BALANCE SHEETSJAPAN BANK FOR INTERNATIONAL COOPERATIONInternational Financial Account

AssetsCash and due from banks (Note 3)Loans (Note 4)
Miscellaneous assets (Note 5)
Premises and equipment (Note 6)
Deferred charges on bonds and notes (Note 7)
Customers' liabilities for acceptances and guarantees
Allowance for possible loan losses (Note 8)
Total assets

Liabilities and equity
Liabilities
Bonds and notes (Note 9)
Borrowings (Note 10)
Miscellaneous liabilities (Note 11)
Allowance for bonus payments
Allowance for employee retirement benefits (Note 12)
Acceptances and guarantees (Note 13)
Total liabilities
EquityCapital attributable to the International Financial AccountReserve attributable to the International Financial Account (Note 15)
Retained earnings (Accumulated deficit)
Total equity
Total liabilities and equity

In millions of yen

In millions of yen

In millions of U.S. dollars

March 31, 2004

March 31, 2003

March 31, 2004

182,404 \8,727,720
622,481
19,8802,694
724,924(133,868)
10,146,237\\\

228,527 $9,738,760
224,946
20,7842,249
629,082(127,151)
10,717,200$

1,726
82,578
5,890
188
26
6,859
(1,267)96,000In millions of yen

In millions of yen

In millions of U.S. dollars

March 31, 2004

March 31, 2003

March 31, 2004\\

See accompanying "Notes to Financial Statements" which are an integral part of these statements.

1,536,373
6,027,018
225,843569
10,806
724,924
8,525,535\

1,564,084
6,606,964
300,891
467
11,215
629,082
9,112,705

985,500
638,582(3,380)1,620,702
10,146,237\

985,500
608,336
10,6581,604,494
10,717,200$$

14,53757,025
2,137
5
102
6,859
80,665

9,325
6,042
(32)
15,33596,000STATEMENTS OF OPERATIONSJAPAN BANK FOR INTERNATIONAL COOPERATIONInternational Financial AccountIncomeInterest income
Interest on loans
Interest on due from banks
Interest on swaps (net)Fees and Commissions
Other operating income
Other ordinary income
Reversal of allowance for possible loan losses
Recovery of Written-off Claims
Profits on sales of premises and equipment
Total income
Expenses
Interest expenses
Interest on bonds and notes
Interest on borrowings
Fees and Commissions
Other operating expenses
Foreign exchange losses
Amortization of bonds and notes issuance costs
OthersGeneral and administrative expenses
Other ordinary expenses
Provision for allowance for possible loan losses
Write-off of loans
Write-off of equities and securities, etc.
Losses on disposal of premises and equipment
ODA-loan related losses
Total expense
Net income

In millions of yen

In millions of yen

In millions of U.S.dollars

FY 2003

FY 2002

FY 2003\\See accompanying "Notes to Financial Statements" which are an integral part of these statements.

264,451
214,915
1,609
47,926
6,116
309
404
32
420
271,735
183,666
60,400123,266
3,574
4,924
4,058
651
214
15,27917,826
17,704122
10225,281
46,453\\

318,185
285,453
3,636
29,0955,327
129
57,410159
2381,215232,381
71,141
161,240
3,099
755
2
567
185
17,169351
351
36
39,188292,982
88,232

$

$

2,502
2,033
15
454
58
3
4
0
4
2,571
1,738
572
1,166
34
47
39
6
2
144
169
168
1
0
2,132
439

STATEMENTS OF CASH FLOWSJAPAN BANK FOR INTERNATIONAL COOPERATIONInternational Financial AccountCash flows from operating activities
Net income
Depreciation and amortization
Increase (decrease) in allowance for possible loan losses
Decrease in allowance for possible investment losses
Increase in allowance for bonus payments(Decrease) increase in allowance for employee retirement benefits
Interest income
Interest expenses
Net loss on securities
Foreign exchange loss (gain)
Net (gain) loss on sales of premises and equipment
Net decrease in loans
Net increase in bonds and notes
Net decrease in borrowings
Net decrease in due from banks (excluding cash equivalents)
Interest received
Interest paid
Others, net
Net cash provided by operating activities
Cash flows from investing activities
Expenditures on premises and equipment
Proceeds from sales of premises and equipment
Net cash provided by (used in) investing activities
Cash flows from financing activities
Payment to National Treasury
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period\\

See accompanying "Notes to Financial Statements" which are an integral part of these statements.

