Japan Securities Finance Co., Ltd.
FY2020Financial Results Presentation

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜Table of Contents＜Part Ⅰ＞

Overview of Financial Results for FY2020



１．Executive summary (Consolidated)Ｐ３



２．Summary Financial Results for FY2020

Ｐ４

３．Summary Financial Results for FY2020（JSF parent）

Ｐ５

４．Financial Highlight（Margin Loan Business）

Ｐ６



５．Financial Highlight（Securities Financing）

Ｐ７



６．Financial Highlight（Securities Investment of JSF parent）

Ｐ８

７．Summary Financial Results for FY2020（ JSF Trust Bank）

Ｐ９



８．Balance Sheet Summary (Consolidated)

Ｐ１０

９．Estimated Figures for FY2020

Ｐ１１

10. Dividend

Ｐ１２＜Part Ⅱ＞

Our Initiatives under the 6th Mid-term Management Plan and Management Issues



１．Achievements of the 6th Mid-Term Management Plan

(Management Goals)

P１４

２．Achievements of the 6th Mid-Term Management Plan

(Major Measures)

P１５



３．Corporate Governance (Review of Executive Remuneration)

P１６



４．Outlook for Fiscal 2021

P１７

Appendix

Ｐ１９〜

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

2

１．Executive Summary (Consolidated)（¥ mil）

Operating
Revenues

FY2020
Full YearYoY ⊿30,924 +1,822⊿％

Highlight＋6.3％

 Margin Loan Business resulted decrease（△2.7％）due to a decrease of balanceof Stock Loan
 Revenue of subsidiary JSFTB decreased(△12.4%)due to a decrease in gains onsales of bonds.
 Securities Financing saw a significant
increase in revenue driven by Bond
Lending (+39.8％）

 Operating expenses increased due toan increase in borrowing fees forsecurities.
 General and administrative expenses
increased. The allowance for doubtful
accounts was reversed in the previous
fiscal year, was transferred.

Operating
Income4,777＋647 ＋15.7％

Recurring
Income5,558＋663 ＋13.6％  Share of profit of entities accounted forNet
Income3,971＋414 ＋11.7％

using equity method increased.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

3２．Summary Financial Results for FY2020
Consolidated（¥ mil）

Operating
Revenues

FY2020
Full Year

YoY.⊿

Parent
(%⊿)

JSF

1,822

(＋6.3%)

27,5502,167

ExceptPremium Charges

23,711

2,864(＋13.7%)

20,337

3,208

Operating Expenses

18,0181,182(＋7.0%)

17,647

1,921

ExceptPremium Charges

10,8192,233(＋26.0%)10,4482,972

General &Administrative Expenses

8,129

▲7

(△0.1%)

6,990

Operating Income

4,777

647

(＋15.7%)

Recurring Income

5,558

663

(＋13.6%)

Gain or Loss inEquity-Method

395

88

(＋28.9%)

43

80

3,971

414

Net Income

Nihon Building

YoY.⊿

YoY.⊿

YoY.⊿

30,924Extraordinary
Profit or Loss

JSF Trust Bank

2,624

▲321

1,295

12

526

▲704

19

▲2

244

847

▲270

679

17

2,912

1

1,251

653

596

▲2

4,484

1,051

1,254

634

715

▲12

(ー)

―

―

―

―

43

80

(＋11.7%)

3,509

1,019

856

360

500

42

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

4３．Summary Financial Results for FY2020（JSF parent）
Key Points

Japan Securities Finance（parent）*excluding premium charge（¥ mil）

FY2020
Full Year

YoY.⊿●Operating Revenues(%⊿)

Operating Revenues*

20,3373,208(＋18.7%)

Margin Loan Business*

4,146

▲116

(△2.7%)

Securities Financing

12,3693,520(＋39.8%)Others

3,820

▲195

(△4.9%)

Operating Expenses*

10,4482,972(＋39.8%)General &Administrative Expenses

6,990

244

(＋3.6%)

Operating Income

2,912

1

(＋0.0%)

Recurring Income

4,484

1,051

(＋30.6%)Extraordinary
Profit or Loss

―

―

(ー)

Net Income

3,509

1,019

(＋40.9%)Copyright Japan Securities Finance Co., LTD. All Rights Reserved Up ¥3,208 mil (+18.7%) YoY driven
by Securities Financing.
̶ Margin Loan Business decreased 2.7%.
Though Margin Loan Balance wasalmost flat as the same period of theprevious year, Stock Loan balance
decreased.
̶ Securities Financing saw a significant
increase in revenue driven by strong
Bond Lending Business andoutstanding lending to some Financial
Instruments Business Operator.
̶ Others(Securities investment) dropped
due to a decrease of gain on sales of
JGBs, etc.
※For details of segments, see “Financial
Highlights for FY2020(P6-P8)”●Operating Expenses

̶ Up ¥2,972mil (+39.8%) YoY
̶ Fees on borrowing securities andinterest on payables under repurchaseagreements in Bond Lending●Recurring Income/Net Income

̶ Significant increase in profit due toincrease in dividend income from two
consolidated subsidiaries (eliminationon consolidated basis).

〜 All For Securities Market 〜

5

４．Financial Highlight （Margin Loan Business）
While Nikkei recovered to ¥30,000 level, mainly in late February, Margin
Loan Balance also recovered to a level higher than the previous year in
March.
Stock Loan Balance remained a gradual downward trend due to position
unwinding mainly in the fourth quarter.



FY2019（\ bn、%）

1Q

2Q

1H

YoY

FY2020

3Q

4Q

full year

1Q

2Q

1H

3Q

4Q

full year

4Q

YTD

Margin Loan

201

202

202

226

248

219

199

219

209

223

256

224

7

4

Margin Loan Rate

0.60

0.60

0.60

0.60

0.60

-

0.60

0.60

0.60

0.60

0.60

-

-

-

Stock Loan

332

350

341

383

268

333

295

333

314

316

255

300

▲12

▲33

Margin Loan（FY2019）
Margin Loan Rate（FY2019）

¥ tri
0.6

1Q Margin Loan

FY20︓¥199bn
FY19︓¥201bn

2Q Margin Loan

FY20︓¥219bn
FY19︓¥202bn

Margin Loan（FY2020）
Margin Loan Rate（FY2020）
3Q Margin Loan

FY20︓¥223bn
FY19︓¥226bn

Stock Loan（FY2019）
Stock Loan Rate (FY2019)

¥ tri
1.5%

0.6

1Q Stock Loan
FY20︓¥295bn
FY19︓¥332bn

4Q Margin Loan

FY20︓¥256bn
FY19︓¥248bn

2Q Stock Loan
FY20︓¥333bn
FY19︓¥350bn

Stock Loan（FY2020）
Stock Loan Rate (FY2020)
3Q Stock Loan
FY20︓¥316bn
FY19︓¥383bn

