JOYO BANK
Annual Report 2009

PROFILE
The Joyo Bank, Ltd. was established in 1935 out of the merger of theTokiwa Bank and Goju Bank (both founded in 1878), and celebrated its
130th year in business in 2008.
As a leading financial institution in Ibaraki Prefecture and surrounding
regions, the Bank, with the philosophy of “Practicing sound management,
creation of values, and partnership with the home region,” is contributing
to the growth of its home region by providing stable and comprehensive
financial services.

Management Philosophy“Sound management, Creation of value, and Partnership with the home region”(1) Focusing on retail banking as our core business, Joyo Bank will pursue sound management and steady banking activities.
(2) Joyo Bank will create high-value business together with our customers, regional communities, and shareholders.
(3) By providing financial services in our base territory of Ibaraki Prefecture and adjacent areas, Joyo Bank will contribute to socialand economic progress in the home region.

Action Guidelines
We will— Provide the most appropriate instruments and services based on a keen understanding of our customers.
— Undertake steady banking activities and grow together with our customers.
— Seek to further improve our financial skills.

CONTENTS
1 Financial Highlights
2 Message from the President
4 Management Policy
5 Business Highlights (Non-consolidated basis)
10 Corporate Social Responsibility (CSR)
15 Corporate Governance and Internal Control System
24 Consolidated Balance Sheets
25 Consolidated Statements of Income
26 Consolidated Statements of Changes in Net Assets
28 Consolidated Statements of Cash Flows
29 Notes to the Consolidated Financial Statements

42 Report of Independent Certified Public Accountants
43 Non-Consolidated Balance Sheets (Unaudited)
44 Non-Consolidated Statements of Income (Unaudited)
45 Non-Consolidated Statements of Changes
in Net Assets (Unaudited)
48 Organization
49 Board of Directors and Corporate Auditors/
Market Business Group and Overseas Office
50 Service Network/Affiliated Companies
51 Corporate Data

FINANCIAL HIGHLIGHTS
Consolidated
THE JOYO BANK, LTD. and Consolidated Subsidiaries
Millions of yen

Thousands of
U.S. dollars

Years Ended March 31
For the Year Ended
Total Income
Total Expenses
Income before Income Taxes and Minority Interests
Net Income

2009

2008

2009

¥ 195,817
192,937
2,879
5,178

¥ 229,078
202,909
26,16913,924$ 1,993,461
1,964,144
29,31752,717At the Year End
Total Assets
Deposits
Loans and Bills Discounted
Securities
Net Assets
Capital Ratio¥7,414,285¥7,384,570
6,646,813
6,385,531
4,911,988
4,635,216
1,975,080
2,301,379
374,881432,016
12.91%
13.22%$75,478,831
67,665,817
50,004,969
20,106,691
3,816,360

For the Year Ended
Net Cash Used in Operating Activities
Net Cash Provided by Investing Activities
Net Cash Used in Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at End of Year¥ (112,937)
164,271(11,493)
39,825
153,550$ (1,149,725)
1,672,314(117,002)
405,426
1,563,176¥(55,787)
75,531(22,368)(2,653)
113,725

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥98.23 to US$1.00 on March 31, 2009.

Non-Consolidated
THE JOYO BANK, LTD.
Millions of yen

Thousands of
U.S. dollars

Years Ended March 31
For the Year Ended
Total Income
Total Expenses
Income before Income Taxes
Net Income

2009

2008

2009

¥ 175,022
172,955
2,067
5,051

¥ 207,479
182,935
24,543
12,940$ 1,781,762
1,760,716
21,046
51,426At the Year End
Total Assets
Deposits
Loans and Bills Discounted
Securities
Net Assets¥7,401,837
6,666,778
4,945,900
1,980,906
370,279¥7,371,265
6,405,962
4,669,468
2,306,788
427,662$75,352,105
67,869,066
50,350,199
20,165,999
3,769,518

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥98.23 to US$1.00 on March 31, 2009.

1

MESSAGE FROM THE PRESIDENT“For the Best ‘Partner Bank’ in a New Financial Era.”

Changes in the economic environment
Our business environment continues to evolve, withchange in economic and social structures and financial
behavior by customers, and severe competition withother banks and companies.
In this environment, we have launched the ‘10th
Medium-Term Business Plan’ for the three years from
April 2008 to March 2011. Under the plan, we aim tobecome “the ‘Best Partner Bank’ in a new financial era.”
To contribute to the development of regional society
and economy, we will create close relationships of trust
through close communication with our customers andprovision of optimized financial instruments and services.
In addition, to achieve our vision, we have set the threebasic aims of strengthening profitability on a consolidated
basis, creating a more sophisticated management system, and building up management resources with all of
our officers and employees.
In the first fiscal year of the plan, we took measures
to strengthen profitability on a consolidated basis. We
expanded our business area, as Ibaraki Prefecture ismore connected closely now with its neighbors, thanks to
the upgrading of transportation infrastructure.
To strengthen our market risk management, we also
have undertaken reorganization of our middle-office
departments for market operations. In computer systemmeasures, we strengthened security through introduction of one-time passwords in our J-WEB OFFICE online
banking service.
Furthermore, in our conviction that the ability of every

2

employee is a vital management resource supporting thequality of financial services we offer, we have expanded
internal and external training programs and introduced asystem of skill grades for loan operations to strengthen
the ability of our employees. We have also taken strictmeasures in the area of compliance, in the belief that
this is the foundation and source of customer trust.
Additionally, our “Customer Services Division” has been
newly reorganized to provide explanations and information to customers and ensure appropriate managementof customer information.

Responding to Diversified Customer Needs
In fiscal 2008, the first year of the 10th medium-termbusiness plan, we carried out the following measures to
respond to diversified customer needs. For corporate
customers, we strengthened funding support for SMEs
to help them cope with the rapidly worsening recession,and encouraged use of the government’s emergency
guarantee system. We also offered holiday consulting
services at the end of the calendar and fiscal years toensure smooth financing for SMEs. And we took measures to support businesses and industries including
arrangement of industrial site inspection tours and the“Joyo Manufacturing Forum in Tsukuba City (in Ibaraki
Prefecture).” To respond better to the diversified financial needs of retail customers, we have launched the“Long Escort” mortgage loan product for women and“Happy Every Day” services for customers of our mortgage loans. Turning to customers’ asset management,

we have launched online investment trust services andother measures to improve customer convenience, and,in light of dramatic change in the economic environment,
expanded market information services through means
such as asset management seminars held in locations
throughout Ibaraki Prefecture. In October 2008, wecompleted the Joyo Tsukuba Building, our main business office in the south of Ibaraki Prefecture, enabling
us to provide comprehensive financial services including
all Group companies. In addition, to capitalize on business opportunities from strengthened connections with
regions around Ibaraki Prefecture, we established offices
to providing corporate finance in Soka City (Saitama
Prefecture) and Utsunomiya and Tochigi cities (Tochigi
Prefecture). In Utsunomiya, we established a Loan Plaza
as a special office for retail loan business.

Kunio Onizawa
President“Sound management, Creation of value,
and Partnership with the home region”
Based on our management philosophy of “Sound management, Creation of value, and Partnership with thehome region,” we will contribute to the development of
the regional community and economy by becoming “the‘Best Partner Bank’ in a new financial era” through soundbusiness operation and management. To fully satisfy
customers, we provide high-quality financial services with
an emphasis on compliance and a customer-centeredbusiness approach. All members of the Joyo Bank
Group are committed to meeting the future expectationsof our customers, people of Ibaraki Prefecture and ourshareholders.

I would like to take this opportunity to thank our shareholders for their continued support.

Kunio Onizawa
President
July 20093

MANAGEMENT POLICY

The 10th Medium-Term Business Plan
“For the ‘Best Partner’ Bank in a New Financial Era”
Amid ongoing economic and social structural reform, diversifying customer needs, and with a new financial industry
structure emerging in Japan under the Basel II regulations for capital adequacy and the Financial Instruments andExchange Act, the Bank faces a new era in its operating environment.
The Bank implements measures under the 10th Medium-Term Business Plan to further strengthen its customers’
point of view, to earn the trust of customers, shareholders and local community members.

The 10th Medium-Term Business Plan
(April 2008 to March 2011)

To make Joyo Bank “the ‘Best Partner’ Bank in a New Financial Era”

Basic
Aims

Under the 10th medium-term business plan, the Bank aims to become “the ‘Best Partner’ Bankin a New Financial Era” — an institution that remains indispensable to its customers and is able toswiftly and flexibly take business opportunities.
We will forge close business relationships by increasing our contacts with the customer, andsupport regional growth, provide financial instruments and services in a way that sustains ourown growth and prepare ourselves for expansion of business activities following the upgrading ofregional transportation infrastructure.

Three Basic Aims

Basic
Aims

Strengthen
profitability on
a consolidated
basis

Build onmanagement
resources

Strengthen
management
organization

To be a “‘Best Partner’ Bank in a new financial era” flexible enough to achieve sustainable growth,
we have set goals for all of the above three aims. We will also build trust throughrigorous compliance, and offer customer support through briefing and information regarding financial instruments, while ensuring that confidential information is appropriately managed.

4

BUSINESS HIGHLIGHTS (NON-CONSOLIDATED BASIS)

Revenues and Earnings
During the year ended March 31, 2009, core businessprofit* decreased ¥4.5 billion (8.7%) year-on-year to¥47.7 billion, reflecting increased interest income onloans and a decrease in interest and dividend income on
securities due to scaling down of portfolios.
In addition, business profit fell ¥18.1 billion (63.6%)
year-on-year to ¥10.3 billion, due chiefly to impairment
losses resulting from falling prices of securities. Ordinary
income decreased ¥23.3 billion (94.2%) to ¥1.4 billion,
due to decreased business profit and an increase in thereserve for bad debts.
Net income for the year decreased ¥7.8 billion (60.9%)
to ¥5.0 billion.
*Core business profit is the amount of business profit (prior to generalprovisions for possible loan losses) adjusted for gains and losses onbond trading.

Deposits, Loans and Securities
During the term, deposits (excluding CDs) increased¥206.8 billion to ¥6,562.7 billion. Of this total, ordinary
deposits increased by ¥114.7 billion to an ending balanceof ¥3,416.8 billion, and time deposits increased ¥123.8
billion to ¥2,779.6 billion.
Loans increased ¥276.4 billion during the term to end
the term at ¥4,945.9 billion, on stable growth in loans tocorporations and public authorities, and mortgage loans
to individuals. Loans to individuals, especially mortgage
loans, increased ¥15.6 billion to ¥1,055.4 billion. Loans to
SMEs increased ¥20.1 billion to end the term at ¥1,978.5billion.
Securities holdings decreased by ¥325.8 billion to¥1,980.9 billion, as a result of an overhaul of our portfolio
to ensure more stable earnings. The balance of Japanese
government bonds decreased ¥88.6 billion to end theterm at ¥788.6 billion. The balance of available-for-salesecurities decreased by ¥194.8 billion to end the term at¥243.1 billion. This is primarily attributable to losses on
disposals and impairment of foreign securities including
securitized instruments.

Assets in custody decreased ¥86.8 billion to ¥999.7
billion at the year-end with an decrease in investment trust
sales in a thin market outweighing increased foreigncurrency denominated deposits, sales of government
bonds for individual investors and pension insurance
policies.
Mortgage-related loans increased ¥24.2 billion
year-on-year to ¥935.9 billion, and loans for apartmentbuilding increased ¥17.1 billion to ¥319.9 billion.

Capital Ratio
Our capital ratio on a consolidated basis stood at
12.91% (Tier I ratio: 11.58%), while the ratio on a nonconsolidated basis also kept at a high level of 12.74%(Tier I ratio: 11.52%).
The capital ratio (domestic standard) has been calculated in accordance with the criteria for judging whether afinancial institution’s regulatory capital is sufficient in lightof the assets held, etc. under the provisions of Article 142 of the Banking Law (Notification No. 19 of 2006, theFinancial Services Agency).
It should be noted that the minimum level required fordomestic banks complying with domestic standards is 4%.

Consolidated Accounts
We currently have nine consolidated subsidiaries. On a
consolidated basis, ordinary income for the year decreasedby ¥33.3 billion to ¥193.3 billion. Ordinary expenses for theyear decreased by ¥91 billion to ¥191.3 billion. Ordinary
income, net, decreased to ¥19 billion, and net income
also posted a year-on-year decrease, to ¥51 billion.
In cash flows in the year, net cash used in operating
activities increased to ¥112.9 billion due primarily to anincrease in loans. Net cash provided by investing activities increased to ¥164.2 billion due to proceeds fromsecurities transactions. Net cash used in financing activities decreased to ¥11.4 billion as a result of dividend payment and acquisition of treasury stock. As a result of theabove, cash and cash equivalents at the date of record
increased by ¥39.8 billion to ¥153.5 billion.

5Asset Soundness
Results of Processing Non-Performing Loans in
Fiscal 2008
We have calculated write-off and reserve amounts forpossible loan losses based on results of asset selfassessment in line with established internal rules. Credit
costs for non-performing loans processed in fiscal 2008
totaled ¥17.2 billion. Below is a breakdown.
In fiscal 2008, the amount of total credit costs
increased year-on-year by ¥2.0 billion, due chiefly to anincrease in customers suffering earnings deterioration
amid the economic downturn in Japan and abroad.
Millions of Yen

March 3120092008 Change
Write-off of claims¥11,904 ¥10,689 ¥1,214
Net provision for specific reserves
4,197
3,438
758
Provision for specific foreign borrowers———
Losses on bulk sale of loans
99
165
(65)
Provision for contingent losses
1,083
911
171
Other
12
—
12
Total
¥17,297 ¥15,205 ¥2,091

Reserve for Possible Loan Losses
For debtors in a state of legally or substantially bankrupt
based on self-assessment, we reserved for possible
loan losses for an amount of 100% of the amount of theclaims thought to be uncollectible after we deducted
the value of collateral amounts from the loan amounts.
Furthermore, for a state of substantially bankrupt, we provided reserves for 56.49% of uncollectible loans basedon the Bank’s historical rate of loan-loss. As a result,compared to the ¥31.2 billion total of uncollectible loans,
our specific reserves for possible loan losses amount to¥17.6 billion, a reserve for possible loan losses ratio of
56.51%.

6

The Claims we deemed to be uncollectible or valueless (¥43.3 billion) based on self-assessment have been
conducted on a “partial direct write-off” basis, and havebeen deducted in the balance sheet asset amounts. For
the general reserve for possible loan losses, we haveconducted an appropriate reserve provision following theguidelines of the Financial Inspection Manual preparedby the Financial Services Agency. For customers requiring caution, we have divided them into three categories
to include debtors requiring management, and haveprovided reserves for possible loan losses based on the
Bank’s historical loan-loss ratio.
In the future, we will continue to improve our credit
risk management system, and conduct appropriate writeoffs, provide reserves for possible loan losses in a sufficient amount, and work toward improving the soundnessof our asset portfolio.
Reserve Based on Self-Assessment
Billions of Yen

March 31, 2009
Claims of balance (i)Claims secured
by collateral (ii)Claims with uncertain
collectibility (A)=(i)-(ii)Specific reserve (B)Reserve ratio (B)/(A)Potentially Substantially Legallybankrupt
bankrupt
bankrupt
borrowers borrowers borrowers

Total

¥77.7

¥16.5

¥8.4

¥102.8

46.5

16.5

8.4

71.5

31.2
0.0
0.0
17.6
0.0
0.0
56.49% 100.00% 100.00%

31.2
17.6
56.51%

Reserve for Possible Loan Losses
Billions of Yen
2008 Change¥15.1¥(2.5)
19.1
(1.3)
—
—
34.2
(3.8)
—
—
—
—
¥ 1.0 ¥ 0.5

March 312009
General loan loss reserve¥12.6
Specific reserve
17.7
Reserve for specific foreign borrowers—
Reserve for possible loan losses
30.4
Reserve for assistance to specific borrowers—
Reserve for possible losses on sale of loans—
Reserve for other contingent losses¥ 1.6Enhanced Managerial and Financial Support for
Businesses
To raise the quality of assets, not only must we aggressively undertake the disposal of bad debt, but we mustalso strengthen our efforts to resolve problems on the
debtor side, such as deterioration in performance resulting from changes in the economic environment or industrial structure, and weakened financial position resulting
from declining asset values. This is the vital role we are
expected to fulfill in the revitalization and development of
the regional economy, and it is something that all of us
are working toward.
Specifically, the Corporate Management Support
Office has been cooperating closely with our branch staff
to provide management analysis, advice on improvement strategies, support for the drafting of operational
rehabilitation plans and, where necessary, support basedon partnerships with external organizations, such as the
SME Rehabilitation Support Association. Through these
activities, we are providing support for rehabilitation andoperational improvement of our corporate customers.
In fiscal 2008, we have improved the classificationsof 50 of our debtors (debtors’ credit rating based on
financial condition). We will keep our commitment to supporting debtors, with the aim of revitalizing the regional
economy.
Disclosure of the Bank’s Assets
We continue to view the improvement of asset quality as apriority management issue, and work toward the disposalof bad debt and ensuring the soundness of our assets,with full disclosure of all pertinent information.
Risk-Monitored Claims under the Banking Law
For loans subject to risk management under the Banking
Law, we have adopted four classifications for disclosure

purposes. Loans to debtors in legally bankrupt basedon self-assessment are “loans in bankruptcy and dishonored bills.” Loans to debtors who are substantially or
potentially in bankruptcy are “delinquent loans.” Loansto companies requiring caution (those which have beendelinquent for three months or more) are “loans past duewith respect to interest payments for more than threemonths.” Loans to debtors whom we support throughinterest reduction or waiver of loan repayment are“restructured loans.”
Thanks to the Bank’s effective measures for corporate rehabilitation including the creation of rehabilitation
programs, risk-monitored loans decreased ¥34.7 billion
year-on-year to ¥120.9 billion. The bank maintained acoverage ratio of 79.49%.
Risk-Monitored Assets under the Banking Law(Non-consolidated)
March 31
Loans in bankruptcy
and dishonored bills
Delinquent loans
Loans past due with respect
to interest payments for morethan three months
Restructured loans
Total (a)Loans and bills discounted (b)Ratio of risk-monitored assets toloans outstanding (a)/(b)Portion covered by collateraland guarantees (c)Coverage ratio (c)/(a)(Consolidated)
March 31
Loans in bankruptcy anddishonored bills
Delinquent loans
Loans past due with respect tointerest payments for more than
three months
Restructured loans
Total

2009
¥

Billions of Yen
2008
Change

8.4
94.1

¥

1.8
16.4
¥ 120.9¥4,945.9

7.2
95.8

1.2
51.2
¥ 155.6¥4,669.4

2.44%
¥

¥

1.1
(1.7)

0.6
(34.7)¥ (34.7)¥276.43.33%(0.88)%

96.1 ¥ 106.2
79.49% 68.26%¥ (10.1)
11.23%

2009
¥

9.1
96.4

2.4
16.4
¥124.5

Billions of Yen
2008
Change
¥

7.4
97.1

¥ 1.7
(0.6)

1.4
51.3
¥157.31.0(34.8)¥(32.8)

7

Claims Subject to Mandatory Disclosure under the
Financial Revitalization Law
Disclosure of the results of an asset assessment isrequired under the Financial Revitalization Law. Under
the law, the Bank regards non-performing loans determined through self-assessment to be loans to legallyor substantially bankrupt companies as “bankrupt andquasi-bankrupt assets.” Loans to potentially bankrupt
companies are “doubtful assets.” Loans past due (threemonths or more) and restructured loans are “substandard
loans.”
Claims subject to disclosure under the Financial
Revitalization Law during fiscal 2008 decreased by¥35.2 billion year-on-year, to ¥121.2 billion, accountingfor 2.42% of all claims, a decrease of 0.88% from theprevious year. Furthermore, the ¥0.3 billion differential
between the ¥121.2 billion in claims for disclosure under
the Financial Revitalization Law, which excludes normal
claims, and the ¥120.9 billion in claims (loans and bills
discounted only) for mandatory disclosure in accordancewith the Banking Law represents non-loan claims including customers’ liabilities for acceptances and guarantees,
accrued interest and suspense payments.