In millions of yen

In millions of yen

In millions of U.S. dollars

FY 2003

FY 2002

FY 200346,453
1,025
6,717
101
(409)
(264,451)
183,666
299,531(410)
469,897
54,212(579,946)
87,947314,047(199,334)(320,063)
98,986\

88,232
1,127(63,991)(1,119)98
1,280(318,185)
232,381
1,471(12,226)
34
796,319
51,465(967,684)
200,850
323,273(256,309)
7,726
84,743

$

(522)
525
2

(390)
22
(368)

(38,459)(38,459)(0)60,52958,796
119,325 \(30,400)(30,400)(0)53,975
4,821
58,796 $

439
10
64
1
(4)
(2,502)
1,738
2,834
(4)
4,446
513
(5,487)832
2,971(1,886)(3,028)
937
(5)
5
0
(364)
(364)
(0)
573
556
1,129

STATEMENTS OF EQUITYJAPAN BANK FOR INTERNATIONAL COOPERATIONInternational Financial AccountIn millions of yen

Balance at March 31, 2003

Capitalattributable tothe International
Financial AccountReserve
attributable tothe International
Financial Account

Retainedearnings /(Accumulated
deficit)

Total Equity

\

\

\

\

985,500

608,336

10,6581,604,494

Transfer from net
earnings accounted
under the JBIC Law toreserve-

30,246(30,246)-

Payment to National
Treasury--(30,246)(30,246)

Issuance of capital from
Government

-

-

-

-

Net income--

46,45346,453

Balance at March 31, 2004\

985,500\

638,582\(3,380)\1,620,702

Appropriations:
Transfer from net
earnings accounted
under the JBIC Law toreserve-

37,675(37,675)-

Payment to National
Treasury--(37,675)(37,675)

Total

\

-

\

37,675\(75,351)\(37,675)

UnappropriatedAccumulated deficit

\

-

\

-

\

(78,731)\-

See accompanying "Notes to Financial Statements" which are an integral part of these statements.

STATEMENTS OF EQUITYJAPAN BANK FOR INTERNATIONAL COOPERATIONInternational Financial AccountIn millions of dollars

Balance at March 31, 2003

Capitalattributable tothe International
Financial AccountReserve
attributable tothe International
Financial Account

Retainedearnings /(Accumulated
deficit)

$

$

$

9,325

5,756

Total Equity
101$

15,182

Transfer from net
earnings accounted under
the JBIC Law to reserve

-

286

(286)

-

Payment to National
Treasury

-

-

(286)

(286)

Issuance of capital from
Government

-

-

-

-

Net income

-

-

439

439

Balance at March 31, 2004

$

9,325

$

6,042

$

(32)

$

15,335

Appropriations:
Transfer from net
earnings accounted under
the JBIC Law to reserve

-

356

(356)

-

Payment to National
Treasury

-

-

(356)

(356)

Total

$

-

$

356

$

(712)

$

(356)

UnappropriatedAccumulated deficit

$

-

$

-

$

(744)

$

-

See accompanying "Notes to Financial Statements" which are an integral part of these statements.

STATEMENTS OF EQUITYJAPAN BANK FOR INTERNATIONAL COOPERATIONInternational Financial AccountIn millions of yen

Capitalattributable tothe International
Financial Account\985,500

Reserve
attributable tothe International
Financial Account\564,230

Retainedearnings/(Accumulated
deficit)\
10,636

Total Equity\
1,560,367

Transfer from net
earnings accounted
under the JBIC Law toreserve-

44,105(44,105)-

Payment to National
Treasury--(44,105)(44,105)

Issuance of capital from
Government

-

-

-

-

Net income--

88,232

88,232

Balance at March 31, 2002

Balance at March 31, 2003\

985,500\

608,336\

10,658\1,604,494

Appropriations:
Transfer from net
earnings accounted
under JBIC Law toreserve-

30,246(30,246)-

Payment to National
Treasury--(30,246)(30,246)

Total

\

-

\

30,246\(60,492)\(30,246)

UnappropriatedAccumulated deficit

\

-

\

-

\

(49,834)\-

See accompanying "Notes to Financial Statements" which are an integral part of these statements.

NOTES TO FINANCIAL STATEMENTS

JAPAN BANK FOR INTERNATIONAL COOPERATIONInternational Financial Account

1. Basis of presentation

The accompanying financial statements have been prepared from the accounts maintained by Japan Bank forInternational Cooperation ("JBIC") in accordance with the provisions set forth in conformity with accounting principles
and practices generally accepted in Japan, which are different in certain respects as to application and disclosure
requirements from International Financial Reporting Standards.
The financial statements are not intended to present the financial position, results of operations and cash flows inaccordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan.
The Bank’s accounts are separated into the International Financial Account and the Overseas Economic Cooperation
Account as required under Article 41 of the Japan Bank for International Cooperation Law ("JBIC Law") whereby theaccounting shall be separated according to the categories of international financial operations and overseas economic
cooperation operations and be recorded by establishing a separate account for each operation. In separating the accounts,transactions directly related to either of the operations are attributed to the account for these operations and overhead
expenses and others are allocated to both of the accounts in accordance with certain pre-defined allocation rate.
Consolidated financial statements are not prepared since JBIC has no subsidiaries.
The amounts indicated in millions of yen are rounded down by omitting figures less than one million. Totals may
therefore not add up exactly because of such omission.
Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥105.69=$1.00,
the exchange rate as of March 31, 2004, has been used in translation. The presentation of such amounts is not intended to
imply that Japanese yen have been or could be readily converted, realized or settled into U.S. dollars at that rate or any
other rate.

2. Significant accounting policies(a)Cash and cash equivalents"Cash and cash equivalents" as stated in the statements of cash flows consists of cash in hand and due from Bank ofJapan included in "Cash and due from banks" in the balance sheets.

