November 14, 2018

SURUGA bank, Ltd.
Consolidated financial results for the six months ended September 30, 2018
<under Japanese GAAP>
Stock exchange listings: Tokyo (code: 8358)
URL:
https://www.surugabank.co.jp
Representative:
Michio Arikuni, President
Dividend payment date: ―(Amounts and percentages are rounded down to the nearest million yen and first decimal places, respectively.)

1. Consolidated financial results for the six months ended September 30, 2018
(1) Consolidated operating results(％ represents the change from the same period in the previous fiscal year)

Ordinary income

Profit attributableto owners of parent

Ordinary profit

Six months ended
Millions of yen％
Millions of yen％
Millions of yen％
September 30, 201875,027(0.9)(85,726)(100,785)
September 30, 201775,775
7.4
31,162
11.2
21,16810.1(Note) Comprehensive income:(a) Six months ended Sep. 30, 2018: ¥(103,360) million [-%]; (b) Six months ended Sep. 30, 2017: ¥24,980 million [59.7 %]Earnings per share
Six months ended
September 30, 2018
September 30, 2017

Earnings per share(diluted)

yen

yen

(435.08)
91.39

91.37

(2) Consolidated financial position
Total assets
Total net assets
Net assets ratio
As ofMillions of yen
Millions of yen％
September 30, 2018
3,747,710
238,987
6.3
March 31, 2018
4,461,576
344,763
7.6(Reference) Shareholders’ equity:(a) As of September 30, 2018: ¥236,949 million; (b) As of March 31, 2018: ¥342,667 million(Note) Net assets ratio = {(Total net assets - Subscription rights to shares - Non-controlling interests) / Total assets} × 100
This ratio is not calculated based on the “Capital Adequacy Ratio Notification”.

2. Dividends on common stock
1st quarter -end

2nd quarter -end

Dividends per share
3rd quarter -end Fiscal year -end

Fiscal year
yen
yen
ended March 31, 201810.50
ending March 31, 2019
0.00
ending March 31, 2019 (forecast)(Note) Revision of dividend forecast from the latest announcement: Yes

yen

Total

yen

yen

-

10.50

21.00

-

-（not decided）-（not decided）

3. Consolidated earnings forecast for the fiscal year ending March 31, 2019(％ represents the change from the previous fiscal year)

Ordinary profit

Profit attributableto owners of parent

Fiscal year ending
Millions of yen％
Millions of yen
March 31, 2019(75,500)(97,500)(Note) Revision of earnings forecast from the latest announcement: Yes

Earnings per share
％

yen

-

(420.89)

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries that caused changes in the scope of
consolidation): No(2) Changes in accounting policies, changes in accounting estimates and restatements(A) Changes in accounting policies due to revision of accounting standards: No(B) Changes in accounting policies due to reasons other than (A): No(C) Changes in accounting estimates: No(D) Restatements: No(3) Number of issued shares (common stock)(A) Number of issued shares
As of Sep. 30, 2018
(including treasury shares):(B) Number of treasury shares:

As of Sep. 30, 2018

(C) Average number of shares:

Six months ended
Sep. 30, 2018

232,139,248 shares

As of Mar. 31, 2018

232,139,248 shares

487,787 shares

As of Mar. 31, 2018507,295 shares

231,646,282 shares

Six months ended
Sep. 30, 2017

231,615,477 shares(Summary of non-consolidated financial results)
1. Non-consolidated financial results for the six months ended September 30, 2018
(1) Non-consolidated operating results
Ordinary income
Six months ended
Millions of yen
September 30, 201870,239September 30, 2017
68,357(％ represents the change from the same period in the previous fiscal year)

Ordinary profit

Net income％

Millions of yen％

Millions of yen

％

2.7
6.6

(83,737)
29,941

8.9(98,280)
20,479

7.1

Earnings per share
Six months ended
September 30, 2018
September 30, 2017yen(424.26)88.41(2) Non-consolidated financial position
Total assets
Total net assets
Net assets ratio
As ofMillions of yen
Millions of yen％
September 30, 2018
3,735,881
229,255
6.1
March 31, 2018
4,451,689
332,711
7.4(Reference) Shareholders’ equity:(a) As of September 30, 2018: ¥229,243million; (b) As of March 31, 2018: ¥332,694 million(Note) Net assets ratio = {(Total net assets - Subscription rights to shares) / Total assets} × 100
This ratio is not calculated based on the “Capital Adequacy Ratio Notification”.

2. Non-consolidated earnings forecast for the fiscal year ending March 31, 2019(％ represents the change from the previous fiscal year)

Ordinary profit
Fiscal year ending
March 31, 2019

Net income

Earnings per share

Millions of yen％

Millions of yen％

yen(76,000)-(97,000)-(418.73)(Note) This report is outside the scope of the external auditor’s interim audit procedure.
(Note) Explanation on appropriate use of forecast and other special items
1. The company is a “Specified business company” under the Article 17-15-2 of the “Cabinet Office Ordinance regarding Disclosure of
Corporate Information, etc.” and prepares its interim consolidated and interim non-consolidated financial statements for the six months
ended September 30, 2018.
2. The performance forecasts and other forward-looking statements in this report are based on information currently available to thecompany and on certain assumptions deemed to be reasonable, and are not intended to guarantee future performance. Actual
performance may differ materially depending on various factors.

SURUGA bank, Ltd.

(Appendix)
Table of contents

1. Qualitative information on financial results··························································· 2(1) Details of operating results ·········································································· 2(2) Details of financial position ········································································· 2(3) Details of forecast information, including consolidated earnings forecast ··················· 2
2. Consolidated financial statements and notes ·························································· 3(1) Consolidated balance sheets ········································································· 3(2) Consolidated statements of income andConsolidated statements of comprehensive income ············································· 4(3) Consolidated statements of changes in net assets ················································ 6(4) Notes regarding consolidated financial statements··············································· 8(Notes on going-concern assumption)······························································ 8(Changes in accounting policies, changes in accounting estimates and restatements) ······ 8
3. Non-consolidated financial statements ································································ 9(1) Non-consolidated balance sheets ··································································· 9(2) Non-consolidated statements of income ·························································

11(3) Non-consolidated statements of changes in net assets ·········································

12

4. Response to the filing of a lawsuit for compensation of damages to the Bankagainst the Bank’s current director concerning share house loans andother loans for income-producing real estate ·······················································

14* Financial results for the six months ended September 30, 2018 supplementary information-1-

SURUGA bank, Ltd.

1. Qualitative information on financial results(1) Details of operating results
As for the consolidated operating results for the six months ended September 30, 2018, ordinary
income decreased by ¥0.748 billion year-on-year to ¥75.027 billion. This was primarily due to thedecline in interest income reflecting the drop in interest on loans and bills discounted. Meanwhile,
ordinary expenses increased by ¥116.141 billion year-on-year to ¥160.753 billion, mainly due to anincrease in credit costs related to share house loans, etc. As a result, ordinary profit decreased by¥116.888 billion year-on-year to a loss of ¥85.726 billion. Profit attributable to owners of parent
decreased by ¥121.953 billion year-on-year to a loss of ¥100.785 billion.

(2) Details of financial position
As for the consolidated major account balances as of September 30, 2018, loans and bills
discounted came in at ¥3,090.985 billion, down by ¥157.174 billion from March 31, 2018. This wasprimarily due to the decrease (¥135.107 billion) in consumer loans (non-consolidated).
Securities amounted to ¥144.328 billion, up by ¥12.791 billion from March 31, 2018.
Deposits amounted to ¥3,410.317 billion, down by ¥669.655 billion from March 31, 2018, mainly
due to a decrease (¥448.529 billion) in individual deposits.

(3) Details of forecast information, including consolidated earnings forecast
The Bank has revised its earnings forecast for the fiscal year ending March 31,
2019 from that announced on August 9, 2018. For details, please refer to the
document disclosed separatel y today (November 14, 2018) titled "Difference inbusiness performance between forecast and result for the interim period of the fiscal
year ending March 31, 2019, revision of full-year earnings forecast, dividends ofsurplus and dividend forecast".
Consolidated

Ordinary profit
Profit attributable toowners of parent
Non-consolidated

Net operating profit
Core net operating profit
Ordinary profit
Net income(Billions of yen)

Fiscal year ending
March 31, 2019(75.5)(97.5)(Billions of yen)

Fiscal year ending
March 31, 2019
16.5
52.0
(76.0)(97.0)

Actual credit costs

134.0(Note) The performance forecasts and other forward-looking statements in this report are basedon information currently available to the company and on certain assumptions deemed
to be reasonable, and are not intended to guarantee future performance. Actual
performance may differ materially depending on various factors.

-2-

SURUGA bank, Ltd.