8

Problem Assets under the Financial Revitalization Law
March 31
Bankrupt andquasi-bankrupt assets (a)Doubtful assets (b)Substandard loans (c)Problem assets (A)=(a)+(b)+(c)Normal assets (d)Total (B)=(A)+(d)Ratio of problem assets (A)/(B)2009

Billions of Yen
2008
Change¥25.0¥ 20.6
77.8
83.3
18.3
52.5
121.2
156.4
4,880.6
4,569.2¥5,001.8¥4,725.6
2.42%
3.30%

¥

4.5
(5.5)
(34.1)(35.2)
311.4¥276.2(0.88)%

Coverage Status at Fiscal 2008 Year-End

March 31, 2009
Problem assets (a)Assets secured bycollateral andguarantees (b)Reserve for possible
loan losses (c)Coverage ratio{(b)+(c)}/(a)Billions of Yen
Bankrupt andquasi-bankrupt Doubtful Substandard
assetsassets
loans
Total
¥25.0
¥77.8
¥18.3
¥121.2

25.0

46.5

5.0

76.5

0.0

17.7

2.1

19.8

100.00%82.51%

38.91%

79.52%

The disclosure-based assets for each borrower classification of self-assessment are summarized below.

Self-Assessment: Classification of Borrowers and Disclosure-Based Assets (Billions of Yen)
Self-Assessment
Classificationof Borrowers
Legally Bankrupt
Substantially Bankrupt
Potentially Bankrupt

Borrowers Requiring Caution

Normal Borrowers

Problem Assets
under Financial
Revitalization Law
Bankrupt andQuasi-Bankrupt
Assets 25.0

Legally
Bankrupt 8.5
Substantially
Bankrupt 16.6

Doubtful Assets
77.8

Risk-Monitored
Assets underthe Banking Law
Loans in Bankruptcy andDishonored Bills 8.4

Delinquent Loans
94.1

Substandard Loans
18.3

Loans Past Due with Respect
to Interest Payments forMore than Three Months 1.8
Restructured Loans 16.4

Subtotal 121.2

Subtotal 120.9

Normal Loans
4,880.6

Note: Assets Covered by Disclosure Standards

Note: Categorization of Disclosure Standards

Financial Revitalization Law:
Loans, securities lending, foreign exchange, interest receivable,suspense payments, and customers’ liabilities for acceptanceand guarantees

Financial Revitalization Law:
Categorized by borrower basis, in accordance with selfassessment results. (As an exception, Substandard Loans are
categorized on individual loan basis.)

Banking Law:
Loans and bills discounted

Banking Law:
Loans to Legally Bankrupt Borrowers, Substantially Bankrupt
Borrowers, and Potentially Bankrupt Borrowers are categorized
on an individual borrower basis, in accordance with selfassessment results. Loans to Borrowers Requiring Caution aredisclosed on an individual loan basis.

9

CORPORATE SOCIAL RESPONSIBILITY (CSR)
Relationship Banking Policies
The local economy is the bedrock of the operations of a regional bank. Our mission is to contribute to the development oflocal society and economy by providing communities with reliable financial services.
To fulfill this mission, the Bank has adopted the following three priority policies:(1) Strengthen support for customer companies tailored to their stage of corporate growth(2) Develop new financing options for SMEs
(3) Contribute to a sustainable growth of regional economy
In addition to continuing to improve customer convenience and providing greater safeguards to protect to customer
interests, we will continue to contribute to regional prosperity by providing optimized financial products and services to ourcustomers while deepening our local roots.

Key Initiatives(1) Strengthen support for customer companies tailored to their stage of corporate growth1) Support for start-ups and launch of new businesses> Support new ventures, Organize forums for dialog among businesses2) Support for business succession and M&A activities> Meet business succession needs, Propose M&A solutions when companies cannot find a successor at
the helm3) Support customers’ management reform and business revitalization programs> Offer support for corporate rehabilitation, Raise skill levels among bank’s staff involved in management
reform and business revitalization(2) Develop new financing options for SMEs
1) Promote funding methods that do not depend excessively on real estate collateral or personal guarantees> Increase loan products using a quick “scoring system” (in which points are allotted for creditworthiness inpreset categories), Expand loan products guaranteed by external organizations2) Improve ability to rapidly and accurately assess enterprise value of customer companies> Improve credit-screening abilities, and ability to understand situations faced by companies from theirperspective3) Rigorously diversify funding channels> Promote syndicated loans, private placement bonds and lump-sum factoring, etc., Leverage assetbacked loan

(3) Contribute to a sustainable regional economy
1) Contribute to the revitalization of the region in the broad sense, without focusing solely on companies
under rehabilitation> Business support for customers using public information services promoting regional development andestablishment of new factories or logistics facilities> Contribute to regional development by better meeting funding and PFI needs of local public organizations
and corporations> Develop a manufacturing business support organization to serve as a platform for business matching for
manufacturers and technology-driven companies

10

Contributions to the Regional Community

Loans to Regional Customers

Under the management philosophy, “Soundness,
Corporation, Partnership with the home region,” we willcontinue to contribute to the development of the regional
community and economy by providing regional customers with comprehensive high-quality financial services,
based on a robust business performance under a soundmanagement.
We regard supply of financial services for the region
as our mission. We will continue to ensure due disclosureof diverse information relating to our contribution to theregional economy.
“Region” refers to Ibaraki Prefecture and neighboring areas forming the main catchment area (by locationof main branches) of the Bank: Fukushima, Tochigi,
Saitama, Chiba and Miyagi prefectures.
Loans to customers outside the local region are
mainly limited to loans to corporate customers in Tokyo
or Osaka who have factories or offices in the areas
mentioned above and who have a deep relationship with
regional business.

Regional and SME Loans
Loans to customers in our region totaled ¥3,779.3 billion,
and accounted for 76.4% of all loans made by Joyo Bank.
Loans to SMEs totaled ¥1,978.5 billion, andaccounted for 40.0% of all loans. Of all regional loans,
47.0% went to SMEs.
The total number of SMEs is 33,692, of which 98.6%
are local.
Balance of Loans, Balance of Loans and Percentage of Loans toRegional Customers(Billions of yen)

5,000

¥4,669.4¥4,438.8¥4,945.9¥3,779.3
78.0%
76.4%
¥3,643.1¥3,522.6

4,000

100
80

79.3%
3,000

60

Loan balance

2,000

40

Balance of loans toregional customers

1,000

20

Percentage of loans
to regional customers

00
As of March 31, As of March 31, As of March 31,
2007
2008
2009

Balance of Loans and Percentage of Loans to SMEs, andBalance of Loans and Percentage of Loans to Regional SMEs

Deposits(Billions of yen)

2,000 ¥1,925.1

15.58%

18.82%

Joyo Bank

42.23%

City banks/Trust banks

Joyo Bank

Other regional banks
Shinkin banks (credit unions)¥1,748.8¥1,765.3¥1,978.5¥1,778.1

1,500
49.6%

48.4%

47.0%

43.3%

41.9%

40.0%

1,000

Other

16.87%¥1,958.4

500

6.50%

100
80

Balance of loans to
SMEs

60

Balance of loans toregional SMEs

40

Percentage of loans to
SMEs

20

Loans to regional SMEs
as percentage of loans
to regional customers

00
As of March 31, As of March 31, As of March 31,
2007
2008
2009

Loans
11.65%

Number of SME Customers and Number of Regional SME
Customers
Joyo Bank

18.32%

42.69%

City banks/Trust banks

Joyo Bank

Other regional banks(Unit: Customers)

40,00033,44430,00032,92833,45432,952

33,69233,225

Shinkin banks (credit unions)Other

21.71%

Number of SMEs

20,000

Number of regional
SMEs

5.69%
Note: Figures for share exclude postal savings, which are held in the
public sector.

10,0000
As of March 31, As of March 31, As of March 31,
2007
2008
2009

11

Loans to Individuals
Loans to individuals have increased to ¥1,055.4 billion,
with mortgage loans performing well. Of these, ¥1,053.6
billion or 99.8% are loans to individuals in the region.
Loans to individuals are 21.3% of all loans, and loans to
individuals in the region are 27.8% of all regional loans.
Optimal Financial Services for Regional Customers
98.1% of deposits, in an amount of ¥6,444.4 billion, arefrom regional customers, and 99.6% of assets in custody are from regional customers. Japanese government
bonds issued to individual investors and pension insurance premiums have shown strong increases.
Balance of Loans and Percentage of Loans to Individuals,
Percentage of Regional Loans used for Loans to Individuals
in the Region(Billions of yen)

28.4%

28.4%

27.8%

22.6%

22.2%

21.3%

¥1,005.1¥1,039.7¥1,055.4

1,200

900

30

20

Balance of loans to
individuals
Percentage of loans
to individuals

600
10
300

0

Percentage of regionalloans used for loans
to local individuals

0
As of March 31, As of March 31, As of March 31,
2007
2008
2009

Deposit Balance, Deposits by Customers in the Region(Billions of yen)

7,000
6,000
5,000

100
97.9%

98.3%

98.1%

¥6,285.2¥6,355.8¥6,652.7¥6,153.8¥6,250.8¥6,444.4

80

4,000

60

3,000

40

Local deposit balance

2,000
20

1,000
0

0
As of March 31, As of March 31, As of March 31,
2007
2008
2009

12

Deposit balance

Local deposit balance
percentage

Initiatives for Stimulating the Regional Economy
Measures to Develop New Ventures
Investment by Joyo Bank
We provide financial support to companies developing new businesses and new ventures via the “Ibaraki
Venture Business Development Partnership” andthe “Nikko Region-Based Industry, Education, andGovernment-Partnered Investment Partnership.”As part of our efforts to support corporations in the
Ibaraki Prefecture area, we have invested in an investment fund operated by the Organization for Small &Medium Enterprises and Regional Innovation and Ibaraki
Prefecture. By providing rehabilitation support to SMEs,
we help to revitalize the regional economy.
Working with Agri-Business
We operate in a predominantly agricultural area, andare actively engaged in agri-business. We aim to contribute to regional industrial and economic revitalization
by fostering and supporting ambitious farmers and agribusinesses.
In business funding support measures, we offer
three series of “Daichi” multi-purpose loans. For firms
specializing in beef-fattening, we have developed theAsset-Based Lending (ABL) system as a new method forproviding finance using fattening cattle as collateral. By
giving support to ambitious farmers and food-production
companies, we aim to support the development of new
instruments and services in our region. In this endeavor,
we offer loan instruments designed for the developmentof related businesses in agriculture, commerce and foodprocessing. As a means of supporting development ofmarketing channels for food producers and processors,
we conduct regular business matching meetings for the
agricultural production and food processing, restaurant
and retail industries, and, in partnership with regionalbanks across Japan, the regional bank’s annual Food
Selection exhibit.

Support for Manufacturers of Excellence
Our business area comprises Ibaraki, Tochigi and
Fukushima prefectures. Due to their proximity to Tokyoand their good transportation infrastructure, many major
companies have set up plants in these prefectures, anda need has arisen to secure high-quality SMEs to act
as suppliers. As a key player in regional revitalization,
we support highly capable manufacturing businesses
in meeting these needs. We offer support in development of marketing channels, in quality management
areas such as acquisition of ISO certification, and in
upgrading technological and management capabilities,
through means such as business matching meetings for
major and regional manufacturers, as well as between
manufacturers.
Tie-ups with External Institutions
We foster and support new ventures and establishedcompanies beginning new businesses with entities suchas National Institute of Advanced Industrial Scienceand Technology, the Organization for Small & Medium
Enterprises and Regional Innovation, Ibaraki Corporationfor Small and Medium Enterprise Promotion, Foundation
for the Promotion of Small and Medium Enterprises, theDevelopment Bank of Japan, the Shoko Chukin Bank,
the Japan Finance Corporation, and other partners inindustry, academia and regional government.
Invitation of Companies to the Area
We actively encourage companies to set up plants inour business area, by showing them eligible sites andproviding local information. For those that have made adecision to move in, we offer funding and provide business information collected and accumulated throughour networks. In addition to cooperating with inspection
tours and seminars for attracting companies to Ibaraki
Prefecture, we cooperate with prefectural and municipal
governments in measures to invite businesses to thearea and revitalize its industries. For example, we participate in regional industrial revitalization associations ineight areas of Ibaraki Prefecture. By attracting companies in this way, we are helping to revitalize the regional
economy.
Joyo Area Research CenterWith the aim of contributing to the comprehensive promotion of the region, we conduct research into the economy, industry and social change in Ibaraki Prefecture,and provide information needed by industries and forother strategic activities. The Joyo Area Research Center
developed out of the Foundation for Industrial Researchfounded in March 1969.
This foundation cooperates with various economic
associations and research institutions, performing various tasks that contribute to the regional community andeconomy. The Center researches into and publishes
data on economic industry trends and regional development, holding lectures and sending speakers to regionalorganizations and events.
Joyo Industrial Research Institute
Joyo Industrial Research Institute was established aspart of activities to commemorate the 60th anniversaryof the founding of the Bank, in April 1995 as a regional
think tank. The Institute carries out regional planning surveys on an outsourcing basis and consulting. As a “Best
Partner” organization working for regional prosperity, it
provides information and makes strategy proposals withthe aim of becoming a “compass” providing guidelines forregional development and business operation.

13

Environmental Preservation Activities“Eco Ibaraki” Charitable Trust Environmental
Conservation Fund
The “Eco Ibaraki” Charitable Trust Environmental
Conservation Fund was established in October 1992
with a capital of ¥100 million, by a consortium including The Nippon Fire & Marine Insurance Co., Ltd. (nowNipponkoa Insurance Co., Ltd.). The fund contributes tothe development and prosperity of a greener, more livable
region by subsidizing groups involved in environment
protection activities within the prefecture.
Registration under the Ibaraki Eco-Business Plan
In March 2007, our nine business offices were officiallyapproved as Ibaraki Eco-Businesses by the prefectural
government. In August 2008, all 108 branches throughout the prefecture and two centers and Group companies were also registered under this program, whichaccredits business locations that operate in anenvironment-friendly way.
Our 10 offices in Fukushima also signed the“Fukushima Prefecture protocol aimed at preventing
global warming.”
We support this protocol as a measure against serious environmental problems such as global warming. We
will continue our environmental activities in years ahead.
Regional Contributions to Environmental
Conservation
As part of the Joyo Volunteer Club’s activities and individual branch contributions, we participate in clean-up
and recycling activities in local areas, actively working witheveryone in the region to preserve the environment.

14

CORPORATE GOVERNANCE AND INTERNAL CONTROL SYSTEM
To ensure a greater level of trust from customers, theregional community and our shareholders, we believe it
is essential that our management be efficient, sound andtransparent, and firmly rooted in compliance. Constantly
mindful of the importance of corporate ethics, we haveestablished eight basic principles under which we arestrengthening and expanding our corporate governance.
Corporate Governance at Joyo Bank
The Board of Directors meets twice a month in principle
to exercise decision-making and supervisory functions.
The Bank has a total of 12 directors, of whom two
external directors appointed to strengthen supervisory
functions by providing an outside perspective. Executive
directors number eight excluding the Chairman of theBoard and managing director (responsible for auditing
duties). Major items relating to conduct of operations
excluding those decided by the Board of Directors arehandled by an Executive Officer Committee created as an
assessment and decision-making body. Executive Officer
Committee meetings are held twice a month to discussand implement specific policies and proposals in the conduct of business.
Special committees (Compliance Committee, General
Budget Committee, ALM Committee, Risk Management
Committee and Sound Asset Committee) have been
established to determine the major themes for management audits. Reports are compiled regarding the discussions and decisions of these committees for perusal of
the Board of Directors.

General Meetingof Shareholders

Decision-making/
Management
supervision

In order to audit performance of duties by directors, the auditors attend important meetings such as
the Board of Directors and Executive Officer Committee
meetings, peruse relevant documents, and carry out
business and asset status inspections, all of which
are based on the auditing policies and plans outlined
at Board of Corporate Auditors meetings (held once amonth in principle).
With regard to internal auditing, the Corporate Audit
Division (the auditing office) monitors internal management in terms of appropriateness and effectiveness ofconduct, and suggests improvements when problem
areas are identified. Results of the audits are regularly
submitted in a report to the Board of Directors.
In addition to strengthening internal auditing, we havecreated a Compliance Audit Committee comprising four
outside experts including lawyers and CPAs to ensure
greater expert input and objectivity.
The Joyo Bank Corporate Philosophy
Corporate Social Responsibly (CSR) and Public Mission
Always keep in mind the Bank’s CSR and public mission, and deepen
trust through sound and open business management.
Compliance
Comply with the legal and social code and execute honest and open
business activities.
Fight Against Crime
Ensure that the Bank has no relationship with organized crime.
Provide Valuable Financial Services
We will contribute to the development of the region in which we operateby responding to our customers’ needs and providing valuable financial

Corporate Audit Division
Operating execution

Business Section
Corporate Auditors
Board of Corporate
Auditors
Board of Directors

Executive
Officer
Committee

Business Planning Division
Customer Services Division
Retail Banking DivisionCorporate Banking Business Division
Government and Municipal Business Division
Treasury and Securities DivisionMarkets and Business Administration Division
Credit Examination Division
Operation Planning Division
Computer System Division

Auditing Company

Corporate Risk Management DivisionCorporate Planning Division
Personnel Division・General Affairs Division15

services, taking security issues into due consideration.
Relationship with the Regional Community
We will communicate openly and freely with the community where we
do our business, raising our transparency through active disclosure ofcorporate information.
Respecting the Human Rights of our Employees
We will provide a work environment that respects individuality andprotects the rights of all employees.
Environmental Initiatives
We will reduce environmental impact, and help the environment throughcore banking activities.
Community Contribution Activities
We are committed to contributing to the community we serve, as agood corporate citizen that marches in step with regional society.