1.5%

4Q Stock Loan
FY20︓¥255bn
FY19︓¥268bn

0.4

1.0%

0.4

1.0%

0.2

0.5%

0.2

0.5%

Full Year Margin Loan

Full Year Stock Loan
FY20︓¥300bn
FY19︓¥339bn

FY20︓¥224bn
FY19︓¥219bn

0.0%

0.0
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

0.60%
Copyright Japan Securities Finance Co., LTD. All Rights Reserved

Mar

0.0
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

0.0%
Dec

Jan

Feb

Mar

0.40%

〜 All For Securities Market 〜

6５．Financial Highlight （Securities Financing）


Strong Bond Lending drive “Securities Financing Business”

Loan to Securities Companies also steady as a result in the balance ofequity repo and loans to FIBOs.
(¥ mil)Type of transaction

FY2020
Full Year

YoY⊿

YoY%

Securities Financing

Loans for Negotiable margintransaction

80

▲0

△0.0％

 The balance of loans outstanding
bottomed out at the beginning of the
fiscal year, but declined slightly on afull-year basis

Loans to Securities Companies*

785

47

+6.5％

 Increased outstanding balance ofequity repo denominated in foreign
currencies and loans to some FIBOs**.

Loans to Individual Investors or
Firms

468

▲26

△5.3％

 Outstanding of COM-STOCK Loan
recovered as the stock market
recovered, but declined year on year.

△6.4%

 Though borrowing demands for mainly
fail-cover increased, borrowing
demands for stablishing equity
positions decreased.
 Both outstanding of Gensaki
transactions and Repo transactions
increased significantly due to flexible
response to clients needs.

General Stock Lending

Bond Lending

Total Revenues

950

▲64

10,0853,561＋54.6%

12,3693,520＋39.8%* Equity Repo, General Loans, Stabilizing funding loan, etc.
** FIBOs : Financial Instruments Business Operators
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

7６．Financial Highlight（Securities Investment of JSF parent）
Resulted in decrease due to decrease in gain on sales of JGBs and theimpact of foreign exchange gains concerning foreign currency.

Revenues from securities investment（JSF）

Yen-based

EquityFY2020

YoY¥ 3,230 mil¥ 118 mil

¥ 1,041 mil▲¥ 284 mil

Others※¥ 2,188 mil¥ 402 mil

¥ 556 mil▲¥ 315 mil¥ 3,786 mil▲¥ 197 mil

Total

Foreign Bonds

2.9%
7.5%

10.8%

80%
78.9%

70%
Mar.2018

Mar.2019

ref. Trend of Interest Rate and Hedge Cost (JPY v.s. USD, EUR)
Trend of Interest Rate
US

Germany

Japan

3.0%

2.0%

2.0%

1.0%

1.0%

0.0%

0.0%
2014

2015

2016

2017

2018

2019

2020

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

2021

▲1.0%
2013

Mar.2020

Mar.2021

source）Bloomberg

Trend of hedge cost

4.0%

3.0%

▲1.0%
2013

Domestic Bonds

90%
90%

※ Investment Trust, etc.

4.0%

Others100%

Domestic Bonds

In foreign currencies

Transition of investment portfolio

USD3M
EUR3M

2014

2015

2016

2017

2018

2019

2020

〜 All For Securities Market 〜

2021

8

７．Summary Financial Results for FY2020（JSF Trust Bank）

Highlights

 Trust charges remained stable, contributing from strengthening custodian type trust service.
 Interest income resulted in a modest increase due to an increase in outstanding of loan balance
and investment securities.
 Both gains on sales of bonds and costs of unwinding IRS dropped.
 Large increases were posted in Recurring Income and Net Income

JSF Trust Bank（¥ mil）【Point of Trust Charge】

YoY

FY2020
Full Year(%)

Recurring Revenue

2,813

▲155

(△5.2%)

Trust charges

1,094

246

(+29.0%)1▲665(△99.7%)

1,558

▲790

(△33.6%)ー▲632(△100.0%)

1,254

634

(＋102.2%)

856

360

(＋72.5%)

Gains on sales ofbonds

Recurring Expenses
Losses fromderivatives

Recurring Income
Net Income

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

Trust charges increased
contributing from strengthening
custodian type trust service(trusts for the separate
management of money andsecurities, ABL trust, etc).

(¥ mil)〜 All For Securities Market 〜

9８．Balance Sheet Summary（end of Mar-2021, consolidated）\mil

Total assets
Cash & Deposit
Short-term
investments

Mar-21

Change from
Mar-2012,136,229

2,321,734

1,421,557
42,967

121,621 Deposit at BOJ▲ 25,324

JGB and other bonds (Maturity: 1year
or less)

Short-term loans
receivable

1,116,353

Margin loan / Loans for negotiable
428,673 margin transactions / General loans /Trust bank loans

Receivables underresale agreements

3,001,856

254,460

Collateral money of
securities borrowed

5,325,571

1,447,744

Collateral money of bond borrowing
Collateral money of stock borrowing

Investments insecurities

935,344

145,162

JGB and other bonds (Maturity: morethan 1year), Stock

Total liabilities

12,001,062

2,313,255

Call money

1,706,600

529,804

Short-termborrowings

137,594

36,121

Commercial Paper

613,000

247,000

Payables under
repurchase agreements

4,191,808

268,394

4,028,703

924,674

1,143,462

273,973

135,166

8,479

Collateral money
received of securities
lent
Borrowed money fromtrust accountTotal net assets

Features of Assets
Comprise Margin loans (short-termloans receivable) and deposits incurrent account balance at BOJ (cashand deposits) that are changing by
the day, collateral deposited for the
procurement of securities (Collateralmoney of securities borrowed), andsecurities held for the purpose of
efficient use of funds.
Cash and cash equivalents maychange significantly depending on thestatus of standby funds in the trust
account of JSF Trust and Banking Co.,
Ltd. and the status of cash
management of the Group as a whole.

