Japan Securities Finance Co., Ltd.
Third quarter, FY2021
Financial Results Presentation

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜Table of Contents
 １．Executive summary (Consolidated)P3

 ２．Summary Financial Results for the1Q-３Q of FY2021

P4

 ３．Summary Financial Results for the1Q-3Q of FY2021（Non-consolidated）

Ｐ５

 ４．Financial Highlight（Margin Loan Business）

Ｐ６

 ５．Financial Highlight（Securities Financing）

Ｐ７

 ６．Financial Highlight（Securities Investment, Non-consolidated）

Ｐ８

 ７．Summary Financial Results for the 1Q-3Q of FY2021（JSF Trust Bank）

Ｐ９

 ８．Balance Sheet Summary (Consolidated)

Ｐ１０

 ９．Estimated Figures for FY2021

Ｐ１１

 10. Dividend and Share Buyback Program (historical)

Ｐ１２ [Reference] Formulation of the Medium-Term Management Policies

Ｐ１３

 Appendix

Ｐ２４〜

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

2

１．Executive Summary (Consolidated)（¥ mil）

1Q-3Q
FY2021YoY ⊿Highlights⊿％
Operating
Revenues22,362

▲812

△3.5％




Operating
Income

5,029

＋943

＋23.1％

Recurring
Income5,625＋1,136＋25.3％Net
Income

4,032

＋775

＋23.8％

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

There was a downturn in the margin loanbusiness （△49.1％） due to a decrease in
the balance of stock loans.
Securities financing saw an increase inrevenue（+22.1%). Bond lending
remained steady and outstanding equity
repo transactions also increased.
Revenue of subsidiary JSFTB increased(+13.3%) due to steady trust business.
Operating expenses decreased due to adecrease in borrowing fees accompanying
a decrease in the stock loan balance.
General and administrative expenses
decreased mainly due to a revision of themethod to calculate the allowance for
doubtful accounts, etc.

〜 All For Securities Market 〜

3２．Summary of Financial Results for the 1Q-3Q of FY2021
Consolidated（¥ mil）

Non-consolidated
JSF

1Q-3Q
FY2021

YoY.⊿

22,362▲812(△3.5%)

19,690▲1,001

20,4852,873(＋16.3%)

17,813

2,864

11,941▲1,368(△10.3%)

11,770▲1,254

10,0892,330(＋30.0%)

9,918

2,444

General &Administrative Expenses

5,391

▲387

(△6.7%)

4,454

Operating Income

5,029

943

(＋23.1%)

Recurring Income

5,625

1,136

(＋25.3%)180

100(+127.6%)

23

23

4,032

775

Operating Revenues
ExceptPremium Charges

Operating Expenses
ExceptPremium Charges

Gain or Loss inEquity-Method

Extraordinary
Profit or LossNet Income(%⊿)

JSF Trust Bank

Nihon Building

YoY.⊿

YoY.⊿

YoY.⊿

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

2,215

287

966

▲3

339

▲68

19

4

▲585

759

232

506

4

3,465

837

1,116

124

441

▲13

5,087

941

1,118

121

542

▲17

(ー)

23

23

―

―

―

―

(＋23.8%)

4,021

699

772

▲4

358

▲12

〜 All For Securities Market 〜

4３．Summary of Financial Results for the 1Q-3Q of FY2021（Non-consolidated）
Key Points

Japan Securities Finance（Non-consolidated）*Excluding premium charge（¥ mil）

1Q-3Q
FY2021

YoY.⊿

(%⊿)

17,8132,684(+17.7%)

Margin Loan Business*

2,556

▲595

(△18.9%)Securities Financing

11,3532,052(＋22.1%)Others

3,903

1,227

(＋45.9%)Operating Expenses*

9,918

2,444

(＋32.7%)

General &Administrative Expenses

4,454

▲585

(△11.6%)

Operating Income

3,465

837

(+31.9%)Recurring Income

5,087

941

(＋22.7%)Extraordinary
Profit or Loss

23

23

(ー)

Net Income

4,021

699

(＋21.1%)

Operating Revenues*●Operating Revenues
 Up ¥2,684 mil (+17.7%) YoY driven by
Securities Investment （”Others”）.
̶ Margin loan business decreased YoY.
The balance of stock loans continued
to decline.
̶ Securities financing saw an increase
in revenue. Bond lending remained
steady and outstanding equity repo
transactions also increased.
̶ Others (securities investment) also
saw an increase in revenue due tothe steady accumulation of carry
income and the recording of gains onsale under portfolio management.
*For details of segments, see “Financial
Highlights for the 1Q-3Q of FY2021 (P6-P8)”

Copyright Japan Securities Finance Co., LTD. All Rights Reserved●Operating Expenses
̶ Up ¥2,444mil (+32.7%) YoY
̶ Fees on borrowing securities in bondlending increased.
●General & Administrative Expenses
̶ Decreased ¥585mil (△11.6%) YoY
̶ This was mainly due to a revision of
the method to calculate theallowance for doubtful accounts.

〜 All For Securities Market 〜

5

４．Financial Highlights （Margin Loan Business）
Margin loan balance remained steady at a level higher than the same period of
the previous fiscal year.



Stock loans has been on a downward trend and continue to be below the levelof the previous year.
FY2020（\ bn、%）

FY2021
1Q

2Q

1H

3Q

224

296

286

291

288

290

64

76

0.60

-

0.60

0.60

-

0.60

-

-

-

255

300

181

194

188

174

183

▲141

▲131

1Q

2Q

1H

3Q

Margin Loan

199

219

209

223

214

256

Margin Loan Rate

0.60

0.60

-

0.60

-

Stock Loan

295

333

314

316

315

Margin Loan（FY2020）
Margin Loan Rate（FY2020）

¥ tri
0.6

YTD

Margin Loan（FY2021）
Margin Loan Rate（FY2021）

1Q Margin Loan

2Q Margin Loan

3Q Margin Loan

4Q Margin Loan

FY21：¥296bn
FY20：¥199bn

FY21 ¥286bn
FY20：¥219bn

FY21：¥288bn
FY20：¥223bn

FY21： ー
FY20：¥256bn

YoY

4Q

full year

Stock Loan（FY2020）
Stock Loan Rate (FY2020)