2. Consolidated financial statements and notes(1) Consolidated balance sheets（Millions of yen）
As of
Mar. 31, 2018

AssetsCash and due from banks
Call loans and bills bought
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Lease receivables and investment assets
Other assets
Tangible fixed assets
Intangible fixed assets
Net defined benefit asset
Deferred tax assets
Customers' liabilities for acceptances and guarantees
Allowance for loan losses
Total assets
Liabilities
Deposits
Borrowed money
Foreign exchanges
Other liabilities
Provision for bonuses
Provision for directors' bonuses
Net defined benefit liability
Provision for directors' retirement benefits
Provision for reimbursement of deposits
Provision for contingent losses
Deferred tax liabilities
Acceptances and guarantees
Total liabilities
Net assets
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Net unrealized gains (losses) on available-for-sale securities

Deferred gains (losses) on hedges
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

-3-

As of
Sep. 30, 2018

973,397
2,141
86
1,571
131,537
3,248,159
2,514
5,995
65,07652,12027,111
10,50916,6952,877(78,218)
4,461,576

531,751645
153
515
144,328
3,090,985
2,442
6,284
64,64449,046
26,11911,11013,376
3,034(196,729)
3,747,710

4,079,972
1,085
23
28,300
699
182
265
2,507
365
137
396
2,877
4,116,813

3,410,317
69,305
5
23,944
694
268
220
286
89
555
3,034
3,508,723

30,043489
292,841(582)
322,791
18,489(15)
1,402
19,876
172,078
344,763
4,461,576

30,043488
189,624(560)
219,595
16,063
2
1,288
17,35412
2,025
238,987
3,747,710

SURUGA bank, Ltd.

(2) Consolidated statements of income and Consolidated statements of comprehensive income(2) Consolidated statements of income

Ordinary income
Interest income
Interest on loans and bills discounted
Interest and dividends on securities
Fees and commissions
Other operating income
Other income
Ordinary expenses
Interest expenses
Interest on deposits
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Ordinary profit
Extraordinary gains
Gains on disposal of non-current assets
Reversal provision for directors' retirement benefits
Extraordinary losses
Losses on disposal of non-current assets
Impairment loss
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent-4-

For the six months
ended
Sep. 30, 201775,77564,82062,285
1,813
6,746
2,090
2,117
44,612
2,013
1,907
7,426
1,680
26,5506,941
31,16299249
249
30,922
9,134
498
9,633
21,289120
21,168（Millions of yen）
For the six months
ended
Sep. 30, 201875,02758,51257,190
921
6,105
2,283
8,125
160,753
1,185
1,027
7,170
1,537
25,856125,002(85,726)
2,311
0
2,311
2,739
143
2,595
(86,153)
10,132
4,551
14,684(100,837)(52)(100,785)

SURUGA bank, Ltd.

Consolidated statements of comprehensive income

ProfitOther comprehensive income
Net unrealized gains (losses) on available-for-sale securities

Deferred gains (losses) on hedges
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests-5-

For the six months
ended
Sep. 30, 201721,289（Millions of yen）
For the six months
ended
Sep. 30, 2018(100,837)

3,607
(109)
192
3,690
24,980(2,425)17(114)(2,522)(103,360)

24,779200(103,307)(52)

SURUGA bank, Ltd.

(3) Consolidated statements of changes in net assets
For the six months ended September 30, 2017
（Millions of yen）
Shareholders' equity
CapitalsurplusCapital stock
Balance at beginning ofcurrent period
Changes of items during
period30,043Retainedearnings
4

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
shares291,063

Total
shareholders'equityTreasuryshares(606)

320,504(2,779)(2,779)21,16821,168

0

(3)

(3)

16

16

Net changes of items otherthan shareholders' equity

Total changes of items during
periodBalance at end of current
periodBalance at beginning ofcurrent period
Changes of items during
period-0

18,38812

18,401

30,043

4

309,452(594)

338,906

Accumulated other comprehensive income
Total
Net unrealized
Remeasureaccumulated
gains (losses) Deferred gains
ments ofon available(losses) on
other
definedfor-salehedgescomprehenbenefit planssecurities
sive income

Subscription
rights toshares

Noncontrollinginterests

24

2,325

17,153(61)433

17,525

Dividends of surplus

Total changes of items during
periodBalance at end of current
period340,379(2,779)Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders' equity

Total net
assets21,168
(3)
16
3,527

(109)

192

3,610

(3)

200

3,808

3,527

(109)

192

3,610

(3)

200

22,21020,680(170)

626

21,136

20

2,526

362,589-6-

SURUGA bank, Ltd.

For the six months ended September 30, 2018
（Millions of yen）
Shareholders' equity
CapitalsurplusCapital stock
Balance at beginning ofcurrent period
Changes of items during
period30,043Retainedearnings

489

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
shares292,841

Total
shareholders'equityTreasuryshares(582)

322,791(2,432)(2,432)(100,785)(100,785)

(0)

(0)

(0)

23

22

Net changes of items otherthan shareholders' equity

Total changes of items during
periodBalance at end of current
period-(0)(103,217)

22(103,195)

30,043488

189,624(560)

219,595

Accumulated other comprehensive income
Total
accumulated
othercomprehensive income

Subscription
rights toshares

Noncontrollinginterests

17

2,078

Net unrealized
Remeasuregains (losses) Deferred gains
ments ofon available(losses) on
definedfor-salehedgesbenefit planssecurities

Balance at beginning ofcurrent period
Changes of items during
period18,489

(15)

1,402

19,876

Dividends of surplus

Total changes of items during
periodBalance at end of current
period344,763(2,432)

Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders' equity

Total net
assets(100,785)(0)22(2,425)17(114)(2,522)(5)(52)(2,580)(2,425)17(114)(2,522)(5)(52)(105,776)

16,063

2

1,288

17,35412

2,025

238,987-7-

SURUGA bank, Ltd.

(4) Notes regarding consolidated financial statements(Notes on going-concern assumption)
Not applicable.

(Changes in accounting policies, changes in accounting estimates and restatements)
Not applicable.

-8-

SURUGA bank, Ltd.

3. Non-consolidated financial statements(1) Non-consolidated balance sheets（Millions of yen）
As of
Mar. 31, 2018

AssetsCash and due from banks
Call loans
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Other
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers' liabilities for acceptances and guarantees
Allowance for loan losses
Total assets
Liabilities
Deposits
Borrowed money
Foreign exchanges
Other liabilities
Income taxes payable
Lease obligations
Other
Provision for bonuses
Provision for directors' bonuses
Provision for directors' retirement benefits
Provision for reimbursement of deposits
Provision for contingent losses
Acceptances and guarantees
Total liabilities

-9-

As of
Sep. 30, 2018

972,082
2,141
86
1,571
136,822
3,245,978
2,514
56,99056,99050,96324,855
8,497
15,786
3,487(70,089)
4,451,689

531,209645
153
515
147,283
3,085,874
2,442
56,98456,98447,88623,954
9,261
12,7273,034(186,095)
3,735,881

4,089,649
23
21,977
11,971
518
9,487
648
182
2,506
365
137
3,487
4,118,977

3,415,930
68,0005
18,416
9,872
488
8,055
643
218
286
89
3,034
3,506,625

SURUGA bank, Ltd.

（Millions of yen）
As of
Mar. 31, 2018

Net assets
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings

30,043
18,59018,585
4
267,090
30,043
237,04759
103,032
133,955(582)
315,141
17,563(10)
17,552
17332,711
4,451,689

Reserve for advanced depreciation of non-current assets

General reserve
Retained earnings brought forward
Treasury shares
Total shareholders' equity
Net unrealized gains (losses) on available-for-sale securities

Deferred gains (losses) on hedges
Total valuation and translation adjustments
Subscription rights to shares
Total net assets
Total liabilities and net assets

-10-

As of
Sep. 30, 2018

30,043
18,58918,585
3
166,378
30,043
136,335
59
103,032
33,243(560)
214,450
14,784
8
14,792
12229,255
3,735,881

SURUGA bank, Ltd.

(2) Non-consolidated statements of income

Ordinary income
Interest income
Interest on loans and bills discounted
Interest and dividends on securities
Fees and commissions
Other operating income
Other income
Ordinary expenses
Interest expenses
Interest on deposits
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Ordinary profit
Extraordinary gains
Gains on disposal of non-current assets
Reversal provision for directors' retirement benefits
Extraordinary losses
Losses on disposal of non-current assets
Impairment loss
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income-11-

For the six months
ended
Sep. 30, 2017
68,35760,382
57,864
1,796
5,871
243
1,860
38,415
2,019
1,907
7,392
59
24,456
4,487
29,9417
7
239
239
29,709
8,788
442
9,230
20,479（Millions of yen）
For the six months
ended
Sep. 30, 201870,23956,77152,930
3,440
5,038
543
7,886
153,977
1,194
1,027
7,154
30
23,497122,100(83,737)
2,311
2,311
2,734
138
2,595
(84,160)
9,860
4,259
14,119(98,280)

SURUGA bank, Ltd.