Internal Controls and Risk Management
Compliance
Based upon our philosophy of soundness, cooperationand partnership with the home region, we attach great
importance to compliance in our management. We haveestablished a corporate ethics guideline and a code of
conduct. Moreover, we have established a new set of
guidelines to ensure that every director and employee
complies with the law and with the Bank’s Articles ofIncorporation. Every company within Joyo Bank Group
follows the same strict guidelines. We have put standards
into place to establish a compliance system across theGroup as a whole.
To ensure the best standards in compliance, we haveestablished a Compliance Office that oversees the compliance program as defined by the Board of Directors.
The Office makes regular reports to the Board. Moreover,
we have established a whistleblower hotline for the entire
Group, called the Compliance Hotline.
In addition to the Compliance Committee, we haveappointed outside experts to form a Compliance Audit
Committee, which monitors compliance issues on aregular basis.
To ensure that our internal controls perform theirintended functions, our various auditing functions, which
are independent from business execution departments,
carry out internal audits across the Group.
We will resolutely take action to prevent transactions
with criminal bodies that threaten public order and security or disrupt economic development.

16

Risk Management Standards and other Controls
In addition to establishing risk management standards forappropriate management of all categories of risk, it is ouraim to build a comprehensive internal risk management
structure to ensure a sound financial position and stableearnings in the future by creating frameworks for comprehensive understanding and control of risk. Moreover, we
also have business contingency plans in place should any
event disrupt our core systems, such as natural disasters
or a systems failure.
The management of risk is the responsibility of various risk management departments, as set down in thein-house regulations. Comprehensive risk management
is carried out by one department that oversees risk management for the entire Bank. The Board of Directors has
appointed one high-ranking officer to oversee the risk
management program.
We have established a Risk Management Committee
to measure the extent of various risks and make decisions on risk management policies. This committee willmeet regularly to ensure an accurate grasp of the situation regarding risk management issues across the Bank.
The officer in charge of risk management will make regular reports to the Board of Directors on the current stateof risk management and the countermeasures that the
Bank is taking against risks.
System to Ensure the Effective Execution of theirDuties by the Directors of Joyo Bank
We have put in place a business plan to clarify our operational targets, as well as an overall budget every year, todefine specific policies.
We have determined the scope of decision-making
responsibilities for each director, to achieve efficient
operations.
We have established an Executive Officer Committeethat consists of executive directors and executive officers
to discuss important matters affecting the daily conductof operations. We have also set up a range of committees, grouping executive directors, executive officers anddivision heads, who meet as and when needed.

Supporting Corporate Auditors
One able and competent staff member is assigned toassist the corporate auditors.
To ensure the independence of this assistant fromthe influence of the business execution departments,
in case of transfer of the staff, the executive director in
charge of all personnel transfers should inform the corporate auditors in advance. The corporate auditors areentitled to express their opinions and advice regarding
the transfer of the staff member who has been selected
for the duties.
The corporate auditors attend meetings of the
Executive Officer Committee and offer their opinions on
the audit process and all related matters.
The directors and employees report any and all information the corporate auditors deem necessary to complete the audit.
In order to improve the efficiency of the audit system,
the corporate auditors maintain open communication
channels with all headquarters departments other than
the internal audit sections.
The Chairman of the Board, representative directors
and accounting auditors each meet regularly with corporate auditors and exchange opinions on the issues related
to the audits.

Internal auditing function

We place high priority on strengthening our compliancesystem to ensure sound banking operations, fulfill oursocial responsibility and public mission, and maintain thetrust of customers, shareholders and other stakeholders.
We establish a compliance program each year
and ensure that executives are fulfilling their roles incompliance.
We are creating a compliance system whose ultimate
supervisory organ is the Board of Directors and placing
dedicated compliance officers in each major division toundertake wide-ranging inspections to address how
divisions are addressing legal issues.
Supplementing internal compliance activities byoutside audits to inject the required professional knowledge and objectivity. Accordingly, the Bank will set up
a Compliance Audit Committee, consisting of outside
professionals including a lawyer and a Certified Public
Accountant (CPA). The Committee evaluates and audits
the Bank’s compliance activities. We are striving tofurther strengthen and improve compliance activities.

[Oversight of decision-making]Board of Directors[Auditing organizations]Board of Corporate Auditors(Auditors)[Policy establishing and performance evaluation]
Compliance Committee[Auditing department]
Corporate Audit Division
Branch audit group
Operations and asset auditing group
Main office[Management]
Compliance and Risk Management Division[Supervision]
Compliance and supervisory officer

Head office departments and branches, etc.
[Senior Manager] Supervisor [Administrator] Compliance officer
External auditing functions

Compliance System[Compliance report]
Executive Officer Committee[Group company management]
Corporate Planning Division
Group business officeGroup company[Senior Manager] Representative [Manager] Compliance officer

Evaluation and audit[External audit]
Compliance Audit Committee

17

Code of Conduct
We will● get to know our customers and offer optimal products and services● expand business scale and grow with our customers● increase our financial expertise

Policy Regarding Solicitations for Financial Products
In accordance with the Law Concerning the Sale of Financial Products, our solicitations for products are basedon the following policies.
1. Financial product solicitation is based on tailoring products to the level of understanding, experience and financial
status of the customer.
2. To ensure that our customers make choices based on their own judgment and at their own liability, we will provide easy-to-understand explanations so that the customer has sufficient understanding of financial products andthe risks attached.
3. We assure that sales are never based on the provision of misleading or false statements or information, nor do we
act in a manner leading to any misunderstanding by our customers.
4. Our solicitations will not be conducted at times or in locations that cause inconvenience.
5. We are setting up a training system within the Bank to ensure proper solicitation to our customers.

Risk Management
While the financial industry has grown due to deregulationand the advancement of financial technology, the risks
carried by banks continue to diversify and become evermore complicated. In this environment, we are working
to meet the highly advanced and various needs of ourcustomers, and we also have placed emphasis on thesubject of “risk management” to ensure the maintenanceand improvement of sound operations which is one of themost vital issues facing management.
The Risk Management System
In our fundamental rules regarding risk management, wehave outlined our fundamental thinking and management
procedures including policies regarding risk management,
organizational structure, and responsibilities.
In business management, the departments that carryrisks when conducting transactions (marketing departments) and the departments that internally manage the18

results of transactions (business administration departments) are separated, thus creating an organizational
structure that allows for mutual checks and balances.
The various risks that are incurred during banking operations are managed by specific risk management departments depending on the type of risk.
We also have established a risk management supervision department, which supervises the management systems for all risks and is responsible for holding meetingsof the Risk Management Committee, an organ for theexamination of Bank-wide solutions to risks. The department also provides regular reports on the overall status ofrisks to the Board of Directors.
Additionally, internal auditing staff verify that risk
management is functioning appropriately and effectively
through the integrated risk management department
and each risk management related department, thereby
increasing the effectiveness of the system.

Risk Management System

Risk Management
Departments

Risk Management
Committee

Credit Risk
Board of Directors

Integrated Risk
Management Dept.

Market Risk
Liquidity Risk

Internal Auditing Dept.

Business Promotion
Departments,
Administrative
Control Departments,
Group Companies

Operational Risk

Verification of suitability
and validity of the risk
management system

Integrated Risk Management
We have adopted integrated risk management for quantitative understanding of risk using statistical methods
for each category of risk, in order not only to manage
individual risk categories but also to enable systematic
risk management as the business of banking grows morediversified and complex.
This integrated approach enables us to manage what
extent of risk amount can be permitted relative to allocated economic capital, the indicator of financial soundness, and whether or not management resources arebeing deployed efficiently.
Allocation of Risk Capital
In integrated risk management, levels of economic capitalthat may be allocated to cover the scale of permissible
risk within Tier I (core capital) are determined. This is thenallocated by risk type and category to control risk within
the permitted parameters. In the case of major change
which cannot be analyzed in terms of historical data, we
use special simulations (stress testing) to verify capital
adequacy levels.

• Credit Risk Management
Credit risk is the risk of not receiving principal or loan
payments as promised on loans due to a decline in
the credit situation of the debtor. This is seen as oneof the most serious risks undertaken within banking
operations.

In order to prevent the occurrence of nonperforming loans and improve the soundness of ourassets, we undertake every effort to ensure good
credit risk management.

• Overview of Basic Policy and Procedures with
Regard to Credit Risk Management
We have compiled management guidelines for credit
risk, which serve as a basic policy for appropriate
management of credit risk on individual loans andmanagement of the credit portfolio, focusing on
spreading risk as its basic tool.

• Credit Risk Management for Individual Loans
We have separated credit-screening departmentsfrom loan departments, and constantly work towardmaking screening stricter while also focusing on credit
management before due date to prevent the status ofa claim from deteriorating.
We have created a set of basic parameters forloans, designed to speed up decision-making onloans and to ensure more rigorous risk management.
We also have a system for accurately reflecting in theasset self-assessments the business performanceachieved by the borrower and changes in the value ofcollateral.
We have also adopted an automated scoring system for small-lot loans to unify credit screening standards and improve efficiency.

19• Internal Credit Ratings• Quantification of Credit Risk Management

We have a 12-stage rating process including quantitative appraisal of data such as financial condition of
our customers and cash flows. In addition to serving
as the basis for asset self-assessments, ratings forcustomers, credit worthiness are used across the fullrange of credit risk management, including assessment of amount of credit risk, setting of interest rates
for loans and setting of decision-making powers.

• Asset Self-Assessment
In asset self-assessments to evaluate the soundnessof assets, a primary evaluation is carried out first, followed by a decision on credit category based on acredit rating by the individual branch concerned. Thenthe head office department in charge of credit screening checks this (secondary assessment), and the
Corporate Audit Division audits the results of the asset
self-assessment and verifies the appropriateness ofprocedures. Based on these results, the Bank provides appropriate reserves and writes down problem
loans based on the assessments.

• Internal credit ratings and categories ofborrowers under asset self-assessment
Borrower
ratings

20

1

1

2

2

3

3

4

4

5

5

Borrower category
under asset
self-assessment

The quantification of credit risk management refers to
the statistical forecasting of future losses (amount ofcredit risk) that can be expected from the bankruptcy
or deterioration of business at borrowers. Based on
our customer credit ratings, we calculate credit riskfor each customer in light of its soundness and otherfactors.

• Loan Portfolio Management
We treat loan assets in their entirety as a single portfolio and conduct credit risk management from amacro-perspective. Based on the quantification of
credit risk, we carry out periodic monitoring to determine whether or not credit risk is concentrated in specific rating groups, sectors or corporate groups, andanalyze and evaluate credit situations by rating, regionand sector.
Market Risk Management
Market risk refers to fluctuation primarily in earnings
caused by interest rate changes, foreign exchange rate
fluctuations, and changes in the demand for funds within
the financial industry. Assets such as loans and securities
and liabilities such as deposits are constantly influenced
by such changes.
We manage all assets and liabilities (deposits, loans,securities, and others) comprehensively based on ALM(asset and liability management) to manage market risks.

• Market Risk Management System
Normal borrowers

6

6

7

8-1

8

8-2

9

8-3

10

9

Potentially bankrupt

11

10-1

Substantially bankrupt

12

10-2

Legally bankrupt

Borrowers requiring caution(Substandard loans)

The front and back office departments are separated.
We have also established middle-office risk management sections to create a system of mutual checks
and balances.

• Market Risk Control
The scale of risks involved in assets and liabilities(deposits, loans, securities) go through a multifaceted
analysis — gap analysis, basis point value (BPV),
simulation of interest fluctuation, and Value at Risk
(VaR) — in order to clarify the state of risks and conduct asset allocation effectively and implement risk
control measures.
We engage in financial derivative transactions tomeet the diverse needs of our customers and hedge
our own risks arising from interest fluctuations. For therisks associated with financial derivatives, in addition

Tangible Assets Risk, Human Resources Risk andto conducting daily mark-to-market valuation and BPV

Compliance (Legal) Risk

analyses to accurately grasp the size and nature of

Risk to tangible assets (inadequate precautions to pre-the risk, we also manage risk appropriately by estab-vent damage from earthquakes and neglect of building

lishing limits according to objectives.

management), personnel management risk relating tosafety and hygiene at the workplace, and compliance risk

Operational Risk Management
Operational risk refers to the risk of losses arising from
irregular procedures or employee conduct in banking
operations, or inappropriate system operation or detrimental external events. The Bank divides such risk up
into five categories: administrative risk, system risk, risk totangible assets, personnel management risk, and compliance (legal) risk.
We have also established a management office foreach risk category, as well as supervision of overall operational risk measures.

• Administrative Risk
Administrative risk is the risk of damages due toimproper administration resulting in accidents or
improprieties. We have taken steps to uphold andimprove the quality of our administrative operations,to ensure that customers are not inconvenienced
by inappropriate administrative management andthat administrative management is as error-free andprompt as possible.
In addition to analyzing and evaluating the circumstances, causes and processes surrounding
administrative mistakes, we verify the effectiveness ofcountermeasures after their introduction and repeatthem as often as necessary to ensure that the problem is resolved. We are drawing up regulations foradministrative processes, and ensuring their strict
application by all staff from executives down throughguidance and training. We are also verifying the effectiveness of internal audits and taking steps to preempt
accidents.

• System Risk
System risk is the risk of losses due to the breakdownof computer systems, erroneous computer operation,and inappropriate computer use. Measures to ensure
appropriate management of such risk is based onprotection of information assets and ensuring stable
operation of computer systems.

(legality of business, illegal behavior by any executives
and employees) are addressed through appropriate measures after identification and evaluation using methods
to gauge risk scale and features, and the effect of risk
reduction measures is later assessed.

• Crisis Management
We have established a set of general emergency
guidelines providing specific measures for dealing withsituations such as major disasters, system failures andreputational damage, and for minimizing disruption ofrelations with business partners. We aim to strengthen
our crisis management through continuous training
and upgrading of procedures.

• Management of Customer Information
In view of the importance of information retained,
we drafted our “rules regarding the managementof important information,” which clarify our fundamental policies regarding our information management system, conduct standards, functions andresponsibilities.
Furthermore, in conjunction with the full implementation of the Law Concerning the Protection of Private
Information, we have enhanced our information management system and improved security for building
access and building management in order to control
access by external parties. In addition, we have varied
the access privileges to customer information depending on the type of information, and limited access to
the locations where information is stored.
Fundamentally we have banned the removal of
information from the premises and have enforced
transmission of faxes by internal lines and dataencryption in order to create a system that prevents
information from being leaked externally due to inappropriate actions or administrative errors. We plan toevaluate these measures as necessary.

21

Meeting Basel II Capital Adequacy
Requirements
On March 31, 2007, the Basel II capital adequacy regulations were introduced. The new regulations have threemain pillars. We take active measures to improve risk
management while meeting the new requirements.

• Pillar 1
Minimum capital adequacy requirements
Under Basel II, a Japanese bank’s capital adequacymust be higher than the domestic standard of 4% and
the international standard of 8% after computation ofrisk assets (risk amount). Basel II rules increase thesophistication of credit-risk computations and bring
operational risk under new regulations. On a consolidated basis, Joyo Bank maintains a high capital ratioof 13.22%, having computed risk amount using theFoundation Internal Ratings Based Approach for credit
risk and the Standardized Approach for operationalrisk (with approval of authorities).

• Pillar 2Internal capital adequacy management andevaluation
For significant risk including risks not covered by Pillar
1, financial institutions carry out their own assessmentof capital adequacy needed for continuation of business, which is then verified by financial authorities. We
create a framework for independent capital adequacy
management, through a comprehensive approach torisk management.

• Pillar 3
Corresponding to market rules throughdisclosure
By increasing disclosure through methods such as
risk volume and calculation methods, financial institutions will achieve higher levels of market discipline andenhance risk management.
Protection of Confidential Private Information
We have drawn up and made public a privacy policy as a
response to the Law Concerning the Protection of Private
Information, and have put in place safeguards for the protection and appropriate handling of personal data.

22• Privacy Policy
We work to build on the mutual trust we have withour customers, the region, and our shareholders,stress the importance of our social responsibility, andoffer high-quality financial services. For the protectionof personal data, we have established the following
policy based on our respect for all individuals, andwill put all our efforts into the protection of private
information.
Policy for Protection of Personal Confidential
Information
We comply with all laws, ordinances and other regulations regarding confidentiality of personal information.

• Appropriate AccessWe acquire personal information only by appropriate
and legal methods, and only when necessary forbusiness operations. Personal information is nevergathered in an inappropriate way.

• Ban on unapproved use of personal
information
We only use personal information inasmuch as it isnecessary for achievement of business objectives,and do not use such information for any other purpose. In addition, information that is registered withcredit-data organizations of which we are a member isused where appropriate for credit-related purposes.

• Ban on provision of personal information tothird parties
Except when prescribed by laws and ordinances,
we never provide personal information to third parties without first obtaining the affected person’s
agreement. In addition, when personal information is
entrusted to an outside organization under an outsourcing arrangement, we require that protection of
personal information be contractually assured, andcarries out checks.

• Security management measures
We have in place appropriate security management
mechanisms to ensure prevention of leakage, loss ordestruction of personal data, and other measures.

• Appropriate response to complaints
When customers have questions or complaints
regarding our protection of personal information, weinvestigate these questions or complaints and deal
with them appropriately and promptly, within a reasonable period of time.

• Continuous improvement
The Bank has compiled regulations for ensuring strictlegal compliance and protection of personal information. In addition to ensuring that these measures arefamiliar to all employees and other affected parties,
the Bank continually upgrades them. Regular audits
into acquisition, use and handling of personal information are part of our broad and thorough commitment
to confidentiality.