Features of Liabilities
Bank borrowing
Market operation by BOJ

Collateral money of bond lending
Collateral money of stock lending

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

In addition to market funding, suchas call money and commercial paper,
which can be adjusted daily toaccommodate assets changing by theday, collateral deposits received whenlending securities (collateral money
received of securities lent).
【ref】 Capital Adequacy Ratio (FIEA base)at the end of Mar 2021︓517％
The increase from the end of Sep,2020 (343%)
is due to a partial revision of the calculation
method〜 All For Securities Market 〜 10

９．Estimated Figures for FY2021
Precondition Balance of Margin Loans
FY2021 Precondition（¥ mil）

Operating Income

5,000

222

ー

Recurring Income

5,700

141

ー

Net Income

4,000

28

ー

Operating
Income

3,368

455

ー

Recurring
Income

5,009

524

ー

Net Income

3,839

329

ー

Recurring
Income

1,042

▲212

ー

Net Income

723

▲133

ー

Operating
Income

560

▲36

ー

Recurring
Income

660

▲55

ー

Net Income

430

▲70

ー

Matching¥110bnStock Loan
¥230bnJSF（Reference）
FY2020 Results

JSF
Trust andBankingOver-lentOver-lent
Stock Loan
Margin Loan
¥184bn¥108bnNihon
Building

Matching¥115bnMargin Loan Stock Loan
¥300bn¥224bn⊿ fromprev. EF

YoY.⊿

Consolidated

Over-lentOver-lentMargin Loan
Stock Loan
¥170bn¥120bnMargin Loan
¥280bnFY2021
Estimated
Figures

Preconditions of Loans for Margin Transactions●Loan Rate ︓0.60％,●Interest on Collateral Money ︓0%,●Lending Fee ︓0.40％

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 11

10. Dividend

FY2020

FY2021（Forecast）¥ 26（YoY＋¥ 4）¥ 26（YoY ¥±0）Interim

¥ 11

¥ 13

Year-End

¥ 15

¥ 13

AnnualDividend

DPR

60.1％

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

59.6％〜 All For Securities Market 〜 12

Our Initiatives under the 6 th Mid-term Management Planand Management Issues
 Review of Fiscal 2020
 Outlook for Fiscal 2021

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

1. Achievements of the 6th Mid-Term Management Plan
(Management Goals)
Given that the margin loan business, JSFʼs core business, is greatly affected bymarket fluctuation, we will strengthen its base by steadily increasing our numberof loanable stock issues and stabilize our role as part of the securities market
infrastructure by diversifying revenue sources and steadily increasing our basic
profitManagement
Goals* Recurring income as a trend calculated based on the assumed gross operating profit of margin loan business

Status of "Number of loanable stock issues"（the number of issues）

2,572

 Status of the "Basic Profit"（¥ mil）

2,522
2,426







+417

+48

Securities

Bond

5,718
▲268

4,887

2,479
FY2019FY2017+634

FY2018FY2019FY2020Due to the impact of restricted face-to-face sales
during the COVID-19 calamity, the company wasforced to stagnate its selection activities.
However, from Q2 onward, as a result of developing aflexible sales system and promoting selection
activities through online conferences, the number ofloanable stock issues was 2,572 at the end of March
2021, an increase of 50 issues from the end of theprevious fiscal year.
Some of the issuers expected liquidity enhancement
effects from their selection of loanable issues.

Copyright Japan Securities Finance Co., LTD. All Rights ReservedTrust Bank

SGA and

FY2020

Basic Profit Financing Investment subsidiaryothersBasic Profit“Basic Profit” in fiscal 2021 was 5,718 mil yen, up
17.0% from the previous fiscal year.
Trust fees rose to a record high (for the ninth
consecutive year) mainly due to the launch of
security trusts related to cryptographic assets, andconsequently profit of the trust bank subsidiary
doubled to 102.2% y-o-y.
Profit in the securitis financing, driven by strong
Bond Lending, also rose 14.7% YoY.

〜 All For Securities Market 〜 14

2. Achievements of the 6th Mid-Term Management Plan
(Major Measures)
1. New Initiatives in
Securities Financing

2. Investment in Indonesian
Securities Finance Company

 Development of borrowers for securities(stocks and government bonds)

 JSF has provided pperational support(technical cooperation) since 2014 witha view to contributing to thedevelopment of the Indonesian
securities market
 In August 2020, JSF acquired a 10%
interest (Approx. 0.4 bn yen)
 With a view to expanding ouroperations internationally andcontributing to SDGs

 To respond flexibly and promptly totransaction needs
 Started handling new trading methods(TRS Transactions with Securities
Companies)

3. Index business4. Countermeasures to COVID-19
Infectious Disease Started daily calculation and publicationof the JSF Margin Transaction Prime
Index (August 2020)

 Focus on establishing a teleworkenvironment and establishing stablebusiness operations under it in order tosimultaneously prevent employee
infections and ensure business
continuity as an infrastructure of the
securities market

 Various information is posted on our
website related to Margin Loan

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 15

3. Corporate Governance (Review of Executive Remuneration)
Performance-based Remuneration

Basic remuneration(fixed)Standard
payment ratio
Concept
Method ofdetermining
remuneration

Bonus

Stock-based
Remuneration

20%

15%

• Determined in conjunction withperformance each fiscal year
from the viewpoint of clarifying
management responsibilities• Make a certain percentage ofconsolidated net income the total
amount to be paid
• Individual payments are
determined according to the rolesof executive officers, etc.
(Profit Sharing Method)• Aim to clarify the linkage
between remuneration and our
performance and stock value.
• Points are granted by multiplying
the number of points determinedaccording to the position of each
executive officer by theperformance-linked coefficient• See Consolidated Recurring
Income (3-Year Average) for the
performance-linked coefficient.

65%• Fixed monthly
remuneration• Determinedaccording to theposition of each
executive officer

Changing the concept and decision method of bonuses
Approach to
Review
New method ofdetermination

 Be a compensation structure consistent with the medium-term management plan
 Determined by multiplying the bonus standard amount according to the position of each
executive officer by the performance-linked coefficient Performance-linked coefficients are determined by multiplying the year-on-year changes ineach of the 3 indicators, which reflect the degree of progress and achievement ofmanagement targets, by the ratio reflecting each indicator[Reference Indicators]①Number of loanable stock issues, ② Basic Profit, ③ Consolidated net income

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 16

4. Outlook for Fiscal 2021
Evaluation of Fiscal 2020
Achieved in the first year of the Sixth Medium-Term Management Plan, including an increase in thenumber of loanable stock issues, growth in “Securities Financing (business)”, and enhancement ofoperational efficiency

Direction of Future Initiatives
1. Steady implementation of various measures outlined in the Mid-term Management Plan
2. Reforming Corporate "Culture", reforming both awareness and behavior of executives and employees
 Awareness of risk-taking Transformation ー Main thrust of RAF introducion• Toward the idea of “Aggressively taking risks that are acceptable in conjunction with capital
allocation and business plans”
 Develop human resources who will actively engage in new fields and review operations• Based on this awareness, we will promote personnel system reforms.
ー Flattening the organization, accelerating the appointment of young employees, and a wage
system that more reflects ability and performance, etc.

