353
19,035$183,389

Net book value
MovablesOthersTotal¥ 7,889 ¥ 9,800
913
1,116
¥ 8,802 ¥10,917$ 73,462
8,508$ 81,970

22...............................................

Minimum lease payment
under finance leases
Due within one year
Due after one year
Total

Millions of yen
2005
2004

Thousands of
U.S. dollars
2005¥ 4,157 ¥ 4,492
7,290
8,217
¥11,447 ¥ 12,710$ 38,714
67,884$106,598(Note) Interest income is added to calculate future lease payment receivables due to thesmall ratio of the balance of future lease payment receivables to trade receivables at theterm-end.
Thousands ofMillions of yen
U.S. dollars...............................................
2005
2004
2005

Lease revenue and depreciation
expense for the term
Lease revenue
Depreciation expense¥4,652
3,801¥4,943
4,052$43,32135,397(Lessee side)
The pro forma information such as acquisition costs, accumulated depreciation and obligations on property leased under finance leases currently
accounted for as operating leases is summarized as follows:
Millions of yen
2005

Thousands of
U.S. dollars
2005

Acquisition cost
Movables¥114$1,064

Others
Total

—
¥114

—
$1,064

¥

2
—
¥ 2

$

¥111
—
¥111

$1,036—$1,036

Accumulated depreciation expenses
MovablesOthersTotal
Net book value
MovablesOthers
Total

$

27
—
27

(Note) Amounts corresponding to interest expenses are added to calculate the assumed
amount of acquisition costs due to the small ratio of the balance of future minimum lease
payments to the net book value of premises and equipment at the term-end.
Thousands ofMillions of yen
U.S. dollars
2005
2005

Minimum lease payment
under finance leases
Due within one year
Due after one year
Total

¥ 22

$ 212

88
¥ 111

823
$1,036(Note) Interest expenses are added to calculate future minimum lease payments due to thesmall ratio of the balance of future minimum lease payments to net book value of premises
and equipment at the term-end.
Thousands ofMillions of yen
U.S. dollars
2005
2005

Total lease payments and assumed
depreciation expenses for the term
Total lease payments

¥2

$27

Assumed depreciation expenses

2

27

Method utilized for calculation of assumed depreciation expenses:
straight-line method assuming the lease period as useful lives of assets
and a residual value of zero.

12. Segment Information
Information regarding the business segments and total income of the Bank and its consolidated subsidiaries for the years ended March 31, 2005
and 2004 is summarized as follows:(a) Business segment information
Millions of yen

Year ended March 31, 2005
Total income and income before income taxes:
Total income from outside customers
Total income from intersegment transactions
Total
Total expenses
Income before income taxes
Total assets
Depreciation and amortization
Capital expenditures

Banking
operations

Other
operations

80,798343
81,141
63,251
17,890¥10,9942,514
13,50912,359¥ 1,149¥¥ 2,930,459
3,181
4,960

¥ 35,416
4,100
3,660

¥2,965,875
7,282
8,621

Banking
operations

Other
operations

79,407328
79,736
63,797
15,938¥ 11,390
3,097
14,48813,337¥ 1,150¥¥2,852,343
3,207
5,229

¥ 35,508
4,877
4,014

¥2,887,852
8,084
9,243

Banking
operations

Other
operations

¥

¥

¥

Total

Eliminations

Consolidated

91,793
2,857
94,651
75,61019,040¥—(2,857)(2,857)(2,787)¥(69)¥¥ (11,726)——¥2,954,148
7,282
8,621

Total

Eliminations

Consolidated

90,7983,426
94,224
77,13417,089¥—(3,426)(3,426)(3,326)¥(99)¥¥ (11,161)——¥2,876,690
8,084
9,243

¥

91,793—
91,79372,822
18,970Millions of yen

Year ended March 31, 2004
Total income and income before income taxes:
Total income from outside customers
Total income from intersegment transactions
Total
Total expenses
Income before income taxes
Total assets
Depreciation and amortization
Capital expenditures

¥

¥

¥

¥

90,798—90,79873,80816,990Thousands of U.S. dollars

Year ended March 31, 2005
Total income and income before income taxes:
Total income from outside customers
Total income from intersegment transactions
Total
Total expenses
Income before income taxes
Total assets
Depreciation and amortization
Capital expenditures

$

Total

Eliminations

Consolidated

854,768
26,608881,377
704,073
177,303$—(26,608)(26,608)(25,959)
$
(649)