(3) Non-consolidated statements of changes in net assets
For the six months ended September 30, 2017
（Millions of yen）
Shareholders' equity
Capital surplus

Balance at beginning ofcurrent period
Changes of items during
periodCapital stock

Legal capitalsurplus

Other capitalsurplus30,043

18,585

4

Retained earnings
Other retained earnings
Reserve for
Total capital Legal retained advanced
surplusearnings
depreciationof non-current
assets
18,59030,04359

Retainedearnings
brought
forwardGeneralreserve

103,032

133,943

Dividends of surplus(2,779)Net income

20,479Purchase of treasury
shares
Disposal of treasury
shares

0

0

0

0

4

18,590Net changes of items otherthan shareholders' equity

Total changes of items
during period
Balance at end of current
period30,043

18,585

Total retained
earnings
Balance at beginning ofcurrent period
Changes of items during
period267,078

Treasuryshares(606)-

30,043-

59

103,032

Net unrealized
Total
Total
gains (losses) Deferred gains
valuation and(losses) on
shareholders' on availabletranslation
for-salehedgesequityadjustments
securities

Subscription
rights tosharesShareholders' equity
Retainedearnings-

17,700151,643

Valuation and translation adjustments

315,104

16,480(58)

16,422

24

Total net
assets331,551

Dividends of surplus(2,779)(2,779)(2,779)Net income

20,47920,47920,479

(3)

(3)

(3)

16

16

16

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders' equity

Total changes of items
during period
Balance at end of current
period

3,330

(109)

3,221

(3)

3,218

17,70012

17,713

3,330

(109)

3,221

(3)

20,931

284,778(594)

332,817

19,810(167)

19,643

20

352,482-12-

SURUGA bank, Ltd.

For the six months ended September 30, 2018
（Millions of yen）
Shareholders' equity
Capital surplus

Balance at beginning ofcurrent period
Changes of items during
periodCapital stock

Legal capitalsurplus

Other capitalsurplus30,043

18,585

4

Retained earnings
Other retained earnings
Reserve for
Total capital Legal retained advanced
surplusearnings
depreciationof non-current
assets
18,59030,04359

Retainedearnings
brought
forwardGeneralreserve

103,032

133,955

Dividends of surplus(2,432)

Net income(98,280)

Purchase of treasury
shares
Disposal of treasury
shares

(0)

(0)

(0)

(0)

3

18,589Net changes of items otherthan shareholders' equity

Total changes of items
during period
Balance at end of current
period30,043

18,585

Shareholders' equity
Retainedearnings
Total retained
earnings
Balance at beginning ofcurrent period
Changes of items during
period267,090--

30,04359(582)

103,032(100,712)
33,243

Valuation and translation adjustments

Net unrealized
Total
gains (losses) Deferred gains
Totalvaluation andshareholders' on available- (losses) on
translation
hedgesequityfor-saleadjustments
securities

Treasuryshares-

315,141

17,563(10)

17,552

Subscription
rights toshares17

Total net
assets332,711

Dividends of surplus(2,432)(2,432)(2,432)

Net income(98,280)(98,280)(98,280)

(0)

(0)

(0)

23

22

22

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders' equity

Total changes of items
during period
Balance at end of current
period(2,779)19(2,760)(5)(2,765)(100,712)

22(100,690)(2,779)19(2,760)(5)(103,456)

166,378(560)(214,450)

14,784

8

14,792

12229,255-13-

SURUGA bank, Ltd.

4. Response to the filing of a lawsuit for compensation of damages to the Bank against
the Bank’s current director concerning share house loans and other loans forincome-producing real estate
Following the deliberations of the Corporate Culture and Governance Reform
Committee, which functions as the nomination committee, the Bank has decided tohold an extraordinary general shareholders meeting as early as possible in 2019 inorder to rebuild and strengthen management with the aim of establishing asustainable business model in the future. The current director, Mr. Takeshi Yagi, isthe subject of a lawsuit over management accountability and will resign as director at
the conclusion of the extraordinary general shareholders meeting.

-14-

Financial Results
For the six months ended September 30, 2018

- Supplementary Information -SURUGA bank, Ltd.

Table of contents
Ⅰ. Financial highlights for the six months ended September 30, 2018
1. Financial results

Non-consolidated

・・・・・・・・

2. Major accounts

Non-consolidated

・・・・・・・・

3. Management indicesNon-consolidated

・・・・・・・・

4. Own capital

Non-consolidated

・・・・・・・・

5. Unrealized gains (losses) on securities

Non-consolidated

・・・・・・・・

6. Earnings forecast for the fiscal year ending March 31, 2019

1
3
7
8
9

Non-consolidated, Consolidated

7. Asset quality

Non-consolidated

・・・・・・・・

8. Credit costs

Non-consolidated

・・・・・・・・

10
11

9. Dividends

Non-consolidated

・・・・・・・・・・・・・・・・

12
13

・・・・・・・・

14

Ⅱ. Financial data for the six months ended September 30, 2018
1. Details of financial results

Non-consolidated
Consolidated

2. Net operating profit

Non-consolidated

3. Interest margins

Non-consolidated

4. ROA and ROE

Non-consolidated

5. Gains (losses) on securities

Non-consolidated

15
16

6. Capital adequacy ratio (domestic standard)

Non-consolidated, Consolidated

・・・・・・・・

7. Composition of own capital (domestic standard)

Non-consolidated, Consolidated

・・・・・・・・

Non-consolidated

・・・・・・・・

1. Risk-monitored loans

Non-consolidated, Consolidated

・・・・・・・・

2. Allowance ratio for risk-monitored loans

Non-consolidated, Consolidated

・・・・・・・・

17
18
19

3. Allowance for loan losses

Non-consolidated, Consolidated

・・・・・・・・

20

・・・・・・・・

21

Non-consolidated, Consolidated

・・・・・・・・

22

Non-consolidated, Consolidated

・・・・・・・・

22

Ⅲ. Status of Loans, etc.
Comparison of asset disclosure by standard

4. Non-performing loans based on the Financial Reconstruction Law
5. Status of coverage of non-performing loans based on
the Financial Reconstruction Law

Non-consolidated
Non-consolidated

6. Loan breakdown by industry, etc.
(1) Loan breakdown by industry

Non-consolidated(2) Breakdown of risk-monitored loans by industry

Non-consolidated(3) Consumer loans

Non-consolidated(4) The ratio of loans to small- and medium-sized enterprises, etc.

Non-consolidated

7. Loan breakdown by country(1) Loans to specific foreign countries

Non-consolidated(2) Loans to Asian countries

Non-consolidated

8. Deposits and loans

Non-consolidated

9. Number of branches

Non-consolidated

Ⅳ. Unrealized gains (losses) on securities
1. Unrealized gains (losses)
Ⅴ. Retirement benefits
1. Retirement benefit expenses

SURUGA bank, Ltd.

Ⅰ. Financial highlights for the six months ended September 30, 2018
1. Financial results (Non-consolidated)
Six months ended
Sep. 30, 2018(a)
53,97455,577(2,115)26
53,48823,81929,668486
30,155
26,8303,324
93,354
548
5,336(83,737)
2,311
(138)
2,595
(98,280)

Gross operating profit
Net interest income
Net fees and commissions
Net other operating income (Note1）
Core gross operating profit
Expenses (-)
Core net operating profit （Note2）
Gains (losses) on bonds
Actual net operating profit (Note3）
Provision for general allowance for loan losses (-)
Net operating profit
Disposal of non-performing loans (-)
Recoveries of written-off claims
Gains (losses) on stocks
Ordinary profit
Reversal of provision for directors’ retirement benefits
Gains (losses) on disposal of non-current assets
Impairment loss (-)
Net income(a) - (b)(3,051)(2,785)(594)(6)(3,385)(15)(3,371)335(3,035)26,752(29,787)
89,702
89
4,154(113,678)
2,311
93
2,595
(118,759)(Millions of yen)Six months ended
Sep. 30, 2017(b)
57,02558,362(1,521)
32
56,873
23,83433,039151
33,19078
33,111
3,652
459
1,182
29,941(231)
20,479Net credit costs
120,185
116,454
3,731
Actual credit costs（Note4）
119,636
116,365
3,271(Note1) Excludes gains (losses) on bonds.
(Note2) Core net operating profit = Net operating profit + Provision for general allowance for loan losses- Gains (losses) on bonds(Note3) Actual net operating profit = Net operating profit + Provision for general allowance for loan losses(Note4) Actual credit costs = Net credit costs (Provision for general allowance for loan losses + Disposal of non-performing loans)- Recoveries of written-off claims(1) Gross operating profit: ¥53.9 billion
・Net interest income decreased by ¥2.7 billion year-on-year, mainly due to a decrease in interest on
loans and bills discounted.
・Yen loan-deposit income decreased by ¥4. 4 billion year-on-year.
・Core gross operating profit decreased by ¥3.3 billion year-on-year, mainly due to a decrease in net interest income.
・Gross operating profit decreased by ¥3.0 billion year-on-year.