(b)

Securities
All securities are classified as "Available-for-sale Securities" which have no market value and are carried at cost basedon a moving average cost valuation.

(c)

Valuation method for derivative financial instruments
instruments
All derivative financial instruments are carried at fair value, except for certain derivatives that are designated as
hedging instruments as discussed below.

(d)

(e)

Hedge accounting for interest rate risks(i) Hedge accounting
JBIC measures derivatives used for interest rate hedging purposes under the deferral method.
(ii) Hedging instruments and hedged items
Hedging instruments: interest rate swaps
Hedged items: loans, bonds and notes(iii) Hedging policy
JBIC enters into hedging transactions up to the value of the underlying hedged assets and liabilities.
(iv) Assessment of hedge effectiveness
JBIC assesses the effectiveness of designated hedges by measuring and comparing the fluctuations of fair value
or cumulative fluctuations of cash flows of both hedging instruments and corresponding hedged items from thedate of inception of the hedges to the effectiveness testing date.

Hedge accounting for foreign exchange risks
Hedge instruments used to hedge foreign exchange risks associated with various foreign currency denominatedmonetary assets and liabilities are measured using the deferral method. In the previous fiscal year, the transitional
treatments stated in The Japanese Institute of Certified Public Accountants (JICPA) Industry Audit Committee Report No.
25 were applied to these transactions. Effective from the current fiscal year, in accordance with the standard treatments of
JICPA Industry Audit Committee Report No. 25, hedge accounting is applied to currency-swap transactions, exchange
swap transactions and similar transactions intended to hedge risks of borrowing and lending in different currencies byswapping the borrowing currency for the lending currency.
The effectiveness of the hedging instruments described above, such as currency-swap, exchange swap and similartransactions, hedging the foreign exchange risks of monetary assets and liabilities denominated in foreign currencies isassessed by comparing the foreign currency position of the hedged monetary assets and liabilities with that of the hedging
instruments.

(f)Foreign currency translation and revaluation method
JBIC maintains its accounting records in Japanese yen. Assets and liabilities denominated in foreign currencies aretranslated into Japanese yen at the market exchange rate prevailing at the fiscal year end.
With regard to derivatives, JBIC has applied hedge accounting from this fiscal year as stated in Note 2 (d) and (e)above.
As a result, currency-swap, exchange swap and similar transactions which had previously been accounted for on an
accrual basis are stated at market value and net assets or liabilities are recorded on the balance sheets. Consequently, thecaptions "Accrued income" and "Other assets" have decreased by ¥11,310 million ($107 million) and ¥307,674 million($2,911 million) respectively, "Derivatives" included in "Miscellaneous assets" has increased by ¥459,846 million ($4,351
million), "Derivatives" included in "Miscellaneous liabilities" has decreased by ¥20,531 million ($194 million), "Deferredhedged losses" has decreased by ¥8,269 million ($78 million), and "Deferred hedged gains" has increased by ¥153,123
million ($1,449 million). These changes have no effects on the results of operations.

(g)Depreciation basis for fixed assets(i) Premises and equipment
Premises and equipment are depreciated on the declining balance basis over their useful economic lives except
for buildings (excluding installed facilities) acquired on or after April 1, 1998, which are depreciated on astraight-line basis.
The principal estimated useful economic lives are as follows:
Buildings: 38 years to 50 years
Equipment: 2 years to 20 years(ii) Software
Software used by JBIC is amortized on a straight-line basis over its useful economic life (5 years).

(h)Accounting standard for impairment of fixed assets
On August 9, 2002, the Business Accounting Council in Japan issued the "Accounting Standard for Impairment of
Fixed Assets." The standard requires that fixed assets be reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not be fully recoverable. An impairment loss shall berecognized in the statements of operations by reducing the carrying amount of impaired assets or a group of assets to therecoverable amount to be measured as the higher of net selling price and value in use.
The standard shall be effective for fiscal years beginning April 1, 2005. However, an earlier adoption is permitted forfiscal year beginning April 1, 2004 and for fiscal years ending between March 31, 2004 and March 30, 2005.
JBIC has not yet applied this new standard nor has determined the effect of applying it on the financial statements.
(i)

Method of amortization for deferred charges"Discounts on bonds and notes" are amortized over terms of redemption, and "Bonds and notes issuance costs" areamortized over 3 years, on a straight-line basis in accordance with the Commercial Code of Japan.
Until the fiscal year ended March 31, 2003, the amounts of amortization of discounts on bonds and notes had beenpresented in "Amortization of discounts on bonds and notes" as their own account. In accordance with the amendment of
the applicable law which regulates the reporting standards, from April 1, 2003, they are presented in "Interest on bonds
and notes" combined with interest.
(j)