• Privacy MarkIn October 2006, the Bank was awarded Japan
Information Processing Development Corporation(JIPDEC)’s “Privacy Mark” certification. We were thesixth bank or trust bank, and the first regional financial
institution in the North Kanto Region, to gain thisaccreditation.
Based on this accreditation, the Bank meets the“requirements for management of personal information protection” (JIS Q15001) laid down by JapaneseIndustrial Standards Committee and now has in placemechanisms for appropriate protection of personal
information.
Financial Crime Prevention
We are fully committed to preventing crimes involving
accounts held at our banks, and to protecting the financial assets of our customers. We require identification
when a new account is set up or for a large-amounttransaction. In addition to working to prevent inappropriate transactions, when an account is used, we will cancel
transactions when considered necessary and will work
hard toward crime prevention. We also have implemented
measures to prevent the crimes of use of forged ATM
cards and online hacking.

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Consolidated Balance Sheets
THE JOYO BANK, LTD. and Consolidated Subsidiaries

March 31,

Millions of yen
2009
2008

Thousands of
U.S. dollars (Note 2)
2009

AssetsCash and due from banks (Note 3)
Call loans and bills purchased
Commercial paper and other debt purchased
Trading assets (Note 5)
Money held in trust
Securities (Notes 6, 8 and 25)
Loans and bills discounted (Notes 7, 9 and 11)
Foreign exchanges
Lease receivables and lease investment assets (Note 24)
Other assets
Tangible fixed assets
Intangible fixed assets
Deferred tax assets (Note 14)
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Reserve for devaluation of investment securities
Total assets¥ 179,030
26,72954,063
9,578—
1,975,080
4,911,988
1,316
31,74270,50097,394
7,124
57,65428,552(36,422)(48)¥7,414,285¥ 136,252
3,885
65,725
26,0633,281
2,301,379
4,635,216
1,037—
69,531
122,929
10,50019,33028,363(38,879)(48)¥7,384,570$ 1,822,567
272,109550,379
97,509—20,106,691
50,004,969
13,398323,146
717,709
991,498
72,525586,931
290,671(370,785)(492)$75,478,831

Liabilities and net assets
Liabilities:
Deposits (Notes 8 and 15)
Call money and bills sold (Note 19)
Payables under securities lending transactions (Note 8)
Trading liabilities (Note 16)
Borrowed money (Note 10)
Foreign exchanges
Bonds (Note 12)
Due to trust account
Other liabilities
Reserve for employees’ retirement benefits (Note 13)
Reserve for directors’ retirement benefits
Reserve for reimbursement of dormant deposits
Reserve for frequent users services
Reserve for losses on interest refunded
Reserve for other contingent losses
Reserves under the special laws
Deferred tax liabilities for land revaluation (Notes 3 and 14)
Negative goodwill
Acceptances and guarantees
Total liabilities¥6,646,813
111,947
73,649270
80,885185
15,00014
57,282
4,219
742
1,333
102
8
1,623
0
14,0072,765
28,5527,039,404¥6,385,531
162,682
166,230
203
71,445303
15,00017
98,483
4,173
650
1,223
160
8
1,093
—
14,061
2,923
28,363
6,952,553$67,665,817
1,139,646
749,767
2,749
823,424
1,886
152,702146
583,148
42,956
7,556
13,577
1,039
91
16,532
5
142,598
28,153
290,671
71,662,470

Net assets:
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Unrealized (losses) gains on available-for-sale securities
Deferred losses on hedging instruments, net of taxes
Land revaluation excess, net of taxes (Notes 3 and 14)
Total valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

85,11358,574254,154(26,804)
371,036(6,397)(1,868)
10,7392,474
1,369
374,881¥7,414,285

85,11358,574
255,255(21,671)377,271
43,833(1,130)10,81953,521
1,222
432,016¥7,384,570

866,467596,294
2,587,337(272,876)
3,777,222(65,124)(19,016)
109,333
25,192
13,945
3,816,360$75,478,831

See accompanying notes to the consolidated financial statements.

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Consolidated Statements of Income
THE JOYO BANK, LTD. and Consolidated Subsidiaries

Millions of yen
2009
2008

Years ended March 31,

Thousands of
U.S. dollars (Note 2)
2009

Income:Interest and dividend income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Trading income (Note 18)
Other operating income
Other income (Note 20)
Total income¥ 97,453
31,371
1,418
23,216580
3,914
37,862
195,817¥ 95,888
46,6062,563
25,294474
23,14835,102
229,078$ 992,100
319,365
14,436236,351
5,911
39,853
385,442
1,993,461

Expenses:
Interest expenses:
Interest on deposits
Interest on borrowings and rediscounts (Note 19)
Other interest expenses
Fees and commissions
Other operating expenses
General and administrative expenses
Other expenses (Note 21)
Total expenses
Income before income taxes and minority interests

16,502
3,428
5,206
6,806
42,631
74,58943,772
192,937
2,879

17,174
8,658
11,915
6,998
47,25871,90338,999202,909
26,169167,994
34,90553,00369,295433,998
759,331445,614
1,964,144
29,317

2,725(5,177)

13,331(1,218)27,747(52,705)

153
5,178
6.62

131
¥ 13,924¥ 17.55

Income taxes:
Current
Deferred (Note 14)
Minority interests in net income of consolidated subsidiaries
Net income
Net income per share (in yen and dollars)

¥
¥

$
$

1,558
52,7170.06

See accompanying notes to the consolidated financial statements.

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Consolidated Statements of Changes in Net Assets
THE JOYO BANK, LTD. and Consolidated Subsidiaries

Years ended March 31,

Shareholders’ equity
Common stock
Balance at end of the previous year
Changes during the year
Balance at end of the current year
Capital surplus
Balance at end of the previous year
Changes during the year:
Disposal of treasury stock
Retirement of treasury stock
Total changes during the year
Balance at end of the current year
Retained earnings
Balance at end of the previous year
Changes during the year:
Cash dividends
Net income
Disposal of treasury stock
Retirement of treasury stock
Transfer from land revaluation excess
Total changes during the year
Balance at end of the current year
Treasury stock
Balance at end of the previous year
Changes during the year:
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total changes during the year
Balance at end of the current year
Total shareholders’ equity
Balance at end of the previous year
Changes during the year:
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer from land revaluation excess
Total changes during the year
Balance at end of the current year

26

Millions of yen
2009
2008

Thousands of
U.S. dollars (Note 2)2009¥ 85,113—¥ 85,113¥ 85,113—¥ 85,113$ 866,467—$ 866,467¥ 58,574¥ 58,574$ 596,294———¥ 58,574

00—¥ 58,574———$ 596,294¥255,255¥256,069$2,598,552(6,262)
5,178
(96)
—
79
(1,101)¥254,154(5,970)13,924—(8,901)
134(813)¥255,255(63,752)
52,717(987)—
806(11,215)$2,587,337¥ (21,671)¥ (21,174)$ (220,616)(5,602)468—(5,133)¥ (26,804)(9,482)
83
8,901
(496)
¥ (21,671)(57,031)
4,771—(52,260)$ (272,876)¥377,271¥378,581$3,840,698(6,262)
5,178(5,602)371
79(6,235)¥371,036(5,970)13,924(9,482)84
134(1,309)¥377,271(63,752)
52,717(57,031)3,783
806(63,475)$3,777,222

Millions of yen
2009
2008

Years ended March 31,

Valuation and translation adjustments
Unrealized (losses) gains on available-for-sale securities
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Deferred losses on hedging instruments, net of taxes
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Land revaluation excess, net of taxes
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Total valuation and translation adjustments
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Minority interests
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Total net assets
Balance at end of the previous year
Changes during the year:
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer from land revaluation excess
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year

Thousands of
U.S. dollars (Note 2)2009¥ 43,833¥128,938$ 446,235(50,230)(50,230)¥ (6,397)(85,104)(85,104)¥ 43,833(511,360)(511,360)$ (65,124)¥ (1,130)¥$(11,512)

(737)
(737)
¥ (1,868)

(339)
(339)
¥ (1,130)$(7,503)(7,503)(19,016)¥ 10,819¥ 10,953$ 110,140

(79)
(79)
¥ 10,739

(134)
(134)
¥ 10,819

(806)
(806)
$ 109,333¥ 53,521¥139,100$ 544,863(51,047)(51,047)¥ 2,474(85,578)(85,578)¥ 53,521(519,670)(519,670)$ 25,192

¥

1,222

¥

1,128

$12,445

¥

147
147
1,369

¥

94
94
1,222

1,500
1,500
13,945(791)$¥432,016¥518,810$4,398,007(6,262)
5,178(5,602)371
79(50,899)(57,135)¥374,881(5,970)13,924(9,482)
84
134(85,484)(86,793)¥432,016(63,752)
52,717(57,031)3,783
806(518,170)(581,646)$3,816,360

See accompanying notes to the consolidated financial statements.

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Consolidated Statements of Cash Flows
THE JOYO BANK, LTD. and Consolidated Subsidiaries

Millions of yen
2009
2008

Years ended March 31,

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation
Impairment losses
Amortization of negative goodwill
Net decrease in reserve for possible loan losses
Net decrease in reserve for devaluation of investment securities
Net increase in reserve for directors’ retirement benefits
Net increase in reserve for reimbursement of dormant deposits
Net (decrease) increase in reserve for frequent users services
Net increase in reserve for other contingent losses
Net increase in reserve for losses on interest refunded
Net decrease in reserve for bonuses to directors and corporate auditors
Net increase (decrease) in reserve for employees’ retirement benefits
Interest and dividend income
Interest expenses
Net losses related to securities transactions
Net losses (gains) on money held in trust
Foreign exchange losses, net
Losses on disposal of tangible fixed assets
Net decrease in trading assets
Net increase in trading liabilities
Net decrease in lease investment assets
Net increase in loans and bills discounted
Net increase in deposits
Net increase in negotiable certificates of deposit
Net increase in borrowed money excluding subordinated borrowings
Net (increase) decrease in due from banks excluding cash equivalents
Net (increase) decrease in call loans and others
Net (decrease) increase in call money and bills soldNet decrease in payables under securities lending transactions
Net increase in foreign exchange (assets)
Net decrease in foreign exchange (liabilities)
Net (decrease) increase in due to trust accountInterest and dividends received
Interest paid
Others, net
Subtotal
Income taxes paid
Net cash used in operating activities

2,879 ¥ 26,169
5,129
17,242
23
115
(158)
(181)
(2,457)(4,868)
(0)
(25)
92
650
110
1,223
(58)
160
530
541
0
3
—
(50)
45
(1,112)(132,976)(147,803)
25,13737,74933,926
17,55354(9)23,22535,953689
365
16,485
3,106
66
114
484
—
(276,771)(232,636)
207,332
66,89153,949
9,020
9,440
3,895
(2,953)
1,407(11,181)
19,167(50,735)
54,235(92,580)(37,023)
(278)
(53)
(118)
(46)
(2)
1
133,648
150,314(24,271)(34,773)(21,651)(19,448)(102,943)(32,153)(9,993)(23,634)(112,937)(55,787)$

Cash flows from investing activities:
Purchases of securities
Proceeds from sale of securities
Proceeds from redemption of securities
Increase in money held in trust
Decrease in money held in trust
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchases of intangible fixed assets
Net cash provided by investing activities(530,475)
380,243
320,424(25,000)
28,500(9,386)190(224)
164,271(1,567,160)
1,388,788
273,855(1,500)—(18,669)
217—
75,531(5,400,339)
3,870,946
3,261,983(254,504)
290,135(95,561)
1,938(2,284)
1,672,314

Cash flows from financing activities:
Repayment of subordinated debt
Cash dividends paid
Cash dividends paid to minority interests
Purchases of treasury stock
Proceeds from sales of treasury stock
Net cash used in financing activities
Translation adjustment for cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 3)—(7,000)(6,262)(5,970)(0)(0)(5,602)(9,482)371
84(11,493)(22,368)(15)(29)
39,825(2,653)
113,725
116,379¥153,550 ¥ 113,725—(63,752)(2)(57,031)
3,783(117,002)(158)
405,426
1,157,749$1,563,176

See accompanying notes to the consolidated financial statements.

28¥

Thousands of
U.S. dollars (Note 2)
2009

29,31752,220239(1,608)(25,015)
(4)
938
1,121
(596)
5,404
6
—
467
(1,353,730)
255,903345,373550
236,439
7,016
167,827676
4,931(2,817,587)
2,110,685
549,216
96,100(30,062)(113,832)(516,493)(942,486)(2,833)(1,203)(29)
1,360,567(247,088)(220,418)(1,047,987)(101,738)(1,149,725)

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Notes to the Consolidated Financial Statements
THE JOYO BANK, LTD. and Consolidated Subsidiaries

1. Basis of Preparation
The accompanying consolidated financial statements of The Joyo
Bank, Ltd. (the “Bank”) and consolidated subsidiaries are prepared on the basis of accounting principles generally accepted inJapan, which are different in certain respects as to the applicationand disclosure requirements of International Financial ReportingStandards, and are compiled from the consolidated financial
statements prepared by the Bank as required by the Financial
Instruments and Exchange Act of Japan.
For the convenience of readers outside Japan, certain items
presented in the original consolidated financial statements havebeen reclassified and rearranged.
In addition, the notes to the consolidated financial statements
include information which is not required under accounting principles generally accepted in Japan but is presented herein as
additional information.

2. Japanese Yen and U.S. Dollar Amounts
As permitted by the Financial Instruments and Exchange Act ofJapan, amounts of less than one million yen have been rounded
off. As a result, the totals shown in the accompanying consolidated
financial statements (both in yen and U.S. dollars) do not necessarily agree with the sums of the individual amounts. Solely for theconvenience of the reader, the U.S. dollar amounts represent
a translation of the Japanese yen amounts at ¥98.23 = US$1.00,
the exchange rate prevailing on March 31, 2009.

3. Significant Accounting Policies(a) Consolidation
The accompanying consolidated financial statements include
the accounts of the Bank and nine significant subsidiaries. In thefiscal year ended March 31, 2009, data for Joyo Staff Service
Co., Ltd. is omitted due to the completion of liquidation of thecompany.
Joyo Series.1 Investment Limited Partnership was excluded
from the scope of consolidation because its assets, ordinary
income, net income and retained earnings have no material
impact on the Bank’s financial position and results of operations.
All significant intercompany transactions have been eliminatedin consolidation. Assets and liabilities held by consolidated subsidiaries are stated at fair value at a time of acquisition.
(b) Translation of foreign currencies
Foreign currency-denominated assets and liabilities are translated
into Japanese yen at the rates prevailing at the balance sheet date.
Foreign currency-denominated assets and liabilities held by consolidated subsidiaries are translated into Japanese yen principally at
the rates prevailing at the balance sheet date.
(c) Transactions for trading purposes
Transactions for “trading purposes” (seeking to capture gains
arising from short-term changes in interest rates, currency
exchange rates or market prices of securities and other marketrelated indices or from arbitrage between markets) are valued atmarket or fair value, and have been included in trading assets
and trading liabilities on a trade date basis. Gain or loss on suchtrading transactions are reflected as trading income or trading
expenses in the consolidated statements of income.
Among the trading assets and liabilities, securities and monetary claims are carried at market value as of the balance sheet

date. Derivatives including swaps, futures, and options are valued
assuming settlement on the balance sheet date.
Trading income or trading expenses include interest received
or paid during the fiscal year. The year-on-year valuation differences of securities and monetary claims are also recorded in theabove-mentioned accounts. As for the derivatives, assuming thatthe settlement will be made in cash, the year-on-year valuationdifferences are also recorded in the above-mentioned accounts.
(d) Securities
Securities other than trading securities have been accounted forby the following methods:
Marketable debt securities held to maturity are stated at amortized cost by the moving-average cost method. Equity sharesand investment trusts listed on Japanese markets are stated atfair value based on their average market prices over the monthprior to the balance sheet date. (Acquisition cost is basically calculated by the moving-average cost method.) Other listed securities are stated at fair value based on the market prices prevailingon the balance sheet date. (Acquisition cost is basically calculatedby the moving-average cost method.) Other available-for-salesecurities for which fair value is not available are stated at cost or
amortized cost by the moving-average cost method.
Unrealized gain or loss on available-for-sale securities (net ofthe related tax effect) has been reported as a component of net
assets.
(e) Derivatives
Derivatives positions held by the Bank (not including transactions
for trading purposes) are stated at fair value.
(f) Depreciation of tangible fixed assets
Depreciation of tangible fixed assets held by the Bank is calculated by the declining-balance method, except for buildings
acquired on or after April 1, 1998 of which depreciation is calculated by the straight-line method. The estimated useful lives are
as follows:
Buildings: 6~50 years
Other: 3~20 years
Depreciation of tangible fixed assets held by the consolidated
subsidiaries is calculated principally by the declining-balancemethod, based on the respective estimated useful lives of theassets.
Depreciation of intangible fixed assets is calculated using thestraight-line method. Software for internal use is depreciatedusing the straight-line method over its estimated useful life (mainly
5 years).
(g) Reserve for possible loan losses
The reserve for possible loan losses of the Bank is provided as
detailed below, in accordance with the internal rules for providing
reserves for possible loan losses:
For claims to debtors who are legally bankrupt (as a result ofbankruptcy, special liquidation, etc.) or who are substantiallybankrupt, a reserve is provided based on the amount of theclaims, net of the amounts expected to be collected by the disposal of collateral or as a result of the execution of guarantees.
For claims to debtors who are not currently bankrupt, but arelikely to become bankrupt, a reserve is provided based on theamount considered necessary based on an overall solvency
assessment of the amount of claims net of the amounts expected
to be collected by the disposal of collateral or as a result of the29execution of guarantees.
For other claims, a reserve is provided based on the Bank’s
historical loan-loss experience.
All claims are assessed by the Business Section (at thebranches and the related head office divisions) based on the
Bank’s internal rules for the self-assessment of asset quality.
The Corporate Audit Department, which is independent of theBusiness Section, subsequently conducts audits of such assessments, and a reserve is provided based on the audit results.
The reserves of the consolidated subsidiaries are provided forgeneral claims at an amount based on the actual historical rate ofloan losses and for specific claims (from potentially bankrupt customers, etc.) at an estimate of the amounts deemed uncollectible
based on the respective assessments.
For collateralized or guaranteed claims from debtors who
are legally or substantially bankrupt, the amounts of the claims
deemed uncollectible in excess of the estimated value of the collateral or guarantees have been written off in aggregate amountsof ¥44,962 million and ¥39,953 million as of March 31, 2009 and2008, respectively.
(h) Reserve for devaluation of investment securities
A reserve for the devaluation of investment securities is provided
at the amount deemed necessary to cover estimated possible
losses on investments which the Bank and its consolidated subsidiaries may incur in the future.
(i) Reserve for employees’ retirement benefits
Reserve for retirement benefits of the Bank and its subsidiaries isprovided for the amount deemed necessary, based on estimatedpension benefits obligations and pension plan assets at the fiscal year end, to cover required retirement benefits for eligible
employees.
Prior service cost is deferred and amortized using the straightline method over certain years (10 years) within the averageremaining service period of the eligible employees.
Unrealized actuarial losses are deferred and amortized using
the straight-line method over a ten-year period commencing withthe following year, which is shorter than the average remaining
service period of the eligible employees.
(j) Reserve directors’ retirement benefits
Reserve is made for the payments of retirement allowances todirectors and auditors of the Bank based on an estimate of theamount attributable for the term.
(k) Reserve for reimbursement of dormant deposits
Reserve for reimbursement of dormant deposits which were
derecognized as liabilities under certain conditions is provided forpossible losses on the future claims of withdrawal based on thehistorical repayment experience.
(l) Reserve for frequent users services
Reserve for frequent users services, which is provided to meet
future use of credits granted to credit card customers, is recordedin the amount deemed necessary based on the estimated future
use of unused credits. This program applies to cards issued by
the Bank and one of its subsidiaries.
(m) Reserve for losses on interest refunded
One consolidated subsidiary provides a provision for losses oninterest refunded in an amount deemed necessary based on