Net interest income(Billions of yen)
53.7
48.7

1H,
FY3/151H,
FY3/1654.8

58.3

Yen loan-deposit income(Billions of yen)
55.5
47.2

1H,
FY3/171H,
FY3/181H,
FY3/191H,
FY3/15

-1-

50.3

53.7

56.0

1H,
FY3/161H,
FY3/171H,
FY3/1851.6

1H,
FY3/19SURUGA bank, Ltd.

(2) Expenses; OHR: 44.1%
・Expenses remained flat at ¥23.8 billion year-on-year.
・OHR rose year-on-year to 44.1%, mainly due to a decrease in ｇross operating profit.
(OHR(%) = Expenses / Gross operating profit × 100)

Gross operating profit

Expenses

OHR

54.0 44.7%

57.0 41.7%(Billions of yen)

48.5%

53.0 43.7%

47.9

53.9 44.1%

23.2

23.1

24.1

23.8

23.8

1H,FY3/15

1H,FY3/16

1H,FY3/17

1H,FY3/18

1H,FY3/19(3) Core net operating profit: ¥29.6 billion, Net operating profit: ¥3.3 billion
・Core net operating profit decreased by ¥3.3 billion year-on-year, mainly due to a decrease in net interest income.
・Net operating profit decreased by ¥29.7 billion year-on-year, mainly due to an increase in provision for general allowance
for loan losses.

Core net operating profit

Net operating profit(Billions of yen)

29.0 29.8

24.5 24.6

1H,FY3/15

29.8 30.0

33.0

33.1
29.6
3.3

1H,FY3/16

1H,FY3/17

1H,FY3/18

1H,FY3/19(4) Ordinary profit: (¥83.7) billion
・Ordinary profit decreased by ¥113.6 billion year-on-year, mainly due to an increase in net credit costs.

(5) Net income: (¥98.2) billion
・Net income decreased by ¥118.7 billion year-on-year, mainly due to a decrease in ordinary profit.

(6) Actual credit costs: ¥119.6 billion
・Net credit costs increased by ¥116.4 billion year-on-year, mainly due to an increase (¥26.7 billion) in provision forgeneral allowance for loan losses and an increase (¥89.7 billion) in disposal of non-performing loans.
・Actual credit costs, calculated as net credit costs (¥120.1 billion) minus the amount of recoveries of written-off claims (¥0.5
billion) amounted to ¥119.6 billion.

-2-

SURUGA bank, Ltd.

2. Major accounts (Non-consolidated)(1) Loans and bills discounted
・Loans and bills discounted decreased by ¥200.1 billion, or 6.0% year-on-year.
・Consumer loans decreased by ¥172.5 billion, or 5.8% year-on-year.
・Yield on loans and bills discounted (overall) dropped by 22 basis points year-on-year to 3.36%.

Sep. 30, 2018(a)Loans and bills discounted(period-end balance)(a) - (b)(a) - (c)Mar. 31, 2018(b)

(Millions of yen)Sep. 30, 2017(c)

3,085,874(160,104)(200,173)

3,245,9783,286,047

Consumer loans

2,790,884(135,107)(172,561)

2,925,991

2,963,445

Secured loans

2,533,341(121,235)(159,596)

2,654,576

2,692,937

Unsecured loans

257,543(13,871)(12,965)

271,414

270,508

Loans and bills discounted(average balance)

3,134,885(94,891)(88,283)

3,229,776

3,223,168

90.3%

11.0%

9.7%

79.3%

80.6%

82.6%

2.8%

3.1%

79.8%

79.5%

(a) - (b)(Billions of yen)Six months ended
Sep. 30, 2017(b)

Loan-deposit ratio(period-end balance basis)
Loan-deposit ratio(average balance basis)（Reference）

Six months ended
Sep. 30, 2018(a)Business alliance with Japan Post Bank
New housing loans (cumulative total)

13.5

(5.2)

18.7

(Billions of yen)
Loans and bills discounted(period-end balance)
Consumer loans(period-end balance)

Yield on loans and bills discounted(overall)

3,286.0
3,184.6
3,085.8
3,057.8
2,954.2
2,963.4
2,835.7
2,790.8
2,672.5
2,549.7

Sep.14

Sep.15

Sep.16

Sep.17

Sep.18

3.44%

3.52%

3.59%

3.58%

3.36%

Sep.14

Sep.15

Sep.16

Sep.17

Sep.18New consumer loans(for the first half)
New consumer loans(for the second half)(Billions of yen)
393.2

465.5

470.0
353.3

193.9

255.7

238.7

199.3

209.7

231.2

226.3

28.1

FY3/15

FY3/16

FY3/17

FY3/18

1H,FY3/19

-3-

127.0

SURUGA bank, Ltd.

Consumer loans
Outstanding balance, yield, delinquency rate by loan category
Sep. 30, 2018

(Billions of yen)
Loan category

Period-end balance

Secured loans

Yield

Delinquency rate

2,533.3

3.39%

2.77%

Housing loans

653.3

2.91%

0.24%

Studio apartment loans

362,7

3.47%

0.20%

1,263.6

3.73%

0.50%

Share house loans

203.0

2.34%

30.13%

Other secured loans

50.7

4.90%

0.55%

Unsecured loans

257.5

10.02%

0.87%

Card loans

167.3

11.28%

0.37%

Unsecured certificate loans

90.2

7.69%

1.81%

2,790.8

4.00%

2.59%

Single building apartment loans

Consumer loans※Delinquency rate ＝ Loans past due 3 months or more / Loans※Yield: Yield for customers (excluding guarantee fee, accrued interest), period-end balance basis

Share house loans (Non-performing loans based on the Financial Reconstruction Law)
Sep. 30, 2018

(Billions of yen)

Claims against
bankrupt andsubstantiallybankrupt obligors

Total

253.7

Claims withcollection risk

31.8

Claims for special
attention

101.6

Subtotal

56.8

Normal assets

190.3

Sep. 30, 2018

63.4
(Billions of yen)

Total
A

Share house claims
253.7

203.4

Collateral or
guarantees, etc.

UnsecuredportionAllowance

Coverage ratio

B

C

D

(B＋D)／A

95.2

158.4

136.2

※ Based on obligors of share house loans※ Covered amount: Estimated amount, calculated by multiplying the covered amount including collateral, etc.
with a certain ratio.

-4-

91.25%SURUGA bank, Ltd.

Actual credit costs and Allowance for loan losses

Sep. 30, 2018

(Billions of yen)
Item

Actual credit costs

Allowance ※2

Share house-related loans

94.7

136.2

Investment property loans ※1

9.2

30.3

Housing loans

1.4

1.7

Unsecured loans

0.5

0.6

Loans to founder-affiliated companies

13.4

13.4

Business financing other than loans to founder-affiliated companies

0.3

3.6

119.6

186.0

Total
※1

Investment property loans: Studio apartment loans, Single building apartment loans, Other secured loans※2

Including allowance for losses of other assets (golf course membership and suspense payment) of ¥0.2 billion-5-

SURUGA bank, Ltd.

(2) Deposits
・Deposits decreased by ¥660.1 billion, or 16.1% year-on-year.
・Individual deposits decreased by ¥464.9 billion, or 14.4% year-on-year.
・Yield on deposits (overall) dropped by 40 basis points year-on-year to 0.05%.

(Millions of yen)Sep. 30, 2018(a)3,415,930
2,743,318
3,791,321

Deposits (period-end balance)
Individual deposits
Deposits (average balance)(a) - (b)(673,719)(448,529)(255,696)(a) - (c)(660,146)(464,951)(258,801)

Deposits(period-end balance)
Individual deposits(period-end balance)(Billions of yen)
4,081.9
3,843.3

4,097.6

4,089,649
3,191,847
4,047,017

Sep. 30, 2017(c)
4,076,076
3,208,269
4,050,122

Yield on deposits(overall)

4,076.0
3,415.9
3,208.2
2,743.3

3,134.7

2,983.7

2,821.4

Mar. 31, 2018
(b)

0.10%

0.10%

0.10%

0.09%
0.05%

Sep.14

Sep.15

Sep.16

Sep.17

Sep.14

Sep.18

Sep.15

Sep.16

Sep.17(3) Net fees and commissions
・Net fees and commissions decreased by ¥0.5 billion year-on-year, mainly due to a decrease (¥0.8 billion)in fees and commissions.

Net fees and commissions

Fees and commissions

Fees and commissions payments(Millions of yen)
5,830

7,487

6,791

(960)

1H,FY3/15

6,130

5,954

(1,533)

1H,FY3/16

7,392

7,019

(1,521)(889)

1H,FY3/17

-6-

7,154

5,871

1H,FY3/18

5,038(2,115)

1H,FY3/19

Sep.18SURUGA bank, Ltd.

