JOYO BANKPROFILE
The Joyo Bank, Ltd., was established in 1935 out of the merger of theTokiwa Bank and Goju Bank (both founded in 1878), and celebrating its
125th year in Business.
As a leading financial institution in Ibaraki Prefecture and surrounding
regions, the Bank, with the philosophy of “Practicing sound management,
creation of values, and partnership with the home region,” is contributing
to the growth of its home region by providing stable and comprehensive
financial services.

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

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

CONTENTS
1 Financial Highlights
2 Message from the President
4 Business Highlights
5 Management Philosophy and Policies
8 Tackling Management Tasks
17 Consolidated Balance Sheets
18 Consolidated Statements of Income/Consolidated Statements of Capital Surplus andRetained Earnings
19 Consolidated Statements of Cash Flows
20 Notes to Consolidated Financial Statements
31 Report of Independent Certified Public Accountants

32 Non-Consolidated Balance Sheets
33 Non-Consolidated Statements of Income/Non-Consolidated Statements of Retained Earnings
34 Notes to Non-Consolidated Financial Statements
39 Report of Independent Certified Public Accountants
40 Organization
41 Board of Directors and Corporate Auditors/
Market Business Group and Overseas Office
42 Service Network/Affiliated Companies
43 Corporate Data

FINANCIAL HIGHLIGHTS
Consolidated
THE JOYO BANK, LTD. AND CONSOLIDATED SUBSIDIARIES
Millions of Yen
Years Ended March 31

Thousands of
U.S. Dollars

2004

2003

2004

For the Year Ended
Total Income
Total Expenses
Income before Income Taxes and Minority Interests
Net Income¥ 179,881
139,752
40,12923,675¥ 172,475
152,459
20,0168,305$ 1,701,968
1,322,282
379,685
224,004

At the Year End
Total Assets
Deposits
Loans and Bills Discounted
Securities
Shareholders’ Equity
Capital Ratio¥7,056,646
6,160,255
4,320,503
2,255,587
408,131
11.39%¥6,792,667$66,767,395
6,081,317
58,286,063
4,232,580
40,879,014
2,070,219
21,341,536
360,082
3,861,585
11.33%For the Year Ended
Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by Financing Activities
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at End of Year¥ 163,061(177,924)(12,412)(27,296)
144,739¥

9,898(105,199)(14,478)(109,796)
172,035$ 1,542,823(1,683,451)(117,437)(258,264)
1,369,467

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥105.69 to US$1.00
on March 31, 2004.

Non-Consolidated
THE JOYO BANK, LTD.
Millions of Yen
Years Ended March 31

Thousands of
U.S. Dollars

2004

2003

2004

For the Year Ended
Total Income
Total Expenses
Income before Income Taxes
Net Income¥ 158,044
118,868
39,17622,820¥ 154,234
136,010
18,223
8,386$ 1,495,354
1,124,685
370,668
215,914At the Year End
Total Assets
Deposits
Loans and Bills Discounted
Securities
Shareholders’ Equity¥7,042,842
6,173,790
4,363,963
2,255,553
407,745¥6,780,242
6,091,865
4,274,410
2,070,023
360,655$66,636,786
58,414,135
41,290,216
21,341,214
3,857,933

Notes: 1. Japanese yen amounts are rounded down to the nearest million yen.
2. U.S. dollar amounts represent translation of Japanese yen at the exchange rate of ¥105.69 to US$1.00
on March 31, 2004.

1

MESSAGE FROM THE PRESIDENT

As part of our drive to become a comprehensive
supplier of high-quality financial services, we are focusing
on implementing a customer-centric business philosophy
even more thoroughly. At the same time, to make ourselves into the most trustworthy financial institution in theeyes of our customers, we are working not only to ensure
the soundness of our asset portfolio, and to raise our earning potential and growth potential, but to communicate
these strengths to our customers and the general publicthrough prompt and unstinting disclosure of corporate
information.

Meeting Customer Needs and Helping Revitalize theRegional Economy
Everything we do in the world of financial services

Isao Shibuya
President

revolves around the customer. We always adopt the customer’s viewpoint in designing our financial products andservices, and we take action only after the customer has

Becoming a Comprehensive Supplier of High-Quality
Financial Services

made an informed decision. We aim to offer a high-quality

The principal social role of regional financial institutions isrequirements.

financial service capable of fully satisfying our customers’

to facilitate the smooth supply of funds to corporations andFor our corporate customers, we are maintaining a

individuals in their communities, thereby contributing topolicy of responding actively to the loan needs of corporate

the robust development of the regional economy and thecustomers ranging from small firms up to so-called second-

well-being of local society. In line with this corporatetier enterprises, while expanding our menu of management

philosophy, under its current medium-term management

consulting services. We are also taking steps to provide aplan, which runs from April 1, 2002 to March 31, 2005,

varied range of fund procurement methods, including the

Joyo Bank is working to transform itself into a comprehen-private placement of bonds, the provision of loans secured

sive provider of financial services capable of satisfying theby trade receivables, and comprehensive factoring system.

expectations of its customers, shareholders, and all otherWe are also pursuing a number of initiatives aimed atstakeholders in the regional community. To do this, we

attracting new customers, such as our active marketing of

have set targets under the plan for improving earning

financial products that make use of the automated scoring

power, asset soundness, and operational efficiency.

system for credit screening, in collaboration with theAdditionally, we have drawn up a plan to strengthen

Ibaraki Prefecture Credit Guarantee Association.

our relationship banking capabilities to enable us to sup-

The Advanced Marketing Section, which we set up in

port local small and medium-sized enterprises and thereby

October 2003, works closely with other financial institutions

help revitalize the regional economy. Initiatives in this field

and organizations to provide venture capital to support

on which we will focus more effort include support forbusiness start-ups, as well as business matching services,business start-ups, especially in new-technology fields, an

M&A consulting, and assistance with IPOs. The Bank’senhanced management consulting service, and financing

Management Support Section works in close liaison with ourfor corporate revitalization.

branches to offer management consulting and assistance in2the rehabilitation of ailing businesses.
As a further part of our program to assist small andmedium-sized companies in Ibaraki Prefecture in theircustomers to access information, apply for management
advice, and conduct negotiations) has now risen to approximately 3,000.

business revival efforts, we have set up a corporate revival
the Organization for Small & Medium Enterprises andSound Management, Creation of Value, andPartnership with the Home Region

Regional Innovation, with the aim of turning around the

Major changes are taking place in the business environ-businesses of poorly performing companies, principally

ment in which financial institutions operate. The scope ofthrough the injection of funds by equity investment. This isbanks’ business operations is expanding in line with ongo-

just one of the steps we are taking to help revitalize theing deregulation, and April 2005 will see the complete

regional economy.

ending of the government’s unlimited guarantees on liquid

fund in collaboration with the prefectural government andTurning to the retail banking business, for our individ-

deposits exceeding ¥10 million. Not only is competition

ual customers we introduced a special credit screening

among financial institutions becoming more intense, cus-system for mortgage loan applicants in October 2003. This

tomers and shareholders alike are taking an increasingly

is a step toward building a system capable of fasterdemanding attitude toward financial institutions. Amid

response to a wide range of retail customer needs. We also

these difficult circumstances, we at Joyo Bank will con-provide a wide range of loans for individuals with a suffi-

tinue to pursue our goals of sound management, creationcient level of creditworthiness. These loans are availableof value, and partnership with the home region to achievethrough our ATMs, and include loans for car purchases,

steady growth, particularly in the retail banking field.