30

estimated amounts to be refunded, taking into account historical
records of interest refunded on the portion of loans whose interest rates exceeded the maximum interest rate stipulated by theInterest Limitation Law.
(n) Reserve for contingent losses
The Bank makes reserve for possible losses on loans guaranteed by the credit guarantee corporations in an amount deemednecessary based on estimated losses in the future, calculatedusing historical default rates after exclusion of contingent losses
covered by reserves.
(o) Reserves under special laws
The reserve under the special laws is a reserve for contingent liabilities and provided for compensation for losses from securitiesrelated transactions or derivative transactions, pursuant to Article
46-5-1 of the Financial Instruments and Exchange Act and Article
175 of the related cabinet order.
(p) Goodwill
Goodwill is amortized using the straight-line method over 20 years.
(q) Land revaluation excess
In accordance with the Law concerning the Revaluation of Land,
the Bank revalued the land held for its operations on March 31,
1998. The net unrealized gain is presented in net assets net ofthe applicable income taxes as land revaluation excess, net oftaxes.
The difference between the revalued carrying amount and thefair value of premises revalued pursuant to Article 10 of the Law
were ¥24,031 million and ¥25,494 million as of March 31, 2009
and 2008, respectively.
(r) Leases
As for finance lease transactions that do not transfer ownershipof the leased property and which commenced prior to April 1,
2008, their treatment was as follows.
As lessee
Using the same method applied to ordinary operating leasetransactions.
As lessor
In line with the stipulations of Article 81 of the Guidance on
Accounting Standard for Lease Transactions (ASBJ GuidanceNo. 16, issued on March 30, 2007), book value (after deductionof accumulated depreciation) of lease assets included in tangible
fixed assets and intangible assets as of the previous balance
sheet date (March 31, 2008) was recorded as the initial balanceof “Lease receivables and lease investment assets.” Income
before income taxes and minority interests would have increasedby ¥1,263 million upon application of Article 80 of the Guidance.
(s) Hedging
Hedging against interest rate changes
The deferred method of hedge accounting is applied to transactions to hedge against the interest rate risks associated with
monetary claims and debt in accordance with the regulations
set out in the “Accounting and Auditing Treatment of AccountingStandards for Financial Instruments in the Banking Industry”(JICPA Industry Audit Committee Report No. 24).
The Bank assesses the effectiveness of such hedges in offsetting movement of the fair value with the changes in interest rates,

by classifying the hedged items (loans) and the hedging instruments (interest swaps) by their maturity. As to cash flow hedges,
the Bank assesses the effectiveness of such hedges in fixing
cash flows by verifying the correlation between the hedged items
and the hedging instruments.
In addition, a portion of deferred hedge losses and gains,which was previously under the “macro hedge,” i.e., the management of interest rate risk arising from large-volume transactions
in loans, deposits and other interest-earning assets, and interestbearing liabilities as a whole using derivatives, in accordance withthe regulations set out in the “Accounting and Auditing Treatmentof Preliminary Accounting Standards for Financial Instruments in
the Banking Industry” (JICPA Industry Audit Committee Report
No. 15) is no longer subject to hedge accounting effective theyear ended March 31, 2005. The deferred hedge losses andgains related to hedging instruments to which the Bank discontinued the application of hedge accounting, or applied fair value
hedge accounting as a result of the change mentioned above,
are periodically charged to interest expenses or interest income
effective fiscal 2003 by maturity and notional principal of eachhedge instrument.
Deferred hedge losses under macro hedge stood at ¥73 millionand ¥959 million at March 31, 2009 and 2008, respectively.
Hedging against foreign exchange fluctuation risk
The deferred method of hedge accounting is applied to transactions to hedge against the foreign exchange fluctuation risks
associated with monetary claims and liabilities denominated inforeign currencies, in accordance with the regulations set out inthe “Accounting and Auditing Treatment of Accounting Standards
for Foreign Currency Transactions in the Banking Industry”(JICPA Industry Audit Committee Report No. 25).
To minimize foreign exchange fluctuation risk on monetaryclaims and liabilities, the Bank engages in currency swaps, foreign exchange swaps, and similar transactions. The effectivenessof these transactions in the hedging of the foreign exchange risks
of monetary claims and liabilities denominated in foreign currencies is assessed through comparison of the foreign currency
position of the hedged monetary claims and liabilities, with that of
the hedging instruments.
(t) Consumption tax
Consumption tax is excluded from transactions reported by the
Bank and its consolidated subsidiaries. However, non-deductible
consumption tax on tangible fixed assets is charged to income as
incurred.
(u) Earnings per share
The computation of earnings per share of common stock isbased on the weighted average number of shares outstanding
during each year.
(v) Statements of cash flows
Cash and cash equivalents in the statements of cash flows
represent cash and due from banks in the consolidated balance sheets, excluding deposits with banks other than the Bankof Japan as well as the time deposits of certain consolidated
subsidiaries.

March 31,

Cash and due from banks
Deposits with banks otherthan the Bank of Japan
Cash and cash equivalents

Millions of yen
2009
2008

¥179,030¥136,252(25,479)(22,526)¥153,550 ¥113,725

4. Application of New Accounting Standards
Accounting standards for lease transactions
Finance lease transactions in which there is no transfer of ownership were formerly accounted for as operating leases. However,for financial statements relating to periods commencing on or after
April 1, 2008, it is mandatory to apply the Accounting Standard
for Lease Transactions (ASBJ Statement No. 13, issued on March
30, 2007) and the Guidance on Accounting Standard for Lease
Transactions (ASBJ Guidance No. 16, issued on March 30, 2007).
Accordingly, they are accounted for as finance leases.
As a result of this change, the total value of lease assets andlease investment assets increased by ¥31,742 million compared with application of the previous standards, “other tangible
fixed assets” decreased by ¥29,508 million, and “other intangible assets: decreased by ¥2,234 million. Operating expenses
decreased by ¥61 million while net ordinary income and income
before income taxes and minority interests increased by ¥61
million.
Valuation of securities
Formerly, the term-end market price of Japanese equities andJapanese investment trusts with market prices that fall within the
category of “available-for-sale securities” has been calculated on
the basis of market prices on the balance sheet date. However, inview of the sharp daily fluctuations in Japanese stock prices andthe likelihood of this situation continuing, we decided, with effectfrom the year ended March 31, 2009, to apply the average pricefor the one-month period immediately prior to the balance sheet
date as the market prices for Japanese equities and investment
trusts (within the category of “available-for-sale securities”) thatare held for medium-to-long-term investment purposes.
As a result of this change, by comparison with the application of the previous accounting standard, “Securities” decreasedby ¥3,317 million, and “Unrealized losses (gains) on availablefor-sale securities” by ¥1,558 million, while deferred tax assets
increased by ¥941 million. “Other operating expenses” forthe reporting period increased by ¥817 million, while ordinary
income and income before income taxes and minority interests
decreased by ¥817 million.
Changes in method of valuation of fair value of available-forsale securities
Regarding the fair value of Japanese Government Bonds (JGBs)
with variable interest rates. In this consolidated balance sheets,
Japanese Government Bonds, (JGBs) with variable interest rates
has hitherto stated at fair value calculated by reference to current
market price. In the case of securities where the asking price ofbuyer and seller diverges markedly, and where it is judged thatthe current market prices cannot be regarded as the fair value,with effect from the reporting fiscal year the Bank has adopted apolicy of estimation based on a “theoretical price,” as explained
below.

31

As a result of this change, by comparison with the previous
system in which the value as stated in the consolidated balance
sheets is calculated using the current market value, the valueof “securities” rose by ¥9,497 million, while deferred tax assets
declined by ¥3,829 million, and the net unrealized losses (gains)
on “available-for-sale securities” increased by ¥5,668 million.
The “theoretical price” used to estimate the value of variableinterest JGBs employs estimations of present value of future
cash flows, which is obtained using the yield on JGBs as well as
the price of zero-floor options as predicted by the Black-Scholes
option model, and the discount rate based on the yield. The
principal variables used in determining the JGB price are the JGB
yield and the implied volatility of swaptions.
With respect to credit investments in securitization products,
we had previously applied as fair value the valuations obtained
from brokers and bid price providers based on our determination that such valuations constitute reasonably calculated
prices that can be used as a proxy for market prices. Given thecurrent situation in which the volume of actual transactions isextremely limited and there exists a considerable gap between
the offers and bids of sellers and buyers, we determined thatvaluations obtained from brokers and bid price providers cannot
be employed for the estimation of fair value amounts, and havedecided to adopt theoretical prices based on reasonable estimates made by our management as fair value.
As a result, securities increased by ¥4,018 million, net unrealized losses (gains) on available-for-sale securities, net of taxes
increased by ¥15 million, and deferred tax assets declined by¥10 million. In addition, other operating expenses decreasedby ¥3,993 million, and net ordinary income and income before
income taxes and minority interests increased by ¥3,993 million.
The subject securities mainly consisted of collateralized loan
obligations (other than those subject to impairment accounting)that the Bank intends to hold over a long period, of which previous credit ratings given by outside rating agencies were maintained and the collateral assets remained sound.
The book value amount was reasonably calculated based on
the theoretical prices mentioned above. In deriving theoreticalprices based on the reasonable estimates made by our management (as mentioned above), we used the Discounted Cash Flow
Method. The variables used in the pricing include default rates,
recovery rates, pre-payment rates and discount rates.

5. Trading Assets
March 31,

Millions of yen
2009
2008

Trading securities
Trading securities-related financial derivatives
Trading-related financial derivatives
Other trading assets
Total¥2,1061
476
6,994¥9,578¥ 2,685—397
22,981¥26,063

6. Securities
March 31,

Japanese government bonds
Japanese local government bonds
Corporate bonds
Corporate stocks
Other securities
Total

Millions of yen
2009
2008

¥ 788,617
397,326
400,381
145,653
243,102¥1,975,080¥ 877,653
375,864
393,882
216,013437,964¥2,301,379

Notes: 1. Securities include ¥31 million and ¥24 million of investments in nonconsolidated subsidiaries as of March 31, 2009 and 2008, respectively.
2. Corporate bonds include ¥21,766 million and ¥22,460 million of guarantee
obligations for privately placed bonds (under Article 2-3 of the Financial
Instruments and Exchange Act) as of March 31, 2009 and 2008, respectively.

7. Bills Discounted
Bills discounted are accounted for as financial transactions inaccordance with JICPA Industry Audit Committee Report
No. 24. The Bank has the rights to sell or pledge bank acceptances bought, commercial bills discounted, documentary bills
and foreign exchanges bought without restrictions. The facevalue at March 31, 2009 and 2008 totaled ¥33,744 million and¥42,959 million, respectively.

8. Pledged Assets
Assets pledged as collateral at March 31, 2009 and 2008 wereas follows:
March 31,

Pledged assets:
Securities
Liabilities covered by pledged assets:
Deposits
Call money
Payables under securities
lending transactions
Borrowed money

Millions of yen
2009
2008

¥310,042¥359,337

21,85035,00031,065—73,64910,000166,230—

In addition to the above, securities amounting to ¥100,091 millionand ¥108,050 million at book value were pledged as collateral inconnection with bank transfer settlements and futures transactions as of March 31, 2009 and 2008, respectively.
One consolidated subsidiary had pledged its lease receivables
amounting to ¥5,000 million and ¥6,048 million as collateralfor borrowed money of ¥4,235 million and ¥4,695 million as ofMarch 31, 2009 and 2008, respectively.
Lease deposits as of March 31, 2009 and 2008 of ¥1,432 million and ¥1,452 million, respectively, have been included in otherassets. Initial margins on futures transactions as of March 31,
2009 and 2008 of ¥160 million, respectively, have been included
in other assets.

9. Commitments and Contingent Liabilities
Overdraft facilities and line-of-credit contracts are agreements
under which, subject to compliance with the contractual conditions, the Bank or consolidated subsidiaries pledge to provide
clients with funds up to a fixed limit upon submission of a loan
application to the Bank. The unused amount related to such
facilities/contracts stood at ¥1,441,272 million and ¥1,386,616
32

million at March 31, 2009 and 2008, respectively. Of this amount,facilities/contracts which expires within one year or which areunconditionally cancelable at any time, totaled ¥1,300,738 millionand ¥1,292,252 million at March 31, 2009 and 2008, respectively.
Most of these agreements will expire without the clients’ having
utilized the financial resources available to them, and the amountof the nonexecuted financing will not necessarily impact on the
Bank or its consolidated subsidiaries’ future cash flows. Most ofthese facilities/contracts contain a clause which allows the Bankor its consolidated subsidiaries to reject a loan application or to
reduce the upper limit requested in view of changing financial
conditions, credit maintenance and other reasonable concerns.
When necessary, the Bank will demand collateral such as realestate or marketable securities at the date on which an agreement is entered into. In addition, after facilities/contracts are set
forth the Bank will regularly assess the business status of theclients, based on predetermined internal procedures and, when
prudent, will revise the agreements or reformulate their policies tomaintain creditworthiness.

Notes: 1. Loans in bankruptcy and dishonored bills refers to loans (excluding
charged-off amounts) stipulated in Article 96, Paragraph 1, Item 3 (a) to(e) or Item 4 of the Enforcement Regulation to Corporation Tax Act (1965
Enforcement Regulation No. 97) to which accrued interest receivables are
not recognized as accruals for accounting purposes as no repayment ofprincipal or payment of interest has been made for a considerable period.
Delinquent loans refers to loans with respect to which accrued interest
receivables are not recognized as accruals for accounting purposes,
excluding loans falling into the category of restructured loans.
Loans past due with respect to interest payments for more than 3 months
refers to loans with respect to which repayment of principal or payment ofinterest are past due three months or more, excluding loans falling into thecategories of loans in bankruptcy and dishonored bills or delinquent loans.
Restructured loans refers to loans to borrowers to whom financial support
is given in the form of reduction in interest, waiver of repayment of the principal or payment of interest, or debt forgiveness with the aim of corporate
rehabilitation, excluding loans falling into loan categories mentioned above.

10. Borrowed Money

The Joyo
May 24, ¥10,000 ¥10,000
1stBank, Unsecured 2000
Ltd.
Straight
Bonds
The Joyo
May 24,
5,000
5,000
2nd
Bank, Unsecured 2000
Ltd.
Straight
Bonds
Total
¥15,000 ¥15,000

Borrowed money at March 31, 2009 and 2008 included subordinated debt of ¥35,000 million, respectively.
Borrowed money at March 2009 and 2008 consisted of thefollowing:
Description

Millions of yen
2009

Bills rediscounted
Other borrowings¥—

80,885

2008¥%
Averageinterest rate—

71,445

Due——

April 2008 1.44
February 2018

Notes: 1. Average interest rate represents the weight average interest rate based on
the balances and rates at respective year-end.
2. The repayment schedule within five years on borrowed money at March
31, 2009 was as follows:

Millions of yen¥14,020
21,140875
490
240Within 1 year
After 1 year through 2 years
After 2 years through 3 years
After 3 years through 4 years
After 4 years through 5 years

In accordance with the disclosure requirements under the Rules
for Bank Accounting in Japan, the balance of loans and bills
discounted at March 31, 2009 and 2008 included the following
non-performing loans:

Loans in bankruptcy and dishonored bills
Delinquent loans
Loans past due with respect to interest
payments for more than 3 months
Restructured loans
Total

Millions of yen
2009
2008

¥

12. Bonds
Bonds at March 31, 2009 and 2008 consisted of the following:
IssuerDescription Date ofissue

Millions of yen
2009
2008

%
CollateralInterest rate

Due

2.02

—

May 24,
2010

2.64

—

May 22,
2020

The redemption schedule within five years on bonds at March 31,
2009 was as follows:
Millions of yen
Within 1 year
After 1 year through 2 years
After 2 years through 3 years
After 3 years through 4 years
After 4 years through 5 years¥—
10,000———13. Employees’ Retirement Benefits

11. Non-Performing Loans

March 31,

2. The above amounts are stated before the deduction of the reserve forpossible loan losses.

9,171
96,420¥ 7,453
97,1072,437
16,474¥124,504

1,436
51,324¥157,321(a) Outline of current retirement benefit system
The Bank and its consolidated subsidiaries have adopted defined
employees’ retirement benefit plans, i.e., the employees’ welfare
pension fund supplemented by the employees’ public pension
system and lump-sum retirement benefits. In addition, extra
benefits may be paid on a case-by-case basis. The Bank has
established an employees’ retirement benefit trust. As of the endof March 31, 2009, the Bank and nine consolidated subsidiaries
have lump-sum severance payment systems for employees. The
Bank and its consolidated subsidiaries have jointly established afund under a defined benefit pension plan.
(b) The following tables set forth the changes in the net retirement benefit obligation, the plan assets and the funded statusof the Bank and its consolidated subsidiaries at March 31, 2009
and 2008:

33

March 31,

Retirement benefit obligation
Fair value of plan assets
Funded status
Unrecognized net retirement benefit
obligation at transition
Unrecognized actuarial loss
Unrecognized prior service cost
Net retirement benefit obligation
Prepaid pension costReserve for employees’ retirement benefits

Millions of yen
2009
2008

¥(61,515)
42,343(19,171)¥(61,331)
54,168(7,162)—
21,327
565
2,721
6,940
¥ (4,219)

—
8,787
664
2,288
6,462
¥ (4,173)

Notes: 1. The above amounts do not include any extra benefits.
2. The consolidated subsidiaries have adopted a simplified method for the
calculation of their retirement benefit obligation.

