PROFILE
The Juroku Bank, Ltd., has its business base in Gifu and Aichi prefectures, the industrial centerof the Chubu region of Japan. In October, 2007, the Bank celebrated its 130th anniversary. In the
13 decades since 1877, it has played a pivotal role as a leading financial institution in its area.
We will continue to follow our philosophy of “serving our community by fulfilling oursocial mission as a financial institution.” We will also pursue reforms by staying open-minded,
managing our operations rationally and steadily, creating a strong management style throughstronger earnings power, and improving our personnel and organization.
The head office of the Bank is located in Gifu Prefecture. The
Bank has 148 domestic branch offices, mainly in Gifu and Aichi
prefectures, as well as overseas operations in Hong Kong andShanghai. On a consolidated basis, as of the end of March 2008, theBank had total deposits of ¥3,630.2 billion (US$36,233 million),
total assets of ¥4,141.6 billion (US$41,337 million), and a capitalratio of 10.69% according to domestic standards.

Head officeContents
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Financial Highlights (Consolidated)
Message from the PresidentManagement Strategy
Non-Performing Loans
Contribution to the Regional Economy and Community
Board of Directors and Corporate Auditors
Organization Chart
Financial Review
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Non-Consolidated Six-Year Summary (Unaudit)
Non-Consolidated Balance Sheets
Non-Consolidated Statements of Income
Non-Consolidated Statements of Changes in Equity
Independent Auditors’ Report
Corporate Data
Affiliates
Directory

Forward-looking Statement
This annual report contains certain
forward-looking statements. Those
forward-looking statements are subject
to risks and uncertainties, and Juroku
Bank’s actual results may differ fromthose described in the forward-looking
statements. We are under no obligation,and expressly disclaim any obligation,
to update or alter our forward-looking
statements, whether as a result of new
information, future events, or otherwise.

Financial Highlights (Consolidated)
The Juroku Bank, Ltd. and Subsidiaries
Years Ended March 31, 2008 and 2007

Millions of Yen
2007

Thousands of
U.S. Dollars
2008

141,934¥ 118,719$ 1,416,648

Total expenses

123,050

93,5501,228,166

Net income

10,314

13,845102,944

Cash dividends

2,916

2,553

29,104¥ 4,141,588¥ 4,186,041$ 41,337,339

2,892,737

2,806,651

28,872,512

Securities

853,864

1,008,739

8,522,447

Deposits

3,630,156

3,616,105

36,232,718

Total equity

241,709287,164

2,412,506

2008

For the Fiscal Year

Total income¥

At Year-End

Total assets
Loans and bills discounted

Cash FlowsNet cash used in operating activities¥(74,067)¥(9,178)$(739,265)

Net cash provided by investing activities

71,00571,597

708,703

Net cash provided by financing activities

2,961

12,331

29,554

Cash and cash equivalents, end of year

193,853

193,976

1,934,854

Note: Amounts stated in United States dollars have been computed, solely for convenience, at the rate of ¥100.19 = US$1,
the approximate rate of exchange at March 31, 2008.

THE JUROKU BANK, LTD.

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Annual Report 2008

Message from the President

Seeking to Enhance
Corporate Value
Nobuo Kojima
President

The environment surrounding financial institutions is changing with increasing rapidity.
New competitors have emerged, including
Japan Post Bank and companies that haveentered the financial sector from other fields.
There have also been business mergers among
regional financial institutions.
In this environment, our challenges are toboost our presence as a regional financial institution, to succeed in a fiercely competitivemarket while enhancing our earnings strength,
and to improve our corporate soundness.
To respond appropriately to the increasingly
diverse and sophisticated needs of customers,
we must bolster our internal control structure.
In response to these challenges, based on
the 10th Medium-Term Management Plan,
and as part of our aim of becoming a financial
services institution that can provide genuine satisfaction to our customers, the Bankis striving to improve the quality of all of its

THE JUROKU BANK, LTD.

operations. These include services, administration, and compliance, and we are pursuing initiatives that will make the Bank themost trusted and popular financial institution in the region, with sustained profitability
and financial soundness. In particular, weare strengthening our internal control structure, to establish a reliable compliance structure that is the basis for earning the trust ofcustomers.
Through these initiatives, we will seek toachieve sustainable development and will
improve our enterprise value.
We hope that the Bank may continue torely on your support.
Nobuo Kojima
President2

Annual Report 2008

Management Strategy
Final year of 10th Medium-Term
Management Plan:
becoming leaders in trust

Basic Strategy
Quality First Policy (For the Customers)
To thrive in an environment of increasing competition, we will
rigorously pursue quality improvement in the services we provide, and ensure security and accuracy based on our key phrase,“Quality First.” We will work to enhance our competitivenessboth in service quality and cost, and to establish a structure that
leads to a virtuous circle of improving brand value and market
share.

In April 2 006, the Bank launched its current threeyear Medium-Term Management Plan, which focuseson improving its reputation for trustworthiness. Under
this three-year plan, we have taken a number of steps toimprove the quality of a wide range of our operations,
including services, administration and compliance. By
so doing, we will become a financial services institutionthat can fully satisfy customers. We will work to enhance
profitability and financial soundness, and by thesemeans, to become the most-trusted bank in our homeregion.

Numerical Targets

Strengthening Retail Functions
To improve competitiveness in both service quality and cost, wemust strengthen our retail functions. As retail functions consistof relationship banking functions and risk-taking functions, wewill endeavor to bolster our activities in both fields.

Improving Organizational Ability and Personnel
Development
The steady achievement of our strategy depends upon our organizational ability and our human resources. With regard to ourorganizational ability, we will establish a structure that can
promptly meet customer needs, although the present organizational structure will be basically maintained. At the same time,
we will strengthen our internal control systems. With regard tohuman resources, considering the expansion and sophisticationof operations, we will endeavor to further improve the skills of
our staff. Moreover, given the stronger demand for customer dataprotection, due to the number of crimes committed in the financial markets, we will further strengthen our compliance structureand nurture higher ethical standards.

To be achieved by fiscal 2008

Outstanding balance of loans¥3 trillion

Market Strategy

ROE (Return on Equity; equity= net assets attributable toshareholders):

6.5% or higher

OHR (Overhead Ratio;
expenses as a percentage of grossbusiness profit):Less than 60%

In Gifu Prefecture, we aim to establish more accessible marketing channels and take steps to support the revitalization of
the regional economy so that we will earn the strong trust of
the communities in which we operate, and particularly of ourcustomers, to an even greater extent than at present. We will
position Aichi Prefecture as a main market on a par with Gifu
Prefecture, and will aggressively conduct business operations
including the further improvement of our marketing channel
network, primarily branch offices.

Strategies to Strengthen Fees and Commissions
Tier I capital ratio (basic components of regulatory capital
divided by risk-adjusted assets):

Net income

Fees and commissions have become the second-largest revenue
source for the Bank after loan and deposit operations. By fully
utilizing the expertise of our financial advisors, whose number
increased during our 9th Medium-Term Management Plan
(April 2003- March 2006) to 200, we will endeavor to accurately
meet customer needs and requirements by providing services
such as fund management advisory services and consulting services. In this way, we have good hopes of further increasing revenues from fees and commissions.

8% or higher¥18 billion

THE JUROKU BANK, LTD.

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Annual Report 2008

and ensures appropriate auditing functions. There are no
conflicts of interest between the outside auditors and the
Bank that need to be disclosed.
With regard to internal controls, the Audit &Inspection Division conducts internal audits, and at
least once per year seeks outside opinions regarding thedevelopment and management of the internal control
system. Based on these objective opinions, we work tofurther improve the internal control system. Moreover,to reinforce the compliance system, we have establisheda whistleblower hotline which provides a reporting
mechanism for both internal use and for use by outside
lawyers.
With respect to the risk control system, we haveestablished the ALM Committee and Compliance
Committee. These committees discuss risk management
issues both on a regular basis and when necessary. At
these meetings, the appropriateness of operations isreviewed and risk management is applied to minimize
loss due to unforeseen circumstances. We have also
signed consultation agreements with three lawyers, whoprovide advice on legal matters and perform a variety oflegal checks when necessary.
The Bank’s accounts are audited by the independent
auditing firm Deloitte Touche Tohmatsu. This firm
provides accurate audits on the basis of appropriate
information disclosure.

Corporate Governance
Basic policy
At Juroku Bank, we believe that retaining the trustof our stakeholders by conducting all of our activities
in a sound manner is vital to our role as a financial
institution. Therefore, we place the highest priority
on building a solid organizational structure andestablishing systems that continually reinforce corporate governance.
In association with the enforcement of the Corporate
Law, we established a Basic Policy related to theEstablishment of an Internal Control System at a meeting of the Board of Directors held on May 24, 2006. A
Board meeting held on September 20, 2007 adopted
a resolution to amend the policy. In this way, we havedeveloped a system to ensure the appropriate executionof our business and have refined our system. Under
this basic policy, we will pursue initiatives to enhance
corporate governance.

Progress thus far
The Board of Directors comprises 11 members who
deliberate and decide matters stipulated in laws and regulations and important management issues, and monitor
the conduct of business operations by each director.
Under the Executive Committee structure, authorized by the Board of Directors, the president, senior
managing directors and managing directors are able toquickly decide on important matters affecting the daily
conduct of business operations.
The Bank employs the conventional statutory
auditor system stipulated by the Corporation Law. The
Board of Corporate Auditors comprises four statutory
auditors, including two outside auditors and two
standing auditors. To support the statutory auditors, wehave established the Corporate Auditors’ Office, whichmonitors the execution of business operations objectively

THE JUROKU BANK, LTD.

Going forward, we will work to further enhance ourcorporate governance standards and ensure the soundness of our ethical conduct and financial position.

Compliance System
Recognizing that the survival of financial institutions
depends on trust, we put top priority on earning the firm
trust of the general public. To this end, we embrace highcorporate ethical standards and promote extensive awareness of the importance of legal compliance.

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Annual Report 2008

We are carrying out an initiative to further strengthen
the compliance system under our current 10th MediumTerm Management Plan, which prescribes compliancepolicies that are designed to:1) earn the firm trust of the general public through themaintenance of high corporate ethical standards andawareness of the importance of legal compliance;2) promote awareness of the crucial importance ofcompliance among our staff; and3) protect customer information in compliance with the
Personal Information Protection Law.
To further enhance the compliance system that
we have built to date, we formulate and implement acompliance program each fiscal year. All departments
hold monthly study meetings to foster knowledge oflegal issues and increase compliance-related awareness.
We have also prepared curriculums related to compliancefor individual training programs in order to boost theknowledge and awareness of compliance among our
employees. In addition, each department conducts
periodic self-checks according to its specific responsibilities. This is part of our initiative to ingrain a complianceoriented corporate culture.

Compliance at Each Division
Compliance officers are appointed in each of the divisions
to check the day-to-day compliance of those divisions.

Customer Protection Management System
The Bank set up a Customer Protection Management
Policy in September 2007 to develop and establish asystem to ensure customer protection. Under the
Customer Protection Management Policy, we
have clearly stated protection measures that
we had taken as part of compliance and risk
management. We are focusing more heavily on

customer-oriented management. The purpose of thepolicy is to improve the protection and convenience ofcustomers through the following initiatives:(i) Providing appropriate information and explanations
on products and services for customers(ii) Responding properly to requests, consultation,
inquiries and complaints from customers(iii) Appropriately managing customer information(iv) Properly managing outsourced operations

Information Security, Management of
Customer Information

Organizational Structure

In line with the top priority that we assign to ensuring
the confidentiality of our customers’ personal data,
information security risk is addressed by the Bank’s
Information Security Management Rules. We have publicly announced our Declaration of Personal Information
Protection (Privacy Policy).
As stipulated in the aforementioned Security
Management Rules, we have also appointed a chief
information officer at the Bank’s headquarters and an
information officer in each department and branch. We
are making every effort to educate employees to bolster
their awareness of security issues so that we can ensure
the maximum degree of protection for customer data indaily operations.

Compliance Committee
Chaired by the managing director in charge of the Risk
Management Division and consisting of standing corporate auditors and general managers from relevant divisions, the Compliance Committee examines, discusses,
and issues directives concerning matters of compliance.

Risk Management Division
As the entity responsible for overseeing compliance,
the Risk Management Division promotes complianceprograms and serves as the secretariat for the Compliance
Committee.

Inspection Section(Audit and Inspection Division)
The section conducts inspections, checks, and other investigations related to the compliance conditions in eachdivision, and reports the results to the Risk Management
Division.

THE JUROKU BANK, LTD.

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Annual Report 2008

Risk Management

Comprehensive Risk Management

The importance of risk management has grownas the risks confronting financial institutions havebecome more complex and diverse. Recognizing
risk management as crucial for safe and soundoperations, we have implemented compliance measures in the Risk Management Policies containedin our 10th Medium-Term Management Plan.
In addition, we have established Comprehenisve
Risk Management Policies and other policies andrules relating to risk management that enable anappropriate and prompt response to various typesof risk. We have established the Risk Management
Division to step up ou r commitment in this area.
We aim to further strengthen our risk management
system through use of the PDCA cycle, by laying
down policy (planning), creating internal rules andorganizations (doing ), assessing results of thesemeasures (checking ) and making improvements
where needed (acting).

The Bank carries out comprehensive risk management to secure sound operations. Each risk is managed by related divisions individually, and, taken
one step further, by quantifying risk statistically tolimit exposure to a certain level of regulatory capital(within Tier 1 thresholds).

