February 14, 2019

SURUGA bank, Ltd.
Consolidated financial results for the nine months ended December 31, 2018
<under Japanese GAAP>
Stock exchange listings: Tokyo (code: 8358)
URL:
https://www.surugabank.co.jp
Representative:
Michio Arikuni, President(Amounts and percentages are rounded down to the nearest million yen and first decimal places, respectively.)

1. Consolidated financial results for the nine months ended December 31, 2018
(1) Consolidated operating results(% represents the change from the same period in the previous fiscal year)

Ordinary income
Nine months ended
December 31, 2018
December 31, 2017

Millions of yen

109,046
117,609

Profit attributableto owners of parent

Ordinary profit%

Millions of yen

(7.2)
8.9

(78,901)
50,689%Millions of yen

14.3

%

(96,165)
34,716

9.4(Note) Comprehensive income: (a) Nine months ended December 31, 2018: ¥ (103,314)million [ - %](b) Nine months ended December 31, 2017:¥38,832 million [19.0%]

Earnings per share(diluted)

Earnings per share
Nine months ended
December 31, 2018
December 31, 2017

yen

yen

(415.13)149.88149.85(2) Consolidated financial position
Total assets
As ofDecember 31, 2018
March 31, 2018

Total net assets

Net assets ratio

Millions of yen

Millions of yen

3,486,539
4,461,576

238,941
344,763

%

6.8
7.6

(Reference) Shareholders’ equity: (a) As of December 31, 2018: ¥237,873 million; (b) As of March 31, 2018: ¥342,667 million(Note) Net assets ratio = {(Total net assets - Subscription rights to shares - Non-controlling interests) / Total assets} × 100
This ratio is not calculated based on the “Capital Adequacy Ratio Notification”.

2. Dividends on common stockst

1 quarter-end

Fiscal year
ended March 31, 2018
ending March 31, 2019
ending March 31, 2019 (forecast)

Dividends per share
2 quarter-end 3rd quarter-end Fiscal year-end
nd

yen

yen

10.50
0.00

―
―

yen

yen

Total
yen

10.50

21.00

-（not decided）-（not decided）――(Note) Revision of dividend forecast from the latest announcement: No

3. Consolidated earnings forecast for the fiscal year ending March 31, 2019(% represents the change from the previous fiscal year)

Profit attributableto owners of parent

Ordinary profit
Fiscal year ending
March 31, 2019

Earnings per share

Millions of yen%

Millions of yen%(75,500)-(97,500)-(Note) Revision of earnings forecast from the latest announcement: No

yen(420.89)

*Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries that caused changes in the scope of
consolidation): No(2) Adoption of any particular accounting methods for quarterly consolidated financial statements: Yes
Note: For details, please refer to page 6 of the appendix “2. Consolidated financial statements and notes, (3) Notes regarding
consolidated financial statements, (Adoption of any particular accounting methods for quarterly consolidated financial
statements)”.
(3) Changes in accounting policies, changes in accounting estimates and restatements(A) Changes in accounting policies due to revision of accounting standards: No(B) Changes in accounting policies due to reasons other than (A): No(C) Changes in accounting estimates: No(D) Restatements: No(4) Number of issued shares (common stock)(A) Number of issued shares
As of(including treasury shares):December 31, 2018
As of(B) Number of treasury shares:
December 31, 2018
Nine months ended(C) Average number of shares:
December 31, 2018

232,139,248 shares
488,100 shares
231,647,945 shares

As ofMarch 31, 2018
As ofMarch 31, 2018
Nine months ended
December 31, 2017

232,139,248 shares
507,295 shares
231,617,829 shares(Note) This report is outside the scope of the external auditor’s quarterly review procedure.

(Note) Explanation on appropriate use of forecast and other special items
The performance forecasts and other forward-looking statements in this report are based on information currently available to thecompany and on certain assumptions deemed to be reasonable, and are not intended to guarantee future performance. Actual
performance may differ materially depending on various factors.

SURUGA bank, Ltd.