$

$(109,196)——$27,508,600
67,81280,279752,3853,196
755,582
588,984
166,597$102,382
23,412
125,795
115,089$ 10,705$$ 27,288,008
29,62946,189$329,789
38,182
34,090$27,617,797
67,81280,279$$$854,768—
854,768
678,114
176,65323

13. Market Value of Securities(a) The market value of, and the valuation difference on, available-for-sale marketable securities at March 31, 2005 and 2004 aresummarized as follows:
Millions of yen

Cost

Corresponding
amount in thebalance sheet

Valuationdifference

Gain

Loss

StocksBonds:
Government bonds
Municipal bonds
Corporate bonds
Other¥ 37,051
365,441
343,924
16,4005,116
44,891¥ 45,086
366,579
344,913
16,492
5,173
44,006¥ 8,035
1,137
989
91
57
(884)

¥ 9,296
1,161
1,012
91
57
723

¥1,260
23
23
0
0
1,608

Total

¥447,384¥455,673¥ 8,288¥11,181¥2,892

Cost

Corresponding
amount in thebalance sheet

Valuationdifference

Gain

Loss

StocksBonds:
Government bonds
Municipal bonds
Corporate bonds
Other¥ 37,289
411,779
382,642
21,786
7,350
52,974¥ 42,486
407,588378,761
21,3697,458
54,229¥ 5,197(4,190)(3,881)
(416)
107
1,255

¥6,938
250
113
26
110
2,581

¥1,741
4,440
3,994
443
3
1,325

Total

¥502,042¥504,305¥ 2,262¥9,770¥7,507

Gain

Loss

March 31, 2005

Millions of yen

March 31, 2004

March 31, 2005

Thousands of U.S. dollars
Corresponding
amount in the
Valuationbalance sheet
difference

Cost

StocksBonds:
Government bonds
Municipal bonds
Corporate bonds
Other$ 345,014
3,402,940
3,202,572
152,723
47,644
418,022$ 419,842
3,413,536
3,211,782
153,575
48,178409,781$74,828
10,596
9,210
852
534
(8,240)$ 86,564
10,819
9,426
853
539
6,739

$11,735222
216
1
5
14,980Total$4,165,976$4,243,161$77,185$104,123$26,938(b) Available-for-sale securities sold during the years ended March 31, 2005 and 2004 were as follows:
Millions of yen
2005
2004

Proceeds from sales
Gain
Loss

24

¥81,0132,090
514¥32,577
1,802
164

Thousands of
U.S. dollars
2005$754,387
19,4694,788

14. Repayment Schedule for Bonds
The repayment schedule for bonds classified as available-for-sale securities which have definite maturities are summarized as follows:
Due within
1 year or lessMarch 31, 2005
Bonds
Government bonds
Municipal bonds
Corporate bonds
Other
Total

March 31, 2005
Bonds
Government bonds
Municipal bonds
Corporate bonds
Other
Total

Millions of yen
Due in 1 toDue in 5 to
5 years
10 years

Due after
10 years¥201,470
196,673
2,357
2,439
1,530

¥20,379
54
14,134
6,190
14,247¥ 4,675
2,247
—
2,428
9,932

¥145,938
145,938——
16,339¥203,001¥34,626¥14,608¥162,277

Due within
1 year or lessThousands of U.S. dollars
Due in 1 toDue in 5 to
5 years
10 years

Due after
10 years$1,876,066
1,831,393
21,95622,716
14,253$189,767
505
131,618
57,643
132,672$ 43,540
20,930—22,61092,492$1,358,953
1,358,953——
152,152$1,890,319$322,440$136,032$1,511,105

15. Money Trusts
A classification of money trusts by purpose at March 31, 2005 and 2004 is summarized as follows:
Millions of yen
Amount in the
Valuationbalance sheet
difference

March 31, 2005

¥1,072

Money trusts for trading purposes¥72

Thousands of U.S. dollars
Amount in the
Valuationbalance sheet
difference$9,989$677

Millions of yen
Amount in the
Valuationbalance sheet
difference

March 31, 2004
Money trusts for trading purposes¥1,028¥28

The net valuation loss on money trusts for trading purposes has been included in “Income before income taxes and other.”