Credit Risk
We manage credit risk according to our Credit Risk
Management Policies as a credit risk management
system, and our Credit Risk Management Rules,
Credit Portfolio Management Rules and our Credit
Policy Rules as specific rules.
We have clearly separated the sales promotion
and credit screening functions and undertake strict
reviews and management under a policy of screening by borrower business sector. Individual cases arescreened by verifying various aspects including theuse of funds, income and expenditure plans, andinvestment outcomes, and by carefully examining aborrower’s resources and plans for repayment. We
have introduced a credit rating system to objectively
determine a borrower company’s credit level and to
standardize credit extension criteria. We endeavor
to maintain a sound asset base by implementing
our own assessment of loan assets and by making
appropriate write-offs and provisions for possible
loan losses. In our portfolio management, we will
ensure a sufficient level of earnings to absorb credit
costs, thereby improving the credit portfolio.

Risk Management Policies(10th Medium-Term Management Plan)
1

Implement appropriate risk management toensure that risk taking is handled in line with
the Bank’s financial strength.

2

Enhance the ability of risk analysis to support
appropriate risk-taking.

3

Establish a risk management system in accordance with new capital adequacy requirements(Basel II).

4

Market Risk
We manage market risk through the Bank’s Market
Risk Management Policies and, as specific rules,
Market Risk Management Rules.
The Risk Manag ement Division manag es

Minimize risk related to the joint operation of
the core computer systems.

THE JUROKU BANK, LTD.

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Annual Report 2008

interest rate risk related to deposits and loans, aswell as the risk associated with securities, derivatives
and other markets. Our current positions, unrealized gains/losses and risk indicators such as BPV
and VaR are measured and evaluated on a daily ormonthly basis and reported to management. Fromthe perspective of managing assets and liabilities
together, we hold monthly ALM Committee
meetings, forecast interest rates, stock prices andexchange rates, as a set of measures to enable anappropriate response to risk.

<System Risk>
System risk is managed through the Bank’s System Risk
Management Policies and System Risk Management
Rules. We have established a framework that swiftly
responds to system failure through our Computer
System Failure Action Rules and Center Failure Rules.
We are also developing a risk management system tocontinue our business in unforeseen situations.

Risk Auditing System
To further reinforce and strengthen our risk management system, we must verify that our risk control
systems are functioning effectively. The Audit andInspection Division works independently of thesections that it inspects (headquarters, branches, andconsolidated subsidiaries) and rigorously examines
control procedures by conducting regular, planned,
on-site inspections. The headquarters and branches
also conduct their own regular self-inspections. We
are working to enhance our system of mutual supervision and self-checks, improve risk management andprevent potential accidents. Moreover, independent
auditors conduct audits of our risk management system, usually once per year, to ensure the effectivenessof the system.

Liquidity Risk
We manage liquidity risk through our Liquidity
Risk Management Policies and Liquidity Risk
Management Rules and regard stable cash flows
as the primar y objective. Moreover, we haveestablished a contingency plan for unforeseen
circumstances and have put a system in place thatcan respond to a wide variety of circumstances
promptly and appropriately.

Operational Risk
We have drawn up an Operational Risk Management
Policies and Operational Risk Management Rules,
with separate provisions for administrative risk,
system risk, legal risk, personnel risk, fixed asset risk
and reputational risk. For the important categories
of administrative and system risk, we have drawn up
the following sub-policies and procedures.

At Juroku Bank, we recognize the importance ofintegrated risk management, and we will continue
working to enhance the sophistication of our risk
management system.

<Administrative Risk>
We manag e administrative risk throug h our own
Adm in istrative Risk Mana g ement Po l icies andAdministrative Risk Management Rules. While adapting to the growing diversification and complexity ofbanking operations, our administration has become
more rigorous in an effort to retain and strengthen thetrust of our customers.

THE JUROKU BANK, LTD.

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Annual Report 2008

Non-Performing Loans
The Bank provides information about the status of its
assets in three different ways. First, we conduct selfassessment to calculate appropriate write-offs andreserves by classifying borrowers according to theirfinancial soundness. Second, disclosure based on“The Financial Reconstruction Law” is used to classify
problem assets. Third, we disclose the value of RiskMonitored Loans based on the Banking Law, which
excludes non-loan assets such as foreign exchange,
accrued interest and advance payments.

Asset Self-Assessment / Assets Disclosed under the Financial Reconstruction Law /Risk-Monitored Loans under the Banking Law(Non-consolidated)

Billions of yen

Asset Self-Assessment
For all assets
Borrower category
Balances of credits
Legallybankrupt borrowers

7.0
[3.0]

Classification
I

II

III

IV

5.7

1.2

—
(0.4)

—
(3.9)

—
(1.2)

—
(8.0)

Virtuallybankrupt borrowers

15.3
[7.3]

11.6

3.7

Potentiallybankrupt borrowers

70.3

Assets disclosed under the Financial Reconstruction Law
and coverage of the claims
For all claims

Risk-monitored loans
Loans only
(no other type of credit included)

Portion of claims
Classification
secured*2
Balances of claims

Classification

Reserves

Coverage ratio

Bankrupt andquasi-bankrupt assets

Bankrupt loans

8.7

22.3

13.6

35.2

19.0

16.1
(16.0)[10.3]
Non-accrual loans

38.3

38.8

16.0

77.1%

4.6

47.7

179.3

382.0

131.4
[119.5]

Others*1
Normal assets

2,864.5

Normal borrowers

7.6

43.3%

56.2

37.2

71.0%

Ratio of disclosed claims under
the Financial Reconstruction Law (subtotal)
to total credits
Figures in brackets are those after application ofpartial charge-offs (direct deduction).

4.3%[4.0%]

2,289.7

Total

2,996.0[2,984.0]

9.2

Past due loans(3 months or more)

0.6

Restructured loans

38.1

Total

131.1
[119.3]Sub-total

Substandard
borrowers

2,289.7

85.5[77.5]

70.3
Substandard loans*3

561.3

6.7
[2.9]

100.0%

Doubtful assets

Borrowers requiringcaution

52.4

Loan balances

Ratio of risk-monitored loans
to total loans
Figures in brackets are those after applicationof partial charge-offs (direct deduction).

4.5%[4.1%]

Total

2,526.2

453.7

16.1
(17.6)—(12.0)*1 Borrowers requiring caution, excluding substandard borrowers*2 Portion of claims secured by collateral or guarantees

2,996.0[2,984.0]*3 Substandard claims consist of loans only.

exchanges + Suspense payments with a similar nature toloans + Accrued interest.

Notes:
1. Amounts in asset self-assessment and claims disclosed
under the Financial Reconstruction Law and the coverage of claims are rounded to the nearest 100 million yen.
Amounts in risk-monitored loans are rounded down to
the nearest 100 million yen. Figures for ratios are rounded
down to the first decimal place.

3. Amounts in asset self-assessment are those after deduction of specific reserves for possible loan losses, and theamounts in parentheses are specific reserves for eachclassification.
4. The Bank does not implement partial charge-offs (direct
deduction). If partial charge-offs were implemented,
relevant figures would decline to the figures shown inbrackets.

2. All credit items = Loans + Customers’ liabilities for acceptances and guarantees + Bonds issued through private
placements covered by guarantees of the Bank + Foreign

THE JUROKU BANK, LTD.

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Annual Report 2008

Contribution to the Regional Economy and Community
Activities to Revitalize the Regional
EconomyBusiness information exchange for Japanesecompanies operating in Hong Kong andSouth China

Support for management improvements andbusiness reconstruction
To revitalize the regional economy, the Bank carries out
activities designed to facilitate management improvements, such as appropriate analysis of the financial situation, recommendations for improving the financial
position, and advice for developing business improvement plans, while valuing relationships with its customers. In cooperation with external organizations, including
SME Revitalization Support Committees and corporate
reconstruction funds, we support business reconstruction by providing consulting and proposals about reconstruction schemes.

The Bank organized a business information exchange
meeting for Japanese Companies in Shenzhen jointlywith 16 regional banks based in Hong Kong in June
2007. This was the first time that regional banks basedin Hong Kong had jointly organized a meeting forexchanging information with Japanese companies that
do not normally interact with each other, and for discovering new business opportunities. Over 220 people participated in the meeting to actively exchange
information.

Handling eco-friendly financial products
Community-Based Finance Promotion Plan
The Bank believes that a commitment to dealing
with environmental issues is necessary for the sustainable development of local communities. Based on thisconcept, we provide proactive support to customers,
addressing environmental issues through the handling of
eco-friendly financial products. These products include
Every Support 21 and Juroku Eco Loan.

The Bank has developed a Community-Based Finance
Promotion Plan for fiscal 2007 and fiscal 2008 and has
introduced business inauguration support, businessreconstruction support, and the expansion of products
for the diversification of financing methods.
We will continue to position the Community-Based
Finance Promotion Plan as the core of our management and to promote initiatives primarily in the following three fields: bolstering the support for corporate
customers in accordance with their life cycle, pursuingfund supply methods suitable for small and mediumsized enterprises, including financing methods based on
an assessment of business value, and making sustainable
contributions to the regional economy using a pool ofregional data.

THE JUROKU BANK, LTD.

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Annual Report 2008

Board of Directors and Corporate Auditors
The Juroku Bank, Ltd. (as of June 30, 2008)

President

Nobuo Kojima
Senior Managing Director

Hakumi Horie
Managing Directors

Yukio Murase
Hajime Muramatsu
Directors

Toshiro Hori
Tomio Kawamura
Yoji Matsuura
Yutaka Sugiyama
Eiji Yamada
Tetsuya Miyaura
Naoki Ikeda

Nobuo Kojima
President

Standing Corporate Auditors

Tatsuharu Ando
Kunitaka Okamoto
Corporate Auditors

Hisashi Yura
Katsuhiko Kumazaki

Hakumi Horie

Yukio Murase

Hajime Muramatsu

Senior Managing Director

Managing Director

Managing Director

Organization Chart
The Juroku Bank, Ltd. (as of June 30, 2008)

Corporate Auditors’ Office
Audit and Inspection DivisionCorporate Administration DivisionCorporate Planning Division

General Meeting of
Shareholders

Marketing Support DivisionMarketing Planning Division

Board of Directors

Area Promotion Division

Board of Corporate
Auditors

International and Securities Division
Hong Kong Representative Office
Shanghai Representative Office

Corporate Auditors
Executive
Committee

Credit Supervision Division
Enterprise Support Division
Operations Administration Division
Risk Management Division
Head Office
Domestic Branches (147)

THE JUROKU BANK, LTD.

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Annual Report 2008

Financial Review
Performance
The Japanese economy expanded in the fiscal year underreview, fueled by strong exports and firm capital expenditure. However, the economy slowed in the second half,reflecting instability in the financial markets triggered by
the U.S. subprime mortgage crisis, soaring crude oil and raw
material prices, and a decline in housing starts in association
with the introduction of the revised Building Standards
Law.
In our territory, which consists primarily of Gifu
Prefecture and Aichi Prefecture, the economy improved
overall, although the situation differed depending on thearea and the industry. However, the improvement slowed in
the latter half.
As a consequence, consolidated results in the fiscal year
were as follows:
Ordinary income from banking operations rose
¥21,123 million year on year, to ¥116,312 million(US$1,161 million), attributable to a rise in interest income
because of increasing yields on loans and an increasein gains from the sale of securities. Ordinary expenses
increased ¥25,132 million, to ¥97,250 million (US$971
million), reflecting a rise in funding costs due to risinghigher deposit interest rates, and an increase in provision
for possible loan losses. As a consequence, ordinary profit
declined ¥4,009 million, to ¥19,062 million (US$190
million).
In the leasing business, as a result of proactive marketing, ordinary income rose ¥2,202 million, to ¥21,887
million (US$218 million). Ordinary expenses increased¥3,049 million, to ¥21,372 million (US$213 million).
Ordinary profit fell ¥847 million, to ¥515 million (US$5
million).
In other businesses, including the credit card business and credit guarantee business, ordinary income
declined ¥300 million, to ¥5,724 million (US$57 million).
Ordinary expenses rose ¥96 million, to ¥4,738 million(US$47 million). Ordinary profit fell ¥396 million, to¥986 million (US$10 million).
As a result, ordinary income on a consolidated basisrose ¥23,195 million year on year, to ¥141,810 million (US$1,415 million). Ordinary expenses increased

THE JUROKU BANK, LTD.

¥28,409 million, to ¥121,459 million (US$1,212 million).
Consequently, ordinary profit fell ¥5,214 million fromthe previous year, to ¥20,351 million (US$203 million).
Net income declined ¥3,531 million, to ¥10,314 million(US$103 million).

Financial Position
To achieve steady and low-cost funding through campaigns
and other sales initiatives we carried out aggressive marketing for deposits. Moreover, to respond to the diversificationof our customers’ asset management needs appropriately
and actively, we sought to bolster investment-type products
especially for individuals, including investment trusts, public bonds, pension insurance, and whole life insurance. As
a result, the balance of deposits increased ¥14,051 million
year on year, to ¥3,630.2 billion (US$36,233 million).
We also responded proactively to the funding needsof local enterprises and individuals, principally mortgage
loans, and sought opportunities to extend loans to local
municipal entities. Consequently, the balance of loans rose
¥86,086 million, to ¥2,892.7 billion (US$28,873 million).
In addition to underwriting and purchasing government and municipal bonds, we engaged in bond transactions for effective fund operations, while keeping a close
watch on market trends. As a consequence, the balanceof securities declined ¥154,875 million, to ¥853.9 billion(US$8,522 million). Unrealized gains on available-forsale securities decreased ¥53,381 million year on year, to¥32,732 million (US$327 million) at the term-end.
Net cash used in operating activities increased ¥64,889
million year on year, to ¥74,067 million (US$739 million), reflecting an increase in loans. Net cash provided byinvestment activities fell ¥592 million, to ¥71,005 million(US$709 million), attributable to the sale and redemption of securities. Net cash provided by financing activities
declined ¥9,370 million, to ¥2,961 million (US$30 million). As a result, the balance of cash and cash equivalents
at year-end fell ¥123 million during the term underreview, to ¥193,853 million (US$1,935 million).