(Appendix)

Table of contents
1. Qualitative information on financial results...........................................................................................2(1) Details of operating results ............................................................................................................2(2) Details of financial position ...........................................................................................................2(3) Details of forecast information, including earnings forecast .......................................................2
2. Consolidated financial statements and notes .........................................................................................3(1) Consolidated balance sheets ..........................................................................................................3(2) Consolidated statements of income and Consolidated statements of comprehensive income ................4(3) Notes regarding consolidated financial statements ......................................................................6(Notes on going-concern assumption).............................................................................................6(Notes for material changes in shareholders’ equity) .....................................................................6(Adoption of any particular accounting methods for quarterly consolidated financial statements)...........6(Changes in accounting policies, changes in accounting estimates and restatements) .................6* Financial results for the nine months ended December 31, 2018 supplementary information ............7- 1-

SURUGA bank, Ltd.

1. Qualitative information on financial results(1) Details of operating results
As for the consolidated operating results for the nine months ended December 31, 2018, ordinary income
decreased by ¥8.563 billion year-on-year to ¥109.046 billion. This was primarily due to the decline in interest
income reflecting the drop in interest on loans and bills discounted. Meanwhile, ordinary expenses increased by¥121.028 billion year-on-year to ¥187.948 billion, mainly due to an increase in credit costs related to sharehouse loans, etc. As a result, ordinary profit decreased by ¥129.59 billion year-on-year to a loss of ¥78.901
billion. Profit attributable to owners of parent decreased by ¥130.881 billion year-on-year to a loss of ¥96.165
billion, mainly owing to the fact that reversal of provision for directors’ retirement benefits of ¥2.311 billion
was posted in extraordinary gains, and impairment losses of fixed assets of ¥2.595 billion were posted in
extraordinary losses.

(2) Details of financial position
As for the consolidated major account balances as of December 31, 2018, loans and bills discounted came in at¥2,973.639 billion, down by ¥274.52 billion from March 31, 2018. This was primarily due to the decrease(¥199.889 billion) in consumer loans (non-consolidated).
Securities amounted to ¥130.543 billion, down by ¥0.994 billion from March 31, 2018.
Deposits amounted to ¥3,221.276 billion, down by ¥858.696 billion from March 31, 2018, mainly due to adecrease (¥603.089 billion) in individual deposits.

(3) Details of forecast information, including earnings forecast
The earnings forecast for the fiscal year ending March 31, 2019 remains unchanged from that announced on
November 14, 2018.
Consolidated

Ordinary profit
Profit attributable toowners of parent
Non-consolidated

Net operating profit
Core net operating profit
Ordinary profit
Net income(Billions of yen)
Fiscal year ending
March 31, 2019(75.5)(97.5)(Billions of yen)
Fiscal year ending
March 31, 2019
16.5
52.0
(76.0)(97.0)

Actual credit costs

134.0(Note) The performance forecasts and other forward-looking statements in this report are based on information
currently available to the company and on certain assumptions deemed to be reasonable, and are notintended to guarantee future performance. Actual performance may differ materially depending on
various factors.

- 2-

SURUGA bank, Ltd.

2. Consolidated financial statements and notes(1) Consolidated balance sheets
As ofMar. 31, 2018
AssetsCash and due from banks
Call loans and bills bought
Trading account securities
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Lease receivables and investment assets
Other assets
Tangible fixed assets
Intangible fixed assets
Net defined benefit asset
Deferred tax assets
Customers' liabilities for acceptances and guarantees
Allowance for loan losses
Total assets
Liabilities
Deposits
Borrowed money
Foreign exchanges
Other liabilities
Provision for bonuses
Provision for directors' bonuses
Net defined benefit liability
Provision for directors' retirement benefits
Provision for reimbursement of deposits
Provision for contingent losses
Deferred tax liabilities
Acceptances and guarantees
Total liabilities
Net assets
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Net unrealized gains (losses) on available-for-sale securities
Deferred gains (losses) on hedges
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets- 3-（Millions of yen）
As of
Dec. 31, 2018

973,397
2,141
86
1,571
131,537
3,248,159
2,514
5,995
65,07652,12027,111
10,50916,6952,877(78,218)
4,461,576

403,317280
166
458
130,5432,973,639
2,416
6,318
70,09848,94825,475
11,39515,301
2,743(204,563)
3,486,539

4,079,972
1,085
23
28,300
699
182
265
2,507
365
137
396
2,877
4,116,813

3,221,276
815
63
21,419
11
273
233
189
105
467
2,743
3,247,598

30,043489
292,841(582)
322,791
18,489(15)
1,402
19,876
172,078
344,763
4,461,576

30,043
1,176
194,243(560)
224,903
11,765(26)
1,231
12,96912
1,055
238,9413,486,539

SURUGA bank, Ltd.