(c) Cost for retirement benefits of the Bank and its consolidated
subsidiaries included the following components for the years
ended March 31, 2009 and 2008:
Years ended March 31,

Service cost
Interest cost
Expected return on plan assets
Amortization:
Amortization of prior service cost
Amortization of unrecognized actuarial (gain) loss
Total retirement benefit cost

Millions of yen
2009
2008

¥1,907
1,044(785)¥1,913
1,036
(878)

98
1,419
¥3,68498(1)¥2,168

Note: Retirement benefit cost of consolidated subsidiaries which is calculated by asimplified method has been included in “service cost” referred to above.

(d) The assumptions used in accounting for the defined benefit
plans for the years ended March 31, 2009 and 2008 were as
follows:
Years ended March 31,

Discount rate
Expected rate of return on plan assets
Periodical allocation of estimatedretirement benefits
Amortization period of prior service cost
Amortization period of actuarial gain/loss

2009

2.0%
3.0%

14. Deferred Tax Assets
March 31,

Millions of yen
2009
2008

Deferred tax assets:
Reserve for possible loan losses
Reserve for retirement benefits
Devaluation of securities
Depreciation
Reserve for employee bonuses
Net operating loss carry forwards
Reserve for directors’ retirement benefits
Reserve for reimbursement of dormant deposits
Unrealized gain on available-for-sale securities
OthersValuation allowance
Total¥27,868
8,320
13,939
3,996
978
455
297
537
6,279
13,093(8,211)¥67,556¥27,767
8,497
9,486
4,041
1,186
496
—
—
—
13,101(8,809)¥55,767¥—(9,495)¥(26,427)(9,495)(36)(369)(9,902)¥57,654(16)(497)(36,437)¥ 19,330

Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Retirement benefit trust
Reversal of reserve for possible loan losses
after elimination of intercompany balances
OthersTotal
Net deferred tax assets (liabilities)

The effective tax rate reflected in the consolidated statements ofincome for the year ended March 31, 2009 and 2008 differs from thestatutory tax rate for the following reasons:Statutory tax rate
Provision for accrued income taxes inprevious terms
Valuation allowances
Dividends exempted for income tax purposes
Other
Effective tax rate

2009

2008

40.32%

40.32%(75.90)%(20.78)%(26.08)%(2.69)%(85.13)%—9.21%(3.45)%
0.21%
46.29%

2008

2.0%
3.5%

Straight-line method
10 years
10 years
10 years
10 years

15. Deposits
March 31,

Current deposits
Time deposits
Negotiable certificates of deposit
Others
Total

Millions of yen
2009
2008

¥3,642,117
2,768,973
99,360136,361¥6,646,813¥3,548,007
2,646,328
45,411
145,783¥6,385,531

16. Trading Liabilities

34

March 31,

Millions of yen
2009
2008

Trading securities–related financial derivatives
Trading-related financial derivatives
Total

¥ —
270
¥270

¥

5
198
¥203

17. Shareholders’ Equity

21. Other Expenses

In accordance with the Banking Law of Japan, the Bank has
provided a legal reserve by appropriation of retained earnings,
which is included in retained earnings. The Banking Law of Japan
provides that an amount equivalent to at least 20% of the amountto be disbursed as distributions of earnings be appropriated to thelegal reserve until the total of such reserve and the capital surplus
equals 100% of the common stock.
The new Corporation Act of Japan (the “Act”), which superseded most of the provisions of the Commercial Code of Japan,
went into effect on May 1, 2006. The Act provides that an amountequal to 10% of the amount to be disbursed as distributions ofcapital surplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capitalreserve and the legal reserve, respectively, until the sum of thecapital reserve and the legal reserve equals 25% of the capitalstock account. Such distributions can be made at any time byresolution of the shareholders or by the Board of Directors if certain conditions are met.
Under the Act, upon the issuance and sale of new shares ofcommon stock, the entire amount of the proceeds is required tobe accounted for as common stock, although a company may,by resolution of the Board of Directors, account for an amount notexceeding one-half of the proceeds of the sale of new shares ascapital surplus.

Millions of yen
2009
2008

Years ended March 31,¥

Losses on disposal of tangible fixed assets
Losses on impairment
Write-offs of claims
Write down of equity shares
Losses on sale of claims
Provision for reserve for directors’ retirement benefits
Provision for reserve for repayment for prescribed deposits
Provision for reserve for frequent users services
Others
Total

736
23
13,500
6,187
478
—
—
—
22,848¥43,772¥373
115
12,143
322
206
692
1,094
94
23,960¥38,999

Impairment losses were recorded in an aggregate amountdeemed irrecoverable on idle assets, primarily located in Ibaraki
Prefecture.
Impairment losses recognized on a consolidated basis for the
fiscal year ended March 31, 2009 and 2008 can be broken down
into the two categories of losses on land holdings in the amountof ¥20 million and ¥113 million, respectively, and losses on buildings in the amount of ¥3 million and ¥1 million, respectively.
The recoverable amounts used for the measurement of such
impairment losses are net sales prices, which are calculated on
the basis of appraisal values after deduction of the estimated costof disposal.

18. Trading Income
Years ended March 31,

Millions of yen
2009
2008

Revenue from trading securities
Revenue from trading-related financial derivatives
Other trading revenue
Total

¥247
104
228
¥580

¥187
116
170
¥474

19. Interest on Borrowings and Rediscounts
Years ended March 31,

Call money and bills sold
Securities lending transactions
Borrowings
Total¥1,651
791
985¥3,428¥6,096
1,597
964¥8,658

20. Other Income

Other ordinary income
Gain on disposal of tangible fixed assets
Gains on collection of loan assets

Reversal of reserve for possible loan losses
Total

Millions of yen
2009
2008

¥35,438
47
2,357
18¥37,862

Accumulated depreciation on tangible fixed assets, amounted to¥103,618 million and ¥147,029 million, respectively.

23. Segment Information(a) Business segment information
Segment information by type of business for the years ended
March 31, 2009 and 2008 are summarized as follows:
Millions of yen

Millions of yen
2009
2008

Years ended March 31,

22. Accumulated Depreciation of Tangible Fixed Assets¥32,8168
2,277—¥35,102

Year ended
March 31, 2009
Ordinary income:Ordinary income
from externalcustomers
Ordinary income
from internaltransactions

Banking
operations

Leasing

Other¥ 172,093¥16,774¥ 4,525 ¥ 193,394

845

1,753

Total
172,939
Ordinary expenses
171,501
Ordinary income, net ¥1,437
Assets¥7,404,663
Depreciation
4,821
Losses on impairment
23
Capital expenditures
7,448

18,52818,210¥ 317¥46,075
53
—
124

5,231

Total

7,830

Eliminations Consolidated¥— ¥ 193,394(7,830)—9,756
201,224(7,830)
193,394
9,477
199,189(7,791)
191,398¥ 279 ¥
2,034 ¥
(39) ¥
1,995¥36,298 ¥7,487,037 ¥(72,751) ¥7,414,285
179
5,054
75
5,129
—
23
—
23
2,038
9,611
—
9,611

35

Millions of yen
Year ended
March 31, 2008
Ordinary income:Ordinary income
from externalcustomers
Ordinary income
from internaltransactions
Total
Ordinary expenses
Ordinary income, net
AssetsDepreciation
Losses on impairment
Capital expenditures

Banking
operations

LeasingOther¥ 204,949¥17,250¥ 4,593 ¥ 226,793

551
205,500
180,678¥ 24,822¥7,374,092
4,187
115
6,464

1,961
19,212
18,787¥ 424¥44,437
12,904—
12,762

5,737
8,251(8,251)—
10,330235,044(8,251)
226,793
9,471
208,938(8,399)200,538¥ 858 ¥ 26,105 ¥ 148 ¥ 26,254¥36,002 ¥7,454,532 ¥(69,962) ¥7,384,570
151
17,243(0)
17,242
—
115
—
115
553
19,779—19,779Total

Eliminations Consolidated¥— ¥ 226,793

Notes: 1. Classification is made according to nature of businesses of consolidated
entities. In addition, “other” includes guarantee business.
2. Instead of the net sales and the operating income of a non-financial
company, ordinary income in gross and net amount are indicated.
3. Finance lease transactions in which there is no transfer of ownershipwere formerly accounted for by a method corresponding to that used
for ordinary operating lease contracts. However, for financial statements
relating to accounting years commencing on or after April 1, 2008, it ismandatory to apply the Accounting Standard for Lease Transactions (ASBJ
Statement No. 13 (March 30, 2007) and the Implementation Guidanceon the Accounting Standard for Lease Transactions (ASBJ Guidance No.
16 (March 30, 2007). Accordingly, they are being duly applied as of thereporting period using the same method applied to ordinary buying andselling transactions.
As a result of this change, the value of lease assets and lease investment assets increased by ¥31,742 million compared with applicationof the previous standards, “other tangible fixed assets” decreased by¥29,508 million, and “other intangible assets: decreased by ¥2,234 million.
Operating expenses decreased by ¥61 million while net ordinary income
increased by ¥61 million.
4. Formerly, the term-end market price of Japanese equities and investment
trusts with market prices that fall within the category of “other securities”
has been calculated on the basis of market prices on the balance-sheet
date. However, in view of the sharp daily fluctuations in Japanese stock
prices and the likelihood of this situation continuing, we decided, with effectfrom the reporting period, to apply the average price for the one-month
period immediately prior to the balance-sheet date as the market prices
for Japanese equities and investment trusts (within the category of “othersecurities”) that are held for medium-to-long-term investment purposes.
As a result of this change, by comparison with the application of theprevious accounting standard, the value of marketable securities employedin banking operations decreased by ¥3,320 million, and “Unrealized losses(gains) on available-for-sale securities” by ¥1,561 million. “Other expenses”
increased by ¥817 million and net ordinary income declined by ¥817
million, while the balance of securities held for leasing operations increasedby ¥2 million, and “Unrealized losses (gains) on available-for-sale securities”
increased by ¥1 million. Securities held in other operations increased by¥1 million and “Unrealized losses (gains) on available-for-sale securities”
increased by less than ¥0 million.
5. Regarding the fair value of Japanese Government Bonds (JGBs) withvariable interest rates, this has hitherto been stated in the consolidatedbalance sheets calculated by reference to current market prices. In thecase of securities where the asking price of buyer and seller diverges
markedly, and where it is judged that the current market prices cannot
be regarded as the fair value, with effect from the reporting fiscal year the
Bank has adopted a system of estimation based on a “theoretical price,”a bond price calculated on a basis of reasonable estimates made by ourmanagement.
As a result of this change, by comparison with the previous system inwhich the value as stated in the consolidated balance sheets is calculatedusing the current market value, the value of “securities” rose by ¥9,497
million, while deferred tax assets declined by ¥3,829 million, and net
unrealized losses (gains) on available-for-sale securities increased by¥5,668 million.
The “theoretical price” used to estimate the value of variable-interest
JGBs employs estimations of present value of future cash flows. The
principal variables used in determining the JGB price are the JGB yield andthe implied volatility of swaptions.
With respect to credit investments in securitization products, we had

36previously applied as fair value the valuations obtained from brokers andbid price providers based on our determination that such valuations constitute reasonably calculated prices that can be used as a proxy for market
prices. Given the current situation in which the volume of actual transactions
is extremely limited and there exists a considerable gap between the offers
and bids of sellers and buyers, we determined that valuations obtained frombrokers and information vendors cannot be employed for the estimation offair value amounts, and have decided to adopt theoretical prices based onreasonable estimates made by our management as fair value.
As a result, the value of securities held for banking purposes by ¥4,018
million, net unrealized losses (gains) on available-for-sale securities, net oftaxes increased by ¥15 million, and deferred tax assets declined by ¥10 million. In addition, other operating expenses in banking operations decreasedby ¥3,993 million, and net ordinary income increased by ¥3,993 million.
The subject securities mainly consisted of collateralized loan obligations(other than those subject to impairment accounting) that the Bank intends
to hold over a long period, of which previous credit ratings given by outside
ratings agencies were maintained and the collateral assets remained sound.
The book value amount was reasonably calculated based on thetheoretical prices mentioned above. In deriving theoretical prices based on
the reasonable estimates made by our management (as mentioned above),
we used the Discounted Cash Flow Method. The price decision variables
include default rates, recovery rates, pre-payment rates and discount rates.

(b) Geographic segment information
Segment information by geographic area has not been disclosed
since over 90% of the total consolidated ordinary income andassets of the Bank and consolidated subsidiaries reside in Japan.
(c) Ordinary income from foreign operations
Segment information related to the Bank’s foreign operations forthe years ended March 31, 2009 and 2008 are as follows:
Years ended March 31,

Millions of yen
2008

Ordinary income from foreign operations (A)Ordinary income (B)(A)/(B)¥ 29,527
226,79313.01%

Notes: 1. Statement has been omitted for ordinary income on international operations forthe term ended March 31, 2009, as this accounted for less than 10% of total
ordinary income on a consolidated basis.
2. Ordinary income arising from foreign operations refers to ordinary income
from foreign currency-denominated transactions and yen-denominatedtransactions with non-residents in Japan, as well as offshore transactions(excluding inter-segment transactions).

24. Leases(a) Finance leases
Finance lease transactions in which ownership of leased property
is not transferred to the lessee are accounted for as operatingleases (outside of the scope of new lease accounting standards),
as follows:
As lessee
Acquisition cost, aggregate depreciation expenses, and bookvalue at term-end
Acquisition cost
Tangible fixed assets:
Total:¥25 million¥25 million

Depreciation expenses
Tangible fixed assets:
Total:¥16 million¥16 million

Book value at term-end
Tangible fixed assets:
Total:¥9 million¥9 million

Note: The acquisition cost presented above is inclusive of interest amounts, as thebalance of acquisition cost and minimum lease payment is small as a percentage of the total book value of tangible fixed assets.

Lease payments receivable for finance leases
Within one year:¥4 million
Over one year:¥5 million
Total:¥9 million(c) Marketable available-for-sale securities
Millions of yen

Note: The acquisition cost presented above is inclusive of interest amounts, as thebalance of acquisition cost and minimum lease payment is small as a percentage of the total book value of tangible fixed assets.

Lease fees paid and depreciation expenses
Lease fees:¥5 million
Depreciation expenses: ¥5 million
Method of calculation of depreciation expenses
The lease assets are depreciated by the straight-line methodon the assumption that the lease term is the useful life and theresidual value is zero.

25. Securities Information
The information includes trading account securities and commercial paper in trading assets and trust beneficiary rights in commercial paper and other debt purchased in addition to securities.
(a) Securities held for trading purposes¥9,10059¥25,66653(b) Marketable debt securities held to maturity
Millions of yen
Book
value

March 31, 2009

Japanesegovernment bonds
Japanese local
government bonds
Corporate bonds
Others
Total

¥

— ¥

Marketvalue

Unrealized Unrealized Unrealized
gain (net) gain (gross) loss (gross)

—

481
488
28,266 26,288
8,763
8,398
¥37,510 ¥35,175¥

Equity securities¥
Debt securities:
Japanesegovernment bonds
Japanese
local government bonds
Corporate bonds
Others145,511 ¥ 141,934¥ (3,576)¥16,788¥20,364

783,247788,617

5,369

5,770

400

392,827
371,534
290,239

396,845
372,115
271,1584,017
581(19,081)

4,025
1,573
1,454

8
991
20,536¥1,983,360 ¥1,970,671¥(12,689)¥29,612¥42,301

—

¥—

¥

—

7
(1,977)(365)¥(2,335)

7
0
0
¥ 8

—
1,977
365
¥2,343Book
value

March 31, 2008

Cost

Equity securities¥
Debt securities:
Japanesegovernment bonds
Japanese
local government bonds
Corporate bonds
Others125,372 ¥ 212,323

Total

As lessor
Future lease payments under non-cancellable operating leasetransactions
Within one year:¥8 million
Over one year:¥38 million
Total:¥47 million
No losses are recognized for the impairment of lease assets.

Carrying value
Holding gains charged to income

Cost

Millions of yen

As lessee
Future lease payments under non-cancellable operating leasetransactions
Within one year:¥42 million
Over one year:¥425 million
Total:¥467 million

Millions of yen
2009
2008

Unrealized Unrealized Unrealized
gain (net) gain (gross) loss (gross)

March 31, 2009

Total(b) Operating leases

March 31,

Book
value

Unrealized Unrealized Unrealized
gain (net) gain (gross) loss (gross)¥86,950¥ 92,765¥ 5,815882,788877,653(5,134)

3,916

9,051

369,257
362,920
489,802374,060
364,672
472,065

4,802
1,752
(17,736)

4,907
1,911
2,452

105
159
20,189¥2,230,141 ¥2,300,775¥70,634¥105,954¥35,320

Notes: 1. Figures posted on the consolidated balance sheets for equities andinvestment trusts (primarily Japanese), are calculated on the basis of average market prices during the one-month period immediately prior to thebalance-sheet date. Other securities are calculated principally on the basisof the market price at term-end.
Formerly, the term-end market price of Japanese equities andJapanese investment trusts with market prices that fall within the categoryof “available-for-sale securities” has been calculated on the basis of market prices on the balance-sheet date. However, in view of the sharp daily
fluctuations in Japanese stock prices and the likelihood of this situation
continuing, we decided, with effect from the reporting period, to apply theaverage price for the one-month period immediately prior to the balancesheet date as the market prices for Japanese equities and investment
trusts (within the category of “available-for-sale securities”) that are held for
medium-to-long-term investment purposes.
As a result of this change, by comparison with the application of
the previous accounting standard, the value of “Securities” decreasedby ¥3,317 million, and “Unrealized losses (gains) on available-for-salesecurities” by ¥1,558 million, while deferred tax assets increased by ¥941
million. “Other operating expenses” for the reporting period increased by¥817 million, while net ordinary income and income before income taxes
and minority interests decreased by ¥817 million.
2. For “available-for-sale securities” with market values, in cases where themarket value has fallen substantially from the acquisition price and there
is believed to be little likelihood of a recovery to the acquisition price level,
said securities are shown on the balance sheets at market value and thedifference between the market value and the acquisition price is posted as aloss (hereinafter “impairment loss”).
Impairment losses for the reporting term amounted to ¥39,687 million, of
which bonds accounted for ¥33,508 million and equities for ¥6,178 million.
Pursuant to “Practical Guidelines for Accounting for Financial
Instruments” (JICPA Accounting Committee Report No. 14), the Bank
recognized the impairment losses on listed equity shares whose average
market price over the one-month period immediately prior to the balance
sheet date declined by 30% or more compared with acquisition cost, andother securities whose market price at the balance-sheet date also declined
by 30% or more compared with acquisition cost.