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Annual Report 2008

Consolidated Balance Sheets
The Juroku Bank, Ltd. and Consolidated Subsidiaries
March 31, 2008 and 2007

Millions of Yen
2008
2007

Thousands of
U.S. Dollars (Note 1)
2008

ASSETS:Cash and due from banks (Note 3).............................................
Call loans and bills bought .......................................................
Monetary receivables purchased ................................................
Trading securities (Note 4) .......................................................
Money held in trust (Note 5).....................................................
Securities (Notes 4, 11 and 23)..................................................
Loans and bills discounted (Note 6)...........................................
Foreign exchanges (Note 7) .......................................................
Other assets (Notes 8 and 11) ...................................................
Premises and equipment (Note 9)..............................................
Intangible assets ........................................................................
Deferred tax assets (Note 20) .....................................................
Customers’ liabilities for acceptances and guarantees (Note 10) ...
Reserve for possible loan losses ..................................................
Total Assets ......................................................................

¥ 194,199
158
0
1,514
4,000
853,864
2,892,737
4,613
79,551
111,500
14,306
8,645
30,785(54,284)¥4,141,588¥ 194,295
—
1
3,042
8,000
1,008,739
2,806,651
3,361
46,425
113,337
15,537
1,788
32,872(48,007)¥4,186,041$ 1,938,307
1,577
0
15,111
39,924
8,522,447
28,872,512
46,043794,002
1,112,886
142,789
86,286307,266(541,811)$41,337,339¥3,630,156
23,23633,063—44,826
737
30,00089,195
7,458—
10,42430,784
3,899,879¥3,616,105
41,30018,88823,833
51,638738
15,00050,971
7,368
29,591
10,57332,872
3,898,877$36,232,718
231,920330,003—447,410
7,356
299,431890,258
74,439—104,042
307,256
38,924,833

36,83925,362
109,766
86,113(37)
12,953367,691
253,139
1,171,654
326,699—
127,049(1,140)269,856
17,308287,164¥4,186,041(12,476)
2,233,756
178,750
2,412,506$41,337,339

LIABILITIES AND EQUITY:

Liabilities:
Deposits (Notes 11 and 12) .......................................................
Negotiable certificates of deposit...............................................
Call money and bills sold ..........................................................
Payables under securities lending transactions (Note 11) ..........
Borrowed money (Note 13) .......................................................
Foreign exchanges (Notes 7) ......................................................
Bonds (Note 14)........................................................................
Other liabilities (Note 15) ........................................................
Liability for retirement benefits (Note 16).................................
Deferred tax liabilities (Note 20) ...............................................
Deferred tax liabilities for land revaluation excess (Note 2.g) .....
Acceptances and guarantees (Note 10) .....................................
Total Liabilities.................................................................

Commitments and Contingent Liabilities (Notes 21, 22 and 23)
Equity (Notes 17 and 24) :Common stock:authorized, 460,000,000 shares;
36,839issued, 366,855,449 shares in 2008 and 2007 .......................
Capital surplus ..........................................................................
25,362Retained earnings......................................................................
117,388
Unrealized gain on available-for-sale securities ..........................
32,732—
Deferred loss on derivatives under hedge accounting .................
Land revaluation excess (Note 2.g).............................................
12,729Treasury stock—at cost:
2,423,329 shares in 2008 and 2,265,081 shares in 2007 .......
(1,250)Total ................................................................................
223,800
Minority interests......................................................................
17,909Total equity ......................................................................
241,709
Total Liabilities and Equity............................................... ¥4,141,588
See notes to consolidated financial statements.
THE JUROKU BANK, LTD.

12

Annual Report 2008

Consolidated Statements of Income
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2008 and 2007

2008

2007

Thousands of
U.S. Dollars (Note 1)
2008¥ 61,273
16,103262
16,936
31,647
13,912
1,801
141,934¥ 54,939
15,120255
17,691
22,791
4,813
3,110
118,719$ 611,568
160,724
2,615
169,039
315,870
138,856
17,976
1,416,648

10,130
3,059
685
4,663
25,67352,60014,383379
11,478123,050
18,884

4,776
1,649
871
4,400
19,95849,088
8,877
165
3,766
93,55025,169101,108
30,532
6,837
46,542
256,243
525,002
143,557
3,783
114,562
1,228,166
188,482

11,369(3,515)
7,854
716¥ 10,314

7,942
2,103
10,045
1,279¥ 13,845

113,474(35,083)
78,391
7,147$ 102,944

2008

2007

U.S. Dollars
2008¥28.298.00¥37.86
7.00

Millions of Yen

Income:Interest on:

Loans and discounts...............................................................
Securities...............................................................................
Other ....................................................................................
Fees and commissions................................................................
Other operating income.............................................................
Gain on sale of securities ...........................................................
Other income (Note 18) ............................................................
Total Income.....................................................................
Expenses:
Interest on:

Deposits ................................................................................
Borrowings and re-discounts .................................................
Other ....................................................................................
Fees and commissions................................................................
Other operating expenses...........................................................
General and administrative expenses .........................................
Provision for possible loan losses................................................
Impairment loss on long-lived assets .........................................
Other expenses (Note 19) ..........................................................
Total Expenses ..................................................................
Income before Income Taxes and Minority Interests ...........
Income Taxes (Note 20) :Current .................................................................................
Deferred ................................................................................
Total Income Taxes ...........................................................
Minority Interests in Net Income ..........................................
Net Income..............................................................................

Yen

Per Share of Common Stock (Note 2.q) :Basic net income ...................................................................
Cash dividends applicable to the year ....................................
See notes to consolidated financial statements.

THE JUROKU BANK, LTD.

13

Annual Report 2008

$0.28
0.08

Consolidated Statements of Changes in Equity
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2008 and 2007
Thousands

Millions of Yen

Outstanding
Number of
Shares ofCommon stock

CommonStock

Balance at April 1, 2006..................

365,708¥36,839

Reclassified balances as of March 31,
2006 (Note 2.r) ...............................

—

—

—

—

—

—

—

—

Net income........................................

—

—

—

13,845———

Cash dividends, ¥7.00 per share.........

—

—

—

(2,553)———

Bonuses to directors andcorporate auditors ............................

—

—

—

(45)

—

—

Transfer of land revaluation excess ....

—

—

—

58

—

Purchase of treasury stock fromsubsidiaries......................................

(970)

—

(9)

—

Purchase of treasury stock-other.........

(164)

—

—

—

CapitalSurplus

Unrealized
Deferred Loss
Gain onLand
onAvailable-for-sale Derivatives under Revaluation
Securities Hedge Accounting
ExcessRetained
Earnings

Minority
Interests

Total

Total Equity—¥252,957—

15,695

15,695—

13,845—

13,845—(2,553)—(2,553)

—

—

(45)

—

(45)

—

(58)

—

—

—

—

—

—

—

(440)

(449)

—

(449)

—

—

—

(115)

(115)

—

(115)

¥25,369 ¥ 98,461 ¥79,871¥—

Treasury
Stock¥13,011 ¥ (594) ¥252,957 ¥Disposal of treasury stock ..................

16

—

2

—

—

—

—

9

11

—

11

Net change in the year.......................

—

—

—

—

6,242

(37)

—

—

6,205

1,613

7,818

Balance at March 31, 2007..............

364,590

36,83925,362

109,766

86,113(37)

12,953(1,140)269,856

17,308287,164

Net income........................................

—

—

—

10,314————

10,314—

10,314

Cash dividends, ¥8.00 per share.........

—

—

—

(2,916)

—

—

—

—

(2,916)—(2,916)

Transfer of land revaluation excess ....

—

—

—

224

—

—

—

—

224

—

224

Purchase of treasury stock-other.........

(180)

—

—

—

—

—

—

(123)

(123)

—

(123)

Disposal of treasury stock ..................

22

—

0

—

—

—

—

13

13

—

13

—

—

(53,381)

37

(224)

—

(53,568)

601(52,967)¥25,362 ¥117,388 ¥32,732¥—¥12,729 ¥(1,250) ¥223,800 ¥17,909¥241,709

Net change in the year.......................

——

Balance at March 31, 2008..............

364,432¥36,839

Thousands of U.S. Dollars (Note 1)
CommonStockCapitalSurplus

Unrealized
Deferred Loss
Land
Gain onon
Available-for-sale Derivatives under Revaluation
Securities Hedge Accounting
ExcessRetained
Earnings

Balance at March 31, 2007............................... $367,691 $253,139 $1,095,578 $859,497 $(369)
Net income.........................................................

——

102,944——

Cash dividends, $0.08 per share..........................

——(29,104)——

Transfer of land revaluation excess ......................

—

—

2,236

—

—

Purchase of treasury stock-other..........................

—

—

—

—

—

Disposal of treasury stock ...................................

—

—

—

—

—

Net change in the year........................................

——— (532,798)

369

Balance at March 31, 2008............................... $367,691 $253,139 $1,171,654 $326,699 $ —See notes to consolidated financial statements.

THE JUROKU BANK, LTD.

14

Annual Report 2008

Treasury
Stock

Total

Minority
Interests

Total Equity$129,285 $(11,378) $2,693,443 $172,752 $2,866,195——

102,944—

102,944

—

—

—

—

(29,104)—(29,104)

2,236

—

2,236

—

(1,228)—130(1,228)—(1,228)

130

—

130

(2,236)—(534,665)

5,998(528,667)$127,049 $(12,476) $2,233,756 $178,750 $2,412,506

Consolidated Statements of Cash Flows
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2008 and 2007

2008

2007

Thousands of
U.S. Dollars (Note 1)
2008¥ 18,884¥ 25,169$ 188,482(11,031)
20,006379(77,638)
13,874(14,996)
1,238
6,278
90
(86,085)
14,051(18,063)(1,742)
17,406
165(70,314)
7,296(4,127)(671)(1,417)(3,139)(99,889)
128,106(2,541)(110,101)
199,681
3,783(774,907)
138,477(149,676)
12,356
62,661
898(859,218)
140,243(180,287)

(27)
(158)
14,175105
0(32,366)(270)(1,577)
141,481(23,833)
79,596(11,232)
425(92,951)(74,067)(30,033)
69,402(5,242)(5,346)(34,347)(9,178)(237,878)
794,451(112,107)
4,243(927,747)(739,265)(537,467)
478,625
130,995(1,787)639
71,005(184,682)
131,821130,805(6,568)221
71,597(5,364,477)
4,777,173
1,307,466(17,837)6,378
708,703

10,000(19,000)
15,00013(123)(2,929)2,961——
15,000
11(115)(2,565)
12,331

99,810(189,640)
149,716130(1,228)(29,234)
29,554(22)(123)
193,976¥193,853

4
74,754
119,222¥193,976(220)(1,228)
1,936,082$1,934,854

Millions of Yen

Operating Activities:

Income before income taxes and minority interests ....................
Adjustments for:
Income taxes - paid ...............................................................
Depreciation and amortization ..............................................
Impairment loss on long-lived assets .....................................
Interest income recognized on statements of income..............
Interest expenses recognized on statements of income............
Net gains on securities ..........................................................
Unrealized loss (gain) on derivatives ......................................
Net increase (decrease) in reserve for possible loan losses........
Net increase (decrease) in liability for retirement benefits ......
Net increase in loans .............................................................
Net increase in deposits.........................................................
Net decrease in negotiable certificates of deposit ...................
Net (increase) decrease in due from banks(excluding cash equivalents) .................................................
Net (increase) decrease in call loans and others........................
Net increase (decrease) in call money and others ....................
Net decrease in payables under securities
lending transactions ............................................................
Interest income - cash basis ...................................................
Interest expense - cash basis...................................................
Other–net .............................................................................
Total adjustments .............................................................
Net cash used in operating activities .............................
Investing Activities:

Purchases of securities ...........................................................
Proceeds from sales of securities.............................................
Proceeds from maturities of securities....................................
Purchases of premises and equipment and others ...................
Proceeds from sales of premises and equipment .....................
Net cash provided by investing activities .....................
Financing Activities:

Proceeds from subordinated loans..........................................
Repayment of subordinated loans ..........................................
Proceeds from issuance of subordinated bonds .......................
Proceeds from sales of treasury stock......................................
Acquisition of treasury stock .................................................
Dividends paid .....................................................................
Net cash provided by financing activities ......................
Foreign Currency Translation Adjustments on Cash andCash Equivalents............................................................................
Net (Decrease) Increase in Cash and Cash Equivalents........
Cash and Cash Equivalents, Beginning of Year ....................
Cash and Cash Equivalents, End of Year (Note 3).................
See notes to consolidated financial statements.

THE JUROKU BANK, LTD.

15

Annual Report 2008

Notes to Consolidated Financial Statements
The Juroku Bank, Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2008 and 2007

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Law (formerly, the Japanese Securities andExchange Law) and its related accounting regulations and the
Enforcement Regulation for the Banking Law, and in conformity withaccounting principles generally accepted in Japan, which are different incertain respects as to application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing the consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial
statements issued domestically in order to present them in a form which
is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the 2007 consolidated financial statements toconform to the classifications used in 2008.
The consolidated financial statements are stated in Japanese yen, thecurrency of the country in which the Juroku Bank, Ltd. (the “Bank”) is
incorporated and operates. The translations of Japanese yen amounts
into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥100.19 to $1, theapproximate rate of exchange at March 31, 2008. Such translations
should not be construed as representations that the Japanese yenamounts could be converted into U.S. dollars at that or any other rate.