education loans, and various other loans to meet the par-With regard to the discovery in 2003 that a certain

ticular needs of our customers at their various stages of

employee of the Bank had embezzled a large amount oflife.

funds from customers’ deposits, the members of the manIn the field of personal asset management, we offer

agement of the Joyo Bank wish to express their deep regret

low-risk investment trust products, personal pension insur-– to both the bank’s customers and its shareholders – thatance denominated in U.S. dollars, and time deposits

such an event should have occurred. To prevent the recur-

denominated in Australian dollars, among others. Thanks

rence of such incidents, we are taking steps to enforce ato this expanded range of products, our outstanding bal-more thorough system of legal compliance and set up aances of both personal loans and assets under custody bysatisfactory internal checking system. By these means, we

individuals have been rising at a steady pace. In June ofare firmly resolved to create a financial service that will

this year we set up a new section that specializes in han-meet with the full satisfaction of our customers, and thatdling assets under custody, and we are well on the way towill, at the same time, make a valuable contribution to theestablishing a service system that will cater to the wholedevelopment of the economy of our home region.

diverse array of customer needs.
We have also been working to expand the number ofour marketing channels. Through tie-ups with E-net Co.,

In conclusion, I look forward to enjoying the continued support of our shareholders as we face the challengesof the future.

Ltd. and IY Bank Co., Ltd., we have made our services
accessible via ATM to a much larger number of customers.
From August this year we opened our Loan Plazas on
Sundays to provide a more convenient customer service.
The number of corporate users of our Joyo Village business

Isao Shibuya
President

portal site (a 24-hours-a-day nationwide service that allows

3

BUSINESS HIGHLIGHTS
Revenues and Earnings (Non-consolidated basis)
Business profit for the reporting term decreased ¥5.0
billion, reflecting an increase in provisions to the general reserves for possible loan losses. Business profit oncore banking operations*, however, increased ¥3.9
billion, or 8.9%, over the previous term, to ¥48.0 billion. This is attributable to increases in interest income,and income from fees and commissions, as well as to a
substantial reduction in general and administrative
expenses. Gross business profit increased ¥17.9 billion,or 149.4%, to ¥29.8 billion, due to a reduction in credit
costs and a substantial decrease in unrealized loss onequity securities in line with the recovery in the stock
market.
Net income increased ¥14.4 billion, or 172.1%, to¥22.8 billion (US$215.9 million).
*Business profit on core banking operations is calculated by adding
provisions to general reserves for possible loan losses to businessprofit after deduction of gain (loss) on bond trading.

Deposits, Loans and Securities
Deposits stood at ¥6,173.7 billion (US$58,414.1 million)
at term-end, an increase of ¥81.9 billion from the previous term-end. Although time deposits decreased by¥90.3 billion to ¥2,739.5 billion at term-end, ordinary
deposits rose ¥170.2 billion to a term-end balance of¥2,871.2 billion.
Thanks to our active initiatives to meet the diverse
asset management needs of our customers, we haveachieved a steady increase in retail customers’ deposits.
At the same time, the balances of assets in our custody inthe form of foreign currency deposits, investment trusts,
and national and local government bonds, and the valueof pension insurance plans handled, have also shownnotable growth.
During the term under review, the balance of loans
and bills discounted increased ¥89.5 billion during theterm under review, to end the fiscal year at ¥4,363.9
billion (US$41,290.2 million). Of this sum, loans to individuals – consisting mainly of mortgage loans amounting
to ¥892.4 billion – increased substantially by ¥99.9 billion.
The balance of loans to small and medium-sized businesses, however, declined by ¥5.9 billion during the termto ¥1,926.9 billion at term-end, owing to slack demand forfunds.
4

The balance of securities at term-end was up ¥185.5
billion year-on-year, at ¥2,255.5 billion (US$21,341.2
million).
Investment in available-for-sale other securities including foreign bonds increased by ¥147.4 billion to ¥1,269.4
billion, reflecting our policy of placing more emphasis on
investment yield.
At the same time, the balance of Japanese Government
Bonds increased by ¥25.4 billion during the term, to¥688.5 billion, reflecting our desire to improve liquidity.

Capital Ratio
In the first half period of the term ended March 31,
2003, the Bank adopted domestic standards for measuring its capital ratio. Previously, the Bank had utilized
the BIS standard.
On a consolidated basis, our capital ratio was
11.39%, and on a non-consolidated basis, the ratio was
11.34%, exceeding by a substantial margin the minimum capital requirement of 4% that is applied underdomestic standards for banks without overseas
operations.

Consolidated Accounts
The Bank currently has ten consolidated subsidiaries.
Total income for the year increased by ¥7.4 billion to¥179.8 billion (US$1,701.9 million). Total expenses
decreased by ¥12.7 billion to ¥139.7 billion (US$1,322.2
million). As a result of above, net income was ¥23.6
billion (US$224.0 million).
Net cash provided by operating activities amounted
to ¥163.0 billion (US$1,542.8 million), chiefly reflecting
net increases in deposit and call money. Net cash used
in investing activities amounted to ¥177.9 billion(US$1,683.4 million), reflecting a decline in proceedsfrom securities transactions. Net cash used in financing
activities came to ¥12.4 billion (US$117.4 million),reflecting the acquisition of Company shares and dividend payments. As a result of the above, cash and cash
equivalents at term-end amounted to ¥144.7 billion(US$1,369.4 million), a decrease of ¥27.2 billion fromthe previous term-end.

MANAGEMENT PHILOSOPHY AND POLICIES—Current management plan focuses on strengthening relationship banking capabilities—

Management Philosophy“Sound management, creation of value, and partnership with the region”
In line with the principles expressed in the Bank’s catchphrase quoted above, our primary goal is to ensure that the Bank is soundly managed
and its business operations conducted in accordance with tried and tested marketing principles. In so doing, we will become a provider of highquality financial services for customers in our local community, facilitating the smooth supply of funds and thereby helping to power thedevelopment of the regional economy and contribute to the well-being of regional society. We believe that it is precisely by fulfilling our original
mission as a financial institution that we can make a truly valuable contribution to prosperity of the community of which we are members.
In line with our customer-centric policy focus, we are devoting our efforts to fully satisfying our customers’ expectations through the provision of a high-quality financial service and market-leading financial products. At the same time, we are working to ensure the soundness of ourasset portfolio and raise our earning potential, to realize a higher level of enterprise value. As a regional financial institution, we constantly ask
ourselves what we can do for the good of the region as a whole.

Management Policies
Becoming a comprehensive supplier of high-quality financial services
The Japanese economy continues to make progress toward full-scale recovery, but the future is still fraught with danger, in view of the persistence of the underlying deflationary trend. The restructuring of the nation’s financial sector is still proceeding, and competition is becoming everfiercer, including with companies that have traditionally operated in other industries. The business environment is thus likely to become moredifficult over the foreseeable future. In this situation, Joyo Bank is pushing ahead determinedly to achieve the goals it has set in its current
medium-term management plan – running from April 1, 2002 to March 31, 2005 – with the ultimate objective of securely gaining the trust of its
customers and shareholders.
We are also bolstering our capabilities in the field of funding support for small and medium-sized enterprises, the core of this initiative
being our plan to dramatically enhance our relationship banking functions for the sake of revitalizing the regional economy. We are enthusiastically developing and marketing our support services for the creation of new companies, the diversification of existing companies into new
business lines, general management consulting, and specialized support for turning around poorly performing companies.