(4) Individual deposit assets
・Individual deposit assets decreased by ¥485.9 billion year-on-year.
・The ratio of investment products to total individual deposit assets rose by 10 basis points year-on-year to 5.2%.
(Millions of yen)Sep. 30, 2018(a)Mar. 31, 2018(b)

Sep. 30, 2017(c)

3,345,282

3,374,713(463,413)

3,185,938

3,201,886(22,539)

159,344

172,827(1,064)(1,539)

5,908

6,383

8,457

(380)

(762)

8,837

9,219

Mutual funds

88,128(5,526)(16,354)

93,654

104,482

Personal pension plans

33,379(2,318)(4,661)35,69738,04015,477232

775

15,245

14,702

5.2%

0.5%

0.1%

4.7%

5.1%

2,888,761(a) - (b)(456,521)(a) - (c)(485,952)

2,738,473(447,465)

150,288(9,056)

Foreign currency deposits

4,844

Public bonds

Individual deposit assets
Yen deposits
Investment products

Single premium life insurance
The ratio of investment products tototal individual deposit assets

3. Management indices (Non-consolidated)(1) Interest margins
・Loan-deposit margin (after deduction of expenses) dropped by 25 basis points year-on-year to 2.06%.
・Net interest margin dropped by 11 basis points year-on-year to 1.51%, mainly due to the decline
in yield on interest earning assets.

(0.17)(%)
Six months ended
Sep. 30, 2017
(b)
3.48

2.06

(0.25)

2.31

1.51(0.11)

1.62

Six months ended
Sep. 30, 2018
(a)
3.31

Loan-deposit margin
Loan-deposit margin(after deduction of expenses)
Net interest margin(a) - (b)Loan-deposit margin
Loan-deposit margin (after deduction of expenses)
Net interest margin

3.34%

3.41%

3.49%

3.48%

2.11%

2.25%

2.29%

2.31%

1.26%

1.44%

1.42%

1H, FY3/15

1H, FY3/16

1H, FY3/17

-7-

3.31%

2.06%

1.62%

1.51%

1H, FY3/18

1H, FY3/19

SURUGA bank, Ltd.

4. Own capital (Non-consolidated)・Capital adequacy ratio dropped by 405 basis points year-on-year to 8.65%.
(%)
Sep. 30, 2018(a)Capital adequacy ratio(domestic standard)(4.05)

8.65

Own capital

Sep. 30, 2017(b)(a) - (b)Deferred tax assets

12.70

Capital adequacy ratio

Deferred tax assets / Own acpital(Billions of yen)
325.5
295.9

283.1

11.53%

257.6

12.15%

12.22%

12.70%

219.7

8.65%
5.7%

1.2%

0.6%

1.0%

(0.5)%

3.1

1.7

3.2

(1.8)

Sep.14

Sep.15

Sep.16

Sep.17

12.7

Sep.18

Sep.14-8-

Sep.15

Sep.16

Sep.17

Sep.18SURUGA bank, Ltd.

5. Unrealized gains (losses) on securities (Non-consolidated)
・Net unrealized gains on securities decreased by ¥7.1 billion year-on-year.
(Millions of yen)

Other securities
Stocks
Bonds
OthersSep. 30, 2018(a)
20,927
20,483(244)687(a) - (b)(3,891)(4,121)(237)466(a) - (c)(7,197)(6,223)(87)(888)

Mar. 31, 2018(b)
24,81824,604(7)
221

Sep. 30, 2017(c)
28,12426,706(157)
1,575

6. Earnings forecast for the fiscal year ending March 31, 2019
Consolidated

Ordinary profit
Profit attributable toowners of parent
Non-consolidated

Net operating profit
Core net operating profit
Ordinary profit
Net income
Actual credit costs(Billions of yen)
Fiscal year ending
Mar. 31, 2019
(forecast)(75.5)(97.5)(Billions of yen)
Fiscal year ending
Mar. 31, 2019
(forecast)
16.5
52.0
(76.0)(97.0)
134.0(Note) The performance forecasts and other forward-looking statements in this report are based on information currently
available to the company and on certain assumptions deemed to be reasonable, and are not intended to guarantee future
performance. Actual performance may differ materially depending on various factors.

-9-

SURUGA bank, Ltd.

7. Asset quality (Non-consolidated)(1) Non-performing loans based on the Financial Reconstruction Law
・Non-performing loans based on the Financial Reconstruction Law increased by ¥202.9 billion year-on-year.
Non-performing loan ratio rose by 666 basis points year-on-year to 8.86%.
Outstanding balance(Millions of yen, %)Sep. 30, 2018(a)(a) - (b)(a) - (c)Mar. 31, 2018(b)

Sep. 30, 2017(c)

Claims against bankrupt andsubstantially bankrupt obligors

45,366

34,79336,104

10,573

9,262

Claims with collection risk

153,879

106,157

141,964

47,722

11,915

Claims for special attention

75,846

61,972

68,243

13,874

7,603

Total

(A)

275,092

202,922

246,310

72,17028,782

Total claims(B)

3,104,703(162,112)(201,941)

3,266,815

3,306,644

(A/B)

8.86

6.66

7.99

2.20

0.87

Non-performing loan ratio
Status of coverage(Millions of yen, %)Claims against
bankrupt andsubstantiallybankrupt
obligors

Claims withcollection risk

Claims for
specialattention

Total

Change from
Sep. 30, 2017

Non-performing loans(A)45,366

153,879

75,846275,092

246,310

Covered amount (C+D)(B)

45,366

137,098

56,999239,464

214,880

Portion secured by collateralor guarantees, etc.

(C)21,09857,70622,525

101,330

80,250Allowance for loan losses(D)

24,267

79,391

34,474

138,133

134,630

100.00

89.09

75.15

87.04

1.63

(E)

24,267

96,17353,321

173,762

166,061

Allowance ratio for unsecured portion(D/E)

100.00

82.55

64.65

79.49

34.00

4,016

25,121

8,097

37,234100.00

42.21

29.56

45.69

Coverage ratio (B/A)
Unsecured portion (A-C)(Reference) As of Mar. 31, 2018
Unsecured portion
Allowance ratio for unsecured portion(2) Risk-monitored loans
Sep. 30, 2018(a)(a) - (b)(a) - (c)Mar. 31, 2018(b)

(Millions of yen, %)Sep. 30, 2017(c)Loans to bankrupt obligors

2,662

692

1,890

1,970

772

Non-accrual delinquent loans

196,523

140,274

176,210

56,24920,313Loans past due 3 months or more

2,628

1,333

1,956

1,295

672

Restructured loans

73,21860,64066,288

12,578

6,930

Total

275,032

202,938

246,343

72,094

28,689

87.04

14.93

1.68

72.11

85.36

Coverage ratio-10-

SURUGA bank, Ltd.

8. Credit costs (Non-consolidated)
Six months ended
Sep. 30, 2018(a)(Millions of yen, %)Six months ended
Sep. 30, 2017(b)(a) - (b)Provision for general allowance for loan losses(1)

26,83026,75278

Disposal of non-performing loans(2)93,35489,702

3,652

Write-off of loans

1,975

151

1,824

Provision for specific allowance for loan losses

90,381

89,629752

Losses on sales of delinquent loans

1,022

(36)

1,058

Provision for allowance for contingent losses

(24)

(41)

17

A

548

89

459

(3) (=(1)+(2))

120,185

116,4543,731(3)- A

119,636

116,365

3,271

3,134,885(88,283)

3,223,168

Net credit costs ratio

7.64

7.41

0.23

Actual credit costs ratio

7.61

7.41

0.20

Recoveries of written-off claims
Net credit costs
Actual credit costs
Loans and bills discounted (average balance)(Note1) Net credit costs ratio = Net credit costs / The average balance of Loans and bills discounted (annualized)(Note2) Actual credit costs ratio = Actual credit costs / The average balance of Loans and bills discounted (annualized)

9. Dividends
・In light of the interim financial results, the company has regretfully decided not to pay interim dividends.
The forecast for fiscal year-end dividends remains undecided at this time and shall be determined based on
the annual financial results.

Fiscal year ending
Mar. 31, 2019(a)
Annual dividend per share
Interim dividend(yen)Fiscal year ended
Mar. 31, 2018(result)(b)

Undetermined

21.00

0.00

10.50

(Note) Annual dividend per share for the fiscal year ending March 31, 2019 is a forecast.

-11-

SURUGA bank, Ltd.

