Japan Securities Finance Co., Ltd.
1st Half FY2020
Financial Results Presentation

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜Table of Contents＜Part 1＞

Overview of Financial Result for 1st Half FY2020

 １．Executive summary (Consolidated)Ｐ３

 ２．Summary Financial Results for 1st Half FY2020

Ｐ４

 ３．Summary Financial Results for 1st Half 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 1st Half FY2020（ JSF Trust Bank）

Ｐ９

 ８．Balance Sheet Summary (Consolidated)

Ｐ１０

 ９．Estimated Figures for FY2020

Ｐ１１＜Part 2＞ The 6th Mid-term Management Plan and Return to shareholders
 The 6th Mid-term Management Plan (FY2020〜FY2022)

Ｐ１２

 Return to shareholders

Ｐ２０ Appendix

Ｐ２４〜

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

2

１．Executive Summary (Consolidated)（¥ mil）

Operating
Revenues

FY2020
1st Half

15,291

YoY ⊿

＋897

⊿％

＋6.2％

Highlight
 Margin Loan Business resulted decrease（△7.4％）due to a decrease of balanceof Stock Loan
 Revenue of subsidiary JSFTB decreased(△30.9%)due to a decrease in gains onsales of bonds.
 Securities Financing saw a significant
increase in revenue driven by Bond
Lending (+63.9％）

 Operating expenses increased due toan increase in borrowing fees forsecurities, but general andadministrative expenses decreased due
to an increase in reversal of allowancefor doubtful accounts.

Operating
Income2,758＋390 ＋16.5％

Recurring
Income3,039＋280 ＋10.2％  Share of profit of entities accounted forNet
Income

2,186

＋115

using equity method decreased.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved＋5.6％〜 All For Securities Market 〜3１．Summary Financial Results for 1st Half FY2020
Consolidated（¥ mil）

Operating
Revenues

FY2020
1st Half

YoY.⊿

Parent
(%⊿)

JSF

897

(＋6.2%)

13,657

1,434

ExceptPremium Charges

11,5801,359(＋13.3%)

9,946

1,896

Operating Expenses

8,777

853

(＋10.8%)

8,579

1,506

ExceptPremium Charges

5,079

1,328

(＋35.4%)

4,881

1,981

General &Administrative Expenses

3,755

▲346

(△8.4%)

3,346

Operating Income

2,758

390

(＋16.5%)Recurring Income

3,039

280

(＋10.2%)Gain or Loss inEquity-Method

3

▲144

(△97.4%)

ー

ー

2,186

115

Net Income

Nihon Building

YoY.⊿

YoY.⊿

YoY.⊿

15,291

Extraordinary
Profit or Loss

JSF Trust Bank

1,273

▲495

645

3

288

▲605

9

▲1

▲108

268

▲244

332

▲4

1,730

36

716

354

303

9

3,243

1,174

717

354

365

▲1

(ー)

―

―

―

―

―

―

(＋5.6%)

2,668

1,102

563

260

242

▲2

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

4２．Summary Financial Results for 1st Half FY2020（JSF parent）
Key Points

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

FY2020
1st Half

YoY.⊿●Operating Revenues(%⊿)

Operating Revenues*

9,946

1,896

(＋23.6%)

Margin Loan Business*

2,106

▲1

(△0.1%)

Securities Financing

6,258

2,442

(＋54.0%)

Others

1,582

▲545

(△25.6%)

Operating Expenses*

4,881

1,981

(＋68.3%)General &Administrative Expenses

3,346

▲108

(△3.1%)

Operating Income

1,730

36

(＋2.1%)

Recurring Income

3,243

1,174

(＋56.8%)

 Up ¥1,896 mil (+23.6%) YoY driven
by Securities Financing.
̶ Margin Loan Business remained thesame level YoY. Though Stock Loanbalance decreased, Margin Loan
Balance recovered to a level higher
than in the same period of the previous
fiscal year.
̶ Securities Financing saw a significant
increase in revenue driven by Bond
Lending .
̶ Others(Securities investment) dropped
due to a decrease of gain on sales of
JGBs, etc.
※For details of segments, see “Financial
Highlights for 1Q, FY2020(P6-P8)”●Operating Expenses

̶ Up ¥1,981mil (+68.3%) YoY
̶ Fees on borrowing securities andinterest on payables under repurchaseagreements in Bond Lending●Recurring Income/Net Income

Extraordinary
Profit or Loss

―

―

(ー)

Net Income

2,668

1,102

(＋70.4%)

Copyright Japan Securities Finance Co., LTD. All Rights Reserved̶ Significant increase in profit due toincrease in dividend income from two
consolidated subsidiaries (eliminationon consolidated basis).