The 8th Medium-Term Management Plan of Joyo Bank
(3-year plan from April 1, 2002 to March 31, 2005)

Joyo
Bank’s
Goal

Becoming a comprehensive supplier of high-quality financial services

Under its 8th medium-term management plan – the current three-year plan ending March 31, 2005 – Joyo Bank aims to transform itself into acomprehensive supplier of high-quality financial services that will satisfy the various needs of its customers, shareholders, and the regional
community as a whole.
Specifically, we aim to become –• The supplier of financial services with the best reputation for trustworthiness among the public (complete focus on customer-centric service
stance)• A financial services company boasting high earnings potential and a sound financial position (raising the Bank’s enterprise value)• A company with a business culture full of vitality, offering a workplace that rewards employees’ efforts (reinvention of corporate culture)5

Basic Objectives
The Bank’s current three-year management plan is
broadly divided into two stages. In the first stage, thekey goals were to sharply reduce the non-performing
loan burden on our balance sheet, and to implement
radical measures to inject a higher level of efficiency
into the operations of the whole Joyo Bank Group. The
particular focus of effort in the second stage of the plan
is to build on the achievements of the first stage torealize a V-shaped recovery. Nevertheless, initiatives tostrengthen our earning power are being pursued
throughout the whole three-year period.
Subsidiary themes that are essential to the attainment of the basic goals include reinforcing our marketing capabilities, reinventing our corporate culture, andintroducing new and far-reaching programs for thedevelopment of our human resources.
Strengthening Earning Power
While redesigning the structure of our loan portfolio toallow for an expansion of lending to local small,medium-sized companies, as well as to retail banking
customers, we are strictly applying the principle oftailoring the interest rate on each loan to the level ofrisk carried. We are investing additional resources inmarketing and attempting to expand our volume ofbusiness with regular customers. At the same time, weare expanding our lineup of financial products to serve
the diverse needs of today’s customers, promoting suchproducts as investment trusts, foreign currency deposits,
insurance plans, and others. In these ways, we aim tobolster our revenue from fees and commissions.
Higher Asset Quality
With the goal of achieving a sounder asset portfolio, ourManagement Support Section works in close liaison
with our branches to offer management consulting andassistance in the rehabilitation of ailing businesses. For
loans that are deemed non-recoverable, we are pushingahead with their removal from the balance sheets
through write-off and sell-off procedures.

6

Raising Efficiency
To achieve higher operational efficiency across theentire Joyo Bank Group, we have focused our efforts on
the four areas of redistribution of human resourcesamong our marketing divisions, streamlining our branch
network, reducing the costs of computer systems andadministrative operations, and restructuring of businesses operated by the Bank’s subsidiaries andaffiliates.

Response to Plan for Strengthening ofRelationship Banking Functions
Regional economies are the environments in which
regional banks have their existence: their social mission
is to assist the economic development of the whole
region through the smooth provision of funds and otherfinancial services to local companies and individuals.
Because of this, Joyo Bank is making the utmost efforts
to act in line with the government’s policy for strengthening relationship banking functions, by providing more
support for the establishment of new companies, andfor the entry of existing companies into new businessfields, as well as general management consulting andassistance in reviving enterprises in danger of falling
into bankruptcy. By strengthening the local base ofsmall and medium-sized businesses in these ways, we
aim to inject greater vigor into the whole regional
economy.
Support for Creation of New Companies and Entry into
New Business Fields
We are currently upgrading our own surveys of trends
at the industry level and analysis of individual companies’ growth potential. In addition, we are making
efforts to reinforce networking for information sharing
with other industries, academia and government institutions with the aim of successfully identifying newly
established companies with good growth potential, as
well as promising new business lines. These will
become short-list candidates for our financial support.
In addition, we plan to utilize venture capital funds toprovide an integrated system of financial support
through both direct loans and equity investment.

Ensuring Smooth Supply of Funds and Enhancing
Management Consulting Capabilities
Joyo Bank intends to further deepen its relationships
with its corporate customers, not only by promptly
meeting their various funding needs, but also by offering the optimal financial and solutions-design support –utilizing the specialized expertise of all Group members– to address our customers’ management issues, including business portfolio restructuring. We are also putting
efforts into nurturing new business skills in the field of
database-centered marketing services, such as management consulting and business matching. These initiatives are being pursued on a Group wide basis.
Aiming at Even Faster Business Turnaround Solutions
The activities of our Management Support Section aresupplemented by utilizing a public loan program forcorporate rehabilitation and a business revitalization
fund. In addition, we are strengthening our collaboration with outside experts.
New Loan Programs for SMEs
To adopt a markedly proactive approach to customers’potential funding needs, together with a swifter
response when such needs are actualized, we have been
actively marketing financial products that make use of
the automated scoring system for credit screening, incollaboration with the Ibaraki Prefecture Credit
Guarantee Association.
We also work to provide a diverse array of fundprocurement methods, including the private placementof bonds, the provision of loans secured by trade receivables, and factoring in lump-sum payments. Thus, therange of our total lineup of products and services covers
almost all the probable financing needs of our corporate
customers.
Note: “Relationship banking” refers to the forming of close and longterm relationship between a financial institution and its corporate borrowers. This allows the institution to amass an extensive
database on each customer, which is used as a tool to enable
the provision of the optimal financing service.

7

TACKLING MANAGEMENT TASKS
Improving Asset Quality
Achievements in Fiscal 2003
In line with the results of self-assessment of loan assets,
and based on in-house rules for write-offs and provisions for possible loans losses, the Bank made provisions and wrote off nonperforming loans in an
appropriate manner. Total credit costs, expenses forwrite-offs of non-performing loans and provisions toreserves for possible loan losses combined, amounted to¥19.1 billion for fiscal 2003. Details are shown in thetable.
We made ample provisions for possible loan losses
corresponding to the deterioration of borrowers’ business performance and declines in the value of realestate serving as collateral, reflecting an overall land
price decline. On the other hand, we strengthened support activities for corporate restructuring, enabling someborrowers to improve their borrower categorization, sothat total credit costs decreased year-on-year.