(2) Consolidated statements of income and Consolidated statements of comprehensive income
Consolidated statements of income
For the nine months
ended
Dec. 31, 2017
117,609
99,194
94,213
3,918
10,083
3,039
5,293
66,9202,942
2,776
11,3172,484
39,43910,736
50,68999425
425
50,273
15,391
34,881
165
34,716

Ordinary income
Interest income
Interest on loans and bills discounted
Interest and dividends on securities
Fees and commissions
Other operating income
Other income
Ordinary expenses
Interest expenses
Interest on deposits
Fees and commissions payments
Other operating expenses
General and administrative expenses
Other expenses
Ordinary profit
Extraordinary gains
Gains on disposal of non-current assets
Reversal provision for directors' retirement benefits
Extraordinary losses
Losses on disposal of non-current assets
Impairment loss
Income before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent- 4-（Millions of yen）
For the nine months
ended
Dec. 31, 2018
109,046
86,336
84,533
1,306
9,053
3,139
10,517
187,948
1,626
1,384
10,403
2,269
38,684
134,964(78,901)
2,311
0
2,311
2,842
247
2,595
(79,432)
16,820(96,252)(87)(96,165)SURUGA bank, Ltd.

Consolidated statements of comprehensive income

ProfitOther comprehensive income
Net unrealized gains (losses) on available-for-sale securities
Deferred gains (losses) on hedges
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests- 5-

For the nine months
ended
Dec. 31, 201734,881（Millions of yen）
For the nine months
ended
Dec. 31, 2018
(96,252)

3,784
1
164
3,950
38,832(6,878)(11)(171)(7,062)(103,314)

38,561
270(103,072)(242)

SURUGA bank, Ltd.

(3) Notes regarding consolidated financial statements(Notes on going-concern assumption)
Not applicable.

(Notes for material changes in shareholders’ equity)
Not applicable.

(Adoption of any particular accounting methods for quarterly consolidated financial statements)(Calculation of income taxes)
Income taxes reported by the company and its subsidiaries are calculated by multiplying income before
income taxes for the nine months ended December 31, 2018 with the reasonably estimated effective tax rate
after applying tax effect accounting to income before income taxes for the fiscal year ending March 31, 2019,
including the current third quarter.
In addition, in the case that calculating income taxes using the estimated effective tax rate significantly lackrationality, income taxes are calculated by using the statutory effective tax rate.

(Changes in accounting policies, changes in accounting estimates and restatements)
Not applicable.

- 6-

SURUGA bank, Ltd.

Financial Results for the nine months ended December 31, 2018
- Supplementary Information (1) Operating results for the nine months ended December 31, 2018 (Non-consolidated)(Millions of yen)Dec. 31, 2018(a)Dec. 31, 2017(b)(a) - (b)FY3/2018

2018.4.1-12.31

2018.10.1-12.31

2017.4.1-12.31

Gross operating profit
Net interest income
Net fees and commissions
Net other operating income(Gains (losses) on bonds)
Core gross operating profit (Note1)
Expenses
Personnel expenses
Non-personnel expenses

78,29180,822(3,052)521( 492
77,79835,45812,18820,34724,31625,244(937)
9
624,310
11,6383,609
7,160

87,28489,656(2,571)
199
151
87,13335,59913,45618,996(8,993)(8,834)
(481)
322
341
(9,335)(141)(1,268)
1,351

115,171
118,336（3,507）
342
281)
114,890
46,742
17,77725,078Core net operating profit (Note2)

42,34012,671

51,533(9,193)

68,148Actual net operating profit (Note3)
Provision for general allowance forloan losses

42,833

12,677

51,684(8,851)

68,42929,6352,804

444

29,19146,499Net operating profit

13,197

9,872

51,240(38,043)

21,930Non-recurring gains (losses)
Gains (losses) on stocks(90,651)
7,377(3,589)2,041(2,307)3,910(88,344)3,467(13,258)
5,454

