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

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

 ２．Summary Financial Results for1Q, FY2020

Ｐ４

 ３．Summary Financial Results for 1Q, FY2020（JSF parent）

Ｐ５ ４．Financial Highlight（Margin Loan Business）

Ｐ６

 ５．Financial Highlight（Securities Financing）

Ｐ７

 ６．Financial Highlight（Securities Investment of JSF parent）

Ｐ８ ７．Summary Financial Results for 1Q, FY2020（ JSF Trust Bank）

Ｐ９

 ８．Balance Sheet Summary (Consolidated)

Ｐ１０

 ９．Estimated Figures for FY2020

Ｐ１１

 Appendix

Ｐ１２〜

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

2

１．Executive Summary (Consolidated)（¥ mil）

Operating
Revenues

FY2020
1Q

7,937

YoY ⊿

＋325

⊿％

＋4.3％

 Margin Loan Business resulted decrease（▲2.8％）due to a decrease of balanceof Margin Loan and Stock Loan
 Securities Financing saw a significant
increase in revenue driven by Bond
Lending (+80.6％）
 Revenue of subsidiary JSFTB decreased(▲52.0%)due to a decrease in gains onsales of bonds.

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

Operating
Income

1,606

＋66

＋4.3％

Recurring
Income

1,759

＋26

＋1.5％

Net
Income

1,315

＋49

＋3.9％

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

Highlight〜 All For Securities Market 〜3１．Summary Financial Results for 1Q, FY2020
Consolidated（¥ mil）

Operating
Revenues

FY2020
1Q

YoY.⊿

Parent
(%⊿)

JSF

325

(＋4.3%)

7,143

950

ExceptPremium Charges

6,287

395

(＋6.7%)

5,493

1,020

Operating Expenses

4,512

394

(＋9.6%)

4,435

1,051

ExceptPremium Charges

2,863

464

(＋19.4%)

2,786

1,121

General &Administrative Expenses

1,818

▲135

(△6.9%)

1,676

Operating Income

1,606

66

(＋4.3%)

Recurring Income

1,759

26

(＋1.5%)

Gain or Loss inEquity-Method

▲11

▲31

(−)

ー

ー

1,315

49

Net Income

Nihon Building

YoY.⊿

YoY.⊿

YoY.⊿

7,937

Extraordinary
Profit or Loss

JSF Trust Bank

623

▲587

322

1

133

▲614

4

▲2

30

72

▲172

164

0

1,031

▲131

418

200

153

3

2,439

962

419

200

205

▲7

(ー)

―

―

―

―

―

―

(＋3.9%)

2,110

1,005

369

176

137

▲6

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

4２．Summary Financial Results for 1Q, FY2020（JSF parent）
Key Points

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

FY2020
1Q

YoY.⊿●Operating Revenues(%⊿)

Operating Revenues*

5,493

1,020

(＋22.8%)Margin Loan Business*

1,000

▲7

(△0.8%)

Securities Financing

3,487

1,558

(＋80.8%)Others

1,005

▲530

(△34.5%)

Operating Expenses*

2,786

1,121

(＋67.4%)General &Administrative Expenses

1,676

30

(＋1.9%)

Operating Income

1,031

▲131

(△11.3%)

Recurring Income

2,439

962

(＋65.2%)Extraordinary
Profit or Loss

―

―

(ー)

Net Income

2,110

1,005

(＋91.0%)

Copyright Japan Securities Finance Co., LTD. All Rights Reserved Up ¥1,020 mil (+22.8%) YoY driven
by Securities Financing.
̶ Margin Loan Business remained thesame level YoY due to the recovery inthe balance of Margin loan and Stock
Loan through June.
̶ Securities Financing saw a significant
increase in revenue driven by Bond
Lending .
̶ Others(Securities investment) dropped
due to the absence of the impact offoreign exchange gains concerning
foreign currency transaction recordedin the same period of the previous
fiscal year.
※For details of segments, see “Financial
Highlights for 1Q, FY2020(P6-P8)”●Operating Expenses

̶ Up ¥1,121mil (+67.4%) YoY
̶ Fees on borrowing securities andinterest on payables under repurchaseagreements in Bond Lending●Recurring Income/Net Income

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

〜 All For Securities Market 〜

5

３．Financial Highlight （Margin Loan Business）
The stock market has been generally firm since the beginning of the
fiscal year, and the pace of increase has widened since June.
Both outstanding of Margin Loan and Stock Loan turned to increase yearon-year in June.