Targeted Future /Our Vision
To grow into a highly competitive company in the overall “Securities Financing (business)”, which iscentered on the licensing business of Margin Loan
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 17Appendix
 Return to shareholders
 The Trend of Financial Result (consolidated) Breakdown of Operating Revenues by business(Historical data) Breakdown of Operating Revenues by business Analysis of YoY Change in Operating Revenue bybusiness (Full Year) Outstanding Balance of Transactions by Group
Business Margin Transactions & Loans for Margin transactions
 Structure of Margin Transaction & Loans for Margin
Transactions
 Revenue structure of Loans for margin transactions

Copyright Japan Securities Finance Co., LTD. All Rights Reserved Margin Loan Rates
 Features of Balance Sheet (Consolidated) Securities Holdings
 JSF Trust Bank (Loan Balance) The 6th mid-term Management Plan I〜Ⅵ
 Our Group Companies Rating Information
 ESG/SDGs Initiatives
 Our Corporate Philosophy and History to Date
 Characteristics of Securities Finance Company
 Our Business Field (image chart)〜 All For Securities Market 〜 Return to Shareholders
1

Basic Policy2Retain solid equity capital to secure the financial health and management
stability that society demands of the company as the infrastructure of securities
market, and to ensure profits are returned to shareholders by comprehensively
considering revenues environment or investment plans. etc. (medium-term
management plan, management policy)
Based upon this policy, we will strive to place more importance on shareholder
return.

Shareholder Return Policy（released on 30 Apr 2020）(１) Dividend Payment PolicyOur policy is that the consolidated payout ratio, as a standard that reflects ourbusiness performance, shall not fall below the 60% level and that we shall strive toprovide stable dividends that are not temporarily affected by earnings fluctuations.

(２) Share Buyback PolicyWith a view to offering even more rewarding returns to shareholders, we will buy
back shares as appropriate while comprehensively considering the company's
financial situation, equity capital levels, and stock price levels.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 19●Dividend and Share Buyback Program (historical)

FY
2015

FY
2016

FY
2017

FY
2018

FY
2019

FY
2020

FY
2021
Forecast

Annual Dividend per share

¥16

¥18

¥26

¥22

¥22

¥26

¥26*

Share Buyback

(shs)

3mil

0.63mil

1.5mil2.0mil1.0mil――（amount）¥1.9bn¥0.3bn¥0.9bn¥1.2bn¥0.5bn――<Consolidated> : Net income¥2.6bn¥3.0bn¥4.2bn¥3.7bn¥3.5bn¥3.9bn¥4.0bn*

: EPS

¥26.9

¥31.9

¥44.2

¥40.0

¥38.4

¥43.2

¥43.6*

: DPR

59.5%

56.4%

58.8%

55.0%

57.2%

60.1%

59.6%*

133.1%

66.3%

79.3%

87.8%

71.0%

60.1%

59.6%*(reference) Total Return Ratio* Net income is a estimated figure released on 30th-Apr. EPS/DPR are calculated base on the estimated figure.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 20 The Trend of Financial Result (consolidated)¥ mil
FY2015FY2016FY2017FY2018FY2019FY2020Operating Revenues

22,03523,06626,33324,321

29,10130,924

Ex Premium charges

16,16016,522

18,38318,603

20,84623,711

Operating Expenses

11,537

11,892

13,33012,284

16,83518,018Ex Premium charges

5,672

5,358

5,385

6,566

8,585

10,819General & Administrative
Expenses

7,939

8,371

9,121

8,056

8,136

8,129

Operating Income

2,558

2,802

3,881

3,981

4,129

4,777

54

92

123

248

306

395

3,349

3,611

4,685

5,046

4,894

5,558

−

▲52

131

▲41

▲36

43

2,645

3,078

4,225

3,765

3,556

3,971

Gain or Loss inEquity-Method

Recurring Income
Extraordinary
Profit or LossNet Income

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 21 Breakdown of Operating Revenues by business(Historical data)\ mil

FY2018

Securities Finance BussinessMargin Loan Business
Interest on Loans
Interest on collateral money of securities borrowed
Fees on Lending Securities
Premium Charges
Lending Fees
Securities Financing
Loans for Negotiable Margin Transactions
Loans to Seurities Companies
Loans to Individual Investors or Firms
Stock Lending
Bond Lending
OthersBond Investment (Parent only)

Trust Business
Interest on Loans
Trust Charges
Bond Investment

Real Estate Management Business
Operating Revenues(excluded Premium Charges)
Copyright Japan Securities Finance Co., LTD. All Rights Reserved

FY2019FY202020,96925,36927,534

9,661(39.7%)
1,799

12,517(43.0%)
1,420

11,359(36.7%)
1,453

708

1,178

1,108

6,819
5,717
1,101
7,735
(31.8%)
80
634
526
1,517
4,975
3,573
(14.8%)
3,530

9,662
8,255
1,407
8,835
(30.4%)
80
737
494
1,015
6,507
4,016
(13.8%)
3,983

8,491
7,213
1,278
12,353(40.0%)
80
785
468
950
10,0693,820(12.4%)
3,786(10.1%)
58
746
1,590

(9.8%)
50
784
1,950

(8.0%)
92
1,031
1,319

(3.6%)(3.0%)(2.9%)

24,321
18,603

29,101
20,84630,92423,711

2,467

884

2,832

899

2,481

908

〜 All For Securities Market 〜 22 Breakdown of Operating Revenues by business(Margin Loan Business) (Ex. Premium Charges) Resulted in a decrease due to a decrease of theStock loan balance, while Margin Loan balance increase slightly.
【Operating Revenues Transition】
Quarterly(mil）Full Year

Margin Loan
Business

¥ mil

9,662

2,785
(2,378)
(406)

368

370

1,987
(1,703)
(284)

398

3Q
FY2019

208

4Q

1,962
(1,649)
(312)

322
279

1Q

2,417
(2,060)
(357)

359
302

2,193

1,918

(1,853)(1,649)

(339)

(268)

364
306

2Q
FY2020

3Q

406

8,491

(8,255)(7,213)(1,407)(1,278)

1,420

1,453

1,178

1,108

220

4Q

Full Year Full Year
FY2019Copyright Japan Securities Finance Co., LTD. All Rights Reserved

FY2020（ex premium
charges）

Fees onLending
Securities

4Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

2,643

11,359(△1.1%)

994(＋2.4%)

1,198(△3.5%)

1,649

Premium
Charges(△3.2%)

LendingFees(△5.3%)

Intereston
LoansInterest on
collateralmoney ofsecurities
borrowed

268

406

Point

(△9.2%)

 Operating revenues
except Premium
Charges resulted in(△2.7%)
a decrease.