March 31

Write Off of Claims
Net Provision for Specific Reserve
Provision for Specific Foreign Borrowers
Losses on Sale of Loans to the
Cooperative Credit Purchasing Co., Ltd.
Losses on Bulk Sale of Loans
Provision for Possible Losses on
Sale of Loans
Provision for Other Contingent Losses
Other
Total

2004

Millions of Yen
2003
Change10,824
7,601—

17,100 (6,275)
3,763 3,837
—
—

—
610

1,398 (1,398)
2,534 (1,924)—
86
22
19,144

354
(354)
81
5
563
(540)
25,795 (6,650)

Reserve for Possible Loan Losses
We have provided reserves covering 100% of loans toborrowers deemed legally or substantially bankrupt andtherefore uncollectible (after deduction of the portion
covered by collateral or guarantees), under our asset
self-assessment. Regarding loans to borrowers threatened with bankruptcy, on the basis of historical default
rates, we have provided specific reserves covering

881.15% of the loans of which the collectibility isdeemed to be at risk. We have thus provided specificreserves of ¥31.8 billion against ¥39.1 billion in loans ofwhich the collectibility is deemed to be at risk. Our
reserve ratio was 81.29%.
An amount of ¥62.5 billion under claims that were
judged, through asset self-assessment, to beuncollectible or valueless, has been written down in thebalance sheets through partial direct charge-offs.
The Bank’s reserve for possible loan losses (excluding specific reserves) has been provided in line with therecommendations of the Financial Inspection Manualissued by the Financial Services Agency. Borrowers
requiring caution have been subdivided into three categories including “borrowers requiring supervision.” Ineach case, reserves have been provided based on pastdefault rates.
We will continue to develop our credit risk management systems, and bolster our loan portfolio by writing
off, and providing reserves against, bad debt.
Reserve Based on Self-Assessment

March 31, 2004

Billions of Yen
Potentially Substantially Legally
Bankrupt
Bankrupt
Bankrupt
Borrowers Borrowers Borrowers

Claims of balance (i)
90.8
19.4
Claims Secured
by Collateral (ii)
52.0
19.1
Claims with Uncertain
Collectibility (A)=(i)-(ii)38.80.2Specific Reserve (B)31.4
0.2
Reserve Ratio (B)/(A)
81.15% 100.00%

Total

7.7

118.0

7.7

78.9

0
0
100.00%39.1
31.8
81.29%

Reserve for Possible Loan Losses
March 31

2004

General Loan Loss Reserve
30.9
Specific Reserve
31.8
Reserve for Specific Foreign Borrowers—
Reserve for Possible Loan Losses
62.7
Reserve for Assistance to Specific Borrowers—
Reserve for Possible Losses on Sale of Loans—
Reserve for Other Contingent Losses
0.1

Billions of Yen
2003
Change

29.2
37.8
—
67.0
—
—
0.1

1.6
(5.9)
—
(4.2)
—
—
0

Helping Local Companies Rebuild Their Performanceand Financial Position
To assure the soundness of our loan portfolio, it isnecessary not only to aggressively tackle the bad debt
issue, but at the same time work from the borrowers’
side to resolve their problems and help them deal withpoor performance due to deterioration in business circumstances and industrial structure, as well as financial
weakness from falling land and other asset values.
Therefore, the Bank is making its best efforts to play animportant role in the reinvigoration and development of
the regional economy, which the Bank recognizes as avital issue.
Specifically, our Customer Management Support
Office supports corporate recovery and management
reform through business analysis, advising on measures
for improvement and supporting the compilation ofbusiness restructuring plans. This office is working hard
to conduct its duties with close collaboration with
branch staff, and, if necessary, with outside experts
belonging to semi-government organizations.
As a result of such activities to date, we have
improved the borrower status (a creditworthiness ratingbased on financial position and similar factors) ofapproximately 400 customers. The Bank is committed todeepening this support for local business and the regionin line with in-house plans for enhancing relationshipbanking.
Disclosure of the Bank’s Assets
The Bank has set a goal of improving asset portfolio
under the current medium-term management plan.
While the Bank is accelerating bad debt disposal, is also
working hard to improving its disclosure system.
Risk-Monitored Loans under the Banking Law
Regarding loans subject to mandatory disclosure underthe Banking Law, the Bank classified non-performing
loans into the four categories of “loans in bankruptcy
and dishonored bills,” “delinquent loans,” “loans past

due with respect to interest payments for more than 3months,” and “restructured loans,” based on asset selfassessment. Loans to legally bankrupt borrowers fall
into the first category, and those to substantially bankrupt borrowers and to potentially bankrupt borrowers
fall into the second category.
Sell-offs and recovery of bad debt as well as (partial)
direct charge-offs and improved performance at borrowers have enabled us to greatly reduce our risk-managedloan balance by ¥63.4 billion to ¥199.7 billion (US$xx
million). At 77.82%, our coverage ratio (collateral andguarantees as a percentage of bad debt) is also high.
Risk-Monitored Assets under the Banking Law(Non-consolidated)
March 31

2004

Billions of Yen
2003
ChangeLoans in Bankruptcy and Dishonored Bills
7.6
17.3
(9.6)
Delinquent Loans
110.1 128.1 (18.0)
Loans Past Due with Respect to Interest
Payments for More than Three Months
1.1
2.1
(0.9)
Restructured Loans
80.7 115.6 (34.8)
Total (a)199.7 263.2 (63.4)
Loans and Bills Discounted (b)4,363.9 4,274.4
89.5
Ratio of Risk-Monitored Assets toLoans Outstanding (a)/(b)4.57% 6.15% (1.58%)
Portion Covered by Collateraland Guarantees (c)155.4 201.1 (45.6)
Coverage Ratio (c)/(a)77.82% 76.40% 1.42%(Consolidated)
March 31

Loans in Bankruptcy and Dishonored Bills
Delinquent Loans
Loans Past Due with Respect to Interest
Payments for More than Three Months
Restructured Loans
Total

2004

Billions of Yen
2003
Change

7.8
112.4

11.4
131.7

(3.6)
(19.3)

1.5
81.1
202.9

2.5
117.4
263.2

(0.9)
(36.3)(60.2)

Assets Subject to Mandatory Disclosure under the
Financial Revitalization Law
Financial institutions are obligated under the stipulations of the Financial Revitalization Law to disclose theresults of their asset self-assessment.
Based on asset self-assessment, the Bank has classified assets subject to mandatory disclosure into the9three categories of (a) “bankrupt and quasi-bankrupt
assets,” (b) “doubtful assets,” and (c) “substandard
loans.”
The claims on legally or substantially bankrupt
borrowers fall into category (a); those to potentiallybankrupt borrowers fall into category (b); and loans
past due with respect to interest payments for a periodof more than three months, as well as restructuredloans, fall into category (c).
In fiscal 2003, we reduced assets subject to mandatory disclosure (excluding “normal” assets) by ¥63.8
billion to ¥200.0 billion, reflecting category upgrading ofsome borrowers through support of corporate management as well as removal of bad debt from the balance
sheet. This brings the ratio of assets subject to mandatory disclosure (excluding “normal” assets) to the relevant total assets down to 4.52%, a decrease of 1.56
percentage points.
Claims meeting disclosure requirements other thanclaims on normal obligors for the business term ended
March 2004 (a+b+c) amounted to ¥200.0 billion. The
difference of ¥0.3 billion from the amount of ¥199.7
billion required to be disclosed under the Banking Law
consists of assets other than loans including claims on
customers’ liabilities for acceptances and guarantees,
accrued interest, foreign exchange, and suspense
payments.