Ordinary profit(77,454)

6,283

48,932(126,386)

8,670

Extraordinary gains (losses)
Income before income taxes
Income taxes (Note4)(521)(77,975)
16,104

(98)
6,184
1,984

(407)
48,524
14,897(114)(126,499)
1,207

(414)
8,256
3,032

Net income(94,080)

4,199

33,627(127,707)

5,223(Millions of yen)

Net credit costs (Note5)
Provision for general allowance
for loan losses
Disposal of non-performing
loans
Recoveries of written-off claims

128,747

8,562

6,260

122,487

65,363

29,6352,804

444

29,19146,49999,111

5,757

5,815

93,296

18,864

602

53

635

(33)

1,346

Actual credit costs (Note6)

128,144

8,508

5,624

122,52064,016(Note1) Core gross operating profit = Gross operating profit - Gains (losses) on bonds(Note2) Core net operating profit = Net operating profit + Provision for general allowance for loan losses - Gains (losses) on
bonds(Note3) Actual net operating profit = Net operating profit + Provision for general allowance for loan losses(Note4) Income taxes for the fiscal year ended March 31, 2018 are the amount of Total income taxes.
(Note5) Net credit costs = Provision for general allowance for loan losses + Disposal of non-performing loans(Note6) Actual credit costs = Net credit costs - Recoveries of written-off claims- 7-

SURUGA bank, Ltd.

(A) Gross operating profit： ¥78.2 billion･Net interest income decreased by ¥8.8 billion year-on-year, mainly due to a decrease in interest on loans and bills
discounted.
･Loan-deposit income decreased by ¥8.1 billion year-on-year.
･Gross operating profit decreased by ¥8.9 billion year-on-year.

Net interest income

Loan-deposit income(Billions of yen)(Billions of yen)

74.7

80.5

84.5

89.6

1-3Q,
FY3/15

1-3Q,
FY3/16

1-3Q,
FY3/17

1-3Q,
FY3/18

80.8

72.1

76.3

81.7

84.8

76.7

1-3Q,
FY3/191-3Q,
FY3/15

1-3Q,
FY3/16

1-3Q,
FY3/17

1-3Q,
FY3/181-3Q,
FY3/19(B) Expenses; OHR: 45.2%･Expenses decreased by ¥0.1 billion year-on-year.
･OHR rose year-on-year to 45.2%, mainly due to a decrease in gross operating profit.
(OHR (%) = Expenses / Gross operating profit × 100)

Gross operating profit

Expenses

OHR(Billions of yen)
47.3%
79.3

73.6

43.2%

43.7%
83.4

45.2%

40.7%
78.2

87.2

34.9

34.7

36.1

35.5

35.4

1-3Q, FY3/15

1-3Q, FY3/16

1-3Q, FY3/17

1-3Q, FY3/18

1-3Q, FY3/19(C) Core net operating profit: ¥42.3 billion, Net operating profit: ¥13.1 billion･Core net operating profit decreased by ¥9.1 billion year-on-year, mainly due to a decrease in net interest income.
･Net operating profit decreased by ¥38.0 billion year-on-year, mainly due to an increase in provision for generalallowance for loan losses.

Core net operating profit

Net operating profit(Billions of yen)

38.5

38.7

1-3Q, FY3/15

43.8

44.5

1-3Q, FY3/16

47.1

47.3

1-3Q, FY3/17

51.5

51.2

1-3Q, FY3/18

42.3

13.1

1-3Q, FY3/19(D) Ordinary profit: (¥77.4) billion, Net income: (¥94.0) billion･Ordinary profit decreased by ¥126.3 billion year-on-year, mainly due to an increase in net credit costs.
･Net income decreased by ¥127.7 billion year-on-year, mainly due to a decrease in ordinary profit.

(E) Actual credit costs: ¥128.1 billion･Net credit costs increased by ¥122.4 billion year-on-year, mainly due to an increase (¥29.1 billion) in provision forgeneral allowance for loan losses and an increase (¥93.2 billion) in disposal of non-performing loans.
･Actual credit costs, calculated as net credit costs (¥128.7 billion) minus the amount of recoveries of written-off
claims (¥0.6 billion) amounted to ¥128.1 billion.
- 8-

SURUGA bank, Ltd.