FY2019（\ bn、%）

1Q

1H

3Q

4Q

YoY

1Q

YTD

full year

Margin Loan

201

202

202

226

248

219

199

▲27

Margin Loan Rate

0.60

0.60

0.60

0.60

0.60

-

0.60

-

Stock Loan

332

350

341

383

268

333

295

▲373

Margin Loan（FY2019）
Margin Loan Rate（FY2019）

¥ tri
0.6

2Q

FY2020Margin Loan（FY2020）
Margin Loan Rate（FY2020）
Full Year Margin Loan

1Q Margin Loan

1.5%

0.6

Stock Loan（FY2020）
Stock Loan Rate (FY2020)

FY19︓¥219bn

1.5%

Full Year Stock Loan
FY20︓ ー
FY19︓¥333bn

1Q Stock Loan
FY19︓¥295bn
FY19︓¥332bn

FY20︓ ー

FY20︓¥199bn
FY19︓¥201bn

Stock Loan（FY2019）
Stock Loan Rate (FY2019)

¥ tri

0.4

1.0%

0.4

1.0%

0.2

0.5%

0.2

0.5%

2Q Margin Loan

3Q Margin Loan

FY20︓ ー
FY19︓¥202bn

FY20︓ ー
FY19︓¥226bn

Jul

Oct

4Q Margin Loan

FY19︓ ー
FY19︓¥248bn

0.0%

0.0
Apr

May

Jun

Aug

Sep

Nov

Dec

Jan

Feb

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

Mar

0.0
Apr

May

Jun

2Q Stock Loan
FY20︓ ー
FY19︓¥350bn

3Q Stock Loan
FY20︓ ー
FY19︓¥383bn

4Q Stock Loan
FY20︓ ー
FY19︓¥268bn

Jul

Oct

Jan

Aug

Sep

Nov

Dec

Feb

0.0%

Mar

0.40%

〜 All For Securities Market 〜

6５．Financial Highlight （Securities Financing）


Strong Bond Lending drive “Securities Finance Business”

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

FY2020
1Q

YoY⊿

YoY%

Securities Financing

Loans for Negotiable margintransaction

15

▲0

△4.2％

 The balance of loans outstanding
decreased due to the persistent senseof excess funds among users.

Loan to Securities Companies*

221

74

+50.6％

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

Loan to Individual Investors or
Firms

112

▲12

△9.8％

 Outstanding of COM-STOCK Loan
remained sluggish.

General Stock Lending

295

81

＋38.0%

 Borrowing demands for mainly failcover increased.

2,843

1,415

＋99.1%

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

3,487

1,558

＋11.8%

Bond Lending

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

7

４．Financial Highlight（Securities Investment of JSF parent）
Resulted in decrease due to the absence of the impact of foreignexchange gains concerning foreign currency transaction recorded in thesame period of the previous fiscal year.



Revenues from securities investment（JSF）
1Q FY2020

EquityYoY

Foreign Bonds△¥ 243 mil

Domestic Bonds¥ 269 mil△¥ 195 mil

Others※¥ 619 mil△¥ 48 milIn foreign currencies¥ 106 mil△¥ 290 mil

Total¥ 995 mil△¥ 534 mil

3.0%
7.8%

90%
90%
6.5%

85%

82.7%

80%
Mar.2018

Mar.2019

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

Germany

Japan

3.0%

2.0%

2.0%

1.0%

1.0%

0.0%

0.0%

▲1.0%

2014

2015

2016

2017

2018

2019

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

2020

▲1.0%
2013

Mar.2020

Jun.2020

source）Bloomberg

Trend of hedge cost

4.0%

3.0%

2013

Domestic Bonds

95%※ Investment Trust, etc.