10

Problem Assets under the Financial Revitalization Law
March 31

2004

Bankrupt and Quasi-Bankrupt Assets (a)Doubtful Assets (b)Substandard Loans (c)Problem Assets (A)=(a)+(b)+(c)Normal Assets (d)Total (B)=(A)+(d)Ratio of Problem Assets (A)/(B)Billions of Yen
2003
Change27.2
41.9 (14.7)
90.9 104.2 (13.3)
81.9 117.7 (35.8)
200.0 263.8 (63.8)
4,220.1 4,074.1 146.0
4,420.1 4,337.9
82.2
4.52% 6.08% (1.56%)

Coverage Status at Fiscal 2003 Year-End

March 31, 2004

Problem Assets (a)Assets Secured by
Collateral andGuarantees (b)Reserve for Possible
Loan Losses (c)Coverage Ratio{(b)+(c)}/(a)Billions of Yen
Bankrupt andQuasi-Bankrupt Doubtful Substandard
AssetsAssets
Loans
Total

27.2

90.9

81.9

200.0

26.9

52.0

28.3

107.3

0.3

31.5

16.7

48.5

100.00%91.94%

54.91%

77.87%

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

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

Borrowers Requiring Caution

Problem Assets
under Financial
Revitalization Law
Bankrupt andQuasi-Bankrupt
Assets 27.2

Legally
Bankrupt 7.8
Substantially
Bankrupt 19.5

Doubtful Assets
90.9

Risk-Monitored
Assets underthe Banking Law
Loans in Bankruptcy andDishonored Bills 7.6

Delinquent Loans
110.1

Substandard Loans
81.9

Loans Past Due with Respect
to Interest Payments forMore than Three Months 1.1
Restructured loans 80.7

Total

Total

200.0

199.7

Normal Borrowers

Note: Assets covered by disclosure standards

Note: Categorization of Disclosure Standards

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

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

Banking Law:
Loans and bills discounted

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

11

Risk Management
Risk Management System
Risk management is one of the most crucial tasks inbank management. It is an essential component inmeeting the highly sophisticated and diversified needsof customers while improving the soundness of management. These issues are particularly important in anenvironment marked by ongoing deregulation and thecontinuous development of financial technology.
The Bank has been establishing systems to respondto the many changes taking place in the operating environment. These systems enable the Bank to continuously monitor and control risks properly, according totheir magnitude and nature, as well as.
The Bank has appointed a director who is responsible for risk management and has endeavored to establish systems that clearly emphasize risk management.
The Bank has made distinction between the departments in charge of conducting transactions (businesspromotion departments) and the departments in chargeof internal controls over the results of transactions(administrative control departments). In our opinion,
these organizational systems provide a sufficient mutual
checking function, by clarifying the system responsible
for risk management.
Each department in charge of risk management
controls the risks that arise from the banking business,based on that department’s operations. In addition, theBank has established a Risk Management Division,
which is responsible for overall risks. The Risk
Management Division has set up a Risk Management
Committee (whose members are drawn from all Bank
sections involved in risk management), at which risks
are discussed in detail. The Committee periodicallysubmits a report on the status of overall risks directly to
the Board of Directors.
In addition, the divisions in charge of internal auditing inspect activities of the divisions engaged in risk
management to check whether the risk management
system is functioning properly and effectively.

Risk Management System
Auditing by Corporate
Auditors

External Auditing

Principal Committees
Board of Directors

Executive Officers
Committee• ALM Committee• Committee of Improvement
Asset Quality• Information Management
Committee

Supervisory Dept. of
Risk Management

Risk Management
Dept.
Management Strategy
Risk
Credit Risk
Market Risk

Business Promotion
Departments

Liquidity Risk
Customers
FinancialMarkets

Internal Auditing Dept.
Verification of suitability
and validity of the risk
management system

Risk Management
Conference

Operational Risk
Administrative Risk
System Risk
Legal Risk
Event Risk
Reputational Risk

12

Administrative
Control DepartmentsComprehensive Risk Management
We have recognized the necessity of obtaining an accurate picture of the overall risk to which the Bank is
exposed, and of addressing the said risk from a Bankwide perspective, in order to raise our earnings potential
while maintaining a sound asset portfolio.
By quantifying different types of risk using statisticaltechniques, we have created an integrated risk management system that enables us to judge whether or not theoverall risk is excessive in comparison with our capital
adequacy, as well as how efficiently our managerial
resources are being utilized.
Credit Risk Management
Credit risk is one of the most important categories ofrisk the Banks must face, by which principal and interest may become uncollectible due to deterioration in thecreditworthiness of borrowers.
The Bank is making its utmost efforts to effectively
manage credit risk in order to prevent the emergence of
new nonperforming loans, and to improve the quality of
its loan portfolio.
• Credit Risk Management Structure
The Bank is working to ensure effective credit
screening by clearly separating the credit risk management group from the business promotion sections. At the same time, the Bank is preventing
deterioration of its loan portfolio through continuous
monitoring of borrowers’ creditworthiness. The selfassessment of assets is first conducted at the branchlevel (initial assessment), and then verified by thehead office division in charge of credit screening(secondary assessment). Finally, the Corporate Audit
Department audits the results. The Bank provides
appropriate reserves and writes down problem loans
based on the assessments.
In April 2004, we began operating a basic credit
screening procedure to speed up the process up toloan approval/refusal and ensure the implementationof stricter standards of risk management. At thesame time, we are building an asset self-assessment
system capable of responding effectively to eachchange in the borrower’s business performance or in
the fair-market value of the collateral.

The Customer Management Support office works
in close liaison with our branches to provide support
for the business revival of borrower companies inneed of management improvement. Bad debt is dealt
with by dedicated teams of specialists in recovery ofdebt, thus contributing to the improved soundness of
the Bank’s asset portfolio.
In addition, the Bank has introduced an automated credit scoring system for small loans to unify
credit screening standards and improve efficiency.
Using its branch PC network, the Bank also sharesand upgrades credit-related information to further
raise the efficiency of screening processes.
• Quantification of Credit Risk Amounts
The Bank quantifies credit risk on the basis of theborrowers’ “corporate rating” which reflects thefinancial conditions and qualitative evaluation ofeach borrower as well as the degree of coverage bycollateral or guarantees.
The size of the credit risk is recognized in termsof both normal credit risk – based on the average
default ratios in the past – and additional credit risk,
caused by external factors such as a substantial
deterioration in Japan’s economy as a whole.
• Loan Portfolio Management
The Bank carries out credit risk management regarding the entire loan assets as a portfolio. Based on
quantitative data, the Bank regularly monitors its
overall credit risk exposure to avoid overconcentration of credit risk on specific industries or
corporations.
We will strive to improve our profitability andrisk-taking capabilities by reducing the amount ofcredit risk through appropriate diversification of
credit provisions.
Market Risk Management
Market risk refers to fluctuations in revenue caused bychanges in interest rates, foreign exchange rates, andsupply-demand conditions of funds, which always affectsuch assets and liabilities as loans, securities, anddeposits.