4,146

 Fees on Lending
Securities resulted(△12.1%)in a decrease,because Stock Loanbalance remained at
7,213
lower level of the(△12.6%)
same period of theprevious year and1,278
premium charges on
over-lent issues also(△9.2%)
decreased.

8,491

1,453  Interest on Loans(＋2.0%)(＋2.3%)

220

1,108

(＋5.7%)

Full Year(△5.9%)

increased, because
average balance ofMargin Loan
increased compared
the same period of
the previous fiscal
year.

〜 All For Securities Market 〜 23 Breakdown of Operating Revenues by business(Securities Financing ①)
 Loans to Securities Companies increased as a result in the balance ofequity repo denominated in foreign currencies and loans to FIBOs.
【Operating Revenues Transition】
Quarterly

Full Year(¥ mil）

¥ mil

80

737

20

21
184

263

15

18

221

27

201

19
175

187

123

123

112

117

121

117

3Q

4Q

1Q

2Q

3Q

4Q

FY2019FY2020

494

80

785

468

Full Year Full Year
FY2019FY2020Loans for
Negotiable
MarginTransaction

Loans toSecurities
Companies

Loans toIndividual
Investors
or
Firms

4Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

27

(＋32.3%)

187(△28.9%)117(△4.9%)

80(△0.0%)

Full YearPoint
 LNMT and
Loans toIndividual
Investors of
Firms
decreased.

 (Loans to
Securities
785
Companies)(＋6.5%)
Outstandingbalance ofequity repo
transactions
denominate
d in foreign
468
currencies(△5.3%)and Loan to
FIBOs
increased.

＜ Loan Lineup ＞
 Loans to Securities Companies ・・・ General Loans, Bond Financing, Loans for Negotiable margin Transaction,
Stabilizing fund loan, Equity Repo(Cash-secured Stock Lending Transaction)
 Loans to Individual Investors or Firms ・・・ Com-STOCK Loan
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 24 Breakdown of Operating Revenues by business(Securities Financing ②)
 Bond Lending : Both outstanding of Gensaki transactions and repo transactions
increased significantly.
 General Stock Lending : Borrowing demands for establishing equity positions decreased.
【Operating Revenues Transition】
Quarterly

Full Year

¥ mil

950

1,015

10,069

295
279

202

280

1,645

2,080

3Q

4Q

FY2019

2,836

1Q

2,225

232

220

2,491

2,514

2Q

3Q

FY20204Q(¥ mil）

GeneralStock
Lending

4Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

220

(△21.6%)

6,507

Bond
Lending
Full Year Full Year
FY20192,514(+20.9%)Full Year
Point

Revenue increased.
Because borrowing
950 demands for(△6.4%)
establishing equity
positions decreased.
Revenue increased.
Both outstanding ofgensaki
10,069 transactions and(+54.7%) repo transactions
increasedsignificantly.

FY2020※ Genera Stock Lending is ・・・
Lending stock to securities companies depending on their various demands (ex. Fail-cover, arbitrage), except
on demand to settle Margin Transaction
 Main business partner ‒ 【Lenders】 Institutional investors, etc 【Borrowers】 Securities Companies



Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 25 Breakdown of Operating Revenues by business(JSF Trust Bank)
Trust charges continued growth trend, hitting a record high.
【Trust charges Transition】
Quarterly

Full Year(¥ mil）

¥ mil

784

194

206

232

251

255

292

3Q

4Q

1Q

2Q

3Q

4Q

FY2019FY2020

4Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

1,031

Trust
Charges292(＋42.0%)

Full Year Full Year
FY2019【Trust Lineup】

FY2020

Full Year
Point

Trust charges
continued
increasing,
contributing fromstrengthening
custodian type1,031 trust service(+31.5%) (trusts for the
separate
management ofmoney andsecurities, ABL
trust, etc).

* Consolidated baseTrusts for the separate managementof money and securities

Trust for protecting deposits which securities companies received from
customers

Trusts for currency future trading

Trust for protecting guarantee deposits which FX business operators
received from customers

Asset Backed Loan (ABL) Trust

For setting up ABL, which is investment product for institutional
investors, JSFTB provides functions as SPC.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 26 Analysis of YoY Change in Operating Revenue by Business(Full Year)〜 Summary of the points for Full Year 〜【Margin Loan Business】【Full Year】 YoY ＋ ¥ 1,822 mil（＋6.0%）+3,561¥ mil+47△1,157

△0

△26

△351

△64

30,924

29,101FY2019【Securities Financing】

＋9
△195

MarginLoan

Loans for Loans for Loans for
NMT
Sec Com Investors

Stock
Lending

Bond
Lending Loan to Securities Companies : Outstandingbalance of equity repo transactions denominatedin foreign currencies and Loan to FIBOs increased.
 Loan to Individual Investors or Firms :resulted in decrease due to lower loan balance.
 Bond Lending : Both outstanding of Gensaki
transactions and Repo transactions increased
significantly.

【Others】
Others

ー

ー

Trust
Bank

Real
EstateFY2020

Securities Financing

Securities Finance Business Resulted in decrease due to a decrease ofoutstanding balance of Stock Loan.

 Resulted in decrease due to decrease in gain on
sales of JGBs and the impact of foreign exchange
gains concerning foreign currency.

【Trust Business】
 Despite Trust Charge remained steady, gains onsales of bonds largely decreased.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 27 Outstanding Balance of Transactions by Group Business(Average balance)\ mil

Transaction typeMargin Loans
Stock Loans
Securities Financing
Loans for Negotiable Margin
Transaction
Loans to Securities Companies
Loans to Individual Investors
or Firms
General Stock Lending
Bond Lending
Trust Bank Loans

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

FY2018FY2019FY2020284,225

219,979

224,615

261,603333,949

300,638

2,931,473

4,609,077

7,099,013

10,624

10,4349,910

299,945

309,033

327,444

14,256

13,934

13,092

63,11260,85947,1262,543,534

4,214,817

6,701,439

431,292

473,808

571,109〜 All For Securities Market 〜 28 Margin Transactions & Loans for Margin Transactions
3.0

¥ tri

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Margin Buying Balance
Margin Loan Balance
Ratio

2.5
2.0
1.5
1.0
0.5
0.0
08

09

10

11

12

13

14

15

16

17

18

19

20

1.0 ￥tri

100%
Margin Selling Balance
Stock Loan Balance
Ratio

0.9
0.8

90%
80%

0.7

70%

0.6

60%

0.5

50%

0.4

40%

0.3

30%

0.2

20%

0.1

10%

0.0

0%
08

09

10

11

12

13

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

14

15

16

17

18

19

20

〜 All For Securities Market 〜 29 Structure of Margin Transaction& Loans for Margin Transaction
MarginTransaction