4.0%

Others100%¥ 889 milYen-based

Transition of investment portfolio

USD3M
EUR3M

2014

2015

2016

2017

2018

2019

2020

〜 All For Securities Market 〜

8５．Summary Financial Results for 1Q, FY2020（JSF Trust Bank）

Highlights

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

JSF Trust Bank（¥ mil）

Recurring Revenue

FY2020
1Q

(%)

797

▲413

(△34.1%)253

46(+22.5%)0▲645(△100.0%)

378

▲613

(△61.8%)ー▲558(△100.0%)

Recurring Income

419

200

(＋91.4%)Net Income

369

176

(＋91.7%)

Trust charges
Gains on sales ofbonds

Recurring Expenses
Losses fromderivatives¥【Point of Trust Charge】

YoY

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

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

(¥ mil)〜 All For Securities Market 〜

9６．Balance Sheet Summary（end of June-2020, consolidated）\mil
Jun-20Total assets
Cash & Deposit
Short-term
investments

Change from
Mar-209,732,369▲ 82,125

1,217,753▲ 82,182 Deposit at BOJ

57,770▲ 10,521

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

Margin loan / Loans for negotiable
238,502 margin transactions / General loans /Trust bank loans

Short-term loans
receivable

926,181

Receivables underresale agreements

2,556,319▲ 191,077

Collateral money of
securities borrowed

3,880,337

2,510

Collateral money of bond borrowing
Collateral money of stock borrowing

Investments insecurities

810,307

20,125

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

Total liabilities

9,606,424▲ 81,383

Call money

980,800▲ 195,995

Short-termborrowings

70,556▲30,917

Commercial Paper

294,000▲ 72,000

Payables under
repurchase agreements

3,801,751▲ 121,662

3,174,811

70,782

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

1,129,949

260,461

125,945▲ 742

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

Features of Liabilities
Bank borrowing
Market operation by BOJ

Collateral money of bond lending
Collateral money of stock lending

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

In addition to market funding, suchas call money and commercial paper,
which can be adjusted daily toaccommodate assets changing by theday, collateral deposits received whenlending securities (collateral money
received of securities lent).

【ref】 Capital Adequacy Ratio*
at the end of Jun 2020︓327％* based on FIEA

〜 All For Securities Market 〜 10

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

Operating Income

3,100▲1,029ー

Recurring Income

3,800▲1,094ーNet Income

2,700

▲856

ー

Operating
Income1,800▲1,111ー

Recurring
Income

3,400

▲32

ー

Net Income

2,700

209

ー

Recurring
Income

740

119

ー

Net Income

510

13

ー

Operating
Income

565

▲34

ー

Recurring
Income

680

▲48

ー

Net Income

445

▲13

ー

Matching¥90bn
Stock Loan
¥240bnJSF（Reference）
FY2019 Results

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

Nihon
Building

Matching¥138bnMargin Loan Stock Loan
¥333bn¥219bn⊿ fromprev. EF

YoY.⊿

Consolidated

Over-lentOver-lent
Stock Loan
Margin Loan
¥150bn¥90bn

Margin Loan
¥180bnFY2020Estimated
Figures

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

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 11Appendix
 Return to Shareholders
 Dividend and Share Buyback Program (historical)
 The Trend of Financial Result (consolidated) Breakdown of Operating Revenues by business(Historical data) Breakdown of Operating Revenues by business Analysis of YoY Change in Operating Revenue bybusiness (Quarterly) Outstanding Balance of Transactions by Group
Business Margin Transactions & Loans for Margin transactions
 Structure of Margin Transaction & Loans for Margin
Transactions