¥ tri
1.5%

0.6

1Q Stock Loan
FY20：¥181bn
FY20：¥295bn

2Q Stock Loan
FY21：¥194bn
FY20：¥333bn

YTD

3Q

YTD

Stock Loan（FY2021）
Stock Loan Rate (FY2021)
3Q Stock Loan
FY21：¥174bn
FY20：¥316bn

1.5%

4Q Stock Loan
FY21： ー
FY20：¥255bn

0.4

1.0%

0.4

1.0%

0.2

0.5%

0.2

0.5%

1Q-3Q Margin Loan
FY21：¥290bn
FY20：¥214bn

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

1Q-3Q Stock Loan
FY21：¥183bn
FY20：¥315bn

0.0
Apr

May

Jun

Jul

Aug

Sep

0.0%
Oct

Nov

Dec

Jan

Feb

Mar

0.40%

〜 All For Securities Market 〜

6５．Financial Highlights （Securities Financing）
Both outstanding balance of Bond Lending and equity repo have been
increasing.
On the other hand, General stock lending was sluggish due to a decrease inborrowing demand.
(¥ mil)Type of transaction

1Q-3Q
FY2021

YoY⊿

YoY%

Securities Financing

Loans for Negotiable
Margin Transactions

112

59

+112.2％ The balance of loans outstanding
increased due to a increase in theuse of clients.

Loan to Securities
Companies*

849

251

+42.1％ Outstanding equity repo transactions
have been on increasing.

Loan to Individual Investors
or Firms

383

31

+9.1％

General Stock Lending

Bond Lending

Total Revenues

 The mainstay COM-STOCK Loan
remained steady.

505

▲225

△30.8%

 Although the balance of large-lot
transactions is recovering, it was notenough to cover the decline ininterest margins. Borrowing demand
for use of fail-cover also decreased.

9,502

1,934

＋25.6%

 Both outstanding gensaki
transactions and repo transactions
have been increasing.

11,3532,052＋22.1%* General Loans, stabilizing funding loan, equity repo, etc.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜

7６．Financial Highlights （Securities Investment / Non-consolidated）


Revenues increased year on year due to the steady accumulation ofcarry income and the recording of gains on sale under portfolio
management.

Gains on management of market assets*1 （JSF）
1Q-3Q
FY2021
Yen-based

YoY¥ 2,612 mil¥ 221 milDomestic Bonds¥ 1,036 mil▲¥ 38 mil

Others*2¥ 1,575 mil¥ 259 mil

¥ 504 mil¥ 207 mil

¥ 3,049 mil¥ 452 milIn foreign currencies

Total

Changes in Investment Portfolio
EquityForeign Bonds

1.9%

90%
90%

13.3%

5.3%

80%

79.5%
70%
Mar.2019

Ref. Trend of Interest Rate and Hedge Cost (JPY v.s. USD and EUR)

Trend of Interest Rate
US

Germany

4.0%

Japan

3.0%

3.0%

2.0%

2.0%

1.0%

1.0%

0.0%

0.0%

▲1.0%
2013 2014 2015 2016 2017 2018 2019 2020 2021

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

Domestic Bonds

100%*1 Includes gains/losses on sales *2 Investment Trust, etc.

4.0%

OthersMar.2020

Mar.2021

Dec.2021

Source） Bloomberg

Trend of hedge cost
USD3M
EUR3M

▲1.0%
2013 2014 2015 2016 2017 2018 2019 2020 2021

〜 All For Securities Market 〜

8７．Summary of Financial Results for the 1Q-3Q of FY2021（JSF Trust Bank）

Highlights

 Trust fees increased steadily due to the growth of trusted deposits and the asset backed
loan trust.
 Interest income increased due to the growth of the outstanding loan balance. On the other
hand, there was a significant decrease in the reversal of ADR.
 Though interest expenses decreased, depreciation expenses increased due to an update of
the bank accounting system.
 Recurring income increased, but net income decreased due to an increase in income tax
expenses.

JSF Trust Bank
(Non-consolidated)（¥ mil）

Recurring Revenue【Growth of Trust Fees】

YoY

1Q-3Q
FY2021

¥

(%)

2,272

112

(＋5.2%)

Trust Fees

980

192

(+24.4%)

Recurring Expenses

1,154

▲9

(△0.8%)

Recurring Income

1,118

121

(＋12.2%)Net Income

772

▲4

(△0.5%)*ADR : Allowance for Doubtful Receivables
Copyright Japan Securities Finance Co., LTD. All Rights Reserved

Trust fees increased contributed
to by the strengthening ofcustodian type trust services(crypt-asset related deposits andsegregated cash of customers
deposited at the brokers) andABL trust, etc.

(¥ mil)〜 All For Securities Market 〜

9８．Balance Sheet Summary （End of Dec-2021 / Consolidated）\mil

Total assets
Cash & Deposit
Short-term
investments

Dec-21

Change from
Mar-21

13,452,001

1,315,772

906,814
118,743

Short-term loans
receivable

1,053,656

Receivables
under resaleagreements

4,088,468

Collateral money of
securities borrowed

Investments insecurities
Total liabilities
Call money
Short-termborrowings
Commercial Paper
Payables under
repurchaseagreements

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

5,916,493
1,038,550▲ 514,743 Deposit at BOJ
JGB and other bonds (Maturity:
1year or less)Margin loan / Loans for▲ 62,696 negotiable margin transactions /General loans / Trust bank loans

75,776

1,086,611
Collateral money of bondborrowing
590,922
Collateral money of stock
borrowing
JGB and other bonds (Maturity:
103,205
more than 1year), Stock

13,316,580

1,315,517

1,363,500▲ 343,100

112,210▲25,384

505,000▲ 108,000

6,344,562

2,152,753

3,847,348▲ 181,355

1,012,505▲ 130,956

135,421254

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

Features of Assets
The major components of assets are
margin loans (short-term loans
receivable), deposits in current
account balance at the BOJ (cashand deposits), both of which are
subject to daily fluctuations,collateral deposited for the
procurement of securities (collateralmoney of securities
borrowed/receivables under resaleagreements), and securities held forinvestment.
Cash and cash equivalents maychange significantly depending on
the amount of standby funds in thetrust account of JSF Trust andBanking Co., Ltd. and the surplus ofcash position of the Group as awhole.