Millions of yen
Book
value

March 31, 2008

Japanesegovernment bonds
Japanese local
government bonds
Corporate bonds
Others
Total

¥

— ¥

Marketvalue

Unrealized Unrealized Unrealized
gain (net) gain (gross) loss (gross)

—

¥ —

¥ —

¥ —

1,803
1,853
29,210 29,097
11,813 11,547¥42,827 ¥42,498

49
(112)
(265)
¥(328)

49
78
6
¥134

—
191
272
¥463

Note: Market value is based on the market prices at the fiscal year end.

Additional information
Regarding the fair value of Japanese Government Bonds (JGBs) with variableinterest rates, this has hitherto been stated in the consolidated balance
sheets calculated by reference to current market prices. Based on the
Bank’s own judgment that the current market prices cannot be regarded as
the fair value, with effect from the reporting fiscal year the Bank has adopted
a “theoretical price” calculation for the estimation of fair value.
As a result of this change, by comparison with the previous system inwhich the value was calculated using the current market value, the valueof “securities” rose by ¥9,497 million, while deferred tax assets declined by¥3,829 million, and the net unrealized losses (gains) on available-for-salesecurities increased by ¥5,668 million.

37

The “theoretical price” used to estimate the value of variable-interest
JGBs is calculated, in principle, by the Discounted Cash Flow Method. The
principal price decision variables are the JGB yield and the implied volatilityof swaptions.
With respect to credit investments in securitization products, we had
previously applied as fair value the valuations obtained from brokers and bid
price providers based on our determination that such valuations constitutereasonably calculated prices that can be used as a proxy for market prices.
Given the current situation in which the volume of actual transactions isextremely limited and there exists a considerable gap between the offers
and bids of sellers and buyers, we determined that valuations obtained frombrokers and bid price providers cannot be employed for the estimation offair value amounts, and have decided to adopt theoretical prices based onreasonable estimates made by our management as fair value.
As a result, securities increased by ¥4,018 million, net unrealized losses(gains) on available-for-sale securities, net of taxes increased by ¥15 million,
and deferred tax assets declined by ¥10 million. In addition, other operating
expenses decreased by ¥3,993 million, and net ordinary income and income
before income taxes increased by ¥3,993 million.
The subject securities mainly consisted of collateralized loan obligations(other than those subject to impairment accounting) that the Bank intends
to hold over a long period, of which previous credit ratings given by outside
ratings agencies were maintained and the collateral assets remained sound.
The book value amount was reasonably calculated based on thetheoretical prices mentioned above. In deriving theoretical prices based on
the reasonable estimates made by our management (as mentioned above),
we used the Discounted Cash Flow Method. The price decision variables
include default rates, recovery rates, pre-payment rates and discount rates.

(g) Money held in trust classified as available-for-sale securities
March 31,

Cost
Book value
Unrealized gain (net)Unrealized gain (gross)
Unrealized loss (gross)

Millions of yen
2009
2008

¥—
—
—
—
—

¥3,656
3,281
(375)
—
375

Note: Book value is based on the market prices at the fiscal year end.

(h) Unrealized (loss) gain on available-for-sale securities
March 31,

Unrealized (loss) gain:
Available-for-sale securities
Other money held in trust
Deferred tax assets (liabilities)
Net unrealized (losses) gains onavailable-for-sale securities
Minority interests
Unrealized (losses) gains on available-for-salesecurities

Millions of yen
2009
2008

¥(12,679)—
6,279¥70,634(6,400)(2)

43,836¥ (6,397)¥43,833(375)(26,422)(2)(d) Marketable available-for-sale securities soldAn unrealized gain of ¥9 million on available-for-sales securities, which
are principally held by dormant associations is included in the total
unrealized loss amounts.

Millions of yen
2009
2008

Years ended March 31,

Proceeds from sales of marketableavailable-for-sale securities
Gains
Losses¥368,987
18,172
8,957¥1,370,112
32,371
31,236(e) Major components and balance sheet amounts of nonmarketable securities

March 31,

Millions of yen
Book value
2009
2008

Non-marketable available-for-sale securities:
Unlisted equity securities
Investments in investment partnerships¥3,718
1,834¥3,6902,092(f) Schedule of redemption of available-for-sale securities withmaturity dates and debt securities being held to maturity
Millions of yen
March 31, 2009

Debt securities:
Japanese government
bonds
Japanese local
government bonds
Corporate bonds
OthersTotal

One yearor less

One tofive years

Five toten yearsOverten years¥ 68,505 ¥ 502,001¥218,111¥

25,984160,006
52,620237,242
44,444103,219¥191,554 ¥1,002,469

211,335
56,85133,437¥519,734—
53,667
81,439¥135,106—Millions of yen
March 31, 2008

Debt securities:
Japanese government
bonds
Japanese local
government bonds
Corporate bonds
OthersTotal

38

One yearor less

One tofive years

Five toten yearsOverten years¥138,390 ¥ 517,473¥183,507¥ 38,282

58,939171,161
49,335202,123
25,579165,467¥272,245 ¥1,056,226

145,762
80,94682,010¥492,227—
61,476
183,985¥283,744

26. Derivatives(a) Transactions(1) The Bank conducts derivatives transactions related to fluctuations in interest rates, currency exchanges and bond prices,which are classified into hedging and non-hedging purposes.
One of the Bank’s consolidated subsidiaries engages ininterest-related derivative transactions for hedging purposes.
(2) Policies: The Bank enters into derivative transactions to: (1) meetcustomer needs for hedging of risks involved in fluctuations inforeign exchanges and interest rates; (2) mitigate risks involvedin the Bank’s operations in the context of efficiently managing its
overall assets and liabilities, and; (3) hedge individual transactionsof the Bank. For trading in derivatives for the purpose of increasing earnings over a short-term period, the Bank has set certain
position limits and loss-cut rules.
The above-mentioned consolidated subsidiary follows trading
policies similar to those of the Bank.
(3) Purposes: The Bank conducts derivatives transactions in accordance with the above-mentioned policies. The Bank employs
hedge accounting in some of its derivatives transactions.
a. Methods of hedge accounting
The Bank has adopted ordinary treatment for deferred hedges
and special treatment for interest-rate swaps.
b. Policies and implementation of hedging transactions
The Bank uses hedging transactions to mitigate its exposure to interest rate risk, risk involving fluctuations in foreignexchange rates and stock prices, and credit risk, in accordance with its internal rules (Rules on Transactions under
Hedge Accounting) based on the Practical Guidelines on
Accounting for Financial Instruments.
During the prior and current years, hedge accounting has
been applied to the following financial instruments and assets
and liabilities hedged:Hedging instruments: Interest-rate swaps, currency swaps
and foreign exchange swaps
Assets and liabilities hedged:(Yen-denominated) Loans and bills discounted, deposits,
and borrowed money(Foreign-currency denominated) Bonds and deposits
c. Assessment of hedging effectivenessThe effectiveness of hedging was assessed in accordancewith Rules on Transactions under Hedge Accounting. As forhedging against interest rate changes by means of offsetting
fluctuations in fair value arising from changes in interest rates,
the Bank assesses the hedge effectiveness by correlating agroup of hedged items (i.e. loans) with hedging instruments(such as interest rate swaps) classified by remaining maturity bucket. As for cash flow hedges, the Bank assesses theeffectiveness of such hedges in fixing cash flows by verifying
the correlation between the hedged items and hedging instruments. As for hedging foreign exchange fluctuations, the Bank
assesses the effectiveness of utilizing currency and exchange
swap transactions as hedging instruments through confirmation of the fact that there exists a sufficient balance of hedging
instruments in the form of foreign exchanges, corresponding
to the hedged items in the form of monetary claims and obligations denominated in foreign currencies.
In addition, the Bank confirmed that its hedging methods for
its special treatment of interest-rate swaps met the required
criteria.
(4) Nature of Risks: Derivative transactions involve market risk andcredit risk. Market risk refers to the risk of losses from fluctuations in interest rates and currency exchanges, etc. Credit risk
is the risk that a position cannot be settled according to theoriginal contract terms due to the bankruptcy or insolvency of thecounterparty.
(5) Risk Management System: The Board of Directors (the “Board”)
is responsible for determining policies on the basis of in-house
regulations on risk management, taking due account of the maximum transaction volumes, the maximum allowable loss amounts,
and loss-cutting rules on derivative transactions, which arereported to the Board on a regular basis. For credit risk management, the current exposure method is applied for risk control, by
setting credit lines by counterparty.
Regarding the organizational structure, the Bank clearly segregates back-office work from front-office work. Furthermore, theBank has established middle-office sections to ensure that thesystem of checks and balances works effectively.
(6) Supplementary Explanation of Quantitative Information: The
contract amounts presented are the notional contract amounts
or the principal for calculation purpose. Accordingly, they do not
represent the actual market risk exposure relating to all derivative
positions.

(b) Interest-rate derivatives
Millions of yen
Contract amounts
Total Over 1 year

March 31, 2009Marketvalue

Unrealized
gain (loss)

—
—

¥ —
—

¥ —
—

—
—

—
—

—
—

—
—

—
—

—
—

37,752343

343

37,752

(137)

(137)

—

—

—

—
—

—
—

—
—

2,946
2,946

(5)
5

115
(59)

3,770
3,770

(115)
115

87
115

—
—
—

—
—
¥ 205

—
—
¥465

Millions of yen
Contract amounts
MarketTotal Over 1 year value

Unrealized
gain (loss)

Transactions listed on exchanges:
Interest-rate futures:¥—
Sold
Bought—Interest-rate options:
Sold—
Bought—Over-the-counter transactions:
Forward rate agreements:—
Sold
Bought—Interest-rate swaps:
Receivable fixed/
116,419
payable floating
Receivable floating/
116,419
payable fixed
Receivable floating/—payable floating
Interest-rate options:
Sold—
Bought
—
Caps:
3,734
Sold
Bought3,734
Swaption:
40,700
Sold
Bought40,700
Others:—Sold
Bought—Total¥—

March 31, 2008¥¥

Transactions listed on exchanges:
Interest-rate futures:
Sold
¥
— ¥
—
Bought——Interest-rate options:
Sold——
Bought——Over-the-counter transactions:
Forward rate agreements:
Sold——
Bought——Interest-rate swaps:
Receivable fixed/
payable floating
103,942
35,749Receivable floating/payable fixed
103,942
35,749Receivable floating/payable floating——
Interest-rate options:
Sold——
Bought
—
—
Caps:
Sold
4,601
3,231
Bought4,601
3,231
Swaption:
Sold36,100
4,483
Bought36,100
4,483
Others:Sold——
Bought
—
—

Total

¥

— ¥

—

¥ —
—

¥

—
—

—
—

—
—

—
—

—
—

163

163

35

35

—

—

—
—

—
—

(12)
12

110
(49)

(104)
103

102
103

—
—

—
—

¥198

¥467

39

Notes: 1. The transactions in this table have been revalued at the market rate prevailing on the balance sheet date, and unrealized gain (loss) is
accounted for in the consolidated statements of income. Derivatives
which qualify as hedges have been excluded from this table.
2. Calculation of market value
The market value of transactions listed on exchanges has been
calculated on the basis of the closing prices on the Tokyo International
Financial Exchange, etc. The market value of over-the-counter transactions has been calculated at their discounted present value or by utilizing
calculation models for options prices.

(d) Stock Derivatives
Not applicable as of March 31, 2009 and 2008.

(e) Bond Derivatives

March 31, 2009
Listed:Millions of yen
Contract amounts
MarketTotal Over 1 year value

Unrealized
gain (loss)

Bond futures:(c) Currency Derivatives
Millions of yen
Contract amounts
MarketTotal Over 1 year value

March 31, 2009

Listed:Currency futures:
Sold
BoughtCurrency options:
Sold
BoughtOver-the-counter transactions:
Currency swaps
Forward foreignexchange contracts:
Sold
BoughtCurrency options:
Sold
BoughtOthers:Sold
Bought
Total

¥

— ¥
—
—
—

—
—

¥

—
—

—
—

—
—

—
—
—
—

774,202635,443

1,188

1,188

6,367
6,581

1,805
1,739

576
(476)

576
(476)

3,161
3,161

1,918
1,918

(188)
189

(100)
154

¥

—
—
— ¥

—
—
—

—
—
¥1,287

Millions of yen
Contract amounts
MarketTotal Over 1 year value

¥

¥

— ¥
—

—
—

¥

—
—

—
—
¥1,341

¥—

¥ 1

¥ 1

—

—

—

—

Sold

—

—

—

—

Bought

—

—

—

—

Sold

—

—

—

—

Bought

—

—

—

—

Sold

—

—

—

—

Bought

—

—

—

—

Total

¥ —

¥—

¥ 1

¥ 1

Bond future options:

Unrealized
gain (loss)

¥

—
—

—
—

—
—

—
—

—
—

657,902635,524

1,404

1,404

¥

12,18016,168

2,763
2,358

(156)
157

(156)
157

7,156
7,156

2,672
2,672

(264)
265

(113)
166

—
—
—

—
—
¥1,405——¥1,458——— ¥2. Calculation of market valueMarket value is calculated at discounted present value, etc.

Bond options:

Others:March 31, 2008
Listed:Millions of yen
Contract amounts
MarketTotal Over 1 year value

Unrealized
gain (loss)

Bond futures:
Sold

¥556

¥—

¥ (5)

¥ (5)

Bought

—

—

—

—

Sold

—

—

—

—

Bought

—

—

—

—

Sold

—

—

—

—

Bought

—

—

—

—

Sold

—

—

—

—

Bought

—

—

—

—

Total

¥ —

¥—

¥ (5)

¥ (5)

Bond future options:Over-the-counter transactions:

Notes: 1. The transactions in this table have been revalued at the market rate prevailing on the balance sheet date, and unrealized gain (loss) is
accounted for in the consolidated statements of income. Derivatives
which qualify as hedges have been excluded from this table.

40

¥277

BoughtOver-the-counter transactions:

March 31, 2008

Listed:Currency futures:
Sold
BoughtCurrency options:
Sold
BoughtOver-the-counter transactions:
Currency swaps
Forward foreignexchange contracts:
Sold
BoughtCurrency options:
Sold
BoughtOthers:Sold
BoughtTotal

Unrealized
gain (loss)

Sold

Bond options:

Others:

Notes: 1. The transactions described above are marked to market, and the unrealized gains and losses are charged to income. Derivatives under hedge
accounting are excluded from the above tables.
2. Calculation of fair market value
Financial derivatives listed on securities exchanges are stated using theclosing prices on the Tokyo Stock Exchange as of the balance sheet date,
and those traded over the counter are stated using discounted present
value or option price calculation models.

(f) Commodity Derivatives
Not applicable as of March 31, 2009 and 2008.

(g) Credit Derivatives
Not applicable as of March 31, 2009 and 2008.

27. Stock Options
No expenses related to the grant of stock options were recorded for the
fiscal years ended March 31, 2009 and 2008.

28. Related-Party Transactions
No material transactions occurred with major individual shareholders for the fiscal year ended March 31, 2009.
For the year ended March 31, 2008, material transactions with major individual shareholders are as follows:
Nature of relationship
Relationshipwiththe Bank

Name

Location

A company in Usui Setsubi Hitachi-Omiya,which majority Kogyo Co. Ltd. Ibaraki Pref.
voting rights
are held byrelatives of adirector of theBank

Paid-in capital(Millions of yen)

Businessline

Voting rights
ownership (%)

10

Hygiene facility
installation forwater supply
and wastewater treatment—

Directors
and statutory
auditors

Businesstie-ups

Details oftransaction

NotapplicableNot
applicable

Lending of
money

—

Guarantees

1

Transaction
amount(Millions of yen)

Year-endbalance(Millions of yen)Accounting
title
Loans
receivable

10

Acceptancesand guarantees

1

Policies on, and terms and conditions of, the transaction
Interest is reasonably determined in a manner similar to ordinary transactions, taking into account the prevailing market interest rates. The loan period
shall not exceed 5 years. Repayment of principal shall be made on a straight-line basis every month or in lump-sum on the due date. However, repayment before the due date shall be allowed.
Nature of relationship
Relationshipwiththe Bank
A company inwhich majority
voting rights
are held byrelatives of adirector of the
Bank

Name

Location

Rarara Ltd.

Mito,
Ibaraki Pref.

Paid-in capital(Millions of yen)

Businessline

Voting rights
ownership (%)

3

Beauty salon—

Directors
and statutory
auditors

Businesstie-ups

Details oftransaction

NotapplicableNot
applicable

Lending ofmoneyTransaction
amount(Millions of yen)—Accounting
title
Loans
receivable

Year-endbalance(Millions of yen)
4

Policies regarding, and terms and conditions of, the transaction
Interest is reasonably determined in a manner similar to ordinary transactions, taking into account the prevailing market interest rates. The loan period is
5 years. Repayment of principal shall be made on a straight-line basis every month.
Note: For the year ended March 31, 2009 and 2008 the Bank has made no related-party transactions with parties falling into categories of parent, subsidiaryand sister companies, and major corporate shareholders.
(Additional information)
Effective from the reporting period, the Bank has applied the Accounting Standards for Disclosure of Related Parties (ABSJ Statement No. 11, issued on
October 17, 2006) and Guidance on the Application of Accounting Standards for Disclosure of Related Parties (ASBJ Guidance, issued on October 17,2006) to its settlement of accounts.