(2) Loans and deposits (Non-consolidated)(A) Loans and bills discounted･Loans and bills discounted decreased by ¥310.2 billion year-on-year.
･Yield on loans and bills discounted (overall) dropped by 25 basis points year-on-year to 3.35%.
(Millions of yen）
Dec. 31, 2018(a)Loans and bills discounted(period-end balance)
Consumer loans
Secured loans
Unsecured loans
Loans and bills discounted(average balance)

Dec. 31, 2017(b)(a) - (b)Mar. 31, 2018

2,968,727(310,270)

3,278,997

3,245,9782,726,102
2,477,929
248,173(243,148)(218,874)(24,274)

2,969,250
2,696,803
272,447

2,925,991
2,654,576
271,414

3,093,742(135,000)

3,228,742

3,229,776(Billions of yen)
Nine months ended
Dec. 31, 2018
New consumer loans

FY3/2018

33.7

353.3

(Reference) Business alliance with Japan Post Bank
Nine months ended
Dec. 31, 201817.2
New housing loans(Billions of yen)
FY3/2018
35.6

Loans and bills discounted (period-end balance)
Consumer loans (period-end balance)

Yield on loans and bills discounted (overall)(Billions of yen)
3,278.9
3,245.9
3,150.4
3,085.8
2,968.7
2,969.2
2,857.3
2,925.9
2,790.8
2,726.1

Dec. 17Mar. 18

Jun. 18

Sep. 18

Dec. 18

- 9-

3.60%

3.61%

3.45%

3.36%

3.35%

Dec. 17Mar. 18

Jun. 18

Sep. 18

Dec. 18

SURUGA bank, Ltd.

Consumer loans
Outstanding balance, yield, delinquency rate by loan category(Billions of yen)Dec. 31, 2018

Sep. 30, 2018

Period-end
balance

Yield

Delinquency
rate

Period-end
balance

Yield

Delinquency
rate

2,477.9

3.31%

3.90%

2,533.3

3.39%

2.77%

Housing loans

636.7

2.89%

0.26%

653.3

2.91%

0.24%

Studio apartment loans

345.1

3.45%

0.66%

362.7

3.47%

0.20%

1,245.0

3.61%

1.15%

1,263.6

3.73%

0.50%

Share house loans

202.0

2.13%

38.71%

203.0

2.34%

30.13%

Other secured loans

48.9

4.89%

0.55%

50.7

4.90%

0.55%

Unsecured loans

248.1

10.05%

1.26%

257.5

10.02%

0.87%

Card loans

161.5

11.32%

0.52%

167.3

11.28%

0.37%

Unsecured certificate loans

86.6

7.68%

2.65%

90.2

7.69%

1.81%

2,726.1

3.92%

3.66%

2,790.8

4.00%

2.59%

Loan category
Secured loans

Single building apartment
loans

Consumer loans※Delinquency rate ＝ Loans past due 3 months or more / Loans※Yield: Yield for customers (excluding guarantee fee, accrued interest), period-end balance basis

Share house loans (Non-performing loans based on the Financial Reconstruction Law)
(Billions of yen)

Total

Subtotal

Claims against
bankrupt andsubstantiallybankrupt obligors

Claims withcollection risk

Claims for
special attention(Non-performing
loans)

NormalassetsSep. 30, 2018

253.7

31.8

101.6

56.8

190.3

63.4

Dec. 31, 2018

251.5

69.5

65.0

76.2

210.9

40.5

(Billions of yen)
Total
A

Collateral or
guarantees, etc.

UnsecuredportionAllowance

Coverage
ratio

B

C

D

(B＋D)／A

Share house claims

Sep. 30, 2018

253.7

203.4

95.2

158.4

136.2

91.25%

Dec. 31, 2018

251.5

202.2

94.9

156.5

136.9

92.21%※ Based on obligors of share house loans※ Covered amount: Estimated amount, calculated by multiplying the covered amount including collateral, etc.
with a certain ratio.

- 10 -SURUGA bank, Ltd.