Allowance for possible loan losses
JBIC provides "Allowance for possible loan losses" as follows:
The allowance for claims on debtors who are legally bankrupt ("Bankrupt borrowers") or substantially bankrupt("Substantially bankrupt borrowers") is provided based on the outstanding balance after the write-offs described in Note 4(h) and the deductions of the amount expected to be collected through the disposal of collateral and execution ofguarantees.
The allowance for claims on debtors who are not legally bankrupt but are likely to become bankrupt ("Potentiallybankrupt borrowers") is provided based on an assessment of the overall solvency of the debtors after deducting theamount expected to be collected through the disposal of collateral or the execution of guarantees.
The allowance for claims on debtors other than Bankrupt borrowers, Substantially bankrupt borrowers and Potentiallybankrupt borrowers is provided primarily based on the default rate, which is calculated based on the actual defaults
during a certain period in the past.
The allowance for possible losses on specific overseas loans is provided based on the expected loss amount taking into
consideration the political and economic situations of these countries.
All claims are assessed initially by the operational departments and secondly by risk evaluation departments based oninternal rules for self-assessment of asset quality. The internal audit department, which is independent from theoperational departments, reviews these self-assessments, and the allowance is provided based on the results of theassessment.
(k)Allowance for bonus payments"Allowance for bonus payments" is calculated and provided for based on estimated amounts of future payments
attributable to the services that have been rendered by employees to the date of the balance sheet. Allowance for bonus
payments to executive directors are included in the account as of March 31, 2004 but not included in the previous fiscal
year.

(l)

Allowance for employee retirement benefits
Allowance for employee retirement benefits represents the future payment for pension and retirement to employees
and executive directors, and is accrued based on the projected benefit obligations and the estimated pension plan assets at
fiscal year end.
The actuarial gain or loss is recognized in the year in which it arises.
(m) Consumption taxes
taxes
Consumption taxes including local consumption tax are excluded from the transaction amounts.

3. Cash and cash equivalents

The reconciliation between the balance of cash and cash equivalents at the end of each fiscal year and the amount ofcash and due from banks reported in the balance sheets as of March 31, 2004, and 2003 is as follows:
March 31, 2004
（In millionsof yen）¥
Cash and due from banks
Due from banks (*)
Cash and cash equivalents¥

March 31, 2003
（In millionsof yen）¥
182,404(63,078)
119,325 ¥March 31, 2004
(In millions of
U. S. dollars)$

228,527(169,731)
58,796

$

1,726
(597)
1,129

(*) Excluding Due from Bank of Japan

4. Loans
Loans

All loans are loans on deeds. The amounts reported in the balance sheets as of March 31, 2004 and 2003 are as follows:
March 31, 2004
（In millionsof yen）¥

Bankrupt loans
Non-accrual loans
Past due loans (3 months or more)
Restructured loans¥

March 31, 2003
（In millionsof yen）¥

83
216,429
16,032385,225
617,770¥

March 31, 2004
(In millions of
U. S. dollars)$

665
147,029
92,620372,451
612,767

$

1
2,048
151
3,645
5,845

(a)

"Bankrupt loans," which are classified as non-accrual (i.e. interest receivable is admitted to be no longer accrued),
are loans to borrowers who fall into the following categories:- who have begun bankruptcy, settlement, reorganization, winding-up or special liquidation proceedings under the
Bankruptcy Law, the Corporate Reorganization Law, the Civil Rehabilitation Law, the Commercial Code or othersimilar laws of Japan- who have had their transactions with the promissory note clearinghouse suspended- who have begun similar proceedings under any foreign law.
These loans are categorized as loans to "Bankrupt borrowers" under the self-assessment of asset quality.

(b)"Non-accrual loans" are loans that are classified as non-accrual and which do not fall into the "Bankrupt loans"
category. These loans are categorized as loans to "Substantially bankrupt borrowers" or "Potentially bankrupt
borrowers" under the self-assessment of asset quality.

(c)"Past due loans (3 month or more)" are loans whose principal and/or interest is past due three months or morecounted from the date following the scheduled payment date, and which do not fall into the "Bankrupt loans" and"Non-accrual loans" categories. These loans are also categorized as loans to "Watchlist borrowers" under the
self-assessment of asset quality.

(d)"Restructured loans" are loans whose contracts were amended in favor of obligors (e.g. reduction of or exemption
from stated interest, deferral of interest payments, extension of maturity dates, renunciation of claims) in order toassist or facilitate the restructuring processes of the obligors in financial difficulties, and which do not fall into the"Bankrupt loans," "Non-accrual loans," and "Past due loans (3 month or more)" categories. These loans are also
categorized as loans to "Watchlist borrowers" under the self-assessment of asset quality.

(e)

The amounts of Loans indicated in the table above are shown the gross amounts prior to deduction of allowance forpossible loan losses.