Loans for Margin
Transaction
Margin Loan application
Stock Loan application

Margin buying order
Margin selling order

Institutional
Investors

Fund for Purchasing
Stock to sell

Fund (Margin loan)
Stock (Stock loan)

JSF

Securities
Companies

BrokerInvestor

Stock

Funds

Call Market

Purchased Stock
Sale ProceedBank of Japan

Stock Exchange
Clearing facilities
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 30

 Revenue structure of Loans for margin transactions

Over-lent

Income statement

Margin Loans

Over-lent(E)=(A)-(D)Stock Loans ※(C)matching(D)=(B)-(C)matching(D)=(B)-(C)Margin Loans(A)

Stock Loans(B)【Operating revenues】
Interest on loans＝(A)×0.60%
Fee on lending securities (lending fees)＝(B)×0.40％
Interest on collateral money of
securities borrowed＝(C)×0.60％【Operating expenses】
Interest on borrowing＝(E)×fundingrateBesides the above, Premium Charges are posted in Operating Revenues (Fees on Lending
Securities) in a part of Over-lent Stock Loan. But the same amount are posted in Operating
Expenses (Fees of Borrowing Charges), so the amount of Premium Charges does not affect our
profit.
【revenue】 Fees on lending securities (premium charges) = 【expense】 Fees on borrowing
securities (premium charges) = (C)ʻ×rate of Premium charges
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 31 Margin Loan Rate

LendingFee
0.40%

Securities
Company

Loan Rate
0.60%

Stock Loan

JSF

Securities
Company

Margin Loan

BOJ Policy Interest RateJul 2006 Uncollateralized O/N Call Rate:0.25％



Feb 2007 Uncollateralized O/N Call Rate:0.50％



Oct 2008 Uncollateralized O/N Call Rate:0.30％（▲0.20%）

Dec 2008 Uncollateralized O/N Call Rate:0.10％（▲0.20%）



Oct 2010 Uncollateralized O/N Call Rate:0〜0.10％（▲0.10~0%）
Apr 2013 Switched from interest rate to monetary baseJan 2016 Embraced negative interest rates
Sep 2016 Introduced QQE with Yield Curve Control

Interest on Collateral Money
0%

1.2%

Loan Rate
Lending Fee
Interest Rate on Collateral Money of Stock Loan
BOJ Policy Rate

Margin Loan Rate



1.0%




0.8%



0.6%




0.4%
Apr.2013〜
Monetary base start

0.2%

0.0%

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

27/Jul/2006 0.74％（+0.14％）
22/Sep/2006 0.86％（+0.12％）
15/Mar/2007 1.02％（+0.16％）
05/Apr/2007 1.11％（+0.09％）
29/Jan/2009 0.97％（▲0.14％）
22/Nov/2010 0.77％（▲0.20％）
06/Aug/2014 0.64％（▲0.13％）
09/Mar/2016 0.60％（▲0.04％）

 Margin Loan Rates are decided by reflecting thechange of market rates and BOJʼs Policy Interest
Rate.

〜 All For Securities Market 〜 32 Loan Rate of Loans for Margin Transactions
2.00%

Loan Rate
Lending Fee

1.60%

1.20%

0.6%
0.80%

0.40%

0.4%
0.00%

97

98

99

00

01

02

03

04

05

06

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

07

08

09

10

11

12

13

14

15

16

17

18

19

20

〜 All For Securities Market 〜 33 Securities Holdings\ mil
Securities Holdings

Unrealized profits andloses

B/S Amountnotes

Mar-21

Mar-20

Unrealized profits andloses

B/S Amount

Equity12,176

7,198

15,338

10,610Bond809,00224,209921,896

18,858

JGB&Municipal Bond

518,829

26,712

510,390

17,593

Corporate Bond

253,617▲567

355,499▲326 Government Guaranteed Bond ,etc.

Others36,555▲1,93556,006

1,591 Foreign government bonds

13,943▲1,67817,5063,539

835,12129,730954,741

33,007ー(6,075)ー(14,359)

Other Securities
Total（included the eﬀects ofderivatives）

held-to-maturity bonds

Unrealized profits andloses

B/S Amount

JGB

1,512

Unrealized profits andloses

B/S Amount

208

1,512

notes

194

※Unrealized proﬁts and losses is not inclueded the eﬀects of hedging with derivatives

Yen Bond Portfolio （JSF Trust Bank）

Yen Bond Portfolio（JSF）
12,00010,000
8,000
6,000
4,000
2,000
010 years 9,424（億円） over
2.69
14/3

（¥ 100 mil）
7,000
6,000

5 years
to9,798
10 years
2.32
14/9

5,286

5,000

（year）
6.0

4.84

4.69

4,930

9,210
2.819,498
1 year to 5 years
2.69
2.41
14/12
15/3

4.25

4,274
3,660

4,000

4.0
3,320

3,370

3,000
2,000

5.0

3.0
2.0

2.10

1,000

1.99

2.10

1.0

0

0.0

Sep.18Mar.19Sep.19Mar.20

Sep.20Mar.21（¥ 100 mil）
7,000

3.67
within3.23
1 year
8,158
15/9

6.0
5.0
4.0

3.0
2.0
1.0
0.0
3.948,378（年）
Averageremaining
period
3.54
15/12
5.35

6,000

3,991

4,000

3,186

3,000

1,000

5.0

4.26

5,000

2,000

5.12

4,183

3,584

2.0

1.06

1.0

1.92

1.18

4.0
3.0

1,310
1,255

（year）
6.0

0.0

0

Sep.18Mar.19Sep.19Mar.20

Sep.20Mar.21(Note) Average remaining period is calculated excluding held-to-maturity bonds, bonds for which hedge-accounting are applied
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 34 JSF Trust Bank （Loan Balance）● Loan Banance by Industry\mil

Mar-20Loan
Balance

Sep-20ratio

Loan
BalanceMar-21ratio

Loan
Balanceratio

Manufacturing

0

0.0%

0

0.0%

0

0.0%

Fishery

0

0.0%

0

0.0%

0

0.0%

Mining

0

0.0%

0

0.0%

0

0.0%

Construction

0

0.0%

0

0.0%

0

0.0%

Energy & Utilities

0

0.0%

0

0.0%

0

0.0%

Communication

0

0.0%

0

0.0%

0

0.0%

Transportation

689

0.2%

689

0.1%

689

0.1%

Wholesale

800

0.2%

0

0.0%

0

0.0%

0

0.0%

0

0.0%

0

0.0%

Finance & Insurance

4,100

0.9%

2,100

0.3%

2,100

0.3%

Real Estate

1,500

0.3%

500

0.1%

1,120

0.2%

0

0.0%

0

0.0%

0

0.0%

440,81098.4%

615,76299.5%

723,947

99.5%

RetailService Industries
Governments
Total

447,899

Copyright Japan Securities Finance Co., LTD. All Rights Reserved

619,051

727,856〜 All For Securities Market 〜 35 Major Issues in Formulating the Plan
(The 6th Mid-term Management Plan Ⅰ)
External environment• Trend of Strengthening Corporate
Governance• Continued ultra-low interest rateenvironment, etc.