〜 All For Securities Market 〜

5

３．Financial Highlight （Margin Loan Business）


As the stock market had climbed back to its pre-coronavirus crisis level since June,
Margin Loan balance recovered to a level higher than in the same period of theprevious fiscal year.



Stock Loan balance declined due to the impact of sluggish April-May.
FY2019（\ bn、%）

1Q

2Q

1H

YoY

FY2020

3Q

4Q

full year

1Q

2Q

1H

2Q

YTD

Margin Loan

201

202

202

226

248

219

199

219

209

168

71

Margin Loan Rate

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

▲166

▲269

Margin Loan（FY2019）
Margin Loan Rate（FY2019）

¥ tri
0.6

1Q Margin Loan

FY20︓¥199bn
FY19︓¥201bn

Margin Loan（FY2020）
Margin Loan Rate（FY2020）

Stock Loan（FY2019）
Stock Loan Rate (FY2019)

¥ tri
1.5%

0.6

1Q Stock Loan
FY20︓¥295bn
FY19︓¥332bn

2Q Margin Loan

FY20︓¥219bn
FY19︓¥202bn

Stock Loan（FY2020）
Stock Loan Rate (FY2020)

1.5%

2Q Stock Loan
FY20︓¥333bn
FY19︓¥350bn

0.4

1.0%

0.4

1.0%

0.2

0.5%

0.2

0.5%

1H Margin Loan

3Q Margin Loan

FY20︓¥209bn

FY20︓ ー
FY19︓¥226bn

FY19︓¥219bn

4Q Margin Loan

0.0%

0.0
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

1H Stock Loan
FY20︓¥314bn
FY19︓¥333bn

FY19︓ ー
FY19︓¥248bn

Jan

Feb

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

Mar

0.0
Apr

May

Jun

Jul

Aug

Sep

3Q Stock Loan
FY20︓ ー
FY19︓¥383bn

4Q Stock Loan
FY20︓ ー
FY19︓¥268bn

Oct

Jan

Nov

Dec

Feb

0.0%

Mar

0.40%

〜 All For Securities Market 〜

6５．Financial Highlight （Securities Financing）


Strong Bond Lending drive “Securities Financing Business”

General Stock Lending and Loans to Securities Companies also steady.
(¥ mil)Type of transaction

FY2020
1st Half

YoY⊿

YoY%

Securities Financing

Loans for Negotiable margintransaction

33▲5△13.2％

 The balance of loans outstanding
decreased due to negotiable margintransactions decreased.

Loan to Securities Companies*

422

133

+46.1％

 Increased use of equity repo
transactions denominated in foreign
currencies contributed.

Loan to Individual Investors or
Firms

229

▲18

△7.4％

 Outstanding of COM-STOCK Loan
remained sluggish.

General Stock Lending

498

43

＋9.6%

 Borrowing demands for mainly use as
collateral increased.

5,074

2,289

＋82.2%

 Both outstanding of Gensaki
transactions and Repo transactions
increased significantly.

6,258

2,442

＋64.0%

Bond Lending

Total Revenues* Equity Repo, General Loans, Stabilizing funding loan, etc.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

7

４．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）
1st Half FY2020

YoY¥ 1,363 mil▲¥ 293 mil

Domestic Bonds¥ 532 mil▲¥ 223 mil

Others※¥ 830 mil▲¥ 70 mil

¥ 201 mil▲¥ 256 mil¥ 1,564 mil▲¥ 549 mil

Yen-based

In foreign currencies
Total

Transition of investment portfolio
EquityForeign Bonds

3.5%
8.7%
6.8%

80%
80.9%

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%

▲1.0%

▲1.0%
2013

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

Mar.2020

Sep.2020

source）Bloomberg

Trend of hedge cost

4.0%

3.0%

2013 2014 2015 2016 2017 2018 2019 2020

Domestic Bonds

90%
90%

※ Investment Trust, etc.