Features of Liabilities
In addition to market funding, suchas call money and commercial paper,
which can be adjusted daily in orderto address daily changes in assets,major liabilities are collateraldeposits received against lending
securities (collateral money
received of securities lent/payables
under repurchase agreements).
Ref) Capital adequacy ratio*
at the end of Dec 2021: 377％
*Based on FIEA

〜 All For Securities Market 〜 10

９．Estimated Figures for FY2021
Precondition

FY2021
Estimated
Figures（¥ mil）

FY2021 Estimate

YoY.⊿⊿ from prev.
EF

Consolidated
Over-lentMargin Loan
¥190bnOver-lent
Stock Loan
¥80bn

Operating Income

6,100

1,322

400

Recurring Income

7,000

1,441

500

Net Income

5,000

1,028

500

Operating
Income

4,177

1,264

369

Recurring
Income

5,879

1,394

384

Net Income

4,496

986

300

Recurring
Income

1,394

139

122

Net Income

1,027

170

145

Operating
Income

570

▲26

5

Recurring
Income

680

▲35

15

Net Income

445

▲55

10

Matching¥100bnMargin Loan
¥290bnStock Loan
¥180bnJSF（Reference）
FY2020 Results

Over-lentMargin Loan
¥108bn

JSF
Trust andBankingOver-lent
Stock Loan
¥184bnNihon
Building

Matching¥115bnMargin Loan
¥224bnStock Loan
¥300bnPreconditions of Loans for Margin Transactions●Loan Rate： 0.60％,●Interest on Collateral Money： 0%,●Lending Fee： 0.40％＜Approach to Estimated Figures for FY2021＞
 We have revised the full financial year estimate upward in light of the following factors: (1) favorable securities
financing business, (2) steady business conditions at JSF Trust Banking, particularly in the trust business, and also(3) a decrease in general and administrative expenses (JSF non-consolidated) due to a revision in the method of
calculating the allowance for doubtful accounts,
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 11

10. Shareholder Returns≪ Return Policy ≫To strive for a total payout ratio of 100% on a cumulative basis from FY2021
through FY2025 through dividend payments and agile implementation of share
repurchases.

 Share repurchase plan Dividends

Established a share repurchase plan for up to
2.8 million shares (3.0% of total shares
outstanding) for a total amount of ¥2.3bn(purchase period: December 2021, 2021 toMarch 31, 2022)

A decision to raise the repurchase target wasmade based on the estimated YTD consolidated
financial results for the third quarter of
FY2021(released on February 4, 2022)

For fiscal 2021, the forecast dividend
is ¥30 yen per share for the year(+¥4 yen year-on-year).
Interim dividend: ¥15 (Actual)
Year-end dividend: ¥15 (Forecast)● Aggregate amount of the repurchase price:¥1.8 bn ⇒ ¥2.3 bn (+¥0.5 bn)● Aggregate shares to be repurchased：
2.2 mil shares ⇒ 2.8 mil shares(+0.6 mil)

Status of shares repurchased as of January 31,
2022● Accumulated amount of repurchased shares:¥1,217,304,400● Accumulated shares repurchased:¥1,303,300 shares

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 12

[Reference]
Formulation of the Medium-Term Management Policies

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜1. Background to the Medium-term Management Policy■ Medium-Term Management Policy
Outline(1) Our Vision for the Future as a Company(2) Medium-Term Management objectives(3) Strategy, etc.
(4) Corporate Governance Response

Background to Formulation
 With the revision of the Corporate Governance Code and the conclusion of areview for reorganizing the market segments of the Tokyo Stock Exchange, as alisted company, JSF thus recognizes the need to further ensure transparency
and to step up its commitment to achieving sustainable growth andmedium/long-term enhancement of enterprise value underpinned by asophisticated system of governance.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 14

2. Management Philosophy and Future Vision
Our Management Philosophy (Summary)

A keen awareness of its public role as an institution specializing in securities
financeProactively meeting the diverse needs of the securities and financial sectors

Contributing to the development of the securities market by improving the longterm interests of participants and users in the securities market

Compatibility

Our Future Vision as a Company
 Be a company that maintains strong financial soundness as asecurities finance company providing infrastructural functions
to the securities market
 Be a company that achieves sustainable growth expected of alisted company, and enhances its enterprise value over the
medium and longer term

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

3. Medium-term Management Goals

Medium-term Management Goals
Aim to achieve the following targets
Period of the Current Medium-Term Management Plan (until fiscal 2022)

ROE4%

Period of the Next Medium-Term Management Plan (FY2023-FY2025)

ROE5%

Approach Assumes the maintenance of high financial soundness required
to maintain its function as a market infrastructure Added ROE, which is widely used as an indicator for
profitability, capital efficiency, etc., to management goals
 ROE goal set at a level above the cost of equity (recognized at
the mid-4%)
Implement business management and risk management in an integrated manner
under the Risk Appetite Framework (RAF) to realize management objectives
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 16

4. Strategies
Accelerate and strengthen initiatives for various measures in
the current medium-term management plan
(1) Strengthening Securities Finance Business centered on loans for
margin transactions
 We aim to pursue stable management of our margin loan business and improve
profitability. Moreover, we aim to increase our number of lending issues steadily,
promote the use of margin loans, enhance the provision of information relating tomargin transactions and margin loans.
 We aim to utilize the financial and securities transaction expertise we have cultivatedthus far to handle diverse transactions in a proactive manner and increase business
partners and applicable securities.

(2) Reinforcing consolidated management of the group
 Improve profitability of the Group as a whole by further utilizing the Group's resources(3) Improving operational efficiency
 Promote further business efficiency by reviewing business processes, etc.