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

 Revenue structure of Loans for margin transactions
 Margin Loan Rates Our Business Field (image chart) Features of Balance Sheet (Consolidated) Securities Holdings
 JSF Trust Bank (Loan Balance) The 6th mid-term Management Plan
(FY2020~FY2022) I The 6th mid-term Management Plan
(FY2020~FY2022) II Corporate Vison and Management Policy of JSF TrustBank Our Group Companies Rating Information〜 All For Securities Market 〜 Return to Shareholders
1

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

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

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

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 13 Dividend and Share Buyback Program (historical)

FY
2014

Annual Dividend per share

FY
2015

FY
2016

FY
2017

FY
2018

FY
2019

FY
2020

Forecast/
Framework

¥22

¥15

¥16

¥18

¥26

¥22

¥22

Interim ¥11Year-end ¥11(shs)

7.46mil

3mil

0.63mil

1.5mil2.0mil1.0mil―（amount）¥4.6bn¥1.9bn¥0.3bn¥0.9bn¥1.2bn¥0.5bn―<Consolidated> : Net
Income¥3.5bn¥2.6bn¥3.0bn¥4.2bn¥3.7bn¥3.5bn¥2.7bn

: EPS

¥33.9

¥26.9

¥31.9

¥44.2

¥40.0

¥38.4

¥29.4

: DPR

44.2%

59.5%

56.4%

58.8%

55.0%

57.2%

74.8%

: DOE

1.2%

1.2%

1.2%

1.8%

1.4%

1.5%

1.6%

173.9%

133.1%

66.3%

79.3%

87.8%

71.0%

74.8%

Share Buyback(reference) Total Return Ratio

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 14 The Trend of Financial Result (consolidated)¥ mil
FY2015FY2016FY2017FY2018FY20191Q

FY2019FY20201Q

22,03523,06626,33324,321

7,612

29,101

7,937

16,16016,522

18,38318,603

5,892

20,846

6,287

11,537

11,892

13,33012,284

4,118

16,835

4,512

Ex Premium charges

5,672

5,358

5,385

6,566

2,399

8,585

2,863

General & Administrative
Expenses

7,939

8,371

9,121

8,056

1,953

8,136

1,818

Operating Income

2,558

2,802

3,881

3,981

1,540

4,129

1,606

54

92

123

248

19

306

▲11

3,349

3,611

4,685

5,046

1,733

4,894

1,759

−

▲52

131

▲41

−

▲36

−

2,645

3,078

4,225

3,765

1,265

3,556

1,315

Operating
Revenues
Ex Premium charges

OperatingExpensesGain or Loss inEquity-Method

Recurring Income
Extraordinary
Profit or LossNet Income

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 15 Breakdown of Operating Revenues by business(Historical data)\ mil

1Q FY2019

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

Trust Business
Interest on Loans
Trust Charges
Bond Investment

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

FY20191Q FY2020

6,191

25,369

7,137

2,727
(35.8%)
323

12,517(43.0%)
1,420

2,650
(33.4%)
322

285

1,178

279

2,066
1,719
347
1,927
(25.3%)
16
147
124
214
1,426
1,535
(20.2%)
1,529

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

1,962
1,649
312
3,481
(43.8%)
15
221
112
295
2,836
1,005
(12.7%)
995(15.7%)
11192
975(9.8%)
50
784
1,950

(7.2%)
13232
313(3.0%)(3.0%)(2.9%)

7,612
5,892

29,101
20,846

7,937
6,287

1,194

225

2,832

899

573

227

〜 All For Securities Market 〜 16 Breakdown of Operating Revenues by business(Margin Loan Business)
Remained the same level YoY due to the recovery in the balanceof Margin loan and Stock Loan through June.
【Operating Revenues Transition】

1Q
Revenue

(mil）

(YoY)

Quarterly
¥ mil

2,066
1,859

2,823

2,785

(2,453)(2,378)(1,719)(1,703)(1,587)

(370)

(406)

323

329

368

198

285

314

4Q

1Q

2Q

(272)

(347)

344

FY2018

1,987

1,962
(1,649)(△2.8%)（ex premium
charges）(△0.8%)