4.0%

Others

100%

USD3M
EUR3M

2014

2015

2016

2017

2018

2019

2020

〜 All For Securities Market 〜

8５．Summary Financial Results for 2Q, 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.
 Increases were posted in Recurring Income and Net Income

JSF Trust Bank（¥ mil）

Recurring Revenue

FY2020
1st Half

(%)

1,497

▲271

(△15.3%)517

103(+25.1%)1▲644(△99.7%)

780

▲626

(△44.5%)ー▲558(△100.0%)

Recurring Income

717

354

(＋97.7%)Net Income

563

260

(＋85.8%)Trust charges
Gains on sales ofbonds

Recurring Expenses
Losses fromderivatives¥【Point of Trust Charge】

YoY

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６．Balance Sheet Summary（end of Sep-2020, consolidated）\mil

Total assets

Sep-20Change from
Mar-209,246,627▲ 567,867

Cash & Deposit

794,958▲ 504,977 Deposit at BOJ

Short-term
investments

36,992▲ 31,299

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

Margin loan / Loans for negotiable
324,050 margin transactions / General loans /Trust bank loans

Short-term loans
receivable

1,011,730

Receivables underresale agreements

2,517,436▲ 229,960

Collateral money of
securities borrowed

3,789,628▲ 88,198

Collateral money of bond borrowing
Collateral money of stock borrowing

Investments insecurities

846,328

56,146

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

Total liabilities

9,117,448▲ 570,358

Call money

850,900▲ 325,895

Short-termborrowings

96,108▲5,365

Commercial Paper

383,000

17,000

Payables under
repurchase agreements

3,332,074▲ 591,340

3,299,773

195,744

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

982,941

113,453

129,178

2,490

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*
at the end of Sep 2020︓343％* based on FIEA

〜 All For Securities Market 〜 10

９．Estimated Figures for FY2020
Precondition Balance of Margin Loans
FY2020 Precondition（¥ mil）⊿ fromprev. EF

Operating Income

4,300

170

1,200

Recurring Income

5,000

105

1,200

Net Income

3,500

▲56

800

Operating
Income

2,700

▲211

900

Recurring
Income

4,300

867

900

Net Income

3,300

809

600

Recurring
Income

1,000

379

260

Net Income

690

193

180

Operating
Income

570

▲29

5

Recurring
Income

685

▲43

5

Net Income

450

▲8

5

Matching¥110bnStock Loan
¥300bnJSF（Reference）
FY2019 Results

JSF
Trust andBankingOver-lentOver-lent
Stock Loan
Margin Loan
¥195bn¥81bn

Nihon
Building

Matching¥138bnMargin Loan Stock Loan
¥333bn¥219bnYoY.⊿Consolidated

Over-lentOver-lent
Stock Loan
Margin Loan
¥190bn¥100bnMargin Loan
¥210bnFY2020Estimated
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

The 6th Mid-term Management Plan
（FY2020-FY2022）

12
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 Major Issues in Formulating the Plan
Corporate Philosophy
Characteristics of securities finance companies<Main Issues>
External environment

Transition to a
Company with
Nominating
Committee, etc.

Responding to
ｰ the New Governance Structure
ｰ the perception of Challenges
under the changing internal andexternal environment

Achievements of
the Fifth Plan

Stakeholders
Investors/Shareholders, Supervisory authorities,
Business partners, Lenders (funds and securities), etc.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 13 Analysis of the internal and external environment andreview of the 5th mid-term management planInternal environment（Review of the 5th mid-term management plan)• Revenues from Margin Loan Business fluctuate• Develop the ability to cover earnings other than Margin
Loan Business and fund management
 Increasing complexity and volume of business Handling of foreign securities, foreign currencies,and direct transactions with overseas bases
 New transaction methods (e.g., evergreen
provisions) Sophistication of fund management (expansion of
investment target assets and hedging methods)

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

Awareness of issues

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 to thepossibility of a global financial stress event.
• Risk of intensifying competition in the securities lending
market under current financial environment of difficulty infund management（Changes occurring after formulation）• Economic Activity and Social Impact of the COVID-19
pandemic〜 All For Securities Market 〜 14 Awareness of issues ⇒ Aiming for the future and vision• Establishment of an
efficient business
management system andan appropriate risktaking management
system
• Maintaining our corecompetence"Fairness and Neutrality""Financial Soundness"“High creditworthiness"

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

To grow into aTargeted Future/Our VisionInternal environment

Awareness of issues

External environment• Aim to further expandand strengthen theearnings base by making
more effective use ofcapitalhighly competitive
company in theoverall “Securities
Finance Business”,
which is centeredon the licensed
business of Margin
Loan Business.