 Incorporate the significance ofthe transition to a governancesystem into a planInternal environment
Business
Philosophy
Characteristics ofSecurities Finance
Company

Transition to a
Company with
Nominating
Committee, etc.

Review of theFifth Plan

Issue I
Response to the
New Governance
Structure
Issue II
Response to theperception ofchallenges under thechanges in theinternal and external
environment

Stakeholders
Shareholder/Investor Supervisory Authority/
Business Partners/
Lenders (funds and securities) and others
Copyright Japan Securities Finance Co., LTD. All Rights Reservedi.

Consider risk appetite for achieving
the plan and ensure transparency andconsistency of the overallmanagement planii. Setting and disclosing managementtargets that JSF believes areappropriateiii. Establishment of a system to regularly
monitor Incorporate responses to awarenessof challenges
i. Secure earnings to stabilize our roleas part of the market infrastructure.
Aiming to diversify revenue sources bymaking more effective use of various"capital"ii. Strive to build an efficient business
operation system, improve corporate
vitality, and strengthen ourcompetitive base

〜 All For Securities Market 〜 36 Our Vision for the Future (The 6th Mid-term Management Plan Ⅱ)
Targeted
Future/Our
VisionAwareness of
issues

To grow into a highly competitive company in the overall
Security Finance Business, which is centered on the licenced
Margin Loan Business• Aim to further expand and strengthen the earnings base by making more
effective use of capital• Establishment of an efficient business operation system and an
appropriate risk-taking management system• Maintaining our core competence “Fairness and Neutrality”,“Financial
Soundness”, and “High creditworthiness”.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved（Review of the 5th mid-term management plan)• Revenues from Margin Loan Business fluctuate• Develop the ability to cover earnings other thanMargin Loan Business and fund management
 Increasing complexity and volume ofbusiness Handling of foreign securities, foreign
currencies, and direct transactions withoverseas bases
 New transaction methods (evergreen
provisions, etc.)
 Sophistication of fund management(expansion of investment target assets andhedging methods)

Internal environment

External environment• Trends in Strengthening Corporate
Governance• Increasing Awareness of Capital Efficiency• Continued ultra-low interest rate environment• On the other hand, attention should be paid tothe possibility of a global financial stressevent.
• Risk of intensifying competition in the
securities lending market under current
financial environment of difficulty in fundmanagement（Changes occurring after formulation）• Economic Activity and Social Impact of the
COVID-19 pandemic〜 All For Securities Market 〜 37 Corporate Philosophy / Management Principles(The 6th Mid-term Management Plan Ⅲ)

Corporate
Philosophy

Management
Principles

As an institution specializing in securities finance, JSF has a mission tocontribute to the development of the securities market by proactively meetingthe diverse needs of the securities and financial sectors and to enhance thelong-term interests of users, while always maintaining a keen awareness of its
public role.
⑴ To practice sound business management by thoroughly
implementing compliance, corporate governance, and risk
management under a new governance structure andthereby establish solid credibility, while always
maintaining a keen awareness of our social
responsibilities as a securities finance company.

Basic Concept as
the Securities
Finance Company⑵ To enhance enterprise value while maintaining solid
equity capital in order to ensure stability in management
and the financial health required of a company that is a
key player in securities market infrastructure, to givecomprehensive consideration to the earnings environment,
investment plans, etc., and to ensure profits are returned
to shareholders.

Solid equity capital
Financial health⑶ To further enhance JSFʼs core margin loan business while
also striving to expand the finance- and securitiesrelated services provided by JSF and Group companies,
develop new business, and to further grow and solidify our
base.

Future businessdevelopment⑷ To build a quick and efficient business management
structure and strengthen our competitive base in order toaddress changes in the business environment in a flexible
manner.

Businessmanagement
structure

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 38 Management Goals / Strategies(The 6th Mid-term Management Plan Ⅳ)

Management
Goals

Given that the margin loan business, JSFʼs core business, is greatly affectedby market fluctuation, we will strengthen its base by steadily increasing ournumber of loanable stock issues and stabilize our role as part of the securities
market infrastructure by diversifying revenue sources and steadily increasing
our basic

Strategies

Enhancing the Margin Loan
Business as part of securities
market infrastructure

Developing and realizing
new business

Diversified management of
securities as an efficientuse of capital
Facilitating diverse work
styles and making JSF more
dynamic

Expanding and enhancing
the “Securities Finance”
businessStrengthening business
management structure

Strengthening ourcompetitive base throughefficient business operation＜Framework to integrate management goals and strategies with risk management＞

Use of Risk Appetite Framework
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 39

● Management Goals(The 6th Mid-term Management Plan Ⅴ)

Number of loanable stock issues : We will aim to increase our number of loanable stock
issues steadily to strengthen our margin loan business base

Basic profit : We will aim to diversify revenue sources and steadily increase our basic
profit to stabilize our role as part of the securities market infrastructure⇒ Actual results on the base of fiscal years will be disclosed (at the announcement of thefinancial results)◆ Definition of “basic profit”
Recurring income as a trend calculated based on the assumed gross operating profit of margin loan business (average over the past three years)

1. Characteristics of Our Recurring Income

2. Calculation of Basic Profit

(A)

(B)

(C)

20XX-320XX-2

20XX-1Margin loan business profit

Basic profit

Change in recurring income(conceptual illustration)(A) + (B) + (C)3

Non-margin loan business profit

FY20XX

20XX+1

20XX+2Non-margin loan business profit
Assumed gross operating profit of margin loan business

Margin loans, JSFʼs core business,
are susceptible to market fluctuation(profit fluctuates significantly)

 We calculate the basic profit tovisualize our profitability based on our
average margin loan business profit.



It is difficult to understand change inour basic earnings

 This makes change in basic earnings
easier to understandCopyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 Strategies(The 6th Mid-term Management Plan Ⅵ)

Enhancing the Margin
Loan Business as part of
securities market
infrastructure.
Expanding and enhancing
the “Securities Finance”
business

We aim to pursue stable management of our margin loan business and improve profitability byappropriately responding to changes in the stock market environment. Moreover, we aim tomonitor trends among market participants carefully, increase our number of lending issues
steadily, promote the use of margin loans, enhance the provision of information relating tomargin transactions and margin loans, and expand the range of investors.
We aim to utilize the financial and securities transaction expertise we have cultivated thus far
to handle diverse transactions with domestic and overseas financial instruments businesses ina proactive manner and increase business partners and applicable securities to enhance andexpand our “Securities Finance” business, increasing opportunities for profit.