16. Subsequent Events
Appropriations of retained earnings
At a shareholders’ meeting held on June 24, 2005, the Bank’s shareholders duly approved the following year-end appropriations of retained
earnings, which have not been reflected in the accompanying consolidated financial statements for the year ended March 31, 2005:
Millions of yen

Thousands of
U.S. dollars

¥ 655
30
8,800

$ 6,105279
81,944Year-end cash dividends (¥2.5 = US$0.023 per share)
Bonuses to directors and corporate auditors
Transfer to voluntary reserve

17. Cash and Cash Equivalents
A reconciliation between cash and due from banks in the consolidated balance sheets at March 31, 2005 and 2004 and cash and cash equivalents inthe consolidated statements of cash flows for the year then ended is as follows:
Millions of yen
2005
2004

Cash and due from banks
Time deposits
Ordinary deposits
Other deposits
Cash and cash equivalents¥71,620(550)(2,664)(8,584)¥59,820¥66,577(850)(2,073)(7,206)¥56,446

Thousands of
U.S. dollars
2005$666,915(5,123)(24,807)(79,941)$557,04225

26

Non-Consolidated Balance Sheets
Suruga Bank Ltd.
Thousands of
U.S. dollars(Note 2)Millions of yen

2005

2004

Change from
2004

2005

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

70,406
191,282
26,700
404
500
1,868
463,5222,129,649
705
20,42040,31528,365
9,008(42,189)

65,662
128,006
13,0009
43
1,028
512,856
2,072,830
677
21,87639,39737,457
10,042(40,527)

4,744
63,276
13,700395
457
840(49,334)
56,81928(1,456)918(9,092)(1,034)(1,662)655,616
1,781,191
248,626
3,768
4,655
17,401
4,316,255
19,830,985
6,571
190,157
375,410
264,132
83,890(392,857)

Total Assets

2,940,961

2,862,361

78,60027,385,805

LIABILITIES AND STOCKHOLDERS’ EQUITY:
Liabilities
Deposits
Negotiable Certificates of Deposit
Borrowed Money
Foreign Exchanges
Other Liabilities
Reserve for Employees’ Bonus
Reserve for Employee Retirement Benefits
Reserves under Special Laws
Acceptances and Guarantees

2,767,671—
5
7
20,240
477
328
0
9,008

2,702,918
6,000
10
15
11,996535
192
010,04264,753(6,000)
(5)
(8)
8,244
(58)
136
—
(1,034)25,772,154—
46
66
188,473
4,443
3,054
0
83,890Total Liabilities

2,797,738

2,731,710

66,02826,052,129

Stockholders’ Equity
Common Stock
Capital Surplus
Capital Surplus Reserve
Other Capital Surplus
Retained Earnings
Earned Surplus Reserve
Voluntary Reserves
Unappropriated Profits at the End of the Term
Net Unrealized Gains (Losses) on Securities, Net of Taxes
Treasury Stock

30,043
18,585
18,585—92,25330,04351,072
11,137
4,896(2,555)30,043
18,586
18,585
083,15930,043
43,6729,443
1,357(2,494)

—
(1)
—
(0)
9,094
—
7,400
1,694
3,539
(61)

279,758
173,068
173,068—
859,049
279,758
475,576
103,71445,597(23,798)

Total Stockholders’ Equity

143,223

130,651

12,572

1,333,675

2,940,961

2,862,361

78,60027,385,805

As of March 31,

Total Liabilities and Stockholders’ Equity
See notes to non-consolidated financial statements.

27

Non-Consolidated Statements of Income
Suruga Bank Ltd.
Thousands of
U.S. dollars(Note 2)Millions of yen

For the Years Ended March 31,

2005

2004

Change from
2004

2005

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

81,82068,27765,0673,073
010,404
1,328
1,809

80,81464,69462,829
1,774
0
9,517
5,389
1,213

1,006
3,583
2,238
1,299
(0)
887
(4,061)
596

761,900
635,786
605,899
28,616
096,887
12,375
16,851

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

63,519
4,322
1,461
7,065
538
36,36815,223

63,332
4,220
1,953
6,942
192
36,497
15,479

187
102
(492)
123
346
(129)
(256)

591,483
40,253
13,606
65,7905,015
338,660
141,763

Ordinary Profits

18,301

17,481

820

170,416Extraordinary Profits
Extraordinary Losses

1,382
1,467

884
2,182

498
(715)

12,871
13,661

Income before Income Taxes and Others
Provision for Income Taxes and Others
Deferred Income Taxes
Net Income
Unappropriated Profits at the Beginning of the Term
Interim Dividends
Losses on Sales of Treasury Stock

18,216
1,058
6,713
10,4441,357
655
8

16,184
61
7,324
8,799
1,300
655
—

2,032
997
(611)
1,645
57
(0)
8

169,627
9,860
62,51097,256
12,645
6,105
81

Unappropriated Profits at the End of the Term

11,137

9,443

1,694

103,714

See notes to non-consolidated financial statements.