〜 All For Securities Market 〜 15 Corporate Philosophy / Management Principles

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 〜 16 Management Goals / Strategies
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 profit (recurring income calculated based on the assumed grossoperating profit of margin loan business)

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 〜 17

● Management Goals


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 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
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 〜 19Return to Shareholders

20
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 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 〜 21 Dividend○ Interim and Year-end dividend (forecast) FY2020
FY2020(Reference)
FY2019Annualdividend¥22 (±¥0 YoY)

¥ 22

Interimdividend¥11 (± ¥0 YoY)

¥ 11

Year-end
dividend¥11 (± ¥0 YoY)

¥ 11

57.7%

57.2%

Consolidated
dividend payout
ratio

1. Disposal of treasury stock Contributed to the continuation of share
remuneration plan for executives① Number of shares: 572,809 shares② Allocation date: November 27, 2020
(planned)
Copyright Japan Securities Finance Co., LTD. All Rights Reserved

2. Retirement of treasury stock① Number of shares: 4 mil shares Percentage of outstanding shares: 4.0%
 Number of shares outstanding aftercancellation: 96 mil shares② Implementation date: December 10,
2020〜 All For Securities Market 〜 22 Dividend and Share Buyback Program (historical)

FY
2014

Annual Dividend per share

FY
2015

FY
2016

FY
2017

FY
2018

FY
2019

FY
2020

Forecast/
Framework

¥22

¥15

¥16

¥18

¥26

¥22

¥22

Interim ¥11Year-end ¥11(shs)

7.46mil

3mil

0.63mil

1.5mil2.0mil1.0mil―（amount）¥4.6bn¥1.9bn¥0.3bn¥0.9bn¥1.2bn¥0.5bn―<Consolidated> : Net income¥3.5bn¥2.6bn¥3.0bn¥4.2bn¥3.7bn¥3.5bn¥3.5bn*

: EPS

¥33.9

¥26.9

¥31.9

¥44.2

¥40.0

¥38.4

¥38.1*

: DPR

44.2%

59.5%

56.4%

58.8%

55.0%

57.2%

57.7%*

173.9%

133.1%

66.3%

79.3%

87.8%

71.0%

57.7%*

Share Buyback(reference) Total Return Ratio* Net income is a estimated figure released on 11th-Nov.
EPS/DPR are calculated base on the estimated figure.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 23Appendix
 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 (Quarterly) 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
 Margin Loan Rates

Copyright Japan Securities Finance Co., LTD. All Rights Reserved Features of Balance Sheet (Consolidated) Securities Holdings
 JSF Trust Bank (Loan Balance) The 6th mid-term Management Plan
(FY2020~FY2022) I The 6th mid-term Management Plan
(FY2020~FY2022) II Our Group Companies Rating Information
 Our Corporate Philosophy and History to Date
 Characteristics of Securities Finance Company
 Our Business Field (image chart)〜 All For Securities Market 〜 The Trend of Financial Result (consolidated)¥ mil
FY2015FY2016FY2017FY2018FY20191H

FY2019FY20201H

22,03523,06626,33324,321

14,393

29,101

15,291

16,16016,522

18,38318,603

10,221

20,846

11,58011,537

11,892

13,33012,284

7,923

16,835

8,777

Ex Premium charges

5,672

5,358

5,385

6,566

3,750

8,585

5,079

General & Administrative
Expenses

7,939

8,371

9,121

8,056

4,102

8,136

3,755

Operating Income

2,558

2,802

3,881

3,981

2,368

4,129

2,758

54

92

123

248

148

306

3

3,349

3,611

4,685

5,046

2,758

4,894

3,039

−

▲52

131

▲41

−

▲36

−

2,645

3,078

4,225

3,765

2,070

3,556

2,186

Operating
Revenues
Ex Premium charges

OperatingExpensesGain or Loss inEquity-Method

Recurring Income
Extraordinary
Profit or LossNet Income

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 25 Breakdown of Operating Revenues by business(Historical data)\ mil

1H FY2019

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

FY20191H FY2020

12,21925,36913,6456,280(43.6%)
653

12,517(43.0%)
1,420

5,816
(38.0%)
682

599

1,178

582

4,889
4,172
717
3,811
(26.5%)
38
289
248
454
2,780
2,127
(14.8%)
2,114

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

4,380
3,710
669
6,246
(40.9%)
33
422
229
498
5,062
1,582
(10.3%)
1,564(12.0%)
21
383
1,292

(9.8%)
50
784
1,950

(7.8%)
36483
648(3.1%)(3.0%)(3.0%)