(f)In the event that a debtor country encounters temporary payment difficulties and requests debt rescheduling withrespect to external public debt (whose creditors are Sovereigns, Trade Insurance Institutions and Export Credit
Institutions, etc.) due to an unfavorable balance of international payment, meetings of creditor countries (the "Paris
Club") would be held to discuss debt relief measures (rescheduling). When creditor countries agree on debt relief
measures, debt-rescheduling agreements between the creditors and a debtor are agreed. Under such temporary
liquidity assistance, the debtor carries out Economic Restructuring Program that was agreed with the International
Monetary Fund ("IMF") and continues to make repayments of the debt. The principal amount of loans for which
JBIC has agreed to provide debt relief pursuant to the Paris Club agreements is as follows:
March 31, 2004
（In millionsof yen）¥

March 31, 2003
（In millionsof yen）¥

International Financial AccountMarch 31, 2004
(In millions of
U. S. dollars)$

463,600

363,922

4,386

In the past, JBIC had not categorized the loans rescheduled under the Paris Club agreements, indicated above,
under "Restructured loans." This was based on the assumption that, unlike loans provided by private financial
institutions, their nature as public creditor provides an asset securing mechanism under the internationalframework which accords a high probability of repayment.
However, in order to facilitate comparison with private financial institutions, effective from the current fiscal
year, JBIC now classifies those loans to borrowers classifed under the self assessment as “Watchlisted” (but not"Past due loans (3 months or more)) that were rescheduled under the Paris Club as "Restructured loans." Theamount of such loans, included in "Restructured loans" in the above table, is ¥115,380 million ($1,092 million) of
which ¥78,955 millon ($747 million) represents original principal attributable to the International Financial
Account.
(g)

As JBIC's debtors mainly require long-term loans, JBIC generally enters into commitment line contracts with these
debtors. JBIC provides commitment lines under which it lends necessary funds up to a predetermined amount, thatis within the borrowers’ financing needs for the projects and up to the agreed maximum to lend, upon borrowers’
request, provided that the request meets terms and conditions for disbursement prescribed in the Loan Agreement.
The total balance of unused commitment lines as of March 31, 2004 and 2003 are ¥1,445,085 million ($13,673
million) and ¥1,685,551 million respectively.

(h)With respect to claims with collateral or guarantees on debtors who are legally or substantially bankrupt("Bankrupt borrowers and Substantially bankrupt borrowers"), the residual booked amount of the claims after
deduction of the amount which is deemed collectible through the disposal of collateral or the execution of guarantees
is written-off against the respective claims. The amounts of the accumulated write-offs as of March 31, 2004 and2003 are ¥18,092 million ($171 million) and ¥7,765 million, respectively.

5. Miscellaneous assets

Miscellaneous assets as of March 31, 2004 and 2003 are as follows:
March 31, 2004
（In millionsof yen）¥

Prepaid expenses
Accrued income (a)Derivatives
Preliminary payment to the National Treasury (b)Others (c)¥March 31, 2003
（In millionsof yen）¥

728
104,991
495,869
19,185
1,706
622,481¥

March 31, 2004
(In millions of
U. S. dollars)$

1,019
154,333
57,733
10,971
888
224,946

$

7
993
4,692
182
16
5,890

(Notes)(a)"Accrued income" includes ¥103,654 million ($981 million) of accrued interest on loans and others as of March 31,
2004, and ¥137,824 million of accrued interest on loans and ¥15,011 million of accrued interests on swaps andothers as of March 31, 2003.
(b)

Pursuant to Article 44 of the JBIC Law, a portion of the net earnings on the General Account of the International
Financial Account is paid to the National Treasury. Preliminary payment to the National Treasury, made on a best
estimate basis, is accounted on an accrual basis.

(c)"Others" includes ¥1,079 million ($10 million) of suspense payments and ¥303 million ($3 million) of other accounts
receivable and others as of March 31, 2004, and ¥607 million of other accounts receivable and others as of March 31,
2003.

6. Premises and equipment

Premises and equipment as of March 31, 2004 and 2003 are as follows:
March 31, 2004
（In millionsof yen）¥

Tangible fixed assets
Land
Buildings
Equipment
Construction in progress
Total
Less-accumulated depreciation
Net book value

Intangible fixed assets
Software
Guarantee deposit
OthersTotal
Less-accumulated depreciation
Net book value

¥
¥

¥
9,556
19,4783,951
135
33,121
13,412
19,708¥¥¥March 31, 2003
（In millionsof yen）$
9,618
19,202
3,992
146
32,961
12,773
20,187

¥
¥

¥
697
162
66
926
431
495

March 31, 2004
(In millions of
U. S. dollars)

$
$

91
184
37
1
313
127
186

$
670
163
66
901
293
607

¥
¥

7
1
1
9
4
5

$
$

7. Deferred charges on bonds and notes

Deferred charges on bonds and notes as of March 31, 2004 and 2003 are as follows:
March 31, 2004
（In millionsof yen）¥

Deferred discounts on bonds and notes
Deferred bonds and notes issuance costs¥

March 31, 2003
（In millionsof yen）
¥

1,278
1,416
2,694

March 31, 2004
(In millions of
U. S. dollars)
$

1,284
965
2,249

¥

$

12
14
26

8. Allowance for possible loan losses

Allowance for possible loan losses as of March 31, 2004 and 2003 are as follows:
March 31, 2004
（In millionsof yen）¥

March 31, 2003
（In millionsof yen）¥

44,79878,536
10,533General allowance for possible loan losses
Specific allowance for possible loan losses
Allowance for possible losses on specificoverseas loans¥

133,868

March 31, 2004
(In millions of
U. S. dollars)$

63,42660,212
3,512¥

127,151

424
743
100
$

1,267

9. Bonds and notes

Bonds and notes as of March 31, 2004 and 2003 are as follows:
Currency
and amounts
March 31, 2004
(In millions)