All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profits included in assets
resulting from transactions within the Group are eliminated in consolidation.
b. Cash and cash equivalents
For the purpose of the consolidated statements of cash flows, cash and cash
equivalents represent cash and amounts due from the Bank of Japan.
c. Trading securities
Trading securities are stated at fair value, and the related unrealized
gains and losses are included in earnings. The cost of trading securities
sold is determined based on the moving-average method.
d. Securities
Securities other than trading securities are classified and accounted for,depending on management’s intent, as follows: 1) held-to-maturity debt
securities, which are expected to be held to maturity with the positive
intent and ability to hold to maturity, are reported at amortized cost,and 2) available-for-sale securities, which are not classified as held-tomaturity, are reported at fair value with unrealized gains and losses, netof applicable taxes, reported in a separate component of equity. Nonmarketable available-for-sale securities are stated at cost or amortizedcost determined by the moving-average method.
Prior to April 1, 2006, synthetic collateralized debt obligationsclassified as available-for-sale securities held by the Bank were not separated into the host contract and the embedded derivative. The Bank
measured the entire hybrid contract at fair value and gains or losses wererecognized in the consolidated statements of income.
Effective April 1, 2006, the Bank adopted a new accounting guidance“Guidance on Accounting for Other Compound Financial Instruments(Compound Financial Instruments Other than Those with Option to
Increase Paid-in Capital)” issued by the ASBJ. In accordance with the
new accounting guidance, the Bank measured the entire hybrid contracts at fair vale and unrealized gains or losses, net of applicable taxes,
were recognized in a separate component of equity.
For other than temporary declines in fair value, securities are
reduced to net realizable value by a charge to income.
Securities included in money held in trust for trading purposes arestated at fair value, and the related unrealized gains and losses areincluded in earnings.
e. Premises and equipment
Premises and equipment are stated at cost less accumulated depreciation. Depreciation of premises and equipment of the Bank except forleased assets is computed by the declining-balance method over the estimated useful lives of the assets. Depreciation of premises and equipment of the consolidated subsidiaries except for leased assets iscomputed principally by the same method as the Bank. Depreciation ofleased assets is computed by the straight-line method over their lease
periods.
The range of useful lives is principally from 15 to 50 years forbuildings and from 4 to 20 years for other premises and equipment.
Under certain conditions such as exchanges of premises and equipment of similar kinds and sales and purchases resulting from expropriation, Japanese tax laws permit companies to defer the profit arising fromsuch transactions by reducing the cost of the assets acquired or by providing a special reserve in the equity section. Deferred gain on premises
and equipment deductible for tax purposes was ¥1,179 million($11,768 thousand) in 2008.
f. Long-lived assets
The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstance indicate the carrying amount of an asset or
asset group may not be recoverable. An impairment loss would be

2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2008 and 2007
include the accounts of the Bank and its seven significant subsidiaries,
including Juroku Business Service Co., Ltd., Juroku DC Card Co., Ltd.,
Juroku JCB Co., Ltd., Juroku Lease Co., Ltd., Juroku Computer Service Co.,
Ltd., Juroku Credit Guarantee Co., Ltd. and Juroku Capital Co., Ltd(together, the “Group”).
Under the control concept, those companies in which the Bank, directly
or indirectly, is able to exercise control over operations are fully consolidated.
On September 8, 2006, the Accounting Standards Board of Japan (the“ASBJ”) issued Practical Issues Task Force (“PITF”) No.20, “Practical
Solution on Application of Control Criteria and Influence Criteria to
Investment Associations” which is effective for fiscal years ending on or after
September 8, 2006. The practical solution clarifies how the control andinfluence concept should be practically applied to the consolidation scope ofcollective investment vehicles, such as limited partnerships, TokumeiKumiai and other entities with similar characteristics, in order to avoid suchvehicles being intentionally excluded from consolidation. The Bank applied
this task force in the year ended March 31, 2007, which resulted in four collective investment vehicles newly identified as subsidiaries. However,investments in these investment vehicles are stated at cost. If the equity
method of accounting had been applied to the investments in these vehicles,
the effect on the accompanying consolidated financial statements would not
be material.
Information on two special purpose entities, which are not regarded as
subsidiaries pursuant to Article 8 Paragraph 7 of the Financial Statements
Regulations, is not disclosed because they are immaterial. “Implementation
Guidance on Disclosures about Certain Special Purpose Entities” (ASBJ
Guidance No.15, issued on March 29, 2007) is effective for the year beginning on or after April 1, 2007, and the Group applied the guidance for theyear ended March 31, 2008.
The difference between the cost of an acquisition and the fair value ofthe net assets of the acquired subsidiaries at the date of acquisition is being
amortized over a period of five years.
THE JUROKU BANK, LTD.

16

Annual Report 2008

recognized if the carrying amount of an asset or asset group exceeds thesum of the undiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset group. The
impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is thehigher of the discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.
g. Land revaluation
Under the “Law of Land Revaluation,” the Bank elected a one-timerevaluation of its own-use land to a value based on real estate appraisal
information as of March 31, 1998.
The resulting land revaluation excess represents unrealized appreciation of land and is stated, net of income taxes, as a component of equity.
There is no effect on the consolidated statements of income. Continuous
readjustment is not permitted unless the land value subsequently
declines significantly such that the amount of the decline in value
should be removed from the land revaluation excess account and related
deferred tax liabilities.
The carrying amount of the land after the above one-time revaluation exceeded the market value by ¥16,872 million ($168,400
thousand) as of March 31, 2008.
h. Intangible assets
Amortization of intangible assets is calculated by the straight-line
method.
Amortization cost for software for internal use is calculated by thestraight-line method over the estimated useful life, principally, five
years.
i. Reserve for possible loan losses
The Bank implemented a self-assessment system for its asset quality.
The quality of all loans is assessed by the related lending division with asubsequent audit by the asset audit division in accordance with theBank’s policies and rules for self-assessment of asset quality.
The Bank has established a credit rating system under which thecustomers are classified into five categories such as “normal,” “caution,”“possible bankruptcy,” “virtual bankruptcy” and “legal bankruptcy.”
The credit rating system is used for self-assessment of asset quality.
For normal and caution loans, the reserve for possible loan losses isprovided for based on actual past loss ratios. For loans such as possible
bankruptcy, the reserve for possible loan losses is provided for in an
amount deemed necessary to cover possible losses on loans considering
the customer’s solvency and other factors, after the estimated fair valueof the collateral real estate or guaranteed amount has been deducted.
For loans such as virtual bankruptcy or legal bankruptcy, the reserve forpossible loan losses is provided based upon the loan amount, after theestimated fair value of the collateral real estate or guaranteed amount
has been deducted.
For loans to possible bankruptcy customers, if the exposure to a customer after deducting the estimated value of the collateral or guaranteedamount exceeds a certain amount, the discounted cash flow method isapplied for reserve provision, under which the reserve is determined as
the difference between the book value of the loan and its present valueof future cash flows discounted using the contractual interest rate in thecase that future cash flows of the principal and interest can be reasonably
estimated.
Reserve for possible loan losses of consolidated subsidiaries is provided based on historical loan loss experience and estimated collectibility of specific claims.

THE JUROKU BANK, LTD.

The Bank applied the discounted cash flow method for reserve provision as of March 31, 2008. The effect of this treatment was todecrease income before income taxes and minority interests for the year
ended March 31, 2008 by ¥3,630 million ($36,231 thousand).
j. Liability for retirement benefits
The Bank has a contributory funded defined benefit pension plan andlump-sum payment severance plan for employees, and certain subsidiaries have lump-sum payment severance plans for employees. Also,
the Bank and certain subsidiaries have severance lump-sum payment
plans for directors and corporate auditors.
Prior to April 1, 2007, retirement benefits to directors and corporate auditors of the Group were expensed when paid. Effective April 1,
2007, retirement benefits to directors and corporate auditors of theGroup are provided at the amount that would be required if all directors
and corporate auditors retired at the balance sheet date in accordancewith a Report of the Auditing and Assurance Practice Committee, “AnAuditing Treatment for Retirement Benefits to Directors and Corporate
Auditors,” which was published by the Japanese Institute of Certified
Public Accountants on April 13, 2007 and is effective for fiscal years
beginning on or after April 1, 2007. The effect of this change was todecrease income before taxes and minority interests for the year ended
March 31, 2008 by ¥494 million ($4,931 thousand).
k. Leases
All leases of the Group are accounted for as operating leases. Under
Japanese accounting standards for leases, finance leases that are deemed
to transfer ownership of the leased property to the lessee are to be capitalized, while other finance leases are permitted to be accounted for as
operating lease transactions if certain “as if capitalized” information isdisclosed in the notes to the lessee’s financial statements.
l. Bonuses to directors and corporate auditors
Bonuses to directors and corporate auditors are accrued at the year end
to which such bonuses are attributable.
m. Income taxes
The provision for current income taxes is computed based on the pretax
income included in the consolidated statements of income. The asset
and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to
the temporary differences.
o. Foreign currency transactions
Foreign currency assets and liabilities of the Group are translated into
yen equivalents at the exchange rates prevailing at the fiscal year end.
p. Derivatives and hedging activities
The Bank uses a variety of derivative financial instruments. Derivative
financial instruments are classified and accounted for as follows: a) all
derivatives are recognized as either assets or liabilities and measured atfair value, and gains or losses on derivative transactions are recognized in
the statements of income and b) for derivatives used for hedging purposes, if derivatives qualify for hedge accounting because of high correlation and effectiveness between the hedging instruments and thehedged items, gains or losses on derivatives are applied for hedge
accounting.
Under the exceptional treatment of hedge accounting, the interest
rate swaps which qualify for hedge transactions and meet specificmatching criteria are not remeasured at market value but the differential
paid or received under the swap agreements are recognized and included

17

Annual Report 2008

s. New Accounting Pronouncements
Lease Accounting
On March 30, 2007, the ASBJ issued ASBJ Statement No.13,“Accounting Standard for Lease Transactions,” which revised the existing accounting standard for lease transactions issued on June 17, 1993.
The revised accounting standard for lease transactions is effective for fiscal years beginning on or after April 1, 2008 with early adoption permitted for fiscal years beginning on or after April 1, 2007.
LesseeUnder the existing accounting standard, finance leases that deem totransfer ownership of the leased property to the lessee are to be capitalized, however, other finance leases are permitted to be accounted for as
operating lease transactions if certain “as if capitalized” information isdisclosed in the note to the lessee’s financial statements. The revised
accounting standard requires that all finance lease transactions shall becapitalized recognizing lease assets and lease obligations in the balance
sheet.
LessorUnder the existing accounting standard, finance lease that deem totransfer ownership of the leased property to the lessee are to be capitalized, however, other finance leases are permitted to be accounted for as
operating lease transactions if certain “as if capitalized” information isdisclosed in the note to the lessor’s financial statements. The revised
accounting standard requires that all finance leases that deem to transfer
ownership of the leased property to the lessee shall be recognized as leasereceivables, and all finance leases that deem not to transfer ownership ofthe leased property to the lessee shall be recognized as investments inlease.

in interest expense or income.
The Bank evaluates the effectiveness of hedges by examining
whether risk exposures of derivatives, serving as the means to adjustrisks, are within risk limits determined in the risk-management policy
and also whether hedged interest rate risk exposure is reduced.
Prior to April 1, 2003, the Bank applied “macro hedge,” the temporary treatment stipulated in “Treatment of Accounting and Auditingin Applying Accounting Standard for Financial Instruments in the
Banking Industry,” JICPA Industry Audit Committee Report No.24,
which is the method to manage aggregate interest rate risks arisingfrom numerous financial assets and liabilities, such as loans anddeposits, by using derivatives.
Effective April 1, 2003, the Bank applied the principle treatment of
JICPA Industry Audit Committee Report No.24 and unrealized gains
and losses incurred during the year were included in earnings for theyear ended March 31, 2004. The deferred hedge losses, which were previously accounted for under “macro hedge,” were charged to other operating expenses over five years beginning April 1, 2003. Deferred loss onderivatives under macro hedge accounting, net of applicable taxes,
included in the separate component of equity was nil at March 31,
2008.
q. Per share information
Basic net income per share is computed by dividing net income available
to common shareholders by the weighted-average number of commonshares outstanding for the period, retroactively adjusted for stock splits.
The weighted average number of common shares used in the computation for the years ended March 31, 2008 and 2007 was 364,496,064
shares and 365,615,783 shares, respectively.
Diluted net income per share reflects the potential dilution that
could occur if securities were exercised or converted into common stock.
Diluted net income per share of common stock assumes full conversion of
the outstanding convertible notes and bonds at the beginning of the year
(or at the time of issuance) with an applicable adjustment for related
interest expense, net of tax, and full exercise of outstanding warrants.
Diluted net income per share is not disclosed because there are no dilutive shares.
Cash dividends per share presented in the accompanying consolidated statements of income are dividends applicable to the respective
years including dividends to be paid after the end of the year.
r. Presentation of Equity
On December 9, 2005, the ASBJ published a new accounting standard
for presentation of equity. Under this accounting standard, certain
items which were previously presented as liabilities or assets, as the casemay be, are now presented as components of equity. Such items include
stock acquisition rights, minority interests, and any deferred gain or loss
on derivatives accounted for under hedge accounting. This standard was
effective for fiscal years ending on or after May 1, 2006. The balances ofsuch items as of March 31, 2006 were reclassified as separate components of equity as of April 1, 2006 in the consolidated statement ofchanges in equity.