 Awareness of sustainability issues and promotion of business operations with low
environmental impact and diverse work styles for employees.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 17

5. Capital Management and shareholder value
 We strive to increase our earning power and capital efficiency byaccelerating and strengthening initiatives for each strategy under the
6th medium-term management plan.
 We recognize that the current level of shareholders' equity is at a
sufficient level to maintain a high level of financial soundness andrealize sustainable growth as a listed company and enhancement ofcorporate value over the medium to long term
 With regard to shareholder returns, we will seek to further enhancethem by striving for a total payout ratio of 100％ on a cumulativebasis in the years from FY2021 through FY2025 (achievement of 5%
ROE target) through agile implementation of dividend payments andshare repurchases.
ー In the case of dividends, (1)the annual per-share amount for FY2021
is expected to be JPY30*, (2) as for the period from FY2022 throughFY2025, with a policy of actively aiming to pay an annual dividend
per share of no less than JPY30.
(*) The forecast for the fiscal year ending March 2022 is unchanged
from the announcement on November 2.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 18

6. Corporate Governance Response In anticipation of the adoption of the revised CG Code and thetransition to the new market segment of the Tokyo Stock Exchange, wewill expeditiously tackle the diverse challenges that need to be
overcome in order to maintain the level of corporate governanceexpected of a listed company.
 Established the Corporate Governance Office as a department incharge of these initiatives

We ask for your understanding of our management philosophy
and your continued support and cooperation.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 19

■ Medium-Term Management Policy
1. Vision for JSF in the Future
JSF, guided by its corporate philosophy, will strive to be a company that maintains strong financial
soundness, achieves the sustainable growth expected of a listed company, and enhances its enterprisevalue over the medium and longer term, while firmly embracing the public roles expected of it as a securities
finance company providing infrastructural functions to the securities market.

2.Medium-Term Management Goals
For its new medium-term management goals, JSF will aspire to attain an ROE of 4% during the period of thecurrent medium-term management plan (ending with FY2022), and of 5% during the period of the next plan
(FY2023‒2025).

3.Strategies
JSF will endeavor to attain the medium-term management goals by increasing its earning power and capitalefficiency through diverse actions such as: 1) strengthening its securities finance business centered on loans for
margin transactions, 2) reinforcing consolidated management of the group, and 3) improving operational
efficiency.
With regard to shareholder returns, JSF will seek to further enhance them by striving for a total payout ratio of
100％ on a cumulative basis in the years from FY2021 through FY2025 (achievement of 5% ROE target) throughdividend payments and agile implementation of share repurchases. In the case of dividends, the annual pershare amount for FY2021 is, as announced on November 2, 2021, expected to be JPY30; as for the period fromFY2022 through FY2025 (achievement of 5% ROE target), since JSF has set the aforementioned total payout
ratio target, it will replace its established dividend policy (consolidated payout ratio of 60%) with a policy ofactively aiming to pay an annual dividend per share of no less than JPY30.

4.Commitment to Corporate Governance
We will expeditiously tackle the diverse challenges that need to be overcome in order to maintain the levelof corporate governance expected of a listed company.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 20

[Reference Ⅰ] Characteristics of Securities Finance Companies(1) Role as a Central Operator of the Margin Loan SchemeJSF plays an institutional role of being obliged to accept loan applications bysecurities companies.



For this reason, JSF is required to have the ability to procure funds and securities
to reliably extend loans and lend securities. To that extent, it is necessary tomaintain a strong financial base and a high credit rating.

(2) Licensed Company under the Financial Instruments and Exchange Act
Businesses operated by securities finance companies other than margin loans are
permitted only to the extent that they do not impair the operations of the marginloans business in accordance with laws and regulations.



In addition to the licensing business of the margin loan business , it is basicallylimited to lending securities and lending funds secured by securities.
Though we are exploring the development of new business, it is not anticipated in
the framework of the law to develop new business completely unrelated tofinance and securities. As a result, M&As and other activities are also constrained.
On the other hand, the business strategy risk is small.



Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 21

[Reference Ⅱ] Characteristics of Securities Finance Companies(3) Business Development through Participation in Payment andSettlement Systems


JSF has direct access to JSCC and JASDEC in order to clear and settle securities
pursuant to the FIEA. As to settlement, JSF also has direct access to the BOJ-Net(central bank system).



For this reason, it is necessary to maintain a capital adequacy ratio above thespecific level.

On the other hand, this leads to settlement risk reduction and ensuring ourcreditworthiness, which in turn leads to securing stable funding.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 22

[Reference Ⅲ] Trend of Total Shareholder Returns （TSR）
 Our stock price is rising, reflecting the rise in the stock market and the JSFʼs

company specific steady business performance.
 Total Shareholder Return(TSR） continuously exceeds the market-average.
Mar-17
Stock prices

Mar-18Mar-19Mar-20Mar-21

￥592

￥653

￥584

￥493

￥798

\18

\26

\22

\22

\26

250.0%TSR （for 5years）
TOPIX（including dividends,for 5years）

Annual dividend ①

201.7%

Total dividends ②

\18

\44

\66

\88

\114

①+②

\610

\697

\650

\581

\912

TSR

134.9%

154.2%

143.8%

128.5%

201.7%

Mar-17

Interest rate

162.3%

150.0%【Index for comparison】

TOPIX (including dividends）

200.0%

Mar-18Mar-192176.87pt 2522.26pt 2395.21pt
114.6%

132.8%

126.1%

Mar-20Mar-212167.6pt 3080.87pt
114.2%

162.3%

100.0%

Mar-17Mar-18Mar-19Mar-20Mar-21(NOTE) Calculated based on the end of March 2016

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 23Appendix
 Dividend and Share Buyback Program (Historical)
 Financial Result Trends (Consolidated) Gross Profit by Business Breakdown of Operating Revenues by Business(Historical Data) Breakdown of Operating Revenues by Business Analysis of YoY Change in Operating Revenue by
Business (Quarterly) Outstanding Balance of Transactions by Group
Business Margin Transactions & Loans for Margin transactions
 Structure of Margin Transactions & Loans for Margin
Transactions
 Revenue Structure of Loans for Margin Transactions

Copyright Japan Securities Finance Co., LTD. All Rights Reserved About the Margin Loan Rates
 Rate of Loans for Margin Transactions
 Securities Holdings
 JSF Trust Bank (Loan Balance) Corporate Philosophy/Management Principles(The 6th
MMP) Management Goals/Strategies(The 6th MMP）
 Management Goals(The 6th MMP)
 Strategies(The 6th MMP）
 Our Group Companies Rating Information
 ESG/SDGｓ Initiatives
 Our Corporate Philosophy and History to Date
 Our Business Field (image chart)〜 All For Securities Market 〜 Dividend and Share Buyback Program (Historical)
FY
2015

FY
2016

FY
2017

FY
2018

FY
2019

FY
2020

FY2021
Forecast/
Framework¥30

Annual Dividend per share

¥16

¥18

¥26

¥22

¥22

¥26

Interim ¥15
Year-end ¥15

Share Buyback(shares)