(312)

398

322

370

208

279

3Q

4Q

1Q

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

FY20201,000

Fees onLending
Securities(△5.0%)

Premium
Charges(△4.0%)

Lending
Fees
(284)

2,650

Margin Loan
Business

Intereston
LoansInterest on
collateralmoney ofsecurities
borrowed

1,962
1,649

312

(△10.0%)322(△0.4%)

279

1Q
Point
 Operating revenues ofthis business, except
Premium Charges,
were about the sameas in the prev year.
 Fees on Lending
Securities resulted indecrease, because
Stock Loan balanceremained at lower
level of the same
period of the previous
year and premium
charges on over-lentissues decreased.
 Interest on Loansdecreased, because
Margin Loan Balanceremained lower.

(△2.0%)〜 All For Securities Market 〜 17 Breakdown of Operating Revenues by business(Securities Financing ①)
Loan to Securities Companies resulted in increase.
Increased use of equity repo transactions denominated in foreign currencies
contributed【Operating Revenues Transition】
Quarterly¥ mil(¥ mil）

(YoY)

20
15

21
17
131

125

4Q
FY2018

16

22
263

147

124

1Q

142

123

2Q

3Q

Loans for
Negotiable
MarginTransaction

15(△4.2%)

221

184

123

1Q
Revenue

123

4Q

FY2019112

1Q
FY2020Loan toSecurities
Companies
Loan toIndividual
Investors
or
Firms

221

(＋50.6%)112(△9.8%)1Q
Point
 Loans for
Negotiable Margin
Transaction andLoan to Individual
Investors or Firms
resulted indecrease due tolower loanbalance.
 Increased use of
equity repo
transactions
denominated inforeign currencies
contributed.(Loanto Securities
Companies)＜ Loan Lineup ＞
 Loan to Securities Companies ・・・ General Loans, Bond Financing, Loans for Negotiable margin Transaction,
Stabilizing fund loan, Equity Repo(Cash-secured Stock Lending Transaction)
 Loan to Individual Investors or Firms ・・・ Com-STOCK Loan
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 18 Breakdown of Operating Revenues by business(Securities Financing ②)
 Bond Lending : Both outstanding of Gensaki transactions and repo transactions
increased significantly.
 General Stock Lending : Profitability improved due to borrowing demands mainly failcover increased.
【Operating Revenues Transition】
Quarterly¥ mil(¥ mil）

(YoY)

295

GeneralStock
Lending

280
279
259
1,247

214

1,426

240

1,354

2,836
1,645

2,080

Bond
Lending
4Q
FY2018

1Q

2Q

3Q

4Q

FY2019

1Q

1Q
Revenue

1Q
Point

 Revenue increased.
Because profitability
improved due to295borrowing demands(＋38.0%)mainly fail-cover
increased.
 Revenue increased.
Both outstanding of
2,836
Gensaki transactions(+98.9%)and Repo transactions
increased significantly.

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



Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 19 Breakdown of Operating Revenues by business(JSF Trust Bank)
Trust charges continued growth trend.
【Trust charges Transition】
Quarterly(¥ mil）
¥ mil

192

(YoY)

192

190

194

206

232

Trust
Charges
4Q

1Q
Revenue

1Q

FY20182Q

3Q

4Q

FY2019

1Q

1Q
Point

Trust charges increased
contributing fromstrengthening
232 custodian type trust(+20.8%) service (trusts for the
separate managementof money and securities,
ABL trust, etc.).

FY2020【Trust Lineup】
Trusts for the separate managementof money and securities

Trust for protecting deposits which securities companies received from
customers

Trusts for currency future trading

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

Asset Backed Loan (ABL) Trust

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

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 20 Analysis of YoY Change in Operating Revenue by Business(Quarterly)〜 Summary of the points for quarterly 〜【Margin Loan Business】【Quarterly】 YoY ＋ ¥ 325 mil（＋4.3%）+1,410

¥ mil

+81

+74
△77

△0

△530

△12

＋1
△621

7,937

7,612

FY20191Q

MarginLoan

Loans for Loans for Loans for StockNMT Sec Com Investors Lending

Bond
Lending【Securities Financing】

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

【Others】
Others

ー

ー

Trust
Bank

Real
EstateSecurities Financing

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

FY20201Q

 The increase was due to the absence of the
impact of foreign exchange gains concerning
foreign currency transaction recorded in thesame period of the previous fiscal year.