14,393
10,221

29,101
20,846

15,291
11,580

1,724

450

2,832

899

1,192

453

〜 All For Securities Market 〜 26 Breakdown of Operating Revenues by business(Margin Loan Business) (Ex. Premium Charges) Remained relatively at the same level YoY due tothe recovery in the balance of Margin loan.
【Operating Revenues Transition】
Quarterly(mil）

1st Half
Margin Loan
Business¥mil（ex premium
charges）

4,889

2,823

2,785

(2,453)(2,378)

(370)

(406)

2,066
(1,719)
(347)

323

329

285

314

1Q

2Q

368
370

FY2019

3Q

1,987

1,962

(1,703)(1,649)

(284)

(312)

2,417

(4,172)(3,710)(2,060)

(717)

(669)

(357)

653

682

599

582

1H

1H

398

322

359

279

302

4Q

1Q

2Q

208

4,380

FY2020FY2019Copyright Japan Securities Finance Co., LTD. All Rights Reserved

FY2020Fees onLending
Securities

2Q
Revenue

1st Half
Revenue

(YoY)

(YoY)

3,166

(△10.9%)1,105(＋0.6%)

2,417(△14.4%)

2,060

Premium
Charges(△16.0%)LendingFees(△3.5%)

Intereston
LoansInterest on
collateralmoney ofsecurities
borrowed357

359(＋9.1%)

302(△3.6%)

Full Year
Point

5,816

(△7.4%)

 Operating revenues
Premium
2,106 except
Charges were on a(△0.1%)
par with 1st half ofthe previous year.
 Fees on Lending
Securities resulted
in a decrease,(△10.4%)
because Stock Loanbalance remained at
3,710
lower level of the(△11.1%)same period of theprevious year and669
premium charges on
over-lent issues also(△6.6%)
decreased.

4,380

682  Interest on Loans(＋4.4%)

582(△2.8%)

increased, because
average balance ofMargin Loan
recovered to a level
higher than in thesame period of theprevious year.

〜 All For Securities Market 〜 27 Breakdown of Operating Revenues by business(Securities Financing ①)
 Loan to Securities Companies resulted in increase.
 Increased use of equity repo transactions denominated in foreign
currencies contributed.
【Operating Revenues Transition】
Quarterly

1st Half
33

¥ mil

38

289

20
16
147

124
1Q

21

22

15

18

221

201

422

263

142

123

184

123

2Q
FY2019

3Q

123
4Q

248

112

229

(¥ mil）

Loans for
Negotiable
MarginTransaction
Loan toSecurities
Companies

2Q
Revenue

1st Half
Revenue

(YoY)

(YoY)

18

(△19.6%)201(＋41.5%)117

1Q
FY20202Q

1H
FY20191H
FY2020Loan toIndividual
Investors
or
Firms

117

(△4.9%)

33(△13.2%)

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

 Loan to
Securities(＋46.1%)companies
resulted inincreaseboosted byincrease in229
use of(△7.4%)
Equity Repo422

＜ Loan Lineup ＞
 Loan to Securities Companies ・・・ General Loans, Bond Financing, Loans for Negotiable margin Transaction,
Stabilizing fund loan, Equity Repo(Cash-secured Stock Lending Transaction)
 Loan to Individual Investors or Firms ・・・ Com-STOCK Loan
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 28 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 mainly use as collateral increased.
【Operating Revenues Transition】
Quarterly

1st Half

¥ mil

498

454

295

214
1,426

1Q

240
1,354

279
2,836
1,645

2Q
FY2019

3Q

2,080

4Q

5,062

202

280

(¥ mil）

GeneralStock
Lending

4Q
Revenue

Full Year
Revenue

(YoY)

(YoY)

202

(△15.8%)

2,780
2,225

1Q
FY20202Q

Bond
Lending
1H

1H

FY2019FY20202,225(+64.3%)Full Year
Point

Revenue increased.
Because borrowing
498 demands for mainly(＋9.6%)
use as collateralincreased.
Revenue increased.
Both outstanding ofgensaki
5,062 transactions and(+82.0%) repo transactions
increasedsignificantly.

※ 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 〜 29 Breakdown of Operating Revenues by business(JSF Trust Bank)
Trust charges continued growth trend.
【Trust charges Transition】
Quarterly

1st Half(¥ mil）

¥ mil

383
192

1Q

190

194

2Q

3Q

206

4Q

232

FY20192Q

FY2020

1st Half
Revenue

(YoY)

(YoY)

483

Trust
Charges

251

1Q

2Q
Revenue

1H

1H

FY2019FY2020251(＋31.4%)

Full Year
Point

Trust charges
continued
increasing,
contributing fromstrengthening
custodian type
483 trust service(+26.1%) (trusts for the
separate
management ofmoney andsecurities, ABL
trust, etc).