Developing and realizing
new businessWe will leverage our strengths as a company with a history in the securities finance field, anddevelop and realize new business based on a long-term perspective in collaboration withGroup companies and domestic and foreign partners.

Diversified managementof securities as anefficient use of capital

We will secure stable revenues by responding to changes in the external environment andrevising our portfolio in a flexible manner while maintaining appropriate risk controls.
Moreover, we will move forward with expanding management based on foreign currencydenominated securities such as foreign government bonds and establishing funding methods
for foreign currency in order to support the development of business using foreign currency.

Strengthening business
management structure

We will proactively address our social obligations and ensure that compliance is positioned asa prerequisite of management in order to achieve our corporate philosophy.
To establish unwavering social trust in our company, we aim to secure theeffectiveness of our internal auditing and further enhance our risk management in responseto the increasingly diverse and complex risks associated with the finance business.
In order to fulfill our role as part of the securities market infrastructure even in the eventthat a major disaster occurs, we will continue to upgrade our business continuity system.

Strengthening ourcompetitive base throughefficient business
operation

As our transaction volume increases and our business becomes more complex, we will
review our processes and actively promote the use of digital technologies such as RPA(robotic process automation) to build an efficient business operation structure andstrengthen our competitive base.

Facilitating diverse work
styles and making JSF
more dynamic

As work changes and diversifies with work-style reform, delayed retirement and more,
we will increase the productivity of individual personnel and make the company more
dynamic by reviewing our employment system and developing a rewarding andemployee-friendly workplace.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 41 Our Group Companies
Subsidiary
Affiliate（ ) Shareholding Ratio

Japan Securities Finance（100%）
JSF
Trust Bank

（100%）Nihon
Building（20.0%）
Japan Information
Processing

Capital（20.8%）
JSFIT

Shareholding
Ratio

Name

100%

JSF Trust and Banking Co., Ltd.

14,000100%

Nihon Building Co., Ltd.

100

Real estate ownership and leasing
Real estate trading and brokerage

20.0%

Japan Information Processing Service Co., Ltd

2,460

Information processing services
Software development and sales

20.8%

JSF Information Technology Co., Ltd

100

Information processing services
Software development and sales

Copyright Japan Securities Finance Co., LTD. All Rights Reserved(mill yen)

Business overview
Trust service, Banking service〜 All For Securities Market 〜 42 Rating Information

JCR

R&I

As of 31/Mar/2021
Japan
Securities
Finance

JSF TrustBank

Standard &Poor’sRatingOutlookRatingOutlookRatingOutlookLong-term

AA-

StableAA-

StableA

StableShort-term

J-1+

a-1+

（Highest）（Highest）

CP Issue

¥1tri

¥1tri

Long-termA+

Short-term

J-1+

Stable

A+
a-1

A-1
―
Stable――――（Highest）

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 43 ESG/SDGs Initiatives
As an institution specializing in securities finance as a key player in securities market
infrastructure, JSF has a mission of contributing to the development of the securities
market, which is the foundation of our economic and social activities.
We are committed to contributing to the development of a sustainable society throughthe promotion of operations centered Margin Loan Business and the following initiatives,
while maintaining a keen awareness of its public role. At the same time, we arecommitted to maintain our social responsibilities by enhancing corporate governance,compliance, and risk management.

E

S

G

 Minimize environmental impact
 Improving company facilities to conserve electricity and be conscious ofenvironmental impact
 Promote paperless operations in all areas of the company
 Contribution to the development of overseas securities markets
 Technical assistance and investment
in Indonesian Securities Finance Realization of diverse work styles for employees
 Support for childbirth, childcare, and nursing care
 Introduction of company-wide telework
 Understanding Employee Engagement
 Further improve governance as a company with nominating committees, etc.
 Majority of directors are independent outside directors.
 Chairperson of the Board of Directors and Chairperson of the 3
Committees are Independent Outside Directors

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 44 Our Corporate Philosophy and History to Date

Corporate Philosophy
As an institution specializing in securities finance, JSF has a mission tocontribute to the development of the securities market by proactively
meeting the diverse needs of the securities and financial sectors andto enhance the long-term interests of users, while always maintaininga keen awareness of its public role.
Our History to Date
 Focus on stable management of Margin Loan Business and improving convenience as an
infrastructure for securities markets
 We will also engage in new operations that meet market needs.

1950
Established as
an institution
specializing insecurities
finance in
response torequests fromthe securities
industry withthe aim ofstabilizing andpromoting thesecurities
market

1951

1977

1989

1998

 Launched Margin
Loan business Launchedgeneralstocklendingbusiness Launched Establishment
brokerageof JSF Trust
business forBankbond lending2019 Launched loans
for margintransactions for
PTS

In conjunction with the establishment of the margin transaction
system, commenced the Margin Loan Business of lending funds orstock certificates, etc. necessary for the settlement of margintransactions to securities companies.
⇒ Roots as a licensed company stipulated in the Financial
Instruments and Exchange Law

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 45

 Characteristics of Securities Finance Company
Securities financecompany＝ Operator of
Margin Loan
Business under
the license of the
FIEASpecificity of
Margin Loan
Business

Responsibility for the
stable operation of the
Margin Loan BusinessAlthough it is the only
licensing company
Be not a monopoly

Statutory Restrictions
on Subsidiary BusinessWith the lending of funds
secured by securities
Mainly lending securities

For ex-post funds andstock certificates loan
application
ー In principle, allapplications must be
accepted

Maintain and improve highprocurement capabilities
Required to be eligible forparticipation in Central
Bank Operations andsecurities settlement
systems.

 Stable earnings and financial base
 Required a certain level of equity
capitalCopyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 46

● Our Business Field（image chart）＜Funds＞(Margin Loan/Stock Loan)

Securities Financing

Equity Repo
Loan to Individual
Investors or Firms

LenderMoney Market,
etc.

Securities
Lending(Equity・Bond)

Financial
Institutions

SubsidiaryBusiness

Loan to Securities
Companies

Investors

Margin Loan BusinessBorrower
Securities Companies

For
Standardized
MarginTransactions＜Securities＞

Institutional investors,
Securities companies,
etc.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 47NoticeThis document includes statements for business forecast. Thesestatements donʼt guarantee companyʼs future achievement and thatinvolve risk or uncertain factors. Companyʼs future achievement may
be changed drastically up to stock market or financial conditions.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