Ⅱ. Financial data for the six months ended September 30, 2018
1. Details of financial results (Non-consolidated)
Six months ended
Sep. 30, 2018(a)
53,97453,488（53,79953,313（55,441(2,129)
487
486
（
175
175
（
136
13
25
（
23,8198,578
13,1872,053

Gross operating profit(excluding gains (losses) on bonds)
Domestic gross operating profit(excluding gains (losses) on bonds)
Net interest income
Net fees and commissions
Net other operating income(of which, Gains (losses) on bonds)
International gross operating profit(excluding gains (losses) on bonds)
Net interest income
Net fees and commissions
Net other operating income(of which, Gains (losses) on bonds)
Expenses (excluding non-recurring losses)
Personnel expenses
Non-personnel expenses
Taxes
Net operating profit(before provision for general allowance for loan losses)(excluding gains (losses) on bonds)
Provision for general allowance for loan losses
Net operating profit
Gains (losses) on bonds
Non-recurring gains (losses)
Recoveries of written-off claims
Gains (losses) on stocks
Ordinary profit
Extraordinary gains (losses)
Gains (losses) on disposal of non-current assets
Impairment loss (-)
Reversal provision for directors' retirement benefits
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Net income(1)Provision for general allowance for loan losses(2)Disposal of non-performing loans
Write-off of loans
Provision for specific allowance for loan losses
Losses on sales of delinquent loans
Provision for allowance for contingent losses(3)Net credit costs (1)+(2)(4)Recoveries of written-off claims(5)Actual credit costs (3)-(4)-12-(a) - (b)(3,051)(3,385)(3,020)(3,355)(2,760)
(597)
336
335
(30)
(30)
(25)
2
(7)
(15)
(481)
508
(41)

(Millions of yen)Six months ended
Sep. 30, 2017(b)
57,02556,873 ）56,81956,668 ）58,201(1,532)
151
151 ）
205
205 ）
161
11
32
- ）
23,834
9,059
12,6792,094

30,155(3,035)33,19029,66826,8303,324
486(87,061)
548
5,336(83,737)
(422)
(138)
2,595
2,311
(84,160)
9,860
4,259
14,119(98,280)(3,371)
26,752(29,787)
335(83,891)
89
4,154(113,678)
(191)
93
2,595
2,311
(113,869)
1,072
3,817
4,889
(118,759)

33,03978
33,111151(3,170)459
1.182
29.941(231)(231)
29,709
8,788
442
9,230
20,47926,83093,354
1,975
90,3811,022(24)
120,185548
119,636

26,752
89,702
151
89,629(36)(41)
116,45489
116,365

78
3,652
1,824
752
1,058
17
3,731
459
3,271

SURUGA bank, Ltd.

Details of financial results (Consolidated)
Six months ended
Sep. 30, 2018(a)
57,00757,327(1,065)745
26,178124,101
7,137
(3)
412
(85,726)(427)(86,153)
10,132
4,551
14,684(52)(100,785)

Consolidated gross profit
Net interest income
Net fees and commissions
Net other operating income
Expenses (excluding non-recurring losses)
Actual credit costs
Gains (losses) on stocks
Equity in gains (losses) of affiliates
OthersOrdinary profit
Extraordinary gains (losses)
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit attributable to non-controlling interests
Profit attributable to owners of parent(a) - (b)(5,530)(5,479)
(386)
335
251
118,625
5,955
(9)
1,572
(116,888)(188)(117,075)
998
4,053
5,051
(172)
(121,953)(Millions of yen)Six months ended
Sep. 30, 2017(b)
62,57362,806(679)
410
25,927
5,476
1,182
6
(1,160)31,162(239)
30,922
9,134
498
9,633
120
21,168(1)Provision for general allowance for loan losses
27,26926,867(2)Disposal of non-performing loans
97,61091,837
Write-off of loans
2,948
119
Provision for specific allowance for loan losses
93,047
91,716
Losses on sales of delinquent loans
1,639
45
Provision for allowance for contingent losses
(24)
(41)
(3)Net credit costs (1)+(2)124,879
118,703(4)Recoveries of written-off claims
77778(5)Actual credit costs (3)-(4)124,101
118,625(Note) Consolidated gross profit = (Interest income - Interest expenses) + (Fees and commissions - Fees and commissions
payments) + (Other operating income - Other operating expenses)

402
5,773
2,829
1,331
1,594
17
6,176
699
5,476

(Reference)(Millions of yen)
(32,647)
36,206
Consolidated net operating profit
3,559(Note) Consolidated net operating profit = Consolidated gross profit - Consolidated expenses - Consolidated provision for generalallowance for loan losses(Number of consolidated subsidiaries and affiliates)
Consolidated subsidiaries
Equity-method accounted affiliates-(Companies)
91(29,787)(19,157)(Millions of yen)Six months ended
Sep. 30, 2017(b)
33,111
21,3219
1

2. Net operating profit (Non-consolidated)
Six months ended
Sep. 30, 2018
(a)
3,324
2,164

Net operating profit
Per employee (Thousands of yen)

-13-(a) - (b)SURUGA bank, Ltd.

3. Interest margins (Non-consolidated)
Overall

Yield on interest earning assets(A)
Yield on loans and bills discounted
Yield on securities
Yield on interest bearing liabilities(B)
Yield on deposits
Loan-deposit margin(after deduction of expenses)
Net interest margin(A) - (B)

(0.07)(0.22)
2.34
0.04(0.04)(%)
Six months ended
Sep. 30, 2017
(b)
2.89
3.58
3.03
1.27
0.09

2.06

(0.25)

2.31

1.51(0.11)

1.62(0.07)(0.22)
2.40
0.04(0.03)(%)
Six months ended
Sep. 30, 2017
(b)
2.88
3.58
3.12
1.22
0.08

2.09

(0.25)

2.34

1.55(0.11)

1.66(1.35)(5.63)(19.00)(74.13)(%)
Six months ended
Sep. 30, 2017
(b)
1.50
0.92
21.06
13.03

Six months ended
Sep. 30, 2018
(a)
2.82
3.36
5.37
1.31
0.05

(a) - (b)Domestic

Yield on interest earning assets(A)
Yield on loans and bills discounted
Yield on securities
Yield on interest bearing liabilities(B)
Yield on deposits
Loan-deposit margin(after deduction of expenses)
Net interest margin(A) - (B)Six months ended
Sep. 30, 2018
(a)
2.81
3.36
5.52
1.26
0.05

(a) - (b)4. ROA and ROE (Non-consolidated)

ROA
ROE

Net operating profit basis
Net income basis
Net operating profit basis
Net income basis

Six months ended
Sep. 30, 2018(a)
0.15
(4.71)
2.06(61.10)(a) - (b)5. Gains (losses) on securities (Non-consolidated)

Gains (losses) on bonds
Gains on sales
Gains on redemptions
Losses on sales
Losses on redemptions
Losses on devaluation

Six months ended
Sep. 30, 2018
(a)
486
517
30
-

Gains (losses) on stocks
Gains on sales
Losses on sales
Losses on devaluation

5,336
7,153
1,817

-14-

335
(0)
307
(29)
-

(Millions of yen)Six months ended
Sep. 30, 2017
(b)
151
0
210
59
-

4,154
5,960
(0)
1,807

1,182
1,193
0
10

(a) - (b)SURUGA bank, Ltd.

6. Capital adequacy ratio (domestic standard)
Non-consolidated

Capital adequacy ratio
Own capital (Core capital)
Core capital : instruments and reserves
Core capital : regulatory adjustments (-)
Risk-weighted assets
Total required capital(Millions of yen)Sep. 30, 2018
(a)
8.65%
219,726
243,432
23,7052,538,011
101,520(a) - (b)(4.05%)(105,844)(96,108)
9,736(24,024)(961)

Consolidated

Capital adequacy ratio
Own capital (Core capital)
Core capital : instruments and reserves
Core capital : regulatory adjustments (-)
Risk-weighted assets
Total required capital

Sep. 30, 2017(b)
12.70%
325,570
339,540
13,9692,562,035
102,481(Millions of yen)Sep. 30, 2018
(a)
8.64%
223,139
250,961
27,8212,580,156
103,206(Note1) Amounts less than one million yen are rounded down.
(Note2) Total required capital = Risk-weighted assets × 0.04

-15-(a) - (c)(4.29%)(111,978)(100,780)
11,198(10,146)(406)

Sep. 30, 2017(b)
12.93%
335,117351,741
16,6232,590,302
103,612SURUGA bank, Ltd.

7. Composition of own capital (domestic standard)(Millions of yen）
September 30, 2018
Non-consolidated
Consolidated
Amounts
Amounts
excluded
excluded
under
under
transitionaltransitionalarrangements
arrangementsCore capital: instruments and reserves(1)
Directly issued qualifying common stock or preferred stock mandatorily convertible
into common stock capital plus related capital surplus and retained earnings
Capital and capital surplus
Retained earnings
Treasury shares (-)
Earnings to be distributed (-)
Accumulated other comprehensive income included in Core capital
Remeasurements of defined benefit plans
Subscription rights to acquire common stock or preferred stock mandatorily
convertible into common stock
Adjusted non-controlling interests (amount allowed to be included in Core capital)
Reserves included in Core capital: instruments and reserves
General allowance for loan losses
Eligible non-cumulative perpetual preferred stock subject to transitional arrangement
included in Core capital: instruments and reserves
Eligible capital instrument subject to transitional arrangement included in Core
capital: instruments and reserves
Capital instrument issued through the measures for strengthening capital by public
institutions included in Core capital: instruments and reserves
45% of revaluation reserve for land included in Core capital: instruments andreserves
Non-controlling interests included in Core capital subject to transitionalarrangementsCore capital: instruments and reserves(A)Core capital: regulatory adjustments(2)
Total intangible fixed assets (net of related tax liability, excluding those relating tomortgage servicing rights)
Goodwill (including those equivalent)
Other intangible fixed assets other than goodwill and mortgage servicing rights