3mil

0.63mil

1.5mil2.0mil1.0mil―2.8mil（amount）¥1.9bn¥0.3bn¥0.9bn¥1.2bn¥0.5bn―¥2.3bn<Consolidated> : Net Income¥2.6bn¥3.0bn¥4.2bn¥3.7bn¥3.5bn¥3.9bn¥5.0bn

: EPS

¥26.9

¥31.9

¥44.2

¥40.0

¥38.4

¥43.2

¥54.7

: DPR

59.5%

56.4%

58.8%

55.0%

57.2%

60.1%

54.8%

(reference)
Total Return Ratio

133.1%

66.3%

79.3%

87.8%

71.0%

60.1%

100.5%

Note for FY2021 (Forecast) The number of shares and the amount of the “Share Buyback“ are both subject to a repurchase limit The “Annual Dividend per share” is a forecast
 "Net income (consolidated)" refers to the estimated figure announced on February 4, 2022. Moreover, EPS and DPR havebeen calculated using this estimated figure.
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 25 Financial Result Trends (Consolidated)¥ mil
FY2016FY2017FY2018FY20191Q-3Q
FY2020

FY2020

1Q-3Q
FY2021

23,06626,33324,321

29,101

23,17530,92422,362

16,522

18,38318,603

20,846

17,611

23,711

20,485

11,892

13,33012,284

16,835

13,30918,018

11,941

5,358

5,385

6,566

8,585

7,758

10,81910,089General &Administrative Expenses

8,371

9,121

8,056

8,136

5,779

8,129

5,391

Operating Income

2,802

3,881

3,981

4,129

4,086

4,777

5,029

92

123

248

306

79

395

180

3,611

4,685

5,046

4,894

4,488

5,558

5,625

Extraordinary
Profit or Loss

▲52

131

▲41

▲36

−

43

23

Net Income

3,078

4,225

3,765

3,556

3,257

3,971

4,032

Operating Revenues
Ex Premium Charges

Operating Expenses
Ex Premium Charges

Gain or Loss inEquity-Method

Recurring Income

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 26 Gross Profit by Business
\ mil

1Q-3Q
FY2020

FY2020

1Q-3Q
FY2021

Operating Revenues (ex. premium charges) A
Secrities Finance BusinessMargin Loan Business (ex. Premium charges)
Securities Financing

17,611
15,1283,152
9,301

23,711
20,337
4,146
12,36920,485
17,813
2,556
11,353Loans for Negotiable Margin Transactions
Loans to Seurities Companies
Loans to Individual Investors or Firms
Stock Lending
Bond Lending

53
597
351
730
7,568

80
785
468
950
10,085

112
849
383
505
9,502

Others （mainly securities investment）
Trust Business
Real Estate Management Business
Operate Expense (ex. premium charge) B

2,675
1,927
970
7,758

3,820
2,624
1,295
10,819

3,903
2,215
966
10,089Gross Profit (A - B)
Secrities Finance BusinessMargin Loan Business (ex. Premium charges)
Securities Financing

9,865
7,667
2,929
2,140

12,906
9,903
3,853
2,876

10,421
7,920
2,128
2,742

Loans for Negotiable Margin Transactions
Loans to Seurities Companies
Loans to Individual Investors or Firms
Stock Lending
Bond Lending

34
483
243
402
976

53
669
323
536
1,293

96
834
264
275
1,271

2,597
1,519
955

3,173
2,098
1,275

3,049
1,876
947

Others （mainly securities investment）
Trust Business
Real Estate Management Business

Note）
Figures for each Group company are on a non-consolidated basis (before elimination of consolidation), and the sum ofthese figures does not correspond to the figures for “Operating Revenues (A)” and “Gross Profit (A-B)” .

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 27 Breakdown of Operating Revenues by Business(Historical Data)
\ mil
1Q-3Q
FY2020

1Q-3Q
FY2021

FY2020

Securities Finance Business

20,67827,534

19,672Margin Loan Business

8,716

11,3594,434(37.6%)
1,047(36.7%)
1,453(19.8%)
1,386

888

1,108

356

6,573
5,564
1,009
9,287
(40.1%)
53
597
351

8,491
7,213
1,278
12,353(40.0%)
80
785
468

2,468
1,877
590
11,337(50.7%)
112
849
383

730
7,554
2,675
(11.5%)
2,649
1,814(7.9%)
59
738
985
681
(2.9%)
23,175950
10,0693,820(12.4%)
3,786
2,481(8.0%)
92
1,031
1,319
908
(2.9%)
30,924

505
9,486
3,900
(17.5%)
3,876
2,056(9.2%)
71
942
1,031
633
(2.8%)
22,362

17,611

23,711

20,485Interest 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 Fees
Bond Investment
Real Estate Management Business
Operating Revenues(excluded Premium Charges)
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 28 Breakdown of Operating Revenues by Business(Margin Loan Business)
 Revenues decreased YoY. Though Margin Loan balance increased,
Stock Loan balance continued to decline.
Changes in Operating Revenues
Quarterly

3Q
Revenue
(YoY)

(mil）

1Q-3Q

¥ mil

1,218
(△58.0%)（ex premium
charges）

802

2,556

(△23.3%)(△18.9%)Fees onLending
Securities
2,468(1,877)(1,009)

2,417

2,193

1,918

(2,060)(1,853)(1,649)416

Premium
Charges(△77.5%)

LendingFees(△44.2%)

(590)

877

984
(776)
(207)

1,047

(339)

(268)

359

364

406

469

455

302

306

220

110

133

461
112

2Q

3Q

4Q

1Q

2Q

3Q

FY2021

(416)
(189)

189

1,386

606

(357)

(684)
(193)

FY2020606(△72.4%)

888

1Q-3Q

356

1Q-3Q

FY2020 FY2021

Copyright Japan Securities Finance Co., LTD. All Rights ReservedIntereston
LoansInterest on
collateralmoney ofsecurities
borrowed

461(＋26.6%)

112(△63.2%)

1Q-3Q
Point

4,434

Margin Loan
Business

6,573(5,564)

1Q-3Q
Revenue(YoY)(△49.1%)  Operating

revenues except
premium charges
resulted in adecrease.