THE JUROKU BANK, LTD.

3. Cash and Due from Banks
Cash and due from banks as of March 31, 2008 and 2007 consisted of
the following:
Millions of Yen
2008
2007

Cash............................................. ¥ 64,330
Due from banks ........................... 129,869
Total ...................................... ¥194,199¥ 66,191
128,104¥194,295

Thousands of
U.S. Dollars
2008$ 642,080
1,296,227$1,938,307

A reconciliation between the cash and due from banks on the consolidated balance sheets and the cash and cash equivalents on the consolidated statements of cash flows for the years ended March 31, 2008 and2007 was as follows:
Millions of Yen
2008
2007

Cash and due from banks ............. ¥194,199 ¥194,295
Due from banksother than the Bank of Japan......
(346)
(319)
Cash and cash equivalents ............ ¥193,853 ¥193,976

18

Annual Report 2008

Thousands of
U.S. Dollars
2008$1,938,307(3,453)$1,934,854

4. Trading Securities and Securities
Trading securities as of March 31, 2008 and 2007 consisted of thefollowing:Thousands of
U.S. Dollars
2008

Millions of Yen
2008
2007

National government bonds......... ¥1,445
Local government bonds ..............
69¥1,514

Available-for-sale securities and held-to-maturity securities whose fairvalue was not readily determinable as of March 31, 2008 and 2007 wereas follows:
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2008
2007
2008

$14,422689$15,111¥2,94399¥3,042Available-for-sale:
Equity securities.........................
Investoment vehicles and others...
Held-to-maturity:
Debt securities ...........................
Total ......................................

Valuation gains, which were included in other operating income for theyears ended March 31, 2008 and 2007 were ¥13 million ($130
thousand) and ¥6 million, respectively.
Valuation losses, which were included in other operating expenses
for the years ended March 31,2008 and 2007 were ¥1 million ($10thousand) and nil, respectively.
Securities as of March 31, 2008 and 2007 consisted of the following:

Stock shares ...............................
National government bonds.......
Local government bonds ............
Corporate bonds.........................
Other securities..........................
Total ....................................

Millions of Yen
2008
2007

Thousands of
U.S. Dollars
2008¥164,710 ¥ 238,229
301,083
371,533
149,798
128,782
162,613
169,90375,660100,292¥853,864 ¥1,008,739$1,643,977
3,005,120
1,495,139
1,623,046
755,165$8,522,447

2008

Cost

Securities classified as:
Available-for-sale:
Equity securities................. ¥102,618
Debt securities ................... 555,048
Other ................................. 75,707
Held-to-maturity:
Debt securities ...................
1,864

2007

Cost

¥60,494 ¥5,944
4,440 1,343
233 7,152
41

0Millions of Yen
Unrealized Unrealized
Losses
Gains

2008

Cost

Securities classified as:
Available-for-sale:
Equity securities.............. $1,024,234
Debt securities................. 5,539,954
Other ..............................
755,634
Held-to-maturity:
Debt securities.................
18,6050¥157,168
558,145
68,788
1,905
Fair
Value

48,810¥56,952

533,836$660,555

Thousands of
U.S. Dollars
Available- Held-tofor-Sale Maturity

5. Money Held in Trust
Information regarding money held in trust for trading purposes as ofMarch 31, 2008 and 2007 was as follows:
Carrying AmountThousands of
U.S. Dollars
2008

Millions of Yen
2008
2007

Amounts per the balance sheet..... ¥4,000
Net valuation loss included in
the consolidated statements ofincome.....................................
—

Fair
Value

19,014

THE JUROKU BANK, LTD.

53,485¥66,181Due in one year or less.......... ¥ 76,829 ¥ 8,851 $ 766,833 $ 88,343
Due after one year
through five years............... 284,655 37,488 2,841,152 374,169
Due after five years
through ten years ............... 202,549 9,010 2,021,649 89,929
Due after ten years................ 62,190—
620,720—
Total .............................. ¥626,223 ¥55,349 $6,250,354 $552,441$603,793 $59,327 $1,568,700
44,316 13,405 5,570,865
2,326 71,384 686,576
409$ 75,287
51,432Millions of Yen
Available- Held-tofor-Sale Maturity

Fair
Value

Securities classified as:
Available-for-sale:
Equity securities................. ¥ 93,981 ¥136,443 ¥ 337 ¥230,087
2,549 2,110 619,032
Debt securities ................... 618,593
Other ................................. 96,949
2,370
710
98,609Held-to-maturity:
2,375
46
0
2,421
Debt securities ...................
Thousands of
U.S. Dollars
Unrealized Unrealized
LossesGains¥ 8,142—

Investments in non-consolidated subsidiaries included in “Securities” inthe accompanying consolidated balance sheet at March 31, 2008 and2007 were ¥1,718 million ($17,147 thousand) and ¥1,684 million,
respectively.
Proceeds from sales of available-for-sale securities for the years ended
March 31, 2008 and 2007 were ¥499,451 million ($4,985,038 thousand) and ¥114,505 million, respectively. Gross realized gains andlosses on these sales, computed on the moving average cost basis, were¥21,831 million ($217,896 thousand) and ¥3,525 million ($35,183
thousand), respectively, for the year ended March 31, 2008, and ¥6,351
million and ¥1,963 million, respectively, for the year ended March 31,
2007.
The carrying values of debt securities and other investments by contractual maturities for securities classified as available-for-sale and heldto-maturity as of March 31, 2008 were as follows:

Information regarding available-for-sale and held-to-maturity securities
as of March 31, 2008 and 2007 was as follows:
Millions of Yen
Unrealized Unrealized
Gains
Losses¥ 7,543
5,153

19

Annual Report 2008

¥8,000$39,924(298)—

6. Loans and Bills Discounted
Loans and bills discounted as of March 31, 2008 and 2007 consisted of
the following:
Millions of Yen
2008
2007

7. Foreign Exchanges
Foreign exchanges as of March 31, 2008 and 2007 consisted of thefollowing:Thousands of
U.S. Dollars
2008

Millions of Yen
2008
2007

Bills discounted ........................... ¥ 49,280 ¥ 60,247 $ 491,865
Loans on bills............................... 234,307
257,881 2,338,627
Loans on deeds ............................. 2,148,571 2,015,061 21,444,965
Overdrafts.................................... 454,535
467,119 4,536,730
Others .........................................
6,044
6,343
60,325
Total ...................................... ¥2,892,737 ¥2,806,651 $28,872,512

Assets:Due from foreign
correspondent account................
Foreign bills of
exchange bought........................
Foreign bills of
exchange receivable....................
Total ......................................
Liabilities:
Due to foreign
correspondent account................
Foreign bills of
exchange payable .......................
Total ......................................

Nonaccrual loans, which include loans to borrowers in bankruptcy andpast due loans, are defined as loans upon which the Bank has discontinued the accrual of interest income. Borrowers are generally placed on
nonaccrual status when substantial doubt is deemed to exist as to ultimate collectibility of either the principal or interest, and if the loans are
past due for certain period or for other reasons.
“Loans to borrowers in bankruptcy” represent nonaccrual loans to
debtors who are legally bankrupt, which are defined in Article 96,
Paragraph 1, Subparagraphs 3 and 4 of Enforcement Ordinance for the
Corporate Tax Law. Loans to borrowers in legal bankruptcy as of March
31, 2008 and 2007 were ¥7,609 million ($75,946 thousand) and¥6,481 million, respectively.
“Past due loans” are nonaccrual loans other than loans to borrowers
in bankruptcy and loans of which interest payments are deferred inorder to assist the financial recovery of a debtor in financial difficulties.
Past due loans as of March 31, 2008 and 2007 were ¥87,058 million($868,929 thousand) and ¥83,090 million, respectively.
“Accruing loans past due three months or more” are defined as loans
on which principal or interest is past due more than three months. Loansclassified as loans to borrowers in bankruptcy and past due loans are
excluded from accruing loans past due three months or more. Accruingloans past due three months or more as of March 31, 2008 and 2007
were ¥672 million ($6,707 thousand) and ¥2,174 million, respectively.
“Restructured loans” are defined as loans which the lender is providing financial support to a borrower by a reduction of the interest rate,
deferral of interest payment, extension of maturity date, or reduction of
the face or maturity amount of the debt or accrued interest. Loans classified as loans to borrowers in bankruptcy, past due loans and accruingloans past due three months or more are excluded from restructuredloans. Restructured loans as of March 31, 2008 and 2007 were ¥38,221
million ($381,485 thousand) and ¥23,159 million, respectively.
The total amount of loans to borrowers in bankruptcy, past dueloans, accruing loans past due three months or more and restructuredloans as of March 31, 2008 and 2007 was ¥133,560 million($1,333,067 thousand) and ¥114,904 million, respectively.
Bills discounted are accounted for as financing transactions in accordance with “Treatment of Accounting and Auditing in Applying
Accounting Standard for Financial Instruments in the Banking
Industry” issued by the JICPA. The Bank has rights to sell or pledge
accepted commercial bills discounted and foreign bills of exchangebought without restrictions. The total face value of commercial bills
discounted and foreign bills of exchange bought included in foreignexchanges as of March 31, 2008 and 2007 was ¥50,825 million($507,286 thousand) and ¥61,633 million, respectively.

THE JUROKU BANK, LTD.

Thousands of
U.S. Dollars
2008¥2,321¥1,127$23,166

1,544

1,387

15,411748¥4,613847¥3,361

7,466$46,043

¥ 447

¥ 737

$ 4,462

290
¥ 737

1
¥ 738

2,894
$ 7,356

8. Other Assets
Other assets as of March 31, 2008 and 2007 consisted of the following:
Millions of Yen
2008
2007

Accrued income ........................... ¥ 5,409
Accounts receivable...................... 31,649
Installment receivable ..................
7,061
Derivative assets........................... 21,108
Other........................................... 14,324
Total ...................................... ¥79,551¥ 5,818
9,182
6,452
13,48911,484¥46,425

Thousands of
U.S. Dollars
2008$ 53,988
315,890
70,476
210,680
142,968$794,002

9. Premises and Equipment
Premises and equipment as of March 31, 2008 and 2007 consisted of
the following:
Millions of Yen
2008
2007

Land ......................................... ¥ 47,215
Building ...................................... 15,287
Construction in progress ..............
65
Other........................................... 48,933
Total ...................................... ¥111,500¥ 48,091
16,677—48,569¥113,337

Thousands of
U.S. Dollars
2008$ 471,255
152,580649
488,402$1,112,886

The accumulated depreciation of premises and equipment as of March
31, 2008 and 2007 amounted to ¥113,766 million ($1,135,503
thousand) and ¥112,923 million, respectively.

20

Annual Report 2008

10. Customers’ Liabilities for Acceptances and Guarantees
All contingent liabilities arising from acceptances and guarantees arereflected in acceptances and guarantees. As a contra account, the customers’ liabilities for acceptances and guarantees are presented as assets,
representing the Bank’s right of indemnity from applicants.
The Enforcement Ordinance of the Banking Law was revised on
April 17, 2007 and effective from the fiscal years beginning on and after
April 1, 2006. The Bank offset customer’s liabilities for acceptance andguarantees with acceptance and guarantees of ¥51,670 million($515,720 thousand) and ¥46,150 arising from guarantees of private
placement securities as of March 31, 2008 and 2007, respectively.

13. Borrowed Money
Borrowed Money as of March 31, 2008 and 2007 consisted of thefollowing:

11. Assets Pledged
Assets pledged as collateral and their relevant liabilities as of March 31,
2008 and 2007 were as follows:Year Ending March 31,

Assets pledged as collateral:
Securities ..................................
Other assets ..............................
Total ......................................

Millions of Yen
2008
2007

Thousands of
U.S. Dollars
2008¥93,23779¥93,316¥116,13280¥116,212$930,602
788$931,390¥ 73,710$931,061

23,833¥ 97,543—$931,061

Relevant liabilities to above assets:
Deposits.................................... ¥93,283
Payables under securities
lending transactions ................
—
Total ...................................... ¥93,283

Millions of Yen
2008
2007

Borrowings due serially to April
2018 with weighted averageinterest rates of 1.66% in 2008
and 1.69% in 2007 .................... ¥44,826

Securities .....................................
Other assets .................................
Total ......................................

Millions of Yen
2008
2007

¥79,895
8¥79,903$797,435
80$797,515¥74,099
8¥74,1072009 ..................................................
2010 .....................................................
2011 .....................................................
2012 ..................................................
2013 ..................................................
2014 and thereafter...............................
Total ...............................................

Thousands of
U.S. Dollars¥15,250
4,239
3,458
2,229
1,650
18,000¥44,826$152,211
42,30934,514
22,24816,469179,659$447,410

14. Bonds
Bonds as of March 31, 2008 and 2007 consisted of the following:
Millions of Yen
2008
2007

Unsecured Yen subordinatedbonds due March 2017 (a)...........
Unsecured Yen subordinatedbonds due September 2017 (b) ....
Total ......................................

Thousands of
U.S. Dollars
2008¥15,000¥15,000$149,716

15,000¥30,000—¥15,000

149,715$299,431(a) The interest rates of the bonds are 1.75% for the period from March
23, 2007 to March 22, 2012 and six-month Euroyen Libor plus
1.92% for the period from March 23, 2012 to March 22, 2017.
(b) The interest rates of the bonds are 1.92% for the period from
September 19, 2007 to September 18, 2012 and six-month Euroyen
Libor plus 2.03% for the period from September 19, 2012 to
September 15, 2017.