28

Non-Consolidated Statements of Stockholders’ Equity
Suruga Bank Ltd.
Thousand

Balance at March 31, 2003

Millions of yen

Number ofsharesCommonstock

CapitalsurplusLegalreserve

Voluntary
reserve

Retained
Net unrealized
Treasury
earnings
gains (losses) on
stock,(deficit) securities, net of taxes at cost

264,939¥30,043¥18,585¥30,043¥38,172¥ 7,487¥(6,136)¥(2,267)

7,494

(227)

1,357

(2,494)

3,539

(60)

¥ 4,896¥(2,555)

Net income for the year
ended March 31, 2004

8,799

Cash dividends paid

(1,312)

Reversal of voluntary reserve

5,500(5,500)Bonuses to directors andcorporate auditors(30)

Net change during the year
Balance at March 31, 2004

0264,939

30,043

18,58630,043

43,672

9,443

Net income for the year
ended March 31, 2005

10,444

Cash dividends paid

(1,311)

Reversal of voluntary reserve

7,400(7,400)Bonuses to directors andcorporate auditors(30)

Losses on sales of treasury stock

(0)

(8)

Net change during the year
Balance at March 31, 2005

264,939¥30,043¥18,585¥30,043¥51,072¥11,137

Thousands of U.S. dollars (Note 2)

Balance at March 31, 2004

Commonstock

CapitalsurplusLegalreserve

Voluntary
reserve

Retained
Net unrealized
Treasury
earnings
gains (losses) on
stock,(deficit) securities, net of taxes at cost

$279,758$173,070$279,758$406,669$ 87,938$12,641$(23,232)

32,956(566)$45,597$(23,798)

Net income for the year
ended March 31, 2005

97,256

Cash dividends paid

(12,212)

Reversal of voluntary reserve

68,907(68,907)

Bonuses to directors andcorporate auditors(279)

Losses on sales of treasury stock

(2)

(81)

Net change during the year
Balance at March 31, 2005

$279,758$173,068$279,758$475,576$103,714

See notes to non-consolidated financial statements.

29

Notes to Non-Consolidated Financial Statements
Suruga Bank Ltd.

1. Summary of Significant Accounting Policies

4. Loans and Bills Discounted(a) Basis of Preparation(a) Loans and bills discounted at March 31, 2005 and 2004
were as follows:

The accompanying non-consolidated financial statements of
Suruga Bank Ltd. (the “Bank”) are prepared on the basis of accounting
principles generally accepted in Japan, which are different in certain
respects as to the application and disclosure requirements ofInternational Financial Reporting Standards, and are compiled from thenon-consolidated financial statements prepared by the Company as
required by the Securities and Exchange Law of Japan.
The non-consolidated financial statements have been prepared on
the same basis as the accounting policies discussed in Note 1 to theconsolidated financial statements except that the accompanying financial statements relate to the Bank only, with investments in subsidiaries and affiliates being substantially stated at cost.
Certain reclassifications of the prior year’s non-consolidated
financial statements and the related footnote amounts have been madeto conform with the presentation in the current year.

2. Japanese Yen and U.S. Dollar Amounts
The Japanese yen amounts in the accompanying non-consolidated
financial statements are presented in millions, with fractions omitted.
Amounts stated in U.S. dollars are translated from Japanese yenamounts, solely for convenience, at ¥107.39 = U.S.$1.00, the exchange
rate prevailing on March 31, 2005. The translation should not be construed as a representation that Japanese yen could be converted into
U.S. dollars at the above or any other rate.

3. Investment Securities
Investment securities at March 31, 2005 and 2004 were as follows:......................................................
......................................................
......................................................

