March 25, 2020
To whom it may concern:

Name of Company:

Suruga Bank, Ltd.

Name of Representative:

Director and President: Michio Arikuni

Contact Person:(Code No. 8358 First Section of Tokyo StockExchange)
Senior Executive Officer
General Manager of General Management Planning
Headquarters: Tatsuya Akita(TEL 03-3279-5536)

Announcement Regarding Transfer of Share House-related Loan Receivables

Suruga Bank, Ltd., is subject to a petition for civil conciliation from 257 obligors (including joint andseveral obligors, hereinafter simply referred to as “Claimants”) of the share house-related financing
executed by the Company. This is to inform you that the share house-related loan receivables have beentransferred to a third party (hereinafter the "Transfer") based on the conciliation recommendation of theTokyo District Court's Conciliation Committee.
Note
1. Circumstances of the Transfer
The Company received an order for business improvement including partial suspension of businessfrom the Financial Services Agency based on Article 26 of the Banking Act on October 5, 2018. In
response to this, the Company has considered and implemented all measures possible as a financial
institution to assist customers who have had difficulty repaying share house-related loans and otherloans for investment real estate, on the basis of the business improvement plan submitted to theFinancial Services Agency on November 30, 2018. As part of these measures, the Company has
decided to execute the Transfer in order to quickly resolve the problems with the customers who havereceived share house-related loans. （The Transfer is limited to share house-related loan receivables,and does not concern other investment real estate-related loan receivables.）2. Regarding the Transfer
The Transfer has been executed on the basis of the conciliation recommendation of the Tokyo
District Court's Conciliation Committee. The outline is as follows.

・Acknowledging its liability for payment of a certain amount of settlement money to each of theClaimants with regard to the share house-related loans, the Company offset its liabilities withthe share house-related loan liabilities of each of the Claimants at an equivalent amount, andtransferred the post-offset loan receivables to a third party.
・After the above-mentioned offset and the Transfer, each of the Claimants provided substituteperformance of their loan obligations using the collateral property that each owned.
The Company's share house-related financing was executed for newly built properties without atrack record of operation on the basis of unrealistic business plans under conditions different fromgeneral investment real estate-related financing in that the market was immature and there were few
similar properties to compare with. As a result, the customers purchased share house properties atprices higher than the market price, and suffered losses from so-called high price grabbing. When
executing the share house-related financing, there were cases in which the Company responded
inappropriately, for instance, failing to conduct sufficient analysis of the risks inherent in sharehouses that are not found in general investment real estate-related financing and overlooking theunrealistic nature of the business plans.
Based on the court's conciliation committee's determination that the Company is typically liable fordamages based on tort regarding the share house-related loans, the Company accepted that it isliable to pay the Claimants settlement money based on the conciliation recommendation.
In the coming days, conciliation as prescribed in Article 16 of the Act for Conciliation of Civil
Affairs is due to be concluded in Tokyo District Court to achieve a final resolution of the issues
between the Claimants and the Company regarding share house-related financing.
3． Future Prospects
Following the transfer of receivables, the Company expects a reversal of approximately ¥ 8.9
billion in the allowance for doubtful accounts in the fiscal year ending March 31, 2020, and thus
has revised its earnings forecast for the fiscal year ending March 31, 2020 as stated in the"Announcement Regarding the Revision to the Earnings Forecast" announced today.
The Company will continue to provide sincere support according to the situation of eachcustomer at its "Share House-Related & Other Loan Customer Service Office" and to work toresolve the share house-related financing issues and to establish a customer-oriented businessstructure.
Contact number for the "Share House-Related & Other Loan Customer Service Office"：
0120-010-636
Address：Suruga Bank, Ltd., 1-7-1 Nihonbashi Muromachi, Chuo-ku, Tokyo.
Business Hours：8：30 - 20：00（except Saturday, Sunday, national holidays and New Year'sseason）