13

• Market Risk Management System
To address market risk, the Bank has separated front
and back office departments and established a middle office risk management department, thus creating
an effective system of mutual checks and balances.
• Market risk control
The Bank controls market risk through comprehensive Asset Liability Management (ALM) of all assets
and liabilities, including deposits, loans and securities. The Bank allocates capital and implements risk
control measures effectively and efficiently by analyzing and accurately assessing the scale of risks
involved in assets and liabilities from multifarious
aspects such as gap analysis, interest rate sensitivity
analysis utilizing basis point value (BPV), simulationof interest rate fluctuations, and Value at Risk (VaR).
The Bank engages in derivative transactions tomeet the diversified needs of customers and hedge
the Bank’s own risks arising from interest rate fluctuations and other sources. The Bank properly controls
the risks involved in derivative transactions by
obtaining an accurate grasp of the magnitude andnature of risk through daily revaluation and interest
rate sensitivity analysis, etc., and by establishing
limits according to objectives.
Administrative Risk Management
The Bank has established a system for fast and accurate
administrative procedures, and has fine-tuned the system to avoid problems with customers caused by
improper administration in the process of carrying out
transactions such as deposits, loans and exchange. The
Bank has firmly instilled administrative risk management through guidance and training and has endeavored to revise its administrative procedures andreinforce its internal audits.
System Risk Management
In recent years, the online systems operated by banks
have come to constitute an increasingly important partof the overall social infrastructure. Moreover, the constant advance of information technology has led to a
rapid growth in the popularity of Internet banking
among customers.
14

We have drawn up a security policy that lays down
basic guidelines regarding information security. These
guidelines clearly identify priority information requiring
protection, prescribe standards of conduct that promotetight security, and provide an implementation plan,
while identifying staff roles and responsibilities.
• Administration Structure for Information Security
The Bank maintains a Comprehensive Security
Management Department that is headed by the highranking officer in charge of information security.
Additionally, information administrators and information security officers have been appointed for all
workplaces, while data handling is regulated by
explicit guidelines. This security structure provides
protection against external threats and prevents
unauthorized actions by employees.
• Backup Systems
To prepare for large-scale disasters and other emergency situations, we have built backup computer
centers in locations remote from the main centers,
thus minimizing the possibility of the same disaster(such as an earthquake) incapacitating both facilities, and have drawn up detailed contingency plans
specifying the procedures to be followed for emergency contact and so on in the event of a majordisaster.

Corporate Governance andthe Bank’s Compliance System
Corporate Governance
The Bank places a high priority on transparent, effective
and sound management to ensure that it has the trust ofcustomers, shareholders and local communities.
To achieve this, the Bank has taken steps to facilitate
rapid decision-making, bolster compliance, and improveinformation disclosure. It has also made efforts toimprove its management systems to enable monitoring
and control of its operations by stakeholders both insideand outside the Bank. Last June, the Bank separated the
management decision-making function (decisions on
strategy) and the management supervision function(governance) from the day-to-day business executionfunction (enactment and implementation of measures)
as far as was practicable. It also revised its management
control system to strengthen these functions.
• The Bank employs the traditional corporate auditor
system. While no outside director is included in theexisting eleven directors, three outside corporate
auditors are included in the five existing corporate
auditors.
• With respect to the functions of decision-making andsupervision by the management, the Bank’s Board of
Directors meets twice a month. In addition, the Bank

General Meetingof Shareholders

Decision-making/
Management
supervision
Board of Directors

has established an Executive Officer Committee as anorganization to deliberate and decide on important
operational matters, other than those that are
resolved exclusively by the Board of Directors. The
Executive Officer Committee meets almost weekly.
• After a careful examination, the Bank identifies
important management issues and sets up a special
committee to address each issue. Specifically, theBank has set up a Compliance Committee (responsible for comprehensive compliance and monitoring),
an ALM Committee (responsible for monitoring risks
and controlling market and liquidity risks), and aSound Asset Committee (responsible for comprehensive credit risk management). Each committee makes
a detailed report of its examinations and decisions,as well as of the status of risks, to the Board of
Directors and other managerial organizations.
• The Board of Directors controls the fulfillment of
duties by directors, and the Board of Corporate
Auditors (which meets once a month, in principle)
audits the fulfillment of duties by directors. The
Corporate Audit Division, which is independent fromoperating divisions, conducts internal audits such as
audits of head office departments, and on-site auditsof branch offices. The results of its audits are thenreported to the Board of Directors.

Operating execution
Strategic Council

Business Section

Retail Banking Business Group
Corporate Banking Business Group

Corporate Auditors
Meeting
Credit Risk Management GroupOperation System Group

Public Business Group
Market Business Group

Corporate Management Section

15

Compliance System
The Bank places a high priority on strengthening its
compliance system to ensure sound banking operations,fulfill its social responsibility and public mission, andmaintaining the trust of customers, shareholders andother stakeholders.
Each year we formulate a practical Compliance
Program, on the basis of which employees enforce
compliance in their respective jurisdictions.
With the hope of ensuring that there is no repeat of
the sort of criminal activity that came to light in 2003,
we will push ahead with efforts to improve our compliance system, in line with the measures laid out below.
• We have put in place a Compliance System, whose
ultimate supervisory organ is the Bank’s Board of
Directors.
• Dedicated Compliance Officers have been assigned toeach major division to undertake a broad variety ofchecks to determine how divisions are addressing
legal issues.
• Internal compliance activities should be supplemented by outside audits to inject the required professional knowledge and objectivity. Accordingly, theBank set up a Compliance Auditing Committee,
consisting of outside professionals including a lawyer
and a CPA. The committee fairly evaluates andaudits the Bank’s compliance activities. The Bank is
striving to further strengthen and improve its compliance activities.

16

F

I

N

A

N

C

I

A

L

S

E

C

T

I

O

N

Consolidated Balance Sheets
THE JOYO BANK, LTD. AND CONSOLIDATED SUBSIDIARIES
Thousands of
U.S. Dollars (Note 2)

Millions of Yen
March 31,

AssetsCash and Due from Banks (Note 3)
Call Loans and Bills Purchased
Commercial Paper and Other Debt Purchased
Trading Assets (Note 4)
Securities (Notes 5, 7 and 22)
Loans and Bills Discounted (Notes 6, 8 and 10)
Foreign Exchange
Other Assets
Premises and Equipment (Notes 3 and 19)
Deferred Tax Assets (Note 12)
Customers’ Liabilities for Acceptances and Guarantees
Reserve for Possible Loan Losses
Reserve for Devaluation of Investment Securities
Total Assets

2004

2003

2004

2003

¥ 184,550
9,555
42,421
14,7142,255,587
4,320,503
1,561
62,691
128,13152,00351,612(66,420)(266)¥7,056,646¥ 204,796—
10,042
11,4312,070,219
4,232,580
2,706
52,804
129,161
92,64057,700(71,125)(290)¥6,792,667$ 1,746,144
90,405
401,371
139,218
21,341,536
40,879,014
14,769593,159
1,212,328
492,033
488,333(628,441)(2,516)$66,767,395$ 1,937,704—
95,013
108,155
19,587,652
40,047,118
25,603499,612
1,222,073
876,525545,936(672,958)(2,743)$64,269,722¥6,081,317
29,78881,661
1
93,317252
15,00030
51,672
8,584
117
10,29557,7006,429,739
2,844$58,286,063
1,019,916
1,451,234
28
885,618
1,863
141,924132
432,841
65,8901,353
94,739488,333
62,869,978
35,821$57,539,190
281,843772,6469
882,9312,384
141,924283
488,901
81,218
1,107
97,407545,936
60,835,831
26,90885,11358,574
185,514
15,24518,066(2,430)360,082¥6,792,667