 Fees on lending
securities
2,468
resulted in a(△62.5%)decrease,because thestock loanbalance remained
1,877
at a lower level(△66.3%)than in the same
period of theprevious year and590
premium charges(△41.5%)on over-lentissues also
decreased.

1,386(＋32.4%)

 Interest on loans
increased,because theaverage balance356
of margin loans(△59.9%)remained steadyduring 1Q-3Q.

〜 All For Securities Market 〜 29 Breakdown of Operating Revenues by Business(Securities Financing (1))
 Loans to securities companies resulted in an increase.
 Outstanding balance of equity repo transactions contributed to the result.
Changes in Operating Revenues
Quarterly

1Q-3Q

¥ mil

112

53
849

(¥ mil）

Loans for
Negotiable
MarginTransactions

3Q
Revenue

1Q-3Q
Revenue

(YoY)

(YoY)

43

112

(＋120.8%)(＋112.2%)

597

39
19
175

27
187

235

117

121

117

120

2Q

3Q

4Q

1Q

306

307
351

128
2Q

383

Securities

307

Companies(＋75.8%)134
3Q

FY2021＜ Loan Lineup ＞
 Loans to securities companies:

Loans to

29

18
201

FY202043

Loan to individual investors or firms:

1Q-3Q
FY2020

1Q-3Q
FY2021Loans toIndividual
Investors
or
Firms

134
(＋10.8%)

1Q-3Q
Point
 LNMT andloans toindividual
investorsof firms
increased.

 Loans tosecurities
849
companies(＋42.1%)
resulted in
an increase
boosted byan increasein the use383
of equity(＋9.1%)
repo

General loans, bon financing, loans for negotiable margintransactions, stabilizing fund loans, equity repo (cash-secured
stock lending transactions)
Com-STOCK loans

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 30 Breakdown of Operating Revenues by Business(Securities Financing (2))
 Bond lending: Both outstanding gensaki transactions (repurchase agreement)
and repo transactions increased.
 General stock lending: Borrowing demand for mainly fail-cover decreased.
Changes in Operating Revenues
Quarterly

1Q-3Q
505

¥ mil

(¥ mil）
730

9,486

202
2,225

2Q

232

220

2,491

2,514

3Q

4Q

174

147

2,989

3,074

1Q

FY20202Q
FY2021

183

7,554

GeneralStock
Lending

3Q
Revenue

1Q-3Q
Revenue

(YoY)

(YoY)

183
(△21.1%)

3,422

3Q

1Q-3Q

1Q-3Q

FY2020 FY2021

Bond
Lending

3,422(+37.3%)

１Q-3Q
Point

Revenuedecreasedbecause505 borrowing(△30.8%)demand formainly fail-coverdecreased.
Revenueincreased. Bothoutstanding
9,486 gensaki(+25.6%) transactions andrepo transactions
increased.

*Genera stock lending is ・・・Lending stock to securities companies depending on their various demands (ex. fail-cover and arbitrage),
except on demand to settle margin transactions
Main business partners: Lenders ‒ Institutional investors, etc. / Borrowers ‒ Securities companies

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 31 Breakdown of Operating Revenues by Business(JSF Trust Bank) Trust fees grew steadily, reaching record highs on a quarterly basis.
Changes in Trust Fees
Quarterly*Consolidated base

1Q-3Q

3Q
1Q-3Q
Revenue Revenue(¥ mil）
¥ mil

(YoY)

(YoY)

1Q-3Q
Point

942
738

251

255

292

307

2Q

3Q

4Q

1Q

FY2020311

2Q
FY2021

Trust
Charges

323

3Q

1Q-3Q

1Q-3Q

FY2020

FY2021

323(＋26.8%)Trust fees
continued
increasing
contributed to942 by strengthening(+27.5%) of custodian
type trust
services and ABL
trust, etc.

Trust Lineup
Trusts for the separate management ofmoney and securities

Trust for segregated deposits which securities companies receive from customers

Trusts for currency future trading

Trust for segregated guarantee deposits which FX business operators receive from
customers

Crypto-asset related trust

Trust for segregated guarantee deposits which crypt-asset exchangers receivefrom customers

Asset Backed Loan (ABL) Trust

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

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 32 Analysis of YoY Change in Operating Revenue by Business(1Q-3Q)

Summary of the Significant Points for the 1Q-3Q
Margin Loan Business Results decreased due tooutstanding of stock loans.

【1Q-3Q】 YoY ▲ ¥ 812 mil（△3.5%）¥ mil+1,931+59△4,282+251＋1,225△48△225

23,175

１Q-3Q
FY202022,362MarginLoan

Loans for Loans for Loans for StockBond
NMT
Sec Com Investors Lending Lending

Others

ー

ー

Trust
Bank

Real
EstateSecurities Financing

Securities Finance Businessdecreasein

Securities Financing

＋241

+31

a

１Q-3Q
FY2021

 Loans to Securities Companies: Revenues
increased due to an increase of outstanding
equity repo transactions, etc.
 Loan to Individual Investors or Firms: Revenues
increased due to an increase of outstanding
Com-STOCK loans.
 General Stock Lending: Borrowing demand foruse of fail-cover decreased.
 Bond Lending: Both outstanding gensaki
transactions and repo transactions increased.

Others Revenues increased due to due to steady
accumulation of carry income and recording ofgains on sale under portfolio management.

Trust Business Trust fees grew steadily.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 33 Outstanding Balance of Transactions by Group Business(Average Balance)\ mil

Transaction Type

1Q-3Q
FY2020

FY2020

1Q-3Q
FY2021Margin Loans

214,171

224,615

290,707

Stock Loans

315,407

300,638

183,662

6,873,620

7,099,013

9,625,047

8,829

9,910

20,622Loans to Securities Companies

303,686

327,444554,319

Loans to Individual Investors
or Firms

13,02013,092

14,780General Stock Lending

55,30347,12644,781

6,492,780

6,701,439

8,990,542

555,735

571,109697,171

Securities Financing
Loans for Negotiable Margin
Transaction

Bond Lending
Trust Bank Loans

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 34 Margin Transactions & Loans for Margin Transactions
3.0

¥ tri

50%
Margin Buying Balance
Margin Loan Balance
Ratio

2.5

45%
40%
35%

2.0

30%
1.5

25%
20%

1.0

15%
10%

0.5

5%
0.0

0%
08

1.0

09

10

11

12

13

14

15

16

17

18

19

20

21

￥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

21

〜 All For Securities Market 〜 35 Structure of Margin Transactions& Loans for Margin Transactions
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 proceeds
Bank of Japan

Stock Exchange
Clearing Facilities
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 36 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 part of over-lent stock loans. However, the same amount is 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) = Expenses: 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 〜 37 About the Margin Loan Rate

LendingFee
0.40%

Securities
Company

Loan Rate
0.60%

BOJ Policy Interest Rate

Stock Loan

JSF

Securities
Company

Margin Loan

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 an 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%




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％）

0.8%


0.6%




0.4%
Apr.2013〜
Monetary base start

0.2%

0.0%

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

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％）

 The margin loan rate is decided byreflecting the changes in market rates andthe BOJʼs Policy Interest Rate.