12. Deposits
Deposits as of March 31, 2008 and 2007 consisted of the following:Thousands of
U.S. Dollars
2008

Current deposits........................... ¥ 215,181 ¥ 247,374 $ 2,147,729
Ordinary deposits......................... 1,489,656 1,464,095 14,868,310
Deposits at notice ........................
25,536
26,913
254,876
Time deposits .............................. 1,694,259 1,672,324 16,910,460
Other deposits ............................. 205,524
205,399
2,051,343
Total ...................................... ¥3,630,156 ¥3,616,105 $36,232,718

THE JUROKU BANK, LTD.

Millions of Yen

Borrowings include subordinated borrowings of the Bank, whichamounted to ¥18,000 million ($179,659 thousand) and ¥27,000
million as of March 31, 2008 and 2007, respectively.

Deposits included in other assets as of March 31, 2008 and 2007 were
¥1,893 million ($18,894 thousand) and ¥1,951 million, respectively.

Millions of Yen
2008
2007

$447,410

Annual maturities of borrowings as of March 31, 2008 were as follows:In addition, the following assets were pledged or deposited with respect
to foreign exchange settlements and derivatives as of March 31, 2008
and 2007.
Thousands of
U.S. Dollars
2008¥51,638

Thousands of
U.S. Dollars
2008

21

Annual Report 2008

15. Other Liabilities
Other liabilities as of March 31, 2008 and 2007 consisted of thefollowing:
Millions of Yen
2008
2007

Domestic exchange settlement
account, credit* .........................
Income taxes payables ..................
Accrued expenses .........................
Unearned income .........................
Employees’ deposits .....................
Derivative liabilities.....................
Accounts payable .........................
Other...........................................
Total ......................................

99
7,537
6,599
9,505
2,209
20,25633,5609,430¥89,195
¥

143
7,227
3,928
7,616
2,207
13,8395,272
10,379¥50,971¥

Assumptions used for the years ended March 31, 2008 and 2007 wereset forth as follows:

Thousands of
U.S. Dollars
2008

Periodic recognition ofprojected benefit obligation
Discount rate
Expected rate of return on plan assets
Amortization period of priorservice benefit/cost
Recognition period of actuarial
gain/loss

988
75,22765,86594,87022,048202,176
334,963
94,121$890,258$

16. Retirement and Pension Plans
The Bank and certain subsidiaries have severance payment plans for
employees, directors and corporate auditors. Under most circumstances,
employees terminating their employment are entitled to retirement
benefits determined based on the rate of pay at the time of termination,
years of service and certain other factors. If the termination is involuntary, caused by retirement at the mandatory retirement age or death, or
certain other causes, the employee is entitled to greater payment than in
the case of voluntary termination.
The liability for retirement benefits for directors and corporate
auditors as of March 31, 2008 was ¥494 million ($4,931 thousand).
The retirement benefits for directors and corporate auditors are paid
subject to the approval of the shareholders.
The liability for retirement benefits for employees as of March 31,
2008 and 2007 consisted of the following:

Projected benefit obligation .........
Fair value of plan assets ................
Unrecognized actuarial loss ..........
Prepaid pension cost ....................
Net liability ...........................

Thousands of
U.S. Dollars
2008¥44,999(32,393)(6,303)661¥ 6,964$449,137(323,316)(62,910)
6,597$ 69,508¥44,579(37,137)(74)—¥ 7,368

The components of net periodic retirement benefit costs for the years
ended March 31, 2008 and 2007 were as follows:
Millions of Yen
2008
2007

Service cost ..................................
Interest cost .................................
Expected return on plan assets......
Amortization of priorservice benefit..............................
Recognized actuarial loss..............
Net periodic retirement(benefit) costs .......................

Thousands of
U.S. Dollars
2008¥1,282891(994)¥1,233884(907)$12,796
8,893(9,921)—675(2,271)
807

—
6,737

¥1,854¥ (254)$18,505

THE JUROKU BANK, LTD.

2007

Straight-line
methodStraight-line
method

2.0%
3.5%

2.0%
3.5%

—

3 years

10 years

10 years

17. Equity
Since May 1, 2006, Japanese banks have been subject to the Corporate
Law of Japan (the “Corporate Law”), which reformed and replaced theCommercial Code of Japan. The significant provisions in the Corporate
Law that affect financial and accounting matters are summarized below:(a) Dividends
Under the Corporate Law, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution
at the shareholders meeting. For companies that meet certain criteriasuch as; (1) having the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year rather than two years ofnormal term by its articles of incorporation, the Board of Directors may
declare dividends (except for dividends in kind) at any time during the
fiscal year if the company has prescribed so in its articles of incorporation. However, the Bank cannot do so because it does not meet all theabove criteria. Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles of incorporation of the company so stipulate. The Corporate Law provides certain
limitations on the amounts available for dividends or the purchase oftreasury stock. The limitation is defined as the amount available for
distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.
(b) Treasury stock and treasury stock acquisition rights
The Corporate Law also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Board of
Directors. The amount of treasury stock purchased cannot exceed theamount available for distribution to the shareholders which is determined by specific formula. Under the Corporate Law, stock acquisitionrights, which were previously presented as a liability, are now presented
as a separate component of equity. The Corporate Law also provides
that companies can purchase both treasury stock acquisition rights andtreasury stock. Such treasury stock acquisition rights are presented as aseparate component of equity or deducted directly from stock acquisition rights.
Other than above, the Japanese Banking Law provided that an
amount at least equal to 20% of the aggregate amount of cash dividends
and certain other cash payments which are made as an appropriation ofretained earnings applicable to each fiscal period shall be set aside as alegal reserve until the total additional paid-in capital and legal reserve
equals 100% of stated capital. The amount of total additional paid-in
capital and legal reserve which exceeds 100% of stated capital can betransferred to retained earnings by resolution of the shareholders, which
may be available for dividends. The Bank’s legal reserve amount, whichis included in retained earnings, totals ¥20,155 million ($201,168
thousand) as of March 31, 2008 and 2007.

*The domestic exchange settlement account consisted of outstanding remittance bills
from other banks and/or collection bills for which the Bank has received notices forpayment from other banks which have not been settled.

Millions of Yen
2008
2007

2008

22

Annual Report 2008

18. Other Income
Other income for the years ended March 31, 2008 and 2007 consisted of
the following:
Millions of Yen
2008
2007

Gain on money held in trust ........
Other...........................................
Total ......................................

¥ 63
1,738
¥1,801¥

23
3,087¥3,11021. Leases
Finance lease(Lessee)A subsidiary leases certain equipment. Total rental expenses under thefinance leases for the years ended March 31, 2008 and 2007 were ¥0
million ($0 thousand).
Pro forma information of leased property such as acquisition cost,
accumulated depreciation, obligation under finance leases and depreciation expense of finance leases that do not transfer ownership of theleased property to the lessee on an “as if capitalized” basis as of March
31, 2008 and 2007 was as follows:

Thousands of
U.S. Dollars
2008

$ 629
17,347$17,976

19. Other Expenses
Other expenses for the years ended March 31, 2008 and 2007 consistedof the following:
Millions of Yen
2008
2007

Write-down of stocks andother securities........................... ¥ 1,715
Loss on sales ofstocks and other securities..........
387
Write-down of loans ....................
36
Loss on sales of loans ....................
6,276
Loss on dispositions ofpremises and equipment ............
258
Other .........................................
2,806
Total................................. ¥11,478

Millions of Yen
2008
2007

Thousands of
U.S. Dollars
2008

¥ 261

$ 17,117

259
26
2,031

3,863
359
62,641300
889¥3,7662,575
28,007$114,562

Acquisition cost ...........................
Accumulated depreciation............
Net leased property ................

Deferred tax assets:
Reserve for possible loan losses .... ¥18,934
Tax loss carryforwards .................
38
Liability for retirement benefits ...
4,846
Write-down of securities..............
5,723
Depreciation ................................
2,097
Other .........................................
3,332
Less: Valuation allowance.............
(6,236)
Total ...................................... 28,734

Millions of Yen
2008
2007

Due within one year.....................
Due after one year ........................
Total ......................................

Deferred tax liabilities:
Unrealized gain on availablefor-sale securities........................ (18,736)
Gain on contribution of availablefor-sale securities to employees’
retirement benefit trusts ............
(1,353)
Total ...................................... (20,089)
Net deferred tax assets(liabilities)............................ ¥ 8,645$188,981
379
48,36857,122
20,93033,257(62,242)286,795(51,842)(187,005)(13,504)(200,509)¥(27,803)$ 86,286

2008

¥—
—
¥—

Millions of Yen
Total
Other
Equipment

Acquisition cost ................... ¥80,188 ¥6,369 ¥86,557
Accumulated depreciation ... (36,575) (3,193) (39,768)
Net leased property ........ ¥43,613 ¥3,176 ¥46,789
Millions of Yen
Equipment
Other
Total

Acquisition cost ................... ¥76,583 ¥6,454 ¥83,037
Accumulated depreciation ... (34,812) (3,062) (37,874)
Net leased property ........ ¥41,771 ¥3,392 ¥45,163
2008

Thousands of U.S. Dollars
Equipment
Other
Total

Acquisition cost ................... $800,359 $63,569 $863,928
Accumulated depreciation ... (365,056) (31,869) (396,926)
Net leased property ........ $435,303 $31,700 $467,003

A reconciliation between the normal effective statutory tax rate and theactual effective tax rate reflected in the accompanying consolidated
statements of income for the year ended March 31, 2008 and 2007 was
not disclosed because the difference was not material.
THE JUROKU BANK, LTD.

¥1
2
¥3

Thousands of
U.S. Dollars
2008

$10
20
$30

Depreciation expense, which was not reflected in the accompanying
consolidated statements of income, was computed by the straight-line
method with useful lives being equal to the lease period and all residual
values at zero. Depreciation expense for the years ended March 31, 2008
and 2007 was ¥0 million ($0 thousand).
(Lessor)A subsidiary leases certain equipment and other assets. Total rental revenues under finance leases for the years ended March 31, 2008 and 2007
were ¥16,828 million ($167,961 thousand) and ¥16,098 million,
respectively.
Leased property of finance leases that do not transfer ownership ofthe leased property to the lessee, which were stated as a component ofassets on the consolidated balance sheets as of March 31, 2008 and 2007
were as follows:2007(1,353)(53,195)

$30
0
$30

*The amounts of obligations under finance leases include the imputed interest
expense portion.

Thousands of
U.S. Dollars
2008¥ 16,464
22
5,227
4,488
2,560
2,216
(5,585)25,392¥ 4(4)¥—Obligations under finance leases as of March 31, 2008 and 2007 were as
follows:

20. Income Taxes
The Bank and its subsidiaries are subject to Japanese national and local
income taxes which, in the aggregate, resulted in normal effective statutory tax rates of approximately 40% for the years ended March 31, 2008
and 2007.
The tax effects of significant temporary differences and tax loss carryforwards, which result in deferred tax assets and liabilities as of March
31, 2008 and 2007 were as follows:
Millions of Yen
2008
2007

¥3
0
¥3

Thousands of
U.S. Dollars
2008

23

Annual Report 2008

23. Derivative Information
The Bank enters into swap, future, cap and floor agreements related tointerest rates, foreign exchange forward contracts, swap and option contracts related to currencies, bond futures, bond futures options, overthe-counter bond options, stock futures, stock futures options and stock
option contracts related to securities. In addition, the Bank has credit
derivatives embedded in compound instruments.
The Bank principally enters into derivative transactions to meet theneeds of the Bank and its customers and to hedge risks of assets and liabilities held, which are related to interest rates, price fluctuations andforeign exchanges. The Bank also enters into derivative transactions for
trading purposes under certain risk limitations for speculative purposes.
Derivatives are subject to market risk and credit risk. Market risk
is the exposure created by potential fluctuation in market conditions,
including interest rate, foreign exchange and price. The Bank mitigatesmarket risks by conducting effective covering transactions against derivative transactions to meet the needs of the Bank’s customers and establishing the permitted risk amount in advance before entering into
derivative transactions for trading purposes. Credit risk is defined as therisk that counterparties will not be able to fulfill their obligations to theGroup. Because the Bank conducts its derivative with trading businessto major financial institutions and enterprises, the Bank considers credit
risk to be minimal.
Derivative transactions entered into by the Bank have been made inaccordance with internal policies. The dealing section is responsible for
executing and controlling derivative transactions, mark-to-market of
positions, determining related gains and losses and the outstanding
exposures of balances.
The dealing section is also responsible for periodically reporting tomanagement and the Risk Management Division, which deals with risk
control. In order to achieve an appropriate segregation of duties relating
to derivative transactions, the ALM office reviews outstanding derivativetransactions executed by the international dealing section. Each derivative transaction is reported to management. Management evaluates therisks concerning the whole portfolio including deposits, loans and securities, and discusses the hedging policies at ALM committee meetings
periodically.

Expected future rental revenues under finance leases as of March 31,
2008 and 2007 were as follows:
Millions of Yen
2008
2007

Due within one year..................... ¥13,876
Due after one year ........................ 33,763
Total ...................................... ¥47,639¥13,272
32,983¥46,255

Thousands of
U.S. Dollars
2008$138,497
336,990$475,487

Depreciation expense for the years ended March 31, 2008 and 2007 was¥13,021 million ($129,963 thousand) and ¥13,679 million, respectively. Interest income for the years ended March 31, 2008 and 2007
were ¥2,036 million ($20,321 thousand) and ¥1,938 million,
respectively.
Expected future rental revenues under operating leases as of March
31, 2008 and 2007 were as follows:
Millions of Yen
2008
2007

Due within one year.....................
Due after one year ........................
Total ......................................