Japanese government bonds
Local government bonds
Corporate bonds
Corporate stock
Other securities
Total
Shares of subsidiaries
included in corporate stock

Millions of yen
2005
2004

¥344,913
21,751
5,763
47,521
43,572¥463,522¥

712¥378,761
26,813
8,088
45,42553,769¥512,856¥

712

Thousands of
U.S. dollars
2005$3,211,782
202,546
53,672442,517405,736$4,316,255
$

6,637

Millions of yen
2005
2004

Bills discounted
Loans on bills
Loans on deeds
Overdrafts
Total

¥

5,874
207,474
1,757,732
158,568¥2,129,649

6,805
216,596
1,671,058
178,369¥2,072,830$

54,698
1,931,970
16,367,748
1,476,567$19,830,985(b) Loans and bills discounted at March 31, 2005 and 2004
included the following items:
Millions of yen
2005
2004

Loans to companies underbankruptcy procedures
Delinquent loans
Loans past due 3 months or more
Restructured loans
Total

¥

2,340
89,824
1,334
41,900¥135,398¥

4,184
83,538
1,377
52,825¥141,924

Thousands of
U.S. dollars
2005$

21,789836,427
12,422
390,166$1,260,806

5. Premises and Equipment
Premises and equipment at March 31, 2005 and 2004 were as follows:
Millions of yen
2005
2004

Land
Buildings
Furniture and equipment
Guarantee money, net
Software, net
Less: accumulated depreciation
Premises and equipment, net¥15,397
21,94523,921
5,471
2,489
69,224(28,909)¥ 40,315¥14,899
22,22923,2135,367
2,551
68,261(28,863)¥ 39,397

Thousands of
U.S. dollars
2005$143,377
204,350
222,756
50,94923,177644,611(269,201)$375,410

6. Deposits
Deposits at March 31, 2005 and 2004 were as follows:
Millions of yen
2005
2004

Current deposits¥ 75,132
Ordinary deposits
1,096,698
Deposits at notice
11,850Time deposits
1,448,513
Other deposits
135,476
Subtotal
2,767,671
Negotiable certificates of deposit—
Total¥ 2,767,671

30¥

Thousands of
U.S. dollars
2005¥

72,8891,051,351
9,641
1,455,456
113,579
2,702,918
6,000¥2,708,918

Thousands of
U.S. dollars
2005$ 699,624
10,212,295
110,347
13,488,350
1,261,535
25,772,154—$25,772,154

7. Common Stock

10. Other Operating Income and Expenses

Common stock was as follows:(1) Authorized:
396,029,983 shares no per value at March 31,
2005 and 2004
(2) Issued andoutstanding:
264,939,248 shares at March 31, 2005 and 2004
(3) Treasury stock: 2,670,800 shares at March 31, 2005

Other operating income and expenses for the years ended March 31,
2005 and 2004 were as follows:

8. Capital Surplus and Legal Reserve
Under the Banking Law of Japan, an amount equivalent to at least 20
percent of cash dividends paid and other cash outflows from retained
earnings must be appropriated to the legal reserve until such reserveand the capital surplus account equal 100 percent of the Bank’s statedcapital.
In the case that the sum of the capital surplus account and the legal
reserve exceed 100 percent of the common stock account, then theamount of the excess is available for appropriation by resolution of theshareholders.

Millions of yen
2005
2004

Other operating income:Gain on foreign exchange transactions
Gain on sales of bonds
Gain on redemption of bonds
Other
Total

¥ 169
1,159
—
—
¥ 1,328

¥ 148
1,093
553
3,592
¥5,389$ 1,582
10,792——$12,375

Other operating expenses:
Loss on sales of bonds
Loss on redemption of bonds
Other
Total

¥ 510
25
2
¥ 538

¥ 159
3
30
¥ 192

$ 4,755232
27$ 5,015

11. General and Administrative Expenses
General and administrative expenses for the years ended March
31, 2005 and 2004 were as follows:

9. Amounts per Share
The computation of basic net income per share is based on the weighted
average number of shares of common stock outstanding during each year.
Amounts per share of net assets are computed based on the number of shares of common stock outstanding at each balance sheet date,less treasury stock.
Yen
2005

Net income
Net assets
Diluted net stock2004¥ 39.70 ¥ 33.41
545.98 497.93
39.67
33.40

Thousands of
U.S. dollars
2005

Millions of yen
2005
2004

Salaries and allowances
Depreciation
Taxes
Other
Total

¥ 13,960
3,180
2,038
17,189¥36,368¥14,227
3,210
1,838
17,221¥36,497

Thousands of
U.S. dollars
2005$129,977
29,61818,978160,066$338,660

U.S. dollars
2005$0.369
5.084
0.369

31

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