〜 All For Securities Market 〜 38 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

21

〜 All For Securities Market 〜 39 Securities Holdings\ mil
Dec-21

Mar-21
Securities Holdings

Unrealized Profits andLossesB/S Amount

Notes

Unrealized Profits andLossesB/S Amount

Equity15,338

10,61013,412

9,013

Bond

921,896

18,8581,103,895

19,166

JGB&Municipal Bond

510,390

17,593543,178

17,437

Corporate Bond355,499▲326

455,111▲173 Government guaranteed bonds etc.

56,006

1,591

105,606

1,902 Foreign government bonds

OthersOther Securities
Total

17,506

3,539

16,001

4,405

954,741

33,007

1,133,309

35,331

ー(14,359)ー(13,238)（included the effects ofderivatives）

Held-to-maturity
bonds

Unrealized Profits andLossesB/S Amount

JGB

1,512

Unrealized Profits andLossesB/S Amount

194

1,511

Notes

192

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

Yen Bond Portfolio （JSF Trust Bank）

Yen Bond Portfolio（JSF）
12,000
8,000
9,798
6,000
4,000
（億円）10,000
2,000
0 years9,424 5 years2.32
Over10
to 10 years
2.69
14/3
14/9
（¥ 100 mil）

6.66

8,000
5.57

7,000
4.69

6,000
5,000

9,210
2.81
9,498
3.67
8,158
2.69
1 year to 5 years
Within3.23
1 year
2.41
14/12
15/3
15/9

3,660

6.0

4.84
4.25

5.0

4,274

4,000

3,853
3,320

3,921

4.0

（¥ 100 mil）

3,370

（year）
7.0

8,000
7,000

5.35

6,000

5.01

4.84

3,186

4,183

5,140

5,157

2.0

1,000

3.0

0

Sep.19Mar.20 Sep.20

Mar.21

Sep.21

Dec.21

2.0

2,000

1.0

1,000

0.0

0

4.0

3,584

3,000
2.10

6.0
5.0

3,991

3.0

5.30

4.26

5,000
4,000

3,000
2,000

（year）
7.0

6.0
5.0
4.0
3.94
3.0
2.0
（年）
1.0
8,378
3.54
0.0
Averageremaining
period
15/12

1.92

1.0
0.0

Sep.19Mar.20 Sep.20

Mar.21

Sep.21

Dec.21(Note) The average remaining period is calculated excluding floating JGB, held-to-maturity bonds and bonds for which hedge-accounting is applied

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 40 JSF Trust Bank （Loan Balance）● Loan Balnance by Industry\mil

Dec-20Loan
BalanceMar-21ratio

Loan
BalanceDec-21

Ratio

Loan
Balance

Ratio

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

0.1%

689

0.1%

689

0.1%

Wholesale

0

0.0%

0

0.0%

0

0.0%

Retail

0

0.0%

0

0.0%

0

0.0%

Finance & Insurance

0

0.0%

2,100

0.3%

1,000

0.1%

1,120

0.2%

1,120

0.2%

1,198

0.2%

0

0.0%

0

0.0%

0

0.0%

507,86499.6%

723,947

99.5%

681,751

99.6%

Real Estate
Service Industries
Governments
Total

509,673

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

727,856

684,638〜 All For Securities Market 〜 41 Corporate Philosophy / Management Principles(The 6th Mid-term Management Plan)

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, andrisk management under a new governance structure
and thereby establish solid credibility, while always
maintaining a keen awareness of our social
responsibilities as a securities finance company.

Basic concept asa securities
finance company⑵ To enhance enterprise value while maintaining solid
equity capital in order to ensure stability inmanagement and the financial health required of acompany that is a key player in securities market
infrastructure, to give comprehensive consideration to
the earnings environment, investment plans, etc., andto ensure profits are returned to shareholders.

Solid equity
capitalFinancial health⑶ To further enhance JSFʼs core margin loan businesswhile also striving to expand the finance- andsecurities-related services provided by JSF and Group
companies, to 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 orderto address changes in the business environment in a
flexible manner.

Businessmanagement
structure

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 42 Management Goals / Strategies(The 6th Medium-term Management Plan)

Management
Goals

Given that the margin loan business, JSFʼs core business, is greatly affectedby market fluctuations, 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

Enhance the margin loanbusiness as part of
securities market
infrastructure

Strategies

Develop and realize new
business

Diversify managementof securities as anefficient use of capital

Facilitate diverse work
styles and make JSF more
dynamic

Expand and enhance thesecurities finance business

Strengthen the business
management structure

Strengthen our competitive
base through efficientbusiness operation＜Framework to integrate management goals and strategies with risk management＞

Use of the Risk Appetite Framework
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 43

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

Number of loanable stock issues: We will aim to increase our number of loanable stock issues steadily tostrengthen 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 the 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(A) + (B) + (C)3
FY20XX

20XX+1

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

Non-margin loan business profit

Margin loans, JSFʼs core business, are

Basic profit

Change in recurring income(Conceptual illustration)

We calculate the basic profit to visualize

susceptible to market fluctuations

our profitability based on our average(profit fluctuates significantly)

margin loan business profit.

It is difficult to understand the changes
in our basic earnings

Copyright Japan Securities Finance Co., LTD. All Rights ReservedThis makes the changes in our basic
earnings easier to understand〜 All For Securities Market 〜 44 Strategies (The 6th Medium-term Management Plan)
Enhance the margin loanbusiness as part of
securities market
infrastructure.