¥ 47
55
¥102

¥178
518
¥696

Thousands of
U.S. Dollars
2008

$ 469
549
$1,01822. Commitments and Contingent Liabilities
Commitment line contracts on overdrafts and loans are agreements tomake loans to customers when they apply for borrowing up to a prescribed amount, as long as there is no violation of any condition of thecontracts.
The total amounts of unused open commitments as of March 31,
2008 and 2007 were ¥1,197,872 million ($11,956,004 thousand) and¥1,156,890 million, respectively. Multi-purpose accounts included in
the unused open commitments as of March 31, 2008 and 2007 were¥506,351 million ($5,053,908 thousand) and ¥500,179 million, respectively. The amounts of unused commitments whose original contract
terms were within one year or unconditionally cancelable at any time asof March 31, 2008 and 2007 were ¥1,185,495 million ($11,832,468
thousand) and ¥1,137,067 million, respectively.
Since many of these commitments are expected to expire without
being drawn upon, the total amount of unused commitments does notnecessarily represent actual future cash flow requirements. Many ofthese commitments have clauses enabling the Bank and certain subsidiaries to reject the loans to customers or reduce the contract amountsof commitment, in the event monetary conditions have changed and the
Bank and certain subsidiaries need to secure claims, or other considerable events have occurred.
In addition, if necessary, the Bank and certain subsidiaries request
the customers to pledge collateral such as premises and securities at theexecution of the contracts. After the execution, the Bank and certain
subsidiaries periodically evaluate the customers’ financial positions
based upon the internal policy, and take necessary measures to manage
the credit exposures, such as revising the terms of contracts or securing
the claims.

THE JUROKU BANK, LTD.

24

Annual Report 2008

The Bank had the following derivative contracts outstanding as ofMarch 31, 2008 and 2007:
2008

Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
floating rate payment ........... ¥ 7,040
Floating rate receipt,
7,040
fixed rate payment ...............
Over-the-countercurrency-related contracts:
Currency swap .......................... 399,684
Foreign exchange forward:
Sell......................................... 12,639
Buy ........................................ 34,457
Currency option:
Sell......................................... 227,265
Buy ........................................ 223,054
Over-the-counter
credit derivative contracts:
Credit default option:
3,000
Sell.........................................

2007

2008

Millions of Yen
Contract or
Fair
Unrealized
Notional Amount Value
Gains/(Losses)

¥

62

¥

(37)

639

639

725
(533)

725
(533)

(18,393)
18,390(2,120)4,328(1,379)Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
floating rate payment ........... $ 70,266
Floating rate receipt,
fixed rate payment ...............
70,266Over-the-countercurrency-related contracts:
Currency swap .......................... 3,989,260
Foreign exchange forward:
Sell......................................... 126,150
Buy ........................................ 343,917
Currency option:
Sell......................................... 2,268,340
Buy ........................................ 2,226,310
Over-the-counter
credit derivative contracts:
Credit default option:
29,943
Sell.........................................

62

(37)

¥

2

(1,379)

¥

$

619

$

619

(369)

(369)

6,378

6,378

7,236
(5,320)7,236(5,320)(183,581)
183,551(21,160)
43,198(13,764)(13,764)

Notes:
1. Derivative transactions are valued at market and the gains/(losses) are recognized in the consolidated statements of income.
2. Market values of exchange-traded transactions are based on closing prices
on the Tokyo International Financial Future Exchange, etc. Market values of over-the-counter contracts are based on the discounted cash flow
method and the option pricing calculation models, etc.
3. The contract or notional amounts of derivatives, which are shown in theabove table, do not represent the amounts exchanged by parties and do
not measure the Group’s exposure to credit or market risk.

Millions of Yen
Contract or
Fair
Unrealized
Notional Amount Value
Gains/(Losses)

Over-the-counterinterest-related contracts:
Interest rate swap:
Fixed rate receipt,
floating rate payment ........... ¥ 8,245
Floating rate receipt,
fixed rate payment ............... 12,749
Over-the-countercurrency-related contracts:
Currency swap .......................... 462,042
Foreign exchange forward:
Sell.........................................
9,269
Buy ........................................ 12,664
Currency option:
Sell......................................... 212,689
Buy ........................................ 218,186

Thousands of U.S. Dollars
Contract or
Fair
Unrealized
Notional Amount Value
Gains/(Losses)

2

(19)

(19)

539

539

(214)
320

(214)
320

(10,063)
10,056

4,155(2,311)

THE JUROKU BANK, LTD.

24. Subsequent Event
On June 20, 2008, the Bank’s shareholders authorized the appropriationof retained earnings as follows:
Year-end cash dividends,¥3.50 ($0.03) per share ..............

25

Annual Report 2008

Millions of Yen

Thousands of
U.S. Dollars¥1,276$12,73625. Segment Information
Information about operations in business segments for the years ended March 31, 2008 and 2007 was as follows:
2008

Banking

Millions of Yen
Other*
Total

Lease

Elimination/Corporate

Consolidated(a) Income
Ordinary income:(1) Outside customers ............................................... ¥115,491(2) Intersegment transactions ....................................
821
Total.............................................................. 116,312
Ordinary expenses .....................................................
97,250Ordinary profit .............................................. ¥ 19,062
Other income and expenses–net...........................
Income before income taxes and minority interests ...

¥21,524363
21,887
21,372¥ 515¥4,795
929
5,724
4,738
¥ 986

¥141,810
2,113
143,923
123,360¥ 20,563¥ —(2,113)(2,113)(1,901)¥ (212)¥141,810—
141,810
121,459
20,351(1,467)¥ 18,884¥58,933
15,042—
16,453¥30,55151
23
24¥4,180,151
20,025379
18,789¥(38,563)
(19)
—
(15)

¥4,141,588
20,006379
18,774

Elimination/Corporate

Consolidated(b) Assets, depreciationand capital expenditures:
Assets........................................................................ ¥4,090,667
Depreciation .............................................................
4,932
Impairment loss on long-lived assets .........................
356
Capital expenditures..................................................
2,312
2007

Banking

Millions of Yen
Other*
Total

Lease

(a) Income
Ordinary income:(1) Outside customers ............................................... ¥ 94,664(2) Intersegment transactions ....................................
525
Total..............................................................
95,189Ordinary expenses .....................................................
72,118
Ordinary profit .............................................. ¥ 23,071
Other income and expenses–net...........................
Income before income taxes and minority interests ...

¥19,074
611
19,68518,323¥ 1,362¥4,877
1,147
6,024
4,642
¥1,382¥118,615
2,283
120,898
95,083¥ 25,815¥ —(2,283)(2,283)(2,033)¥ (250)¥118,615—
118,615
93,05025,565(396)¥ 25,169¥57,967
13,919—21,453¥31,399
86
87
32¥4,224,851
17,426165
27,743¥(38,810)
(20)
—
(26)

¥4,186,041
17,406165
27,717

Elimination/Corporate

Consolidated(b) Assets, depreciationand capital expenditures:
Assets........................................................................ ¥4,135,485
Depreciation .............................................................
3,421
Impairment loss on long-lived assets .........................
78
Capital expenditures..................................................
6,258
2008

Banking

Thousands of U.S. Dollars
Other*
Total

Lease

(a) Income
Ordinary income:(1) Outside customers ............................................... $1,152,720(2) Intersegment transactions ....................................
8,195
Total.............................................................. 1,160,915
Ordinary expenses .....................................................
970,656
Ordinary profit .............................................. $ 190,259
Other income and expenses–net...........................
Income before income taxes and minority interests ...

$214,832
3,623
218,455
213,315$ 5,140$47,859
9,272
57,13147,290$ 9,841$1,415,411
21,0901,436,501
1,231,261$ 205,240$—(21,090)(21,090)(18,974)$ (2,116)$1,415,411—
1,415,411
1,212,287
203,124(14,642)$ 188,482$588,212
150,135—
164,218$304,931
509
230
240

$41,722,238
199,871
3,783
187,534$(384,899)
(190)
—
(150)

$41,337,339
199,681
3,783
187,384(b) Assets, depreciationand capital expenditures:
Assets........................................................................ $40,829,095
Depreciation .............................................................
49,227
Impairment loss on long-lived assets .........................
3,553
Capital expenditures..................................................
23,076* Other includes business segments of credit cards, computer services and credit guarantees.

As discussed in Note 2.i, the Bank applied the discounted cash flow method for reserve provision as of March 31, 2008. The effect of this treatment was
to decrease ordinary profit of Banking by ¥3,630 million ($36,231 thousand) for the year ended March 31, 2008.
As discussed in Note 2.j, effective April 1, 2007, the Group changed its accounting method of liability for retirement benefits for directors and corporate auditors. The effect of this change was to decrease ordinary profit of Banking by ¥58 million ($579 thousand), Lease by ¥1 million ($10 thousand)and Other by ¥1 million ($10 thousand), respectively, for the year ended March 31, 2008.
Ordinary income represents total income less certain special income included in other income in the accompanying consolidated statements of income.
Ordinary expenses represent total expenses less certain special expenses included in other expenses in the accompanying consolidated statements ofincome.
The Bank and its subsidiaries operate only in Japan for the years ended March 31, 2008 and 2007.
Accordingly, the figures for ordinary income and assets by geographical segment for the Bank and its subsidiaries were not presented.
Ordinary income from overseas operations was not presented herein as it was less than 10% of consolidated ordinary income for the years ended March
31, 2008 and 2007.
THE JUROKU BANK, LTD.

26

Annual Report 2008

Non-Consolidated Six-Year Summary (Unaudit)
The Juroku Bank, Ltd.
Years Ended March 31(Supplemental Information)

2008

2007

Millions of Yen
2006
2005

2004

95,288 ¥
72,522
22,766
9,089
13,677 ¥89,491 ¥65,60023,891
8,439
15,452 ¥86,690 ¥ 87,100
69,396135,345
17,294(48,245)
7,294(15,041)
10,000 ¥ (33,204)2003

For the Year

Total income................................. ¥ 116,391 ¥Total expenses...............................
98,819
Income (loss) before income taxes....
17,572
Total income taxes ........................
7,214
Net income (loss) .......................... ¥ 10,358 ¥

83,542 ¥62,51321,029
9,467
11,562 ¥At Year-End
Assets:Trading securities ......................... ¥3,042 ¥
2,898 ¥
2,031 ¥
1,947 ¥
2,395
1,514 ¥
Securities ......................................
966,978
976,246
901,006
852,504 1,008,292 1,075,252
Loans and bills discounted............. 2,909,033 2,822,570 2,724,546 2,640,424 2,564,532 2,601,102
Foreign exchanges .........................
3,361
11,305
3,829
3,375
3,514
4,613
Other ............................................
298,191
261,179
332,309
370,755
402,381322,892
Total assets .......................... ¥4,090,556 ¥4,135,456 ¥4,075,180 ¥3,945,571 ¥3,916,855 ¥3,910,398
Liabilities:

Deposits ....................................... ¥3,639,608 ¥3,624,885 ¥3,497,563 ¥3,534,395 ¥3,511,491 ¥3,543,831
Foreign exchanges .........................
738
560
948
298
366
737
Other ............................................
242,111
325,796
212,087
219,792
206,205
228,491
Total liabilities ..................... 3,868,836 3,867,734 3,823,919 3,747,430 3,731,581 3,750,402
Equity:Common stock..............................
36,83936,83936,83936,83936,83936,839
Capital surplus and earnings .........
230,883
214,422
161,302148,435
123,157
184,881
Total equity..........................
267,722251,261
198,141
185,274
159,996
221,720
Total liabilities and equity.... ¥4,090,556 ¥4,135,456 ¥4,075,180 ¥3,945,571 ¥3,916,855 ¥3,910,398

THE JUROKU BANK, LTD.

27

Annual Report 2008

Non-Consolidated Balance Sheets
The Juroku Bank, Ltd.
March 31, 2008 and 2007
(Supplemental Information)

Millions of Yen
2008
2007

Thousands of
U.S. Dollars
2008

ASSETS:Cash and due from banks...........................................................
Call loans ..................................................................................
Monetary receivables purchased .................................................
Trading securities .....................................................................
Money held in trust...................................................................
Securities ..................................................................................
Loans and bills discounted ........................................................
Other assets ..............................................................................
Premises and equipment............................................................
Intangible assets ........................................................................
Deferred tax assets .....................................................................
Customers’ liabilities for acceptances and guarantees ................
Reserve for possible loan losses ...................................................
Total Assets .......................................................................

¥ 194,060
158
0
1,514
4,000
852,504
2,909,033
67,36565,371
10,817
6,968
29,088(50,322)¥4,090,556¥ 194,152
—
1
3,042
8,000
1,008,292
2,822,570
33,152
67,72911,755—30,797(44,034)¥ 4,135,456$ 1,936,920
1,577
0
15,111
39,924
8,508,873
29,035,163
672,373
652,470
107,965
69,548290,329(502,266)$40,827,987¥3,639,608
28,23733,063—18,00030,00071,564
1,438
7,414
—
10,42429,0883,868,836¥3,624,885
46,30018,88823,83327,00015,00032,1301,409
7,342
29,577
10,57330,797
3,867,734$36,327,059
281,834
330,003—179,659
299,431714,283
14,35374,000—104,042
290,328
38,614,992

36,83936,839367,691

25,367
5

25,367
4

253,18950

20,155
95,39832,716—
12,729
(1,489)221,720¥4,090,556

20,15587,73386,087(37)
12,953(1,379)267,722¥4,135,456

201,168
952,171326,539—
127,049(14,862)
2,212,995$40,827,987

LIABILITIES AND EQUITY:
Liabilities:

Deposits ....................................................................................
Negotiable certificates of deposit...............................................
Call money ...............................................................................
Payables under securities lending transactions ...........................
Borrowed money ......................................................................
Bonds........................................................................................
Other liabilities ........................................................................
Accrued bonuses........................................................................
Liability for retirement benefits.................................................
Deferred tax liabilities .............................................................
Deferred tax liabilities for land revaluation excess .....................
Acceptances and guarantees .......................................................
Total Liabilities .................................................................
Commitments and Contingent Liabilities
Equity:Common stock .........................................................................
Capital surplus:
Additional paid-in capital ......................................................
Other capital surplus ..............................................................
Retained earnings:
Legal reserve ..........................................................................
Unappropriated ......................................................................
Unrealized gain on available-for-sale securities ..........................
Deferred loss on derivatives under hedge accounting .................
Land revaluation excess..............................................................
Treasury stock—at cost .............................................................
Total Equity ......................................................................
Total Liabilities and Equity ...............................................
THE JUROKU BANK, LTD.