Deferred tax assets that rely on future profitability excluding those arising from
temporary differences (net of related tax liability)
Shortfall of eligible provisions to expected losses
Gains on sale related to securitization transactions
Gains (losses) due to changes in own credit risk on fair valued liabilities
Prepaid pension cost
Net defined benefit asset
Investments in own shares (excluding those reported in the net assets)
Reciprocal cross-holdings in relevant capital instruments issued by other financial
institutions
Investments in the capital of banking, financial and insurance entities that areoutside the scope of regulatory consolidation (“Other financial institutions”), net of
eligible short positions, where the bank does not own more than 10% of the issued
share capital (amount above the 10% threshold)Amount exceeding the 10% threshold on specified items
Significant investments in the common stock of Other financial institutions, netof eligible short positions
Mortgage servicing rights
Deferred tax assets arising from temporary differences (net of related tax liability)

Amount exceeding the 15% threshold on specified items
Core capital: regulatory adjustments(B)
Total capital
Total capital
(A-B)
(C)
Risk-weighted assets(3)
Credit risk-weighted assets
Total of items included in risk-weighted assets subject to transitionalarrangements
Intangible fixed assets other than goodwill and mortgage servicing rights (netof related tax liability)_
Deferred tax assets (net of related tax liability)
Prepaid pension cost _Net defined benefit asset
Amount equivalent to market risk × 12.5
Amount equivalent to operational risk × 12.5
Credit risk-weighted assets adjustments
Amount equivalent to operational risk adjustments
Total amount of risk-weighted assets(D)
Capital adequacy ratio (non-consolidated)
Capital adequacy ratio (non-consolidated)(C/D)
Capital adequacy ratio (consolidated)
Capital adequacy ratio (consolidated)
(C/D)
-16-

214,450

219,595

48,632
166,378
560-

30,531
189,624
560
1,030
1,030

12

12

28,96928,96929,107
29,107

-

-

-

-

-

-

-

-

-

1,215

243,432

250,961

13,357

3,339

15,337

3,397

13,357

3,339

1,747
13,589

3,397

-

-

273

-

5,164
-

1,291
-

6,195
-

1,548
-

-

-

-

-

-

-

-

-

5,183

2,012

6,015

2,150

-

-

-

-

5,183
23,705

2,012
-

6,015
27,821

2,150-

219,726

223,1392,317,547

2,328,612

19,371

20,472

4,790

4,874

12,727
1,852
220,464
2,538,011

13,376
2,222
251,5442,580,156

8.65%

-

-

8.64%

SURUGA bank, Ltd.

Ⅲ. Status of loans, etc.
Comparison of asset disclosure by standard
Non-consolidated (As of September 30, 2018)
Classification and status of coverage by disclosure standard
Self-assessment result(by obligor classification)* Includes total claims (“Claims for special
attention” includes only loans and bills
discounted).

* Includes total claims.

Classification

Category
Creditbalance

Nonclassification

Category

Classification
Ⅱ

Classification
Ⅲ

Classification
Ⅳ

1,799

-

[842]

Bankrupt obligors
2,665
[842]

866

Effectively bankrupt
obligors
42,700[23,425]

23,761

18,938-[23,425]

Potentiallybankrupt obligors
153,879[79,391]

Substandard
obligors
Obligors
requiring
cautionNon-performing loans based on
the Financial Reconstruction Law

83,50053,597

16,781[79,391]-

Creditbalance
Claimsagainstbankrupt
andsubstantiallybankrupt
obligors

93,778-24,267

Coverage
ratio

Claims withcollection
risk

57,706

79,391

22,52534,47489.09%

Outstandingbalance

Loans tobankrupt
obligors

2,662

Non-accrualdelinquentloans

196,523

Loans pastdue 3 months
or more2,628

Restructured
loans

73,218

Total

275,032

75.15%

75,846-

Category

100%

153,879

Subtotal

94,263275,092

Other
obligors
requiring
caution

21,098* Includes loans andbills discounted.

45,366Claims for
specialattention
484

CollateralorAllowance
guarantees,
etc.

(Millions of yen)
Risk-monitoredloans

17,406

1,122,297-

138,133

87.04%

Normalassets-1,139,703

101,330

2,829,611

Normal obligors
1,671,491

1,671,491-

1,797,511

1,290,410

-

-

Total
3,104,703[103,659]

Total
16,781[79,391] [24,267]

3,104,703(Note1) “Total claims” includes “Loans and bills discounted”, “Customers’ liabilities for acceptances and guarantees”, “Foreignexchanges”, “Securities lent”, “Suspense payment” and “Accrued interest”.
(Note2) Numbers shown in brackets under “Self-assessment result” represent the reserved amount for each category.

-17-

SURUGA bank, Ltd.

1. Risk-monitored loans
The following table shows figures after partial direct write-off of loans.
The amounts of partial direct write-off of loans for the six months ended September 30, 2018 were as follows:(a) Non-consolidated: ¥2,846 million; (b) Consolidated: ¥3,667 million
Loans to “Potentially bankrupt obligors”, “Effectively bankrupt obligors” and “Bankrupt obligors” under self-assessment areplaced on non-accrual status.
Non-consolidated

Loans to bankrupt obligors
Non-accrual delinquent loans

Riskmonitored Loans past due 3 months or moreloans
Restructured loans
Total
Loans and bills discounted(period-end balance)
Loans to bankrupt obligors％ to loans Non-accrual delinquent loans
and bills Loans past due 3 months or morediscounted Restructured loans
Total(Millions of yen, %)Sep. 30, 2018
(a)
2,662
196,523
2,628
73,218275,032(a) - (b)692
140,274
1,333
60,640202,938(a) - (c)1,890
176,210
1,956
66,288
246,343

Mar. 31, 2018
(b)
1,970
56,2491,295
12,57872,094

Sep. 30, 2017
(c)
772
20,313672
6,930
28,6893,085,874(160,104)(200,173)

3,245,9783,286,047

0.08
6.36
0.08
2.37
8.91

0.02
4.63
0.05
1.99
6.69

0.06
5.75
0.06
2.16
8.04

0.06
1.73
0.03
0.38
2.22

0.02
0.61
0.02
0.21
0.87

Consolidated

Loans to bankrupt obligors
Non-accrual delinquent loans
Riskmonitored Loans past due 3 months or moreloans
Restructured loans
Total
Loans and bills discounted(period-end balance)
Loans to bankrupt obligors％ to loans Non-accrual delinquent loans
and bills Loans past due 3 months or morediscounted Restructured loans
Total(Millions of yen, %)Sep. 30, 2018
(a)
4,064
202,796
2,628
73,218282,707(a) - (b)1,077
140,450
1,333
60,640203,500(a) - (c)2,569
176,335
1,956
66,288247,148

Mar. 31, 2018
(b)
2,987
62,346
1,295
12,57879,207

Sep. 30, 2017
(c)
1,495
26,461672
6,930
35,5593,090,985(157,174)(195,917)

3,248,159

3,286,902

0.13
6.56
0.08
2.36
9.14

0.04
4.65
0.05
1.98
6.71

0.09
5.76
0.06
2.15
8.06

0.09
1.91
0.03
0.38
2.43

0.04
0.80
0.02
0.21
1.08

-18-

SURUGA bank, Ltd.

2. Allowance ratio for risk-monitored loans
Non-Consolidated

Risk-monitored loans(A)
Collateral or guarantees, etc.
(B)
Allowance for loan losses(C)
Allowance ratio(C/A)
Coverage ratio(B+C)/(A)Sep. 30, 2018(a)
275,032
101,321138,082
50.20
87.04

(a) - (b)202,938
66,427
120,990
26.50
14.93

(a) - (c)246,343
80,305
134,607
38.09
1.68(Millions of yen, %)Sep. 30, 2017
Mar. 31, 2018(b)(c)
72,094
28,68921,01634,894
3,475
17,092
12.11
23.70
85.36
72.11

(a) - (c)247,148
80,600135,049
31.69
2.53(Millions of yen, %)Mar. 31, 2018
Sep. 30, 2017(b)(c)
35,55979,20723,45937,403
6,540
20,342
18.39
25.68
84.36
72.90

(a) - (c)173,904
73,251
100,653(Millions of yen)Mar. 31, 2018
Sep. 30, 2017(b)(c)
12,191
70,08955,4038,983
3,207
14,685(a) - (c)177,02174,108102,913(Millions of yen)Mar. 31, 2018
Sep. 30, 2017(b)(c)
19,70878,218
12,951
59,832
6,756
18,385(a) - (c)Mar. 31, 2018(b)

(Millions of yen)Sep. 30, 2017(c)Consolidated

Risk-monitored loans(A)
Collateral or guarantees, etc.
(B)
Allowance for loan losses(C)
Allowance ratio(C/A)
Coverage ratio(B+C)/(A)Sep. 30, 2018(a)282,707
104,059
141,589
50.08
86.89