March 31,
2003
（In millionsof yen）¥
843,484

March 31,
2004
(In millions of
U. S. dollars)$
4,640

June 2005December
2013

505,950

420,600

4,787

September
2006December
2013

540,000

300,000

5,110

Maturity
date

60,000
1,600
1,428
400

2.8758.250

June 2004June 2008

JPY
USD
EUR

60,0003,000
1,000

0.3507.125,
LIBOR+0.0625

JPY

540,0000.2401.520

Date ofissuance

Export-Import
Bank of Japan
Bonds guaranteedby Japanese govt.
27, 32, 33, 35-37,
39, 40, 42, 46

May 1993June 1999

JPY
USD
EUR
GBP

Japan Bank forInternational
Cooperation Bonds
guaranteedbyJapanese govt.
1-6

November
1999December
2003

October
2001February
2004

FILP Agency
Bonds 1-10 (*)

March 31,
2004
（In millionsof yen）¥
490,423

Interest rate(%)

Description of
Bonds and notes¥

1,536,373¥

1,564,084$(*) Non-government guaranteed bonds issued in domestic market
Scheduled redemptions of bonds and notes for each of the next five years as of March 31, 2004 are as follows:
In millions of yen¥

In millions of U.S. dollars$

Fiscal year 2004
2005
2006
2007
2008

133,973
250,242
282,926
205,366
213,735

1,268
2,368
2,677
1,943
2,022

10. Borrowings

Borrowings as of March 31, 2004 and 2003 are as follows:
Averageinterestrate

Due date of
repayment

Long-term borrowings
Borrowings from theGovernment Fund for Fiscal
Investment and Loan Program

1.87

Borrowings from theGovernment Post Office Life
Insurance Fund

2.40

March 31, 2004
（In millionsof yen）¥

March 31, 2003
（In millionsof yen）¥

March 31, 2004
(In millions of
U. S. dollars)$

5,892,214

6,426,646

55,750134,804

180,3181,275

May 2004March 2014¥

6,027,018¥

6,606,964$

57,025

14,537

Long-term borrowings with maturities for the next five years as of March 31, 2004 are as follows:
In millions of yen

In millions of U.S. dollars¥
Fiscal year 2004
2005
2006
2007
2008

$
767,842
740,807794,184
1,135,482
1,323,994

7,265
7,009
7,514
10,744
12,527

11. Miscellaneous liabilities
liabilities

Miscellaneous liabilities as of March 31, 2004 and 2003 are as follows:
March 31, 2004
（In millionsof yen）¥

Accrued expenses (a)Unearned income
Derivatives
Deferred hedge gains (b)Others (c)¥March 31, 2003
（In millionsof yen）¥

51,184
2,199
16,790
153,571
2,097
225,843

March 31, 2004
(In millions of
U. S. dollars)$

66,536
2,398
34,77015,371
181,815300,891

¥

484
21
159
1,453
20
2,137

$

(Notes)(a)"Accrued expenses" includes ¥28,322 million ($268 million) of accrued interest on borrowings and ¥22,046 million($209 million) of accrued interest on bonds and notes and others as of March 31, 2004, and ¥34,941 million of
accrued interest on borrowings and ¥26,298 million of accrued interest on bonds and notes and others as of March
31, 2003.
(b)"Deferred hedge gains" are net realized or unrealized gains from hedging instruments. The gross amounts ofdeferred hedge gains and losses before netting as of March 31, 2004 are ¥169,900 million ($1,608 million) and¥16,328 million ($154 million) respectively, and as of March 31, 2003 are ¥273,907 million and ¥258,536 million
respectively.

(c)"Others" includes ¥1,993 million ($19 million) of suspense receipts and others as of March 31, 2004, and ¥178,104
million of deferred foreign exchange and ¥3,648 million of suspense receipts and others as of March 31, 2003.

12. Employee retirement benefits

JBIC has a defined benefits pension plan comprising welfare pension fund plan and lump-sum severance indemnity
plan.

(a)

The funded status of the pension plans

Disposition

Projected benefit obligation
Fair value of plans assets
Unfunded pension obligation
Unrecognized net obligation at transition
Unrecognized net actuarial gains/losses
Unrecognized prior service cost
Net amount recognized on the balance sheet(A)(B)(C) = (A) + (B)
(D)
(E)
(F)

Prepaid pension cost
Allowance for employee retirement benefits(H)(G) – (H)

(Note)(G) = (C) + (D)+ (E) + (F)March 31, 2004
（In millionsof yen）¥(14,068)
3,261(10,806)(10,806)¥(10,806)

March 31, 2003
（In millionsof yen）¥(13,847)
2,631(11,215)(11,215)¥(11,215)

March 31, 2004
(In millions of
U. S. dollars)
$
(133)
31
(102)
(102)

$

(102)

The projected benefit obligation above includes a portion in which the pension fund acts for the government
welfare program.