【Trust Business】

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

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 21 Outstanding Balance of Transactions by Group Business(Average balance)\ mil

Transaction type

FY20191Q

FY2019FY2020
1Q

Margin Loans

201,842219,979

199,092

Stock Loans

332,536

333,949

295,232

3,761,997

4,609,077

6,731,207

Loans for Negotiable Margin
Transaction

9,025

10,434

7,575

Loan to Securities Companies

318,379

309,033

288,702

Loan to Individual Investors
or Firms

14,23013,934

12,610General Stock Lending

68,71660,85964,011

Bond Lending

3,351,647

4,214,817

6,358,309

Trust Bank Loans

464,873473,808

473,120

Securities Financing

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 22 Margin Transactions & Loans for Margin Transactions
3.0

¥ tri

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

Margin Buying Balance
Margin Loan Balance
Ratio

2.5
2.0
1.5
1.0
0.5
0.0
08

09

10

11

12

13

14

15

16

17

18

19

20

1.0 ￥tri

100%
Margin Selling Balance
Stock Loan Balance
Ratio

0.9
0.8

90%
80%

0.7

70%

0.6

60%

0.5

50%

0.4

40%

0.3

30%

0.2

20%

0.1

10%

0.0

0%
08

09

10

11

12

13

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

14

15

16

17

18

19

20

〜 All For Securities Market 〜 23 Structure of Margin Transaction& Loans for Margin Transaction
MarginTransaction

Loans for Margin
Transaction
Margin Loan application
Stock Loan application

Margin buying order
Margin selling order

Institutional
Investors

Fund for Purchasing
Stock to sell

Fund (Margin loan)
Stock (Stock loan)

JSF

Securities
Companies

BrokerInvestor

Stock

Funds

Call Market

Purchased Stock
Sale ProceedBank of Japan

Stock Exchange
Clearing facilities
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 24 Revenue structure of Loans for margin transactions

Over-lent

Income statement

Margin Loans

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

Stock Loans(B)【Operating revenues】
Interest on loans＝(A)×0.60%
Fee on lending securities (lending fees)＝(B)×0.40％
Interest on collateral money of
securities borrowed＝(C)×0.60％【Operating expenses】
Interest on borrowing＝(E)×fundingrateBesides the above, Premium Charges are posted in Operating Revenues (Fees on Lending
Securities) in a part of Over-lent Stock Loan. But the same amount are posted in Operating
Expenses (Fees of Borrowing Charges), so the amount of Premium Charges does not affect our
profit.
【revenue】 Fees on lending securities (premium charges) = 【expense】 Fees on borrowing
securities (premium charges) = (C)ʻ×rate of Premium charges
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 25 Margin Loan Rate

LendingFee
0.40%

Securities
Company

Loan Rate
0.60%

Stock Loan

JSF

Securities
Company

Margin Loan

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



Feb 2007 Uncollateralized O/N Call Rate:0.50％



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

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



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

Interest on Collateral Money
0%

1.2%

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

Margin Loan Rate



1.0%




0.8%



0.6%




0.4%
Apr.2013〜
Monetary base start

0.2%

0.0%

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

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

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

〜 All For Securities Market 〜 26 Loan Rate of Loans for Margin Transactions
2.00%

Loan Rate
Lending Fee

1.60%

1.20%

0.6%
0.80%

0.40%

0.4%
0.00%

97

98

99

00

01

02

03

04

05

06

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

07

08

09

10

11

12

13

14

15

16

17

18

19

〜 All For Securities Market 〜 27

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

Securities Financing

Equity Repo
Loan to Individual
Investors or Firms

LenderMoney Market,
etc.