【Trust Lineup】
Trusts 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 〜 30 Analysis of YoY Change in Operating Revenue by Business(1st Half)〜 Summary of the points for 1st Half 〜【Margin Loan Business】【1st Half】 YoY ＋ ¥ 897 mil（＋6.2%）+2,281

¥ mil

+43

+133
△463

△5

＋3
△545

△532

△18

15,291

14,393

FY20191H

MarginLoan

Loans for Loans for Loans for
NMT
Sec Com Investors

Stock
Lending

Bond
Lending

Others

ー

ー

Trust
Bank

Real
EstateSecurities Financing

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

【Securities Financing】
 Loans to Securities Companies : increased useof equity repo transactions denominated inforeign currencies contributed
 Loan to Individual Investors or Firms :resulted in decrease due to lower loan balance.
 General Stock Lending : Borrowing demands
for mainly use as collateral increased.
 Bond Lending : Both outstanding of Gensaki
transactions and Repo transactions increased
significantly.

【Others】
FY20201H

 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 〜 31 Outstanding Balance of Transactions by Group Business(Average balance)\ mil

Transaction type

FY20191H

FY2019FY20201H

Margin Loans

202,338

219,979

209,464

Stock Loans

341,623

333,949

314,716

3,842,936

4,609,077

6,658,359

Loans for Negotiable Margin
Transaction

9,935

10,434

7,836

Loan to Securities Companies

314,673

309,033

298,955

Loan to Individual Investors
or Firms

13,976

13,934

12,810General Stock Lending

65,23060,85965,365

Bond Lending

3,439,120

4,214,817

6,273,391

Trust Bank Loans

496,933

473,808

543,506

Securities Financing

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 32 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 〜 33 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 〜 34 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 〜 35 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 〜 36 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 〜 37 Securities Holdings\ mil
Securities Holdings

Unrealized profits andloses

B/S Amountnotes

Sep-20Mar-20

Unrealized profits andloses

B/S Amount

Equity12,176

7,198

17,595

12,617

Bond809,00224,209826,723

22,079

JGB&Municipal Bond

518,829

26,712499,920

22,506

Corporate Bond

253,617▲567

286,030▲366 Government Guaranteed Bond ,etc.

Others36,555▲1,93540,772▲61 Foreign government bonds

13,943▲1,67815,342▲99

835,12129,730859,661

34,597ー(6,075)ー(9,413)

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

210

※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

5,296

5,286

5 years
to9,798
10 years
2.32
14/9

4.25

4,274

4,000

（year） （¥ 100 mil）
6.0
7,000

4.69

4,930

5,000

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

3,660

4.0
3,320

3,000
2,000

5.0

3.0
2.0

2.10

1,000

1.99

2.10

1.0

0

0.0

Mar.18

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

Sep.20

5.35

6,000
3,186

4,000

5.0

3,584

3,991

1.92

2,279

1,255
1.18

2,000
1,000

（year）
6.0

4.26

5,000

3,000
2.57

6.0
5.0
4.0

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

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

4.0
3.0

1,310

2.0

1.06

1.0

1.24

0.0

0

Mar.18

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

Sep.20(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 〜 38 JSF Trust Bank （Loan Balance）● Loan Banance by Industry\mil

Sep-19Loan
Balance
Manufacturing

Mar-20ratio

Loan
Balance

Sep-20ratio

Loan
Balance

ratio

2,000

0.4%

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

0.1%

689

0.2%

689

0.1%

Wholesale

800

0.2%

800

0.2%

0

0.0%

Retail

0

0.0%

0

0.0%

0

0.0%

Finance & Insurance

0

0.0%

4,100

0.9%

2,100

0.3%

3,000

0.6%

1,500

0.3%

500

0.1%

0

0.0%

0

0.0%

0

0.0%

495,17898.7%

440,81098.4%

615,762

99.5%

Real Estate
Service Industries
Governments
Total

501,667

447,899

619,051※ Amounts described in "Wholesale," “Government" and "Total" as of the end of September 2020 were incorrect,
and have been revised as of December 3, 2020.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 39 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 〜 40 Rating Information

JCR

R&I

As of 30/Sep/2020
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 〜 41 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 〜 42

 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 〜 43

● 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 〜 44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 〜