29. Per-share Data
Yen
March 31,

Net assets per share
Earnings per share-basic
Earnings per share-diluted

2009

2008

¥483.216.62—¥549.34
17.55
17.54

Note: Bases for calculation of earnings per share (basic and diluted) are as follows:

Millions of yen
2009
2008

March 31,
Earnings per share
Net income
Earnings not available to common shareholders
Net income after deduction of the portion described above
Weighted average number of common shares for the fiscal year (in thousands)

¥

5,178

¥ 13,924

—

—

5,178

13,924

781,137

793,419

Diluted earnings per share
Adjustment to net income——

Increase in common shares (in thousands)
Of which, acquisition of own shares under stock option pursuant to provisions in Article 210-2,
Paragraph 2 of the Commercial Code (in thousands)

—

29

—

29

Share warrants that have no dilutive effects on earnings per share

—

—

41

42

F

I

N

A

N

C

I

A

L

S

T

A

T

E

M

E

N

T

S

Non-Consolidated Balance Sheets (Unaudited)
THE JOYO BANK, LTD.

March 31,

AssetsCash and due from banks
Call loans and bills purchased
Commercial paper and other debt purchased
Trading assets
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Reserve for devaluation of investment securities
Total assets
Liabilities and shareholders’ equity
Liabilities:
Deposits
Call money and bills soldPayables under securities lending transactions
Trading liabilities
Borrowed money
Foreign exchanges
Bonds
Due to trust account
Other liabilities
Reserve for employees’ retirement benefits
Reserve for bonuses to directors and corporate auditors
Reserve for reimbursement of dormant deposits
Reserve for frequent users services
Reserve for other contingent losses
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
Net assets:
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Unrealized gains on other securities
Deferred losses on hedging instruments, net of taxes
Land revaluation excess
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

Millions of yen
2009
2008

Thousands of
U.S. dollars
2009¥ 178,906
26,72954,063
9,578—
1,980,906
4,945,900
1,316
59,88886,1986,871
53,39828,552(30,423)(48)¥7,401,837¥ 136,038
3,885
65,725
26,0633,281
2,306,788
4,669,468
1,037
58,77582,892
8,150
15,13528,363(34,293)(48)¥7,371,265$ 1,821,300
272,109550,379
97,509—20,165,999
50,350,199
13,398609,680
877,51269,949543,608
290,671(309,721)(492)$75,352,105¥6,666,778
111,947
73,649270
74,000185
15,00014
40,688
3,853
721
1,333
70
1,623
12,86728,5527,031,557¥6,405,962
162,682
166,230
203
64,000303
15,00017
81,072
3,831
635
1,223
61
1,093
12,921
28,363
6,943,603$67,869,066
1,139,646
749,7672,749
753,334
1,886
152,702146
414,218
39,2297,343
13,577717
16,532130,996
290,671
71,582,586

85,11358,574
253,940(28,032)
369,595(6,500)(1,868)9,052
684
370,279¥7,401,837

85,11358,574
255,169(22,899)375,957
43,704(1,130)9,132
51,705
427,662¥7,371,265

866,467596,294
2,585,167(285,380)
3,762,548(66,173)(19,016)
92,1606,970
3,769,518$75,352,105

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥98.23 to US$1.00 on March 31, 2009.

43

F

I

N

A

N

C

I

A

L

S

T

A

T

E

M

E

N

T

S

Non-Consolidated Statements of Income (Unaudited)
THE JOYO BANK, LTD.

Millions of yen
2009
2008

Years ended March 31,

Income:Interest income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Trading income
Other operating income
Other income
Total income
Expenses:
Interest expenses:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expenses
Fees and commissions
Other operating expenses
General and administrative expenses
Other expenses
Total expenses
Income before income taxes
Income taxes:
Current
Deferred
Net income
Per share (in yen and dollars):
Net income
Cash dividends applicable to the year

¥ 97,721
31,4701,456
20,319558
3,913
19,581
175,022¥ 96,117
46,5892,603
22,320474
23,148
16,225
207,479$ 994,824
320,378
14,831
206,851
5,688
39,845
199,342
1,781,762

16,571
3,428
5,076
7,606
42,631
74,03323,607
172,955
2,067

17,232
8,658
11,7807,707
47,25872,087
18,210182,935
24,543

168,697
34,90551,676
77,433433,998
753,675
240,328
1,760,716
21,046

2,142(5,127)¥ 5,051

12,859(1,256)¥ 12,940$

21,815(52,194)
51,426

¥

¥

$

6.46
8.00

16.30
8.00

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥98.23 to US$1.00 on March 31, 2009.

44

Thousands of
U.S. dollars
2009

0.06
0.08

F

I

N

A

N

C

I

A

L

S

T

A

T

E

M

E

N

T

S

Non-Consolidated Statements of Changes in Net Assets (Unaudited)
THE JOYO BANK, LTD.
Thousands of
U.S. dollars

Millions of yen
Years ended March 31,

2009

2008

Shareholders’ equity
Common stock
Balance at end of the previous year
Changes during the year
Balance at end of the current year

¥85,113—¥85,113¥85,113—¥85,113$866,467—$866,467

Capital surplus
Capital reserve
Balance at end of the previous year
Changes during the year
Balance at end of the current year

¥58,574—¥58,574¥58,574—¥58,574$596,294—$596,294

¥

—

¥

—

$

—

¥

—
—
—
—

¥

0
0
—
—

$

—
—
—
—

Other capital surplus
Balance at end of the previous year
Changes during the year:
Disposal of treasury stock
Retirement of treasury stock
Total changes during the year
Balance at end of the current year

2009

Total capital surplus
Balance at end of the previous year
Changes during the year:
Disposal of treasury stock
Retirement of treasury stock
Total changes during the year
Balance at end of the current year

¥58,574¥58,574$596,294———¥58,57400—¥58,574———$596,294

Retained earnings
Legal reserve
Balance at end of the previous year
Changes during the year
Balance at end of the current year

¥55,317—¥55,317¥55,317—¥55,317$563,138—$563,138

¥

115

¥

115

$

1,179

¥

140
(1)
139
254

¥

—
—
—
115

$

1,434
(19)
1,415
2,594

¥

140

¥

—

$

1,434

¥

—
(140)
(140)
—

¥

140
—
140
140

$

—
(1,434)(1,434)—

Reserve for dispositions of fixed assets
Balance at end of the previous year
Changes during the year:
Transfer to reserve for disposition of fixed assets
Transfer from reserve for disposition of fixed assets
Total changes during the year
Balance at end of the current year
Special reserve for disposition of fixed assets
Balance at end of the previous year
Changes during the year:
Transfer to special reserve for disposition of fixed assets
Transfer from special reserve for disposition of fixed assets
Total changes during the year
Balance at end of the current year45

Years ended March 31,

Voluntary reserve
Balance at end of the previous year
Changes during the year:
Transfer to voluntary reserve
Total changes during the year
Balance at end of the current year
Earned surplus brought forward
Balance at end of the previous year
Changes during the year:
Cash dividends
Net income
Transfer from reserve for disposition of fixed assets
Transfer to special reserve for disposition of fixed assets
Transfer to voluntary reserve
Disposal of treasury stock
Retirement of treasury stock
Transfer from land revaluation excess
Total changes during the year
Balance at end of the current year
Total retained earnings
Balance at end of the previous year
Changes during the year:
Cash dividends
Net income
Disposal of treasury stock
Retirement of treasury stock
Transfer from land revaluation excess
Total changes during the year
Balance at end of the current year
Treasury stock
Balance at end of the previous year
Changes during the year:
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total changes during the year
Balance at end of the current year

Millions of yen
2009
2008

¥185,432¥173,432$1,887,732

3,000
3,000
¥188,432

12,00012,000¥185,432

30,54030,540$1,918,273¥ 14,163¥ 28,102$ 144,188(6,262)5,051
1—(3,000)(96)—
79(4,226)¥ 9,936(5,970)12,940—(140)(12,000)—(8,901)
134(13,938)¥ 14,163(63,752)
51,42619—(30,540)
(987)
—
806
(43,027)$ 101,160¥255,169¥256,967$2,597,673(6,262)
5,051
(96)
—
79
(1,228)¥253,940(5,970)12,940—(8,901)134(1,797)¥255,169(63,752)
51,426(987)—
806(12,506)$2,585,167¥ (22,899)¥ (22,403)$ (233,119)(5,602)468—(5,133)¥ (28,032)(9,482)
83
8,901
(496)
¥ (22,899)(57,031)
4,771—(52,260)$ (285,380)

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥98.23 to US$1.00 on March 31, 2009.

46

Thousands of
U.S. dollars
2009Millions of yen
2009
2008

Yeasr ended March 31,

Total shareholders’ equity
Balance at end of the previous year
Changes during the year
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer from land revaluation excess
Total changes during the year
Balance at end of the current year
Valuation and translation adjustments
Unrealized gains (losses) on available-for-sale securities
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Deferred losses on hedging instruments, net of taxes
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Land revaluation excess, net of taxes
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Total valuation and translation adjustments
Balance at end of the previous year
Changes during the year:
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year
Total net assets
Balance at end of the previous year
Changes during the year:
Cash dividends
Net income
Purchase of treasury stock
Disposal of treasury stock
Transfer from land revaluation excess
Net changes in items other than shareholders’ equity
Total changes during the year
Balance at end of the current year

Thousands of
U.S. dollars
2009¥375,957¥378,251$3,827,315(6,262)
5,051(5,602)371
79(6,362)¥369,595(5,970)12,940(9,482)84
134(2,293)¥375,957(63,752)
51,426(57,031)3,783
806(64,767)$3,762,548¥ 43,704¥128,905$ 444,915(50,204)(50,204)¥ (6,500)(85,201)(85,201)¥ 43,704(511,089)(511,089)$ (66,173)¥ (1,130)¥$(11,512)

(737)
(737)
¥ (1,868)

(339)
(339)
¥ (1,130)$(7,503)(7,503)(19,016)

¥

9,132

¥

9,266

$

92,967

¥

(79)
(79)
9,052

¥

(134)
(134)
9,132

$

(806)
(806)
92,160(791)¥ 51,705¥137,380$ 526,369(51,020)(51,020)¥684(85,675)(85,675)¥ 51,705(519,399)(519,399)$
6,970¥427,662¥515,631$4,353,685(6,262)
5,051(5,602)371
79(51,020)(57,382)¥370,279(5,970)12,940(9,482)84134(85,675)(87,969)¥427,662(63,752)
51,426(57,031)3,783
806(519,399)(584,166)$3,769,518

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥98.23 to US$1.00 on March 31, 2009.

47

Organization
The JOYO BANK, LTD.
Internal Administration Group
Corporate Audit DivisionCorporate Risk Management Division
Credit Risk Management Office
General Meeting of
Shareholders

Legal and Compliance Office
Corporate Planning Division
Group Management Office

Board of Corporate Auditors

Publicity Office

Corporate Auditors

Tokyo Sub-Headquarters
Personnel Division

Board of Directors

Staff Counseling Office
Executive Secretariat
General Affairs Division

Executive Officer Committee

Credit Risk Management Group
Credit Examination Division
Loan Supervision Office
Company Management Support Office
Operation Systems GroupOperation Planning Division
Data Processing Center
Area Data Processing Center
Computer System Division
Business Headquarters
Business Planning Division
Overseas Representative Office (Shanghai)
Insurance Business Office
Hokuto District Business Division
Customer Services Division
Customer Counceling Office
Retail Banking Business Group
Retail Banking Division
Custody Business Promotion OfficeCall Center
Loan Operation Center
Consumer Finance Center
Living and Business Consulting Center
Pension Business Promotion Center
Corporate Banking Business Group
Corporate Banking Business Division
Business Information Support Office

Head Office
Tokyo Business Division (Tokyo Main Office)146 Branches, 26 Sub-branches

Quick Business Center
Area Corporate Business Division
Public Business Group
Government and Municipal Business DivisionMarket Business Group
Treasury and Securities DivisionMarkets and Business Administration Division
Securities Business OfficeInternational Business Office48

International Operations Office

As of June 26, 2009

Board of Directors and Corporate Auditors

ChairmanIsao Shibuya
President
Kunio Onizawa
Senior Managing Director
Yoshiyuki Miyanaga
Kazuyoshi Terakado

Managing Directors
Takao Tateno
Mikio Kawamata
Toru Hakata
Toshihisa Suzuki
Katsumi Tomita
Shigeru Ichimura
Directors
Toshihiko Kawamura (outside)
Ryuzaburo Kikuchi (outside)

Corporate Auditors
Kyohei Tomita (standing)
Yoshiaki Terakado (standing)
Akira Yasu
Sanenori Hitomi
Toshio Mizushima

As of June 26, 2009Market Business Group and Overseas Office■ Head Office5-5, Minami-machi 2-chome, Mito,
Ibaraki 310-0021, Japan
Phone: 029-231-2151■ Market Operations
Managing Director
Toru Hakata■ Markets and Business Administration
Division
7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-1741
General Manager
Jun Kawauchi
Advisory officer
Osato Aizawa• Operations Group (Tokyo)
Senior Manager
Hitoshi Gotou■ International Business Office
5-5 Minami-machi 2-chome, Mito,
Ibaraki 310-0021, Japan
Phone: 029-300-2727■ International Operations Office3-3, Shinhara 1-chome, Mito,
Ibaraki 310-0045, Japan
Phone: 029-255-6671
Telex: J23278 JOYOBANK3632105 JOYOBKSwift: JOYOJPJTGeneral Manager
Akihiko Hashimoto■ Shanghai Representative Office(Business Planning Division)
Room 1901, Shanghai International Trade
Centre, 2201 Yan An Road (West),
Shanghai 200336 P.R. of China
Phone: 86-21-6209-0258
Chief Representative
Katsunori Suzuki
Deputy Chief Representative
Hisanori Sonobe■ Treasury and Securities Division
7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-5245
General Manager
Fuminori Nakajima
Deputy General Manager
Masahide Takauchi• Investment GroupManager
Fujiro Iitsuka• Business Promotion GroupManager
Hiroshi Iijima

Chief Officer

Masayuki Ogawa

49

Service Network

Miyagi Pref. (1 Branch)
Mito (Head Office, International Business Office,International Operations Office)Ibaraki Pref. (Head Office, 119 Branches,
24 Sub-Branches)
Fukushima Pref. (10 Branches)
Tochigi Pref. (5 Branches, 1 Sub-Branch)

Overseas:
Shanghai Representative Office
As of March 31, 2009

Chiba Pref. (Tokatsu Wholesale office,5 Branches, 1 Sub-Branch)
Tokyo (Tokyo Business Div. (Tokyo Main Office), 3 Branches)
Treasury and Securities Div.
Markets and Business Administration Div.
Saitama Pref. (2 Branches)
Osaka Pref. (1 Branch)

Affiliated Companies■ The Joyo Computer Service Co., Ltd.

■ The Joyo Business Service Co., Ltd.

16-25, Nishihara 2-chome, Mito, Ibaraki
Established 1973, Capital Stock: ¥47.5 million
Share of Voting Rights: 5%

8-1, Sasano-machi 1-chome, Hitachinaka, Ibaraki
Established 1984, Capital Stock: ¥100 million
Share of Voting Rights: 100%

Sale of software and contract of calculation
businesses

Agent in charge of administrative work for the
Bank■ The Joyo Lease Co., Ltd.
4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1974, Capital Stock: ¥100 million
Share of Voting Rights: 5%

Leasing of machinery and equipment, claim
acquisition■ The Joyo Credit Guarantee Co., Ltd.
4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1978, Capital Stock: ¥30 million
Share of Voting Rights: 5%

Credit guarantee of housing loans from theBank■ The Joyo Credit Co., Ltd.
4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1982, Capital Stock: ¥100 million
Share of Voting Rights: 5%

Credit card services
50■ The Joyo Industrial Research Institute,Ltd.
5-18, Sannomaru 1-chome, Mito, Ibaraki
Established 1995, Capital Stock: ¥100 million
Share of Voting Rights: 5%

Consulting, investigation and research■ The Joyo Equipment Management
Co., Ltd.
5-5, Minami-machi 2-chome, Mito, Ibaraki
Established 1999, Capital Stock: ¥100 million
Share of Voting Rights: 100%

Maintenance and management of operational properties and equipment of the
Bank■ The Joyo Cash Service Co., Ltd.
3-3, Jonan 1-chome, Mito, Ibaraki
Established 1999, Capital Stock: ¥50 million
Share of Voting Rights: 100%

Management and maintenance of ATMs and
CDs■ The Joyo Securities Co., Ltd.
4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 2007, Capital Stock: ¥3,000 million
Share of Voting Rights: 100%

Dealing of securities, mediation, commission
and substitution of trading of securities

As of March 31, 2009

Corporate Data

Date of Establishment

July 30, 1935

Head Office5-5, Minami-machi 2-chome, Mito, Ibaraki 310-0021, Japan
Phone: 029-231-2151
URL: http://www.joyobank.co.jp/
http://www.joyobank.co.jp/joyobank/eng/ (English Page)

Domestic Network

Head Office, Tokyo Business Division (Tokyo Main Office), and
146 Branches, 26 Sub-branches

Overseas Network

1 Representative Office: Shanghai

Number of Employees

3,586

Stock Exchange Listing

Tokyo Stock Exchange

Paid-in Capital¥85,113 million

Number of Shares(as of March 31, 2009)

Authorized
Issued and Outstanding

Number of Shareholders(1 trading unit = 1,000 shares)

22,766

Principal Shareholders

The 10 largest shareholders of the Bank and their respective
shareholdings at March 31, 2009 were as follows:

2,167,515 thousand
822,231 thousand

Number of Shares Percentage of Total
Held
SharesOutstanding(Thousands)(%)

Northern Trust Company (AVFC) Sub Account American Client ..............

44,616

5.42%

The Bank of Tokyo-Mitsubishi UFJ, Ltd. ................................................

37,992

4.62

NIPPONKOA Insurance Company, Ltd. .................................................

37,973

4.61

Japan Trustee Services Bank, Ltd. (Trust Account 4G) ...........................

34,876

4.24

Nippon Life Insurance Company .............................................................

28,003

3.40

Japan Trustee Service Bank, Ltd. (Trust Account)...................................

22,356

2.71

The Dai-ichi Mutual Life Insurance Company ..........................................

17,0492.07

Sumitomo Life Insurance Company ........................................................

16,4482.00

The Master Trust Bank of Japan, Ltd. (Trust Account) ............................

13,026

1.58

Northern Trust Company (AVFC) US Tax Exempted Pension Funds .......

12,767

1.55

Total ..................................................................................................

265,10732.24%
As of March 31, 2009

For further information,please write to:Markets and Business
Administration Division,
The Joyo Bank, Ltd.
7-2, Yaesu 2-chome,
Chuo-ku, Tokyo
104-0028, Japan

51