Actual credit costs and Allowance for loan losses(Billions of yen)Dec. 31, 2018
Actual credit
Allowance ※2
costs

Item

Sep. 30, 2018
Actual credit
Allowance ※2
costs

Share house-related loans

95.3

136.9

94.7

136.2

Investment property loans ※1

15.0

35.5

9.2

30.3

Housing loans

1.5

1.8

1.4

1.7

Unsecured loans

0.6

0.7

0.5

0.6

Loans to founder-affiliated companies

15.1

15.2

13.4

13.4

Business financing other than loans tofounder-affiliated companies, etc.

0.2

3.3

0.3

3.6

128.1

193.6

119.6

186.0

Total

※1 Investment property loans: Studio apartment loans, Single building apartment loans, Other secured loans※2 Including allowance for losses of other assets (golf course membership and suspense payment).

(B) Deposits･Deposits decreased by ¥843.7 billion year-on-year.
･Yield on deposits (overall) dropped by 4 bases points

year-on-year to 0.05%.
（Millions of yen）

Dec. 31, 2018(a)
Deposits (period-end balance)

Dec. 31, 2017(b)(a) - (b)Mar. 31, 2018

3,228,694(843,709)

4,072,403

4,089,649

Individual deposits

2,588,758(647,080)

3,235,838

3,191,847

Deposits (average balance)

3,613,444(435,115)

4,048,559

4,047,017

Deposits (period-end balance)
Yield on deposits (overall)
Individual deposits (period-end balance)(Billions of yen)

4,089.6
4,072.4
3,871.5
3,415.9
3,228.6
3,191.8
3,235.8
3,043.1
2,743.3
2,588.7

Dec. 17Mar. 18

Jun. 18

Sep. 18

0.09%

Dec. 17

Dec. 18- 11 -

0.08%

Mar. 18

0.05%

0.05%

0.05%

Jun. 18

Sep. 18

Dec. 18

SURUGA bank, Ltd.

(3) Interest margins (Non-consolidated)･Loan-deposit margin (after deduction of expenses, overall) dropped by 35 bases points year-on-year to 1.99%.
･Net interest margin (overall) dropped by 19 basis points year-on-year to 1.49%.

Overall(%)
Nine months
ended
Dec. 31, 2018(a)Nine months
ended
Dec. 31, 2017(b)(a) - (b)FY3/2018

Yield on loans and bills discounted

3.35(0.25)

3.60

3.61

Yield on deposits

0.05(0.04)

0.09

0.08

Loan-deposit margin(after deduction of expenses)

1.99(0.35)

2.34

2.37

Net interest margin

1.49(0.19)

1.68

1.68

Domestic(%)
Nine months
ended
Dec. 31, 2018(a)Nine months
ended
Dec. 31, 2017(b)(a) - (b)FY3/2018

Yield on loans and bills discounted

3.35(0.25)

3.60

3.61

Yield on deposits

0.05(0.02)

0.07

0.07

Loan-deposit margin(after deduction of expenses)

2.03(0.34)

2.37

2.40

Net interest margin

1.53(0.19)

1.72

1.72

Loan-deposit margin (overall)
Loan-deposit margin (after deduction of expenses, overall)
Net interest margin（overall）

3.51%

3.52%

2.34%

2.37%

1.68%

1.68%

1-3Q, FY3/18

FY3/18

3.39%

3.31%

3.30%

2.16%

2.06%

1.99%

1.46%

1.51%

1.49%

1Q, FY3/19

1H, FY3/19- 12 -

1-3Q, FY3/19

SURUGA bank, Ltd.

(4) Non-performing loans based on the Financial Reconstruction Law (Non-consolidated)･Non-performing loans based on the Financial Reconstruction Law increased by ¥289.1 billion year-on-year.
･Non-performing loan ratio rose by 976 basis points year-on-year to 10.60%.