Securities
Lending(Equity・Bond)

Financial
Institutions

SubsidiaryBusiness

Loan to Securities
Companies

Investors

Margin Loan BusinessBorrower
Securities Companies

For
Standardized
MarginTransactions＜Securities＞

Institutional investors,
Securities companies,
etc.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 28 Securities Holdings\ mil
Mar-20
Securities Holdings

B/S Amountnotes

Jun-20

Unrealized profits andloses

Unrealized profits andloses

B/S Amount

Equity12,176

7,198

15,368

10,390Bond809,00224,209814,600

20,089

JGB&Municipal Bond

518,829

26,712506,795

21,673

Corporate Bond

253,617▲567

270,449▲470 Government Guaranteed Bond ,etc.

36,555▲1,93537,354

OthersOther Securities
Total

13,943▲1,67814,860▲581

835,12129,730844,829

29,898ー(6,075)ー(6,062)（included the eﬀects ofderivatives）

held-to-maturity bonds▲1,113 Foreign government bonds

Unrealized profits andloses

B/S Amount

JGB

1,512

Unrealized profits andloses

B/S Amount

208

1,512

notes

208

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

Yen Bond Portfolio （JSF Trust Bank）

Yen Bond Portfolio（JSF）
12,00010,000
8,000
6,000
4,000
2,000
010 years 9,424（億円） over
2.69
14/3（¥ 100 mil）
7,000
6,000

5,296

5,286

5 years
to9,798
10 years
2.32
14/9
4.69

4,930

5,000

4,274

4,000

3,660

9,210
2.819,498
1 year to 5 years
2.69
2.41
14/12
15/3
（year）
6.0

4.50

4.0
3,460
3.0

3,000
2,000

5.0

（¥ 100 mil）
7,000

2.0
2.10

1,000

1.99

2.10

1.0

0

0.0

Mar.18

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

6.0
5.0
4.0

3.0
2.0
1.0
0.0
3.948,378（年）
Averageremaining
period
3.54
15/12（year）
6.0

4.99

6,000
3,186

4,000

3,584

3,741

1.92

2,279

1,255
1.18

2,000
1,000

5.0

4.26

5,000

3,000
2.57

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

4.0
3.0

1,310

2.0

1.06

1.0

1.24

0.0

0

Mar.18

Sep.18Mar.19Sep.19Mar.20Jun.20(Note) Average remaining period is calculated excluding Floating JGB, held-to-maturity bonds, bonds for which hedge-accounting is applied
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 29 JSF Trust Bank （Loan Balance）● Loan Banance by Industry\mil

Jun-19Loan
Balance
Manufacturing

Mar-20ratio

Loan
BalanceJun-20ratio

Loan
Balance

ratio

2,000

0.4%

0

0.0%

0

0.0%

Fishery

0

0.0%

0

0.0%

0

0.0%

Mining

0

0.0%

0

0.0%

0

0.0%

Construction

0

0.0%

0

0.0%

0

0.0%

Energy & Utilities

0

0.0%

0

0.0%

0

0.0%

Communication

0

0.0%

0

0.0%

0

0.0%

Transportation

689

0.1%

689

0.2%

689

0.1%

Wholesale

800

0.1%

800

0.2%

800

0.1%

Retail

0

0.0%

0

0.0%

0

0.0%

Finance & Insurance

0

0.0%

4,100

0.9%

1,000

0.2%

Real Estate

-

0.0%

1,500

0.3%

500

0.1%

Service Industries

0

0.0%

0

0.0%

0

0.0%

539,060

99.4%

440,81098.4%

594,645

99.5%

Governments
Total

542,549

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

447,899597,634〜 All For Securities Market 〜 30 The 6th Mid-term Management Plan（FY2020-FY2022）I

Corporate
Philosophy

As an institution specializing in securities finance, JSF has a mission tocontribute to the development of the securities market by proactively
meeting the diverse needs of the securities and financial sectors and toenhance the long-term interests of users, while always maintaining akeen awareness of its public role.