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 to monitor
trends among market participants carefully, increase our number of lending issues steadily, promote
the use of margin loans, enhance the provision of information relating to margin transactions andmargin loans, and expand the range of investors.

Expand and enhance thesecurities finance businessWe aim to utilize the financial and securities transaction expertise we have cultivated thus far tohandle diverse transactions with domestic and overseas financial instruments businesses in aproactive manner and increase business partners and applicable securities to enhance and expand
our securities finance business, increasing opportunities for profit.

Develop and realize new
business

We 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 with Group
companies and domestic and foreign partners.

Diversify management of
securities as an efficientuse of capital

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

Strengthen business
management structure

We will proactively address our social obligations and ensure that compliance is positioned as aprerequisite 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 response to theincreasingly 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 event that amajor disaster occurs, we will continue to upgrade our business continuity system.

Strengthen our competitive
base through efficientbusiness 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 robotic process
automation (RPA) to build an efficient business operation structure andstrengthen our competitive base.

Facilitate 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 〜 45 Our Group Companies
Subsidiary
Affiliate（ ) Shareholding Ratio

Japan Securities Finance（100%）（100%）Nihon
Building

JSF
Trust Bank

Shareholding
Ratio

100%

Name
JSF Trust and Banking Co., Ltd.

（20.0%）（20.8%）

Japan Information
Processing

JSFIT

Capital(mill yen)

Business Overview

14,000Trust service and banking
service
Real estate ownership andleasing
Real estate trading andbrokerage

100%

Nihon Building Co., Ltd.

100

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〜 All For Securities Market 〜 46 Rating Information

JCR

R&I

Standard &Poorʼs

As of 31/Dec/2021

Japan
Securities Finance

JSF TrustBank

RatingOutlookRatingOutlookRatingOutlookLong-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 〜 47 ESG/Sustainability (1)The development of infrastructure that forms the foundation of socio-economic
activities is a key element to realize a sustainable society. It is also one of the
Sustainable Development Goals (SDGs: Goal 9). Our Group provides a variety ofservices, including the Margin Loan Business, as a part of the infrastructure of the
securities market and strives to improve the liquidity of securities and financial
markets and to improve convenience for market participants. Through these
activities, we aim to play a role that includes supporting market participants who are
engaged in similar initiatives to realize a sustainable society.
Our Group believes that it is important to build a system that ensures stable
operations even under various circumstances as it assumes responsibility for the
infrastructure of securities and financial markets. To this end, it is important not
only to respond to disasters in a narrow sense, but also to ensure the stability andhigh reliability of our business base.
In addition, we believe that there are issues to which we can contribute byutilizing the know-how and other resources that our Group has cultivated over theyears.
Based on this perspective, we are currently aware of the following material issues(materialities). Our Group recognizes the roles expected of our Group in addressingthese material issues (materialities) and will advance various initiatives while
flexibly responding to future changes in the social environment.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 48

 ESG/Sustainability (2)Important issues we recognize
Classification

E

Item
Climate changePromote a reduction in environmental impact

EducationPromote financial and economic education activities
Promote academic research activities



Promote diversity
Develop and secure human resources and create a pleasant
workplace

Respect human rights, non-discrimination and diversity
Prohibit various types of harassment

Enhance functions as infrastructure for securities andfinancial markets
Contribute to overseas securities and financial market
infrastructure

Human resources

S
Human rights

Capital market

G

Challenges



Corporate governanceContinuously improve corporate governance

BCP

Stably operate business that is not affected by disasters etc.

ComplianceOperate business based on a high awareness of compliance

Risk management

Implement the Risk Appetite Framework (RAF)

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 49 ESG/Sustainability (3)Specific Initiatives on Key Issues
Classification

E

S

G

Challenges

Initiatives

Reduce environmental impact

 Improve company facilities to conserve electricity and be conscious ofenvironmental impact
 Promote paperless operations in all areas of the company

Promote financial and economic
education activities

 Hold various seminars on margin transactions
 Hold seminars for investors and training for securities company employees,
etc.

Promote academic research
activities Conduct joint empirical research with the University of Tokyo (Securities
Lending and Lending Transactions Utilizing Distributed Ledger Technology)
 Collaborate with Kyoto University in Index Development Utilizing Margin
and Credit/Debit Transaction Data

Contribute to overseas
securities and financial market
infrastructure Provide technical assistance and investment in Indonesian Securities
Finance

Realize diverse work styles for
employees

 Provide support for childbirth, childcare, and nursing care
− Introduce company-wide teleworking− Understand employee engagement

Enhance corporate governance Strive to enhance governance as a company with a Nominating Committeeetc.
− Ensure that the majority of directors are independent outside directors− Ensure that the Chairman of the Board of Directors and Chairman of the
3 Committees are Independent Outside Directors
 Establish dedicated departments to address various corporate governanceissues with a sense of urgency

Implement risk management

 Implement RAF and establish a system to integrate business management
and risk management

Implement BCP

 Continue to strengthen the BCP system and cyber security system toensure stable business operations as a part of the infrastructure of
securities and financial markets

Implement compliance Prepare manuals and establish Compliance Enhancement Month

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 50 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 the margin loan business and improving convenience as
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
market1951

1977

 Launched themargin loanbusiness Launched
the generalstock
lendingbusiness

1989

1998

 Established Launched
JSF TrusttheBank
brokeragebusiness forbond lending2019 Launchedloans formargintransactions
for PTS

In conjunction with the establishment of the margin transaction system,
commenced the margin loan business of lending funds or stock
certificates, etc. necessary for the settlement of margin transactions tosecurities 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 〜 51

● Our Business Field （Image Chart）＜Funds＞(Margin Loan/Stock Loan)

Securities Financing
Securities
Lending(Equity andBonds)

Equity Repo
Loan to Individual
Investors or Firms

LenderMoney Market,
etc.

Financial
Institutions

SubsidiaryBusiness

Loan to Securities
Companies

Investors

Margin Loan BusinessBorrower

Securities Companies

For
Standardized
MarginTransactions＜Securities＞

Institutional
Investors andSecurities
Companies, etc.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 52

NoticeThis document includes statements relating to business forecasts.
These statements do not guarantee future business performance;
they contain risks and uncertainties. Future business performance
may vary significantly depending on the stock market and financial
conditions or other factors.

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