805,307554,205
1,944,024
140,230
518,213(100,397)
3,861,585$66,767,395

805,307554,205
1,755,265
144,242
170,933(22,991)
3,406,963$64,269,722

Liabilities, Minority Interests and Shareholders’ Equity
Liabilities:
Deposits (Notes 7 and 13)¥6,160,255
Call Money and Bills Sold (Note 7)
107,795
Payables under Securities Lending Transactions
153,381
Trading Liabilities (Note 14)
3
Borrowed Money (Note 9)
93,601
Foreign Exchange
197
Corporate Bonds
15,000Due to Trust Account
14
Other Liabilities
45,747
Reserve for Employees’ Retirement Benefits (Note 11)
6,964
Reserve for Other Contingent Losses
143
Deferred Tax Liabilities for Land Revaluation (Notes 3 and 12)
10,013
Acceptances and Guarantees
51,612
Total Liabilities
6,644,728
Minority Interests
3,786
Shareholders’ Equity (Note 15):
Common Stock:
Authorized — 2,180,515 thousand shares
Issued — 865,231 thousand shares
85,113
Capital Surplus
58,574Retained Earnings
205,464
Land Revaluation Reserve, Net of Taxes (Notes 3 and 12)
14,821
Unrealized Gain on Available-for-Sale Securities
54,770Less, Treasury Stock at cost
(10,611)
Total Shareholders’ Equity
408,131
Total Liabilities, Minority Interests and Shareholders’ Equity ¥7,056,646
See accompanying notes to consolidated financial statements.

17

F

I

N

A

N

C

I

A

L

S

E

C

T

I

O

N

Consolidated Statements of Income
THE JOYO BANK, LTD. AND CONSOLIDATED SUBSIDIARIES
Thousands of
U.S. Dollars (Note 2)

Millions of Yen
Years Ended March 31,

IncomeInterest Income:Interest on Loans and Discounts
Interest and Dividends on Securities
Other Interest Income
Fees and Commissions
Trading Revenue (Note 16)
Other Operating Income
Other Income
Total Income
Expenses
Interest Expenses:
Interest on Deposits
Interest on Borrowings and Rediscounts (Note 17)
Other Interest Expenses
Fees and Commissions
Other Operating Expenses
General and Administrative Expenses
Other Expenses (Note 18)
Total Expenses
Income before Income Taxes and Minority Interests
Income Taxes:
Current
Deferred (Note 12)
Minority Interests in Net Income ofConsolidated Subsidiaries
Net Income

2004

2003

2004

2003

¥ 85,062
31,376523
21,460181
4,727
36,546
179,881¥ 88,296
29,835510
18,896210
7,607
27,118172,475$ 804,825
296,868
4,948
203,046
1,712
44,725
345,784
1,701,968$ 835,424
282,287
4,825
178,787
1,986
71,974
256,580
1,631,895

2,764
3,457
5,346
5,639
2,550
74,35845,633
139,752
40,129

3,817
3,412
7,076
4,640
1,695
75,30756,509152,459
20,01626,151
32,70850,58153,354
24,127
703,548431,762
1,322,282
379,685

36,11532,283
66,95043,901
16,037
712,527534,667
1,442,511
189,384454
15,589

1,878
9,118

4,295
147,497

17,76886,271409¥ 23,675

713
8,305

3,869
$ 224,004

6,746
78,578¥Yen

Per Share
Net Income$

U.S. Dollars (Note 2)¥28.08¥9.62$0.265$0.091

See accompanying notes to consolidated financial statements.

Consolidated Statements of Capital Surplus and Retained Earnings
THE JOYO BANK, LTD. AND CONSOLIDATED SUBSIDIARIES
Thousands of
U.S. Dollars (Note 2)

Millions of Yen
Years Ended March 31,

Capital Surplus
Balance at Beginning of Year
Balance at End of Year
Retained Earnings
Balance at Beginning of YearNet Income
Increase in Retained Earnings Due to Decreasein Consolidated Subsidiary
Reversal of Land Revaluation Reserve
Appropriation:
Cash Dividends
Balance at End of Year
See accompanying notes to consolidated financial statements.

18

2004

2003

2004

2003

¥ 58,574
58,574¥ 58,574
58,574$ 554,205
554,205$ 554,205
554,205¥185,514
23,675¥180,390
8,305$1,755,265
224,004$1,706,783
78,578

90
421

—
1,138

851
3,983

—
10,767(4,237)¥205,464(4,320)¥185,514(40,088)$1,944,024(40,874)$1,755,265

F

I

N

A

N

C

I

A

L

S

E

C

T

I

O

N

Consolidated Statements of Cash Flows
THE JOYO BANK, LTD. AND CONSOLIDATED SUBSIDIARIES
Thousands of
U.S. Dollars (Note 2)

Millions of Yen
Years Ended March 31,

2004

2003

2004

2003

¥ 40,129
15,865(14)(4,705)¥ 20,016
15,461
18(23,478)$ 379,685
150,108(132)(44,516)$ 189,384
146,286
170(222,140)

(23)

(26)

(217)

(246)

—
25
(1,743)(124,295)
11,5703,224
38,336960(3,282)
1(87,923)
79,030(93)(6,492)(4,070)(11,003)(124,246)
14,306
15,456
14,377
159
(851)
(49)
19,361(27,617)(5,480)—236(16,491)(1,176,033)
109,471
30,504
362,7219,083(31,053)9(831,895)
747,752(879)(61,424)(38,508)(104,106)(1,175,570)
135,358
146,239
136,0291,504(8,051)(463)
183,186(261,301)(51,849)283(7,049)(41,933)
78,006(10,646)(1,924)
3,240
(147)

2,677
(66,695)(396,754)
738,064(100,728)(18,204)
30,655(1,390)71,719
1,145
(55)
(15)
123,694(13,246)(14,499)
165,110(2,049)163,061

8,623
(572)
62
16
128,640(16,393)
1,553
8,293
1,604
9,898

678,578
10,833(520)(141)
1,170,347(125,328)(137,184)
1,562,210(19,386)
1,542,823

81,587(5,412)586
151
1,217,144(155,104)
14,69378,465
15,176
93,651(839,005)
360,567
315,962(16,698)
1,250—(177,924)(920,157)
607,524
221,810(17,509)
3,063
69(105,199)(7,938,357)
3,411,552
2,989,516(157,990)
11,827—(1,683,451)(8,706,187)
5,748,169
2,098,684(165,663)
28,980652(995,354)——(4,237)(0)(8,185)
10(12,412)(22)(27,296)
172,035

7,000(15,000)(4,317)(2)(2,157)—(14,478)(16)(109,796)
281,831——(40,088)(0)(77,443)
94(117,437)(208)(258,264)
1,627,732