Dec. 31, 2018

Dec. 31, 2017

(Millions of yen)Mar. 31, 2018

Claims against bankrupt andsubstantially bankrupt obligors

88,433

9,475

10,573Claims with collection risk

117,910

11,19647,722Claims for special attention

110,633

7,205

13,874

Total (Non-performing loans based on
the Financial Reconstruction Law)

316,977

27,877

72,170Non-performing loan ratio

10.60%

0.84%

2.20%

Total coverage

270,149

23,62051,951

Coverage ratio

85.22%

84.73%

71.98%(Note1) Total claims = Loans and bills discounted + Foreign exchanges + Accrued interest + Customers’ liabilities for
acceptances and guarantees + Securities lent + Suspense payment (”Claims for special attention” include only “Loansand bills discounted”)(Note2) The figures above are based on the claim classification as defined in the Article 4 of the “Ordinance for Enforcementof the Act on Emergency Measures for the Revitalization of Financial Functions”.
(Note3) The correspondence between classifications of obligors, etc.
(a) ”Claims against bankrupt and substantially bankrupt obligors” correspond to the claims against “Effectively
bankrupt obligors” or “Bankrupt obligors” under self-assessment.
(b) ”Claims with collection risk” correspond to the claims against “Potentially bankrupt obligors” underself-assessment.
(c) ”Claims for special attention” correspond to the claims which are against “Obligors requiring caution” underself-assessment and classified as “Loans past due 3 months or more” or “Restructured loans”.

- 13 -SURUGA bank, Ltd.

(5) Capital adequacy ratio (domestic standard)･Capital adequacy ratio (non-consolidated) dropped by 430 basis points year-on-year to 9.05%.

Non-consolidated(Millions of yen)Dec. 31, 2018

Dec. 31, 2017

Capital adequacy ratio

9.05%

13.35%

Own capital (Core capital)

223,606

339,131Core capital: instruments and reserves

246,780

353,049

Core capital: regulatory adjustments (-)

23,174

13,917

Risk-weighted assets

2,469,850

2,539,784

Total required capital

98,794

101,591

Consolidated
Dec. 31, 2018

(Millions of yen)Dec. 31, 2017

Capital adequacy ratio

9.05%

13.56%

Own capital (Core capital)

227,715

349,095

Core capital: instruments and reserves

254,827

365,618

Core capital: regulatory adjustments (-)

27,111

16,523

Risk-weighted assets

2,514,9782,572,947

Total required capital

100,599

102,917(Note) Total required capital = Risk-weighted assets × 0.04

Capital adequacy ratio （non-consolidated）
Own capital (non-consolidated)(Billions of yen)

13.35%

339.1

Dec. 17

12.15%

324.7

Mar. 18

12.14%
8.65%

9.05%

219.7

223.6

Sep. 18

Dec. 18

328.2

Jun. 18- 14 -SURUGA bank, Ltd.

(6) Composition of own capital (domestic standard)Core capital: instruments and reserves(Millions of yen)
December 31, 2018
Non-consolidated
Consolidated
Amounts
Amounts
excluded
excluded
under
under
transitionaltransitionalarrangements
arrangements(1)

Directly issued qualifying common stock or preferred stock mandatorily convertible into
common stock capital plus related capital surplus and retained earnings

218,650

224,903

Capital and capital surplus
Retained earnings
Treasury shares (-)
Earnings to be distributed (-)
Accumulated other comprehensive income included in Core capital
Remeasurements of defined benefit plans
Subscription rights to acquire common stock or preferred stock mandatorily
convertible into common stock
Adjusted non-controlling interests (amount allowed to be included in Core capital)
Reserves included in Core capital: instruments and reserves
General allowance for loan losses
Eligible non-cumulative perpetual preferred stock subject to transitionalarrangement included in Core capital: instruments and reserves
Eligible capital instrument subject to transitional arrangement included in Core
capital: instruments and reserves
Capital instrument issued through the measures for strengthening capital by public
institutions included in Core capital: instruments and reserves
45% of revaluation reserve for land included in Core capital: instruments andreserves
Non-controlling interests included in Core capital subject to transitionalarrangementsCore capital: instruments and reserves(A)Core capital: regulatory adjustments(2)
Total intangible fixed assets (net of related tax liability, excluding those relating tomortgage servicing rights)
Goodwill (including those equivalent)

48,632
170,578560-

31,220194,243
560
985
985

12

12

28,117
28,11728,292
28,292

-

-

-

-

-

-

-

-

-

633

246,780

254,827

13,026

3,256

14,963

3,312

13,026

3,256

1,715
13,248

3,312

-

-

273

-

5,369
-

1,342
-

6,354
-

1,588
-

-

-

-

-

-

-

-

-

4,778

1,999

5,519

2,130

-

-

-

-

1,999
-

5,519
27,111

2,130
-

(B)