(b)Component of pension cost
March 31, 2004
（In millionsof yen）
¥
579
274
(39)
(387)
¥
426

Disposition

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of net actuarial gains/losses
Amortization of net obligation at transition
Other Costs
Net pension cost(c)March 31, 2003
（In millionsof yen）
¥
586
316
(42)
(186)
1,346
¥
2,020

March 31, 2004
(In millions of
U. S. dollars)
$
5
3
(0)
(4)
$
4

Principal assumptions madeMarch 31, 2004

Discount rate
Expected rate of return on plan assets

March 31, 2003
2.0%
1.5%

Method of attributing the projected benefits toperiods of services
Amortization period of prior service costs

Straight-line basis

Amortization period of actuarial gains/losses

Gains/losses arecharged to net
income for the year-

Amortization period of net obligation at transition

2.0%
1.5%
Straight-line basis
Prior service cost is
charged to net
income for the year
Gains/losses arecharged to net
income for the year--

13. Acceptances and guarantees

Acceptances and Guarantees as of March 31, 2004 and 2003 are as follows:
March 31, 2004
（In millions ofyen）¥

Acceptances
Guarantees¥

March 31, 2003
(In millions ofyen)¥
724,924
724,924 ¥$629,082
629,082 $March 31, 2004
（In millions of
U.S. dollars）
6,859
6,859

14. Assets pledged as collateral

There were no assets pledged as collateral as of March 31, 2004 and 2003.

15. Reserve

Pursuant to Article 44 of the JBIC Law, the reserve attributable to the International Financial Account is provided
from net earnings from the International Financial Account.

16. Lease transactions

Lease transactions in the fiscal year ended March 31, 2004 and 2003 are as follows:(a)Finance lease transactions, excluding leases that ownership of the property are deemed to be transferred to thelessee:lessee:・Acquisition cost, accumulated depreciation and net balance of leased property as of March 31, 2004 and 2003, are as
follows:
March 31, 2004
（In millions ofyen）
Acquisition cost
Equipment
Others
Total
Accumulated depreciation
Equipment
OthersTotal
Net balance
Equipment
OthersTotal

March 31, 2003
（In millions ofyen）March 31, 2004
（In millions of U.S.
dollars）

¥

¥

$

¥

199
313
513 ¥

- $

2
3
5

¥

24
31
55 ¥

- $

0
0
0

¥

175
282
458 ¥

- $

2
3
5

・Future lease payment obligations as of March 31, 2004 and 2003 are summarized below:
March 31, 2004
（In millions ofyen）¥
Due within 1 year
Due after 1 year
Total

March 31, 2003
（In millions of
yen）

¥
100
359
460 ¥

¥

March 31, 2004
（In millions of
U.S. dollars）
$
- $

1
3
4

・Lease payment, depreciation expenses and interest expense for the fiscal year ended March 31, 2004 are ¥59 million($1 million), ¥56 million ($1 million) and ¥4 million ($0 million) respectively. There are no corresponding amounts
for the fiscal year ended March 31, 2003.
・Depreciation expense is calculated using the straight-line method over the useful economic life of the respective
leased assets with zero residual value.
・The difference between total lease payments and the acquisition cost of leased assets is debited to interest expenses,
and is allocated to each fiscal year using the interest method.
(b)

Operating lease transactions:・Future lease payment obligations as of March 31, 2004 and 2003 are summarized below:
March 31, 2004
（In millions ofyen）¥

Due within 1 year
Due after 1 year
Total

¥

March 31, 2003
(In millions of
yen)
¥
1
1 ¥

March 31, 2004
（In millions of
U.S. dollars）
$
5
1
7 $

0
0

17. Derivative transactions

Notes to derivative transactions in the fiscal year ended March 31, 2004 are as follows:(a)

Policy for derivative transactions
JBIC engages in derivative transactions solely for the purpose of hedging foreign exchange rate risks and interest raterisks that are incurred in respect of its lending and funding operations.

(b)Transactions
Derivative transactions include interest rate and currency swaps and forward exchange contracts.

(c)Risks involved in derivative transactions
Derivative transactions involve the following risks:(i) Credit risk
Potential loss from the failure of a counterparty to perform its obligations in accordance with terms andconditions under the contract governing transactions due to bankruptcy or deteriorating business.
(ii) Market risk
Potential loss from the changes in the market value of financial products due to fluctuations in interest rates or
exchange rates.

(d)

Policies for risk management on derivative transactions(i) Credit risk
JBIC constantly monitors the market value of its derivative transactions with each counterparty and theamount of its credit exposure, and creditworthiness of each counterparty in order to ascertain theappropriateness of entering into or maintaining a transaction with each counterparty.
(ii) Market risk
JBIC uses derivative transactions solely for the purpose of hedging. Therefore, the market risk on derivativetransactions and that on hedged (lending or funding) transactions basically offset each other.
(In 100 millions of yen)
Credit risk amounts of derivative etc.

Interest rate swaps
Currency swaps
Forward exchange contracts
Other derivatives
Credit risk reductions through nettings
Total(Note)

Contract
amount/notionalamount¥19,95041,997
14¥
61,962(In 100 millions of U.S. dollars)

Contract
amount/notionalamount
$
838
189
7,902
397
0
0
(1,806)
6,934 $
586

Credit risk¥¥

Credit risk
$

$

8
75
0
(17)
66

Credit risk amounts are calculated under Uniform International Standards in accordance with the Banking Law
of Japan and the related regulations.