28

Annual Report 2008

Non-Consolidated Statements of Income
The Juroku Bank, Ltd.
Years Ended March 31, 2008 and 2007
(Supplemental Information)

2008

2007

Thousands of
U.S. Dollars
2008¥ 60,728
16,091
223
13,531
9,949
14,095
1,774
116,391¥54,254
15,086198
14,324
3,543
4,785
3,098
95,288$ 606,128
160,605
2,226
135,054
99,301
140,683
17,706
1,161,703

10,156
2,724
668
4,460
6,226
49,5381,301
23,746
98,81917,572

4,785
1,436
849
4,225
3,083
46,30978
11,757
72,522
22,766

101,367
27,1886,667
44,516
62,142494,441
12,985
237,010986,316
175,387

10,863(3,649)7,214¥ 10,358

7,172
1,917
9,089
¥13,677

108,424(36,421)72,003$ 103,384

Millions of Yen

Income:Interest on:

Loans and discounts...............................................................
Securities...............................................................................
Other ....................................................................................
Fees and commissions................................................................
Other operating income.............................................................
Gain on sales of securities ..........................................................
Other income ............................................................................
Total Income.....................................................................
Expenses:
Interest on:

Deposits ................................................................................
Borrowings and re-discounts .................................................
Other ....................................................................................
Fees and commissions................................................................
Other operating expenses...........................................................
General and administrative expenses .........................................
Impairment loss on long-lived assets .........................................
Other expenses .........................................................................
Total Expenses ..................................................................
Income before Income Taxes.................................................
Income Taxes:
Current .................................................................................
Deferred ...............................................................................
Total Income Taxes ...........................................................
Net Income..............................................................................

THE JUROKU BANK, LTD.

29

Annual Report 2008

Non-Consolidated Statements of Changes in Equity
The Juroku Bank, Ltd.
Years Ended March 31, 2008 and 2007
(Supplemental Information)
Thousands

Millions of Yen

Outstanding
Number of
Shares ofCommon Stock

CommonStockCapital surplus
Additional
Other
Paid-in
CapitalCapitalSurplusRetained earnings
Legal
Reserve

Deferred Loss
Unrealized Gain onon
Available-for-sale Derivatives under
Unappropriated
Securities
Hedge Accounting

Land
Revaluation
ExcessTreasury
Stock

Total
EquityBalance at April 1, 2006..................

365,808¥36,839¥25,367¥2¥20,155¥76,599¥79,837¥—

Net income........................................

—

—

—

—

—

13,677————

13,677

Cash dividends, ¥7.00 per share.........

—

—

—

—

—

(2,561)

—

—

—

—

(2,561)

Bonuses to directors andcorporate auditors ...........................

—

—

—

—

—

(40)

—

—

—

—

(40)

Transfer of land revaluation excess ....

—

—

—

—

—

58

—

—

(58)

—

—

Purchase of treasury stock ..................

(1,234)

—

—

—

—

—

—

—

—

(839)

(839)

Disposal of treasury stock ..................

16

—

—

2

—

—

—

—

—

9

11

¥13,011 ¥ (549)¥251,261

Net change in the year.......................

—

—

—

—

—

—

6,250

(37)

—

—

6,213

Balance at March 31, 2007..............

364,590

36,83925,367

4

20,15587,73386,087(37)

12,953(1,379)267,722

Net income........................................

—

—

—

—

—

10,358————10,358Cash dividends, ¥8.00 per share.........

—

—

—

—

—

(2,917)

—

—

—

—

(2,917)

Transfer of land revaluation excess ....

—

—

—

—

—

224

—

—

—

—

224

Purchase of treasury stock ..................

(180)

—

—

—

—

—

—

—

—

(123)

(123)

Disposal of treasury stock ..................

22

—

—

1

—

—

—

—

—

13

14

Net change in the year.......................

—

—

—

—

—

—

(53,371)

37

(224)

—

(53,558)

Balance at March 31, 2008..............

364,432¥36,839¥25,367¥5¥20,155¥95,398¥32,716¥—¥12,729 ¥(1,489)¥221,720

CommonStockCapital surplus
Other
Additional
Paid-in
CapitalCapitalSurplusThousands of U.S. Dollars

Balance at March 31, 2007............................... $367,691 $253,189$40

Retained earnings
Legal
Reserve

Deferred Losson
Unrealized Gain on
Available-for-sale Derivatives under
Unappropriated
Securities
Hedge Accounting$201,168 $875,666 $859,237 $(369)Land
Revaluation
ExcessTreasury
Stock

Total
Equity$129,285 $(13,764) $2,672,143

Net income.........................................................

—

—

—

—

103,384

—

—

—

—

103,384

Cash dividends, $0.08 per share..........................

—

—

—

—

(29,115)

—

—

—

—

(29,115)

Transfer of land revaluation excess .....................

—

—

—

—

2,236

—

—

—

—

2,236

Purchase of treasury stock ...................................

—

—

—

—

—

—

—

—

(1,228)(1,228)

Disposal of treasury stock ...................................

—

—

10

—

—

—

—

—

130

140

Net change in the year........................................

—

—

—

—

— (532,698)

369(2,236)—(534,565)

Balance at March 31, 2008............................... $367,691 $253,189$50

THE JUROKU BANK, LTD.

30

$201,168 $952,171 $326,539 $ —Annual Report 2008

$127,049 $(14,862) $2,212,995

Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORTTo the Board of Directors of The Juroku Bank, Ltd.:We have audited the accompanying consolidated balance sheet of The Juroku Bank, Ltd. (the “Bank”) and consolidated subsidiaries as of March 31, 2008, and the related consolidated statements of income, changes in equity, and cash flows for theyear then ended, all expressed in Japanese yen. These consolidated financial statements are the responsibility of the Bank’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The
consolidated financial statements of the Bank and consolidated subsidiaries for the year ended March 31, 2007 were jointly
audited by us and other auditors whose report, dated June 22, 2007, expressed an unqualified opinion on those statements
and included an explanatory paragraph that described adoption of the accounting standard for presentation of equity for theyear ended March 31,2007.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis forour opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of the Bank and consolidated subsidiaries as of March 31, 2008, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in Japan.
Our audit was conducted for the purpose of forming an opinion on the basic 2008 consolidated financial statements taken asa whole. The supplemental non-consolidated financial information which includes a non-consolidated balance sheet as ofMarch 31, 2008, and non-consolidated statements of income and changes in equity for the year then ended and omits related
footnote disclosure, is presented for the purpose of additional analysis and is not a required part of the basic consolidated
financial statements. The non-consolidated financial information is the responsibility of the Bank’s management. Such nonconsolidated financial information for the year ended March 31, 2008 has been subjected to our audit of the basic consolidated financial statements for the year then ended and, in our opinion, is fairly stated in all material respects when
considered in relation to the basic consolidated financial statements taken as a whole. The report issued jointly by us andother auditors, dated June 22, 2007, described non-consolidated financial information for the year ended March 31, 2007
was fairly stated in all materials respects when considered in relation to the basic consolidated financial statements taken as awhole.
Our audits also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made in conformity with the basis stated in Note 1. Such U.S. dollar amounts are presented solely forthe convenience of readers outside Japan.

June 20, 2008

THE JUROKU BANK, LTD.

31

Annual Report 2008

Corporate Data(as of March 31, 2008)

Date of Establishment:
October 10, 1877
Authorized Shares:
460,000 thousand shares
Shares of Common Stock Issued andOutstanding:
366,855 thousand shares
Stock Listed:
First Sections of the Tokyo andNagoya Stock Exchanges
Paid-in Capital:¥36,839 million
Number of Shareholders:
11,065
Number of Employees:
2,775

10 Principal Shareholders:
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
NIPPONKOA Insurance Co., Ltd.
Meiji Yasuda Life Insurance Company
Japan Trustee Services Bank, Ltd.
Tokio Marine and Nichido Fire Insurance Co., Ltd.
State Street Bank and Trust Company
Fuji Baking Co., Ltd.
Mizuho Corporate Bank, Ltd.
The Juroku Bank Employee Shareholders’
Association
The Master Trust Bank of Japan, Ltd.

Affiliates(as of March 31, 2008)

Business Lines

Established

Capital(¥ Millions)

Equitystake*

Juroku Business Service Co., Ltd.

Clerical work service

Jan. 197910

100

Juroku DC Card Co., Ltd.

Credit card flotation service

Aug. 1982

50

5

Juroku JCB Co., Ltd.

Credit card flotation service

Nov. 1994

50

5

Juroku Lease Co., Ltd.

Leasing service

Mar. 1975

102

5

Juroku Computer Service Co., Ltd.

Computer system development service

Aug. 1985

245

5

Juroku Credit Guarantee Co., Ltd.

Credit guaranty service

May 1979

50

3

Juroku Capital Co., Ltd.

Investment and finance service

Apr. 1984

108

5

Name

* Voting rights held by the Bank as a percentage of total voting rights

THE JUROKU BANK, LTD.

32

Annual Report 2008

Directory(as of June 30, 2008)

Head Office

Branches Handling
Foreign Exchange
Business

8-26, Kandamachi, Gifu-shi,
Gifu 500-8516, Japan
Telephone: +81-58-265-2111

Takayama Branch(18 Offices)

136, Shimosannomachi,
Takayama-shi, Gifu
Telephone: +81-577-32-1600

International and Securities Division

Head Office

Ichinomiya Branch

8-26, Kandamachi, Gifu-shi,
Gifu 500-8516, Japan P.O. Box 40
Telephone: +81-58-265-2111
Facsimile: +81-58-266-1698
SWIFT Address: JUROJPJ T
General Manager
Akinori Sasaki

8-26, Kandamachi, Gifu-shi, Gifu
Telephone: +81-58-265-2111

1-2-5, Sakae,
Ichinomiya-shi, Aichi
Telephone: +81-586-73-5116

Overseas Network
Hong Kong Representative Office

Yanagase Branch

Suite 1505, One Exchange Square,
8 Connaught Place, Central,
Hong Kong
Telephone: +852-2526-5716
Facsimile: +852-2810-6261
Chief Representative
Yoshitaka Masuda
Shanghai Representative Office
18th Floor, HSBC Tower, 1000 Lujiazui
Ring Road, Pudong New Area, Shanghai,
People’s Republic of China
Telephone: +86-21-6841-1600
Facsimile: +86-21-6841-1881
Chief Representative
Masahiro Furuike

Nagara Branch

Nagoya Ekimae Branch

1643-5, Nagarafukumitsu,
Gifu-shi, Gifu
Telephone: +81-58-232-1611

3-28-12, Meieki,
Nakamura-ku, Nagoya-shi, Aichi
Telephone: +81-52-561-5431
Nagoya Branch

3-10-2, Kandamachi,
Gifu-shi, Gifu
Telephone: +81-58-265-2521

3-1-1, Nishiki, Naka-ku,
Nagoya-shi, Aichi
Telephone: +81-52-961-8111

Toiyamachi Branch

Ozone Branch

3-38, Toiyamachi, Gifu-shi, Gifu
Telephone: +81-58-262-2111

1-19-16, Ozone, Kita-ku,
Nagoya-shi, Aichi
Telephone: +81-52-911-6116

Kakamigahara Branch
1, Higashinakacho,Naka, Kakamigahara-shi, Gifu
Telephone: +81-58-383-1600

Atsuta Branch
3-1-1, Shin-Otou, Atsuta-ku,
Nagoya-shi, Aichi
Telephone: +81-52-671-4116

Ogaki Branch
1-26, Takayacho, Ogaki-shi, Gifu
Telephone: +81-584-78-2161

Kariya Branch

Seki Branch

3-20, Toyocho, Kariya-shi, Aichi
Telephone: +81-566-21-1611

1-4, Honmachi, Seki-shi, Gifu
Telephone: +81-575-22-2016

Osaka Branch

Tajimi Branch

2-3-8, Honmachi, Chuo-ku,
Osaka-shi, Osaka
Telephone: +81-6-6264-1600

5-34, Honmachi, Tajimi-shi, Gifu
Telephone: +81-572-22-1301

Tokyo Branch

Nakatsugawa Branch
2-5-1, Ootamachi, Nakatsugawa-shi, Gifu
Telephone: +81-573-65-3116

4-1-10, Nihombashi Honcho,
Chuo-ku, Tokyo
Telephone: +81-3-3242-1661

Gifu Prefecture (109)ShanghaiHong Kong

Tokyo Branch
Aichi Prefecture (37)Osaka Branch

THE JUROKU BANK, LTD.

33

Annual Report 2008

Total 148 Domestic Offices

http://www.juroku.co.jp/