4,778
23,174(C)

223,606

227,715

2,249,385
21,152

2,263,434
22,332

4,672

4,751

14,554
1,925
220,464
2,469,850

15,301
2,279
251,5442,514,978

9.05%

-

-

9.05%

Other intangible fixed assets other than goodwill and mortgage servicing rights

Deferred tax assets that rely on future profitability excluding those arising from
temporary differences (net of related tax liability)
Shortfall of eligible provisions to expected losses
Gains on sale related to securitization transactions
Gains (losses) due to changes in own credit risk on fair valued liabilities
Prepaid pension cost
Net defined benefit asset
Investments in own shares (excluding those reported in the net assets)
Reciprocal cross-holdings in relevant capital instruments issued by other financial
institutions
Investments in the capital of banking, financial and insurance entities that areoutside the scope of regulatory consolidation (“Other financial institutions”), netof eligible short positions, where the bank does not own more than 10% of theissued share capital (amount above the 10% threshold)Amount exceeding the 10% threshold on specified items
Significant investments in the common stock of Other financial institutions,net of eligible short positions
Mortgage servicing rights
Deferred tax assets arising from temporary differences (net of related tax liability)

Amount exceeding the 15% threshold on specified items
Core capital: regulatory adjustments
Total capital
Total capital(A-B)
Risk-weighted assets(3)
Credit risk-weighted assets

Total of items included in risk-weighted assets subject to transitional arrangements

Intangible fixed assets other than goodwill and mortgage servicing rights(net of related tax liability)_
Deferred tax assets (net of related tax liability)
Prepaid pension cost _Net defined benefit asset
Amount equivalent to market risk × 12.5
Amount equivalent to operational risk × 12.5
Credit risk-weighted assets adjustments
Amount equivalent to operational risk adjustments
Total amount of risk-weighted assets(D)
Capital adequacy ratio (non-consolidated)
Capital adequacy ratio (non-consolidated)(C/D)
Capital adequacy ratio (consolidated)
Capital adequacy ratio (consolidated)(C/D)- 15 -SURUGA bank, Ltd.

(7) Unrealized gains (losses) on securities (Non-consolidated)･Net unrealized gains (losses) on securities decreased by ¥13.2 billion year-on-year.
(Millions of yen)Dec. 31, 2018

Dec. 31, 2017

Mar. 31, 2018

Fair
value

Net unrealized gains (losses)

601

111,597

28,23228,549467

45,80627,809439

460,372

668

129

5,418

Fair
Value

Net unrealized gains (losses)

Other
securities

115,055

14,933

15,535

Stocks25,34913,96014,427

Bonds

85,387434

Others

4,318

538

Gains

LossesFairvalue

Net unrealized gains (losses)

316

116,151

24,81825,400581

27,89485

41,27524,604

24,699

95

(67)

72

140

62,850

(7)

90

98

491

581

90

12,025

221

609

388

Gains

Losses

Gains

Losses(Note1) Stocks of subsidiaries and affiliates are not included since they are not valuated with fair value.
(Note2) Unrealized gains (losses) represent the difference between the fair value as of period-ends and acquisition costs.

(8) Individual deposit assets (Non-consolidated)･Individual deposit assets decreased by ¥683.4 billion year-on-year.
･The ratio of investment products to total individual deposit assets declined by 20 basis points year-on-year to 4.8%
(Millions of yen)

Individual deposit assets
Yen deposits
Investment products
Foreign currency deposits
Public bonds
Mutual funds
Personal pension plans
Single premium life
insurance
The ratio of investment
products to total individual
deposit assets

Dec. 31, 2018(a)2,716,696
2,584,488
132,207
4,269
8,489
77,95026,054(a) - (b)(683,447)(645,473)(37,974)(1,607)(454)(25,842)(10,442)

Dec. 31, 2017(b)
3,400,143
3,229,961
170,181
5,876
8,943
103,792
36,496

15,443371

15,072

15,2454.8%(0.2%)

5.0%

4.7%- 16 -

Mar. 31, 2018
3,345,282
3,185,938
159,344
5,908
8,837
93,65435,697