(e)Interest raterate-related transactions
Gains or losses arising from changes in fair value of interest rate related derivatives are not included in the statementof operations.
Hedge accounting is applied to all interest rate-related derivative transactions.
(f)CurrencyCurrency-related transactions
Gains or losses arising from changes in fair value of currency related derivatives are not included in the statement ofoperations.
Hedge accounting is applied to all currency-related derivative transactions.
(g)EquityEquity-related transactions
Not applicable(h)

BondBond-related transactions
Not applicable(i)

CommodityCommodity-related transactions
Not applicable(j)Credit derivatives transactions
Not applicable
Notes to derivative transactions in the fiscal year ended March 31, 2003 are as follows:(a)

Policy for derivative transactions
JBIC engages in derivative transactions solely for the purpose of hedging foreign exchange rate risks and interest raterisks that are incurred in respect of its lending and funding operations.

(b)Transactions
Derivative transactions include interest rate and currency swaps and forward exchange contracts.

(c)

Risks involved in derivative transactions
Derivative transactions involve the following risks:(i) Credit risk

Potential loss from the failure of a counterparty to perform its obligations in accordance with terms andconditions under the contract governing transactions due to bankruptcy or deteriorating business.
(ii) Market risk
Potential loss from the changes in the market value of financial products due to fluctuations in interest rates or
exchange rates.
(d)

Policies for risk management on derivative transactions(i) Credit risk
JBIC constantly monitors the market value of its derivative transactions with each counterparty and theamount of its credit exposure and creditworthiness of each counterparty in order to ascertain theappropriateness of entering into or maintaining a transaction with each counterparty.
(ii) Market risk
JBIC uses derivative transactions solely for the purpose of hedging. Therefore, the market risk on derivativetransactions and that on hedged (lending or funding) transactions basically offset each other.
(In 100 millions of yen)
Credit risk amounts of derivative etc.

Contract amount/notionalamount¥17,001
45,52814¥
62,543

Interest rate swaps
Currency swaps
Forward exchange contracts
Other derivatives
Credit risk reductions through Nettings
Total(Note)

Credit risk
¥
1,093
5,456
0
(2,526)
4,023¥

Credit risk amounts are calculated under Uniform International Standards in accordance with the Banking Law
of Japan and the related regulations.

(e)Interest raterate-related transactions
Gains or losses arising from changes in fair value of interest rate related derivatives are not included in the statementof operations.
Hedge accounting is applied to all interest rate-related derivative transactions.
(f)CurrencyCurrency-related transactions
Gains or losses arising from changes in fair value of currency related derivatives are not included in the statement ofoperations.
Certain currency swaps have been accounted for by using the accrual method of accounting based on the transitional
applications described in "Treatment of Accounting and Auditing Concerning Accounting for Foreign Currency
Transactions in the Banking Industry." The contractual amount, market value and unrealized gain/(loss) of such currency
swaps accounted for on accrual method are as follows:

Type

Contractual amount¥Currency swaps(g)EquityEquity-related transactions
Not applicable(h)

BondBond-related transactions
Not applicable(i)

CommodityCommodity-related transactions
Not applicable(j)Credit derivatives transactions
Not applicable

4,536,027

March 31, 2003
（In millions of yen）
Market value

Unrealized gain/(loss)¥¥
118,779-18. Market value of securities

Notes to market value of securities as March 31, 2004 are as follows:(a)

Trading securities
Not applicable(b)

HeldHeld-toto-maturity debt securities
Not applicable(c)

AvailableAvailable-forfor-sale securities with market value
Not applicable(d)

HeldHeld-toto-maturity debt securities soldNot applicable(e)

AvailableAvailable-forfor-sale securities soldNot applicable(f)

HeldHeld-to maturity debt securities and availableavailable -forfor-sale securities whose market value is not readily determinableNot applicable(g)

Change of classification of securities
Not applicable(h)

Redemption schedule of availableavailable-forfor-sale securities with maturity
Not applicable(i)

Money held in trust
Not applicable(j)

Net unrealized gain (loss) on availablesecurities
uritiesavailable-forfor-sale sec
Not applicable

Notes to market value of securities as March 31, 2003 are as follows:(a)

Trading securities
Not applicable(b)

HeldHeld-toto-maturity debt securities
Not applicable(c)

AvailableAvailable-forfor-sale securities with market value
Not applicable(d)

HeldHeld-toto-maturity
maturity debt securities soldNot applicable(e)

AvailableAvailable-forfor-sale securities soldNot applicable(f)

HeldHeld-to maturity debt securities and availableavailable -forfor-sale securities whose market value is not readily determinableNot applicable(g)

Change of classification of securities
securities
Not applicable(h)

Redemption schedule of availableavailable-forfor-sale securities with maturity
Not applicable(i)

Money held in trust
Not applicable(j)

Net unrealized gain (loss) on availableavailable-forfor-sale securities
Not applicable