Management
Principles⑴ To practice sound business management by thoroughly implementing
compliance, corporate governance, and risk management under a
new governance structure and thereby establish solid credibility,
while always maintaining a keen awareness of our social
responsibilities as a securities finance company.
⑵ To enhance enterprise value while maintaining solid equity capital inorder to ensure stability in management and the financial healthrequired of a company that is a key player in securities market
infrastructure, to give comprehensive consideration to the earnings
environment, investment plans, etc., and to ensure profits are
returned to shareholders.
⑶ To further enhance JSFʼs core margin loan business while also
striving to expand the finance- and securities-related services
provided by JSF and Group companies, develop new business, and tofurther grow and solidify our base.
⑷ To build a quick and efficient business management structure andstrengthen our competitive base in order to address changes in thebusiness environment in a flexible manner.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 31 The 6th Mid-term Management Plan（FY2020〜FY2022）IIManagement
Goals

Given that the margin loan business, JSFʼs core business, is greatly affectedby market fluctuation, we will strengthen its base by steadily increasing ournumber of loanable stock issues and stabilize our role as part of the securities
market infrastructure by diversifying revenue sources and steadily increasing
our basic profit (recurring income calculated based on the assumed grossoperating profit of margin loan business)

Strategies

Enhancing the Margin Loan
Business as part of securities
market infrastructure

Developing and realizing
new business

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

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

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

Use of Risk Appetite Framework
Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 32 Corporate Vision and Management Policy of JSF Trust Bank

【Corporate Vision】
In addition to playing a part in the JSF Group and providing important
infrastructure functions in the financial capital markets, we aim to become ahighly specialized trust bank that grows together with its customers throughsupporting investment and economic activities of various entities byenhancing our unique services centered on the field of managed trusts.
[Management Policy]
 Establish No. 1 position in management-type trusts, such as security trusts and assetbacked loan trusts, and expand the scope of trust business by utilizing the knowledge
cultivated in this field Banking will be restructured by lending to financial instruments business operators andother financial sectors, while appropriately responding to trends in prudential
regulations.
 Securities investment is positioned as an earnings supplement business necessary forthe smooth promotion of the above business, and it will be stably operated underappropriate risk management.
 We will enhance our internal control and governance systems, steadily carry out a seriesof operations under them, realize the smooth development of core systems, andincrease our corporate value.

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 33 Our Group Companies
Subsidiary
Affiliate（ ) Shareholding Ratio

Japan Securities Finance（100%）
JSF
Trust Bank

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

Capital（20.8%）
JSFIT

Shareholding
Ratio

Name

100%

JSF Trust and Banking Co., Ltd.

14,000100%

Nihon Building Co., Ltd.

100

Real estate ownership and leasing
Real estate trading and brokerage

20.0%

Japan Information Processing Service Co., Ltd

2,460

Information processing services
Software development and sales

20.8%

JSF Information Technology Co., Ltd

100

Information processing services
Software development and sales

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

Business overview
Trust service, Banking service〜 All For Securities Market 〜 34 Rating Information

JCR

R&I

As of 30/Jun/2020
Japan
Securities
Finance

JSF TrustBank

Standard &Poor’sRatingOutlookRatingOutlookRatingOutlookLong-term

AA-

StableAA-

StableA

StableShort-term

J-1+

a-1+

（Highest）（Highest）

CP Issue

¥1tri

¥1tri

Long-termA+

Short-term

J-1+

Stable

A+
a-1

A-1
―
Stable――――（Highest）

Copyright Japan Securities Finance Co., LTD. All Rights Reserved〜 All For Securities Market 〜 35

NoticeThis document includes statements for business forecast. Thesestatements donʼt guarantee companyʼs future achievement and thatinvolve risk or uncertain factors. Companyʼs future achievement may
be changed drastically up to stock market or financial conditions.

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