(a) - (b)203,500
66,656
121,247
24.40
13.99

3. Allowance for loan losses
Non-consolidated

Allowance for loan losses
General allowance for loan losses
Specific allowance for loan losses

Sep. 30, 2018(a)
186,095
82,234
103,860(a) - (b)116,006
26,831
89,175

Consolidated

Allowance for loan losses
General allowance for loan losses
Specific allowance for loan losses

Sep. 30, 2018(a)
196,72987,059109,669(a) - (b)118,511
27,22791,284

4. Non-performing loans based on the Financial Reconstruction Law
Non-consolidated
Sep. 30, 2018(a)

Claims against bankrupt andsubstantially bankrupt obligors
Claims with collection risk
Claims for special attention
Total

(A)

(a) - (b)45,366

34,79336,104

10,573

9,262

153,879
75,846275,092

106,157
61,972
202,922

141,964
68,243
246,31047,722
13,874
72,17011,915
7,603
28,782

5. Status of coverage of non-performing loans based on the Financial Reconstruction Law
Non-consolidated

Total coverage
Allowance for loan losses
Collateral or guarantees, etc.
Coverage ratio(B)

Sep. 30, 2018(a)239,464
138,133
101,330(a) - (b)187,513
121,118
66,395(a) - (c)214,880
134,630
80,250

(B/A)

87.04

15.06

1.63

-19-

(Millions of yen, %)Mar. 31, 2018
Sep. 30, 2017(b)(c)
24,584
51,951
3,503
17,01521,08034,935

71.98

85.41

SURUGA bank, Ltd.

6. Loan breakdown by industry, etc.
(1) Loan breakdown by industry (Non-consolidated)(Millions of yen)Sep. 30, 2018(a)Domestic offices (excluding Japan
offshore banking accounts)
Manufacturing
Agriculture and forestry
Fishery
Mining, quarrying and gravel
Construction
Utilities
Information and communication
Transportation and postal service
Wholesale and retail trade
Finance and insurance
Real estate, goods rental and leasing

Services
Government and municipal government

OthersMar. 31, 2018(b)

Sep. 30, 2017(c)(a) - (b)(a) - (c)3,085,874(160,104)(200,173)

3,245,9783,286,047

48,1284,769
36
254
13,1801,191
1,355
12,76031,61270,66367,59630,9884,183
2,799,146(6,148)
(180)
(1)
254
(2,229)190(300)(1,087)(4,240)(4,110)(1,762)(2,658)(3,112)(134,722)(6,154)
(281)
(2)
254
(2,028)(1,935)(136)(477)(5,873)(3,368)(2,744)(4,691)(1,503)(171,238)

54,276
4,949
37
15,4091,001
1,655
13,84735,852
74,77369,35833,646
7,295
2,933,868

54,2825,050
38
15,2083,126
1,491
13,23737,48574,031
70,34035,6795,686
2,970,384(2) Breakdown of risk-monitored loans by industry (Non-consolidated)
Sep. 30, 2018(a)Domestic offices (excluding Japan
offshore banking accounts)
Manufacturing
Agriculture and forestry
Fishery
Mining, quarrying and gravel
Construction
Utilities
Information and communication
Transportation and postal service
Wholesale and retail trade
Finance and insurance
Real estate, goods rental and leasing

Services
Government and municipal government

Others ※(a) - (b)(Millions of yen)(a) - (c)Mar. 31, 2018(b)

Sep. 30, 2017(c)

275,032

202,938

246,343

72,094

28,689

1,364
0
33
1,181
5
125
83
1,915
18,5091,511
250,301

(185)
0
0
(337)
(5)
0
(10)
(686)
16,351(246)
188,056

(189)
0
0
(337)
(6)
0
(18)
(930)
16,066(281)
232,080

1,549
33
1,518
10
125
93
2,601
2,158
1,757
62,245

1,553
33
1,558
11
125
101
2,845
2,443
1,792
18,221※ “Others” includes real estate financing for rent to individuals.

-20-

SURUGA bank, Ltd.

(3) Consumer loans (Non-consolidated)

Consumer loans
Secured loans
Unsecured loans(Millions of yen)Sep. 30, 2018(a)2,790,884
2,533,341
257,543(a) - (b)(135,107)(121,235)(13,871)(a) - (c)(172,561)(159,632)(12,965)

Mar. 31, 2018(b)
2,925,991
2,654,576
271,414(4) The ratio of loans to small- and medium-sized enterprises, etc. (Non-consolidated)
Sep. 30, 2018(a)
The ratio of loans to small- andmedium-sized enterprises, etc.

(a) - (b)

96.88

(%)

(a) - (c)0.23

Sep. 30, 2017(c)
2,963,445
2,692,937
270,508

0.14

Mar. 31, 2018(b)

Sep. 30, 2017
(c)

96.65

96.74

7. Loan breakdown by country(1) Loans to specific foreign countries (Non-consolidated)
Not applicable.
(2) Loans to Asian countries (Non-consolidated)
Not applicable.

8. Deposits and loans (Non-consolidated)
Millions of yen)

Deposits
Loans

period-end balance
average balance
period-end balance
average balance

Sep. 30, 2018(a)3,415,930
3,791,321
3,085,874
3,134,885(a) - (b)(673,719)(255,696)(160,104)(94,891)(a) - (c)(660,146)(258,801)(200,173)(88,283)

Mar. 31, 2018(b)
4,089,649
4,047,017
3,245,9783,229,776

Sep. 30, 2017(c)
4,076,076
4,050,122
3,286,047
3,223,168

9. Number of branches (Non-consolidated)(Branches)

Number of branches

Sep. 30, 2018(a)132(a) - (b)(a) - (c)
-

-21-

-

Mar. 31, 2018(b)132

Sep. 30, 2017(c)132

SURUGA bank, Ltd.

Ⅳ. Unrealized gains (losses) on securities
1. Unrealized gains (losses)
Non-consolidated(Millions of yen)Sep. 30, 2018
Mar. 31, 2018
Sep. 30, 2017
Fair Net unrealized gains (losses) Fair Net unrealized gains (losses) Fair Net unrealized gains (losses)
value
Gains Losses value
Gains Losses value
Gains Losses

Other
securities
Stocks
Bonds
Others128,203

20,927

21,381454 116,151

24,81825,400581 111,220

28,12428,530406

33,52489,0705,608

20,483(244)
687

20,551
43
787

67
287
99

24,604(7)
221

24,699
90
609

95
98
388

26,706(157)
1,575

26,813
55
1,661

106
213
85

41,27562,85012,02546,08555,477
9,657(Note1) Amounts less than one million yen are rounded down.
(Note2) Stocks of subsidiaries and affiliates are not included since they are not valuated with fair value.
(Note3) Unrealized gains (losses) represent the difference between the fair value as of period-ends and acquisition costs.
Consolidated

Other
securities
Stocks
Bonds
Others(Millions of yen)Sep. 30, 2018
Mar. 31, 2018
Sep. 30, 2017
Fair Net unrealized gains (losses) Fair Net unrealized gains (losses) Fair Net unrealized gains (losses)
value
Gains Losses value
Gains Losses value
Gains Losses
130,797

23,29923,754454 118,214

26,65927,241

581 113,177

29,86030,266406

34,28489,0707,442

21,145(244)
2,397

21,213
43
2,497

67
287
99

25,201(7)
1,464

25,296
90
1,853

95
98
388

27,289(157)
2,728

27,396
55
2,814

106
213
85

41,97062,85013,393

46,76555,477
10,934(Note1) Amounts less than one million yen are rounded down.
(Note2) Stocks of subsidiaries and affiliates are not included since they are not valuated with fair value.
(Note3) Unrealized gains (losses) represent the difference between the fair value as of period-ends and acquisition costs.

Ⅴ. Retirement benefits
1. Retirement benefit expenses
Non-consolidated(Millions of yen)Six months ended
Six months ended
Sep. 30, 2018
Sep. 30, 2017
Service cost
264276Interest cost
54
56
Expected returns on plan assets
(386)
(365)
Amortization of unrecognized net actuarial gains (losses)
(164)
(79)
Others (non-recurring extra retirement payments, etc.) (Note1)
106
114
Retirement benefit expenses(124)
2(Note1) “Others (non-recurring extra retirement payments, etc.)” for the six months ended Sep. 30, 2017 includes the contribution
to a defined contribution pension plan.
Consolidated(Millions of yen)Six months ended
Six months ended
Sep. 30, 2018
Sep. 30, 2017
Service cost (Note1)
274
289
Interest cost
54
56
Expected returns on plan assets
(386)
(365)
Amortization of unrecognized net actuarial gains (losses)
(164)
(79)
Others (non-recurring extra retirement payments, etc.) (Note2)112
120Retirement benefit expenses(108)
21(Note1) Retirement benefit expenses of consolidated subsidiaries adopting a simplified method are included in “Service cost”.
(Note2) “Others (non-recurring extra retirement payments, etc.)” includes the contribution to a defined contribution pension plan.

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