66,231(141,924)(40,845)(18)(20,408)—(136,985)(151)(1,038,849)
2,666,581

1

0

9

0

—
¥144,739(0)¥172,035—$1,369,467(0)$1,627,732

Cash Flows from Operating Activities:
Income before Income Taxes and Minority Interests
Depreciation
Amortization of Goodwill
Net Decrease in Reserve for Possible Loan Losses
Net Decrease in Reserve for Devaluationof Investment Securities
Net Decrease in Reserve for Possible
Losses on Sales of Loans
Net Increase (Decrease) in Reserve for Other Contingent Losses
Net Decrease in Reserve for Employees’ Retirement Benefits
Interest and Dividend Income
Interest Expenses
Net Losses Related to Securities Transactions
Foreign Exchange Losses, Net
Losses on Disposal of Premises and Equipment
Net Increase in Trading Assets
Net Increase (Decrease) in Trading Liabilities
Net (Increase) Decrease in Loans and Bills Discounted
Net Increase (Decrease) in Deposits
Net Decrease in Negotiable Certificates of Deposit
Net Increase (Decrease) in Borrowed Money Excluding
Subordinated Borrowings
Net Increase in Due from Banks Excluding Cash Equivalents
Net (Increase) Decrease in Call Loans and Others
Net Increase (Decrease) in Call Money and Bills Sold
Net Increase in Payables under Securities
Lending Transactions
Net Decrease (Increase) in Foreign Exchange (Assets)
Net (Decrease) Increase in Foreign Exchange (Liabilities)
Net (Decrease) Increase in Due to Trust AccountInterest and Dividends Received
Interest Paid
Other, Net
Subtotal
Income Taxes (Refunded) Paid
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Purchases of Securities
Proceeds from Sales of Securities
Proceeds from Redemption of Securities
Purchases of Premises and Equipment
Proceeds from Sales of Premises and Equipment
Proceeds from Sales of Consolidated Subsidiary
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Proceeds from Issuance of Subordinary Debt
Repayment of Subordinary Debt
Cash Dividends Paid
Cash Dividends Paid to Minority Interests
Purchases for Retirement of Treasury Stock
Proceeds from Sales of Treasury Stock
Net Cash Used in Financing Activities
Translation Adjustment for Cash and Cash Equivalents
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of YearNet Increase in Cash and Cash Equivalents
Due to Increase in Consolidated Subsidiaries
Net Decrease in Cash and Cash Equivalents
Due to Decrease in Consolidated Subsidiaries
Cash and Cash Equivalents at End of Year (Note 3)
See accompanying notes to consolidated financial statements.

19

F

I

N

A

N

C

I

A

L

S

E

C

T

I

O

N

Notes to Consolidated Financial Statements
THE JOYO BANK, LTD. AND CONSOLIDATED SUBSIDIARIES

1. Basis of Presentation of Consolidated Financial
Statements
The Joyo Bank, Ltd. (the “Bank”) maintains its accounting records
and prepares its consolidated financial statements in accordancewith accounting principles and practices generally accepted andapplied in Japan, the Commercial Code of Japan and the Banking
Law of Japan, which are different in material respects as to theapplication and disclosure requirements of International Financial
Reporting Standards. The accompanying consolidated financial
statements have been compiled from the consolidated financial
statements filed with the Prime Minister as required by the
Securities and Exchange Law of Japan.
For the convenience of readers outside Japan, certain items
presented in the original consolidated financial statements havebeen reclassified and rearranged to conform to the current year’s
presentation.
In addition, the notes to the consolidated financial statements
include information which is not required under accounting
principles generally accepted in Japan but is presented herein as
additional information.

accounting pursuant to the basic provisions of JICPA Industry
Audit Committee Report No. 25. The summary of this hedge
accounting is described in the following (m) “Hedging.”
Consequently, for the fiscal year ended March 31, 2004, suchforeign exchange swaps, whose profits or losses were formerly
charged to income by periodical allocation, are valuated at fairvalue as assets and liabilities on the consolidated balance sheet.
As a result, “Other assets” and “Other liabilities” increased by¥732 million. However, this accounting change had no impact on
profits or losses.
Forward foreign exchange transactions were formerly accounted
for as “Other assets” or “Other liabilities” on a net basis, buteffective April 1, 2003, they are accounted for as “Other assets” or“Other liabilities” on a gross basis pursuant to JICPA Industry
Audit Committee Report No. 25. Consequently, “Other assets” and“Other liabilities” increased by ¥29 million each.
No foreign currency-denominated assets and liabilities were heldby the consolidated subsidiaries.

3. Significant Accounting Policies(c) Transactions for trading purposes
Transactions for “trading purposes” (seeking to capture gains
arising from short-term changes in interest rates, currency
exchange rates or market prices of securities and other marketrelated indices or from arbitrage between markets) are valued atmarket or fair value, and have been included in trading assets andtrading liabilities on a trade date basis. Gain or loss on suchtrading transactions are reflected as trading revenue or trading
expenses in the consolidated balance sheets.
Among the trading assets and liabilities, securities and monetaryclaims are carried at market value as of the balance sheet date.
Derivatives including swaps, futures, and options are valued
assuming settlement on the balance sheet date.
No consolidated subsidiaries have engaged in trading activities
or other transactions in order to generate profit from short-term
price fluctuations.

(a) Consolidation
The accompanying consolidated financial statements include theaccounts of the Bank and 10 significant subsidiaries.
In addition, The Joyo Computer Service Co., Ltd. and The Joyo
Industrial Research Institute, Ltd. were included in the range ofconsolidation.
The Joyo Financial Services Co., Ltd. has excepted fromconsolidation by having finished liquidation.
All significant intercompany transactions have been eliminatedin consolidation. The difference between the cost of investments
and the equity in their net assets has been fully charged toincome in the year of acquisition.

(d) Securities
Securities have been accounted for by the following methods:
Marketable debt securities held to maturity are stated atamortized cost by the moving-average cost method. Other
available-for-sale securities of which market prices are available
are stated at fair value based on the market prices, etc. at the
fiscal year end, whereas, those of which fair value is notavailable, are stated at cost or amortized cost by the movingaverage cost method.
Unrealized gain or loss on available-for-sale securities (net ofthe related tax effect) have been reported as a component ofshareholders’ equity.

(b) Translation of foreign currencies
Foreign currency-denominated assets and liabilities are translated
into Japanese yen at the rates prevailing at the balance sheet date.
As for the accounting method of foreign currency transactions,in the fiscal year ended March 31, 2003, the Bank applied thetemporary treatment stipulated in JICPA Industry Audit
Committee Report No. 25 to currency swaps and foreign exchange
swaps for the purpose of lending or borrowing funds in different
currencies. Effective April 1, 2003, they apply the hedge(e) Derivatives
Derivatives positions held by the Bank (not includingtransactions for trading purposes) are stated at fair value.

2. Japanese Yen and U.S. Dollar Amounts
As permitted by the Securities and Exchange Law, amounts of lessthan one million yen have been rounded off. As a result, the totals
shown in the accompanying consolidated financial statements(both in yen and U.S. dollars) do not necessarily agree with thesums of the individual amounts. Solely for the convenience of thereader, the U.S. dollar amounts represent a translation of theJapanese yen amounts at ¥105.69 = US$1.00, the exchange rate
prevailing on March 31, 2004.

20

(f) Depreciation of premises and equipment
Depreciation of premises and equipment held by the Bank iscalculated by the declining-balance method, except for buildings
acquired on or after April 1, 1998 of which depreciation is
calculated by the straight-line method. The estimated useful lives
are as follows:
Buildings: 6~50 years
Equipment: 3~20 years
Depreciation of premises and equipment held by the
consolidated subsidiaries is calculated principally by the
declining-balance method, based on the respective estimateduseful lives of the assets.
Depreciation of the leased assets of a consolidated subsidiaryis calculated by the straight-line method over the lease terms.
(g) Reserve for possible loan losses
The reserve for possible loan losses of the Bank is provided as
detailed below, in accordance with the internal rules for providing
reserves for possible loan losses:
For claims to debtors who are legally bankrupt (as a result ofbankruptcy, special liquidation, etc.) or who are substantiallybankrupt, a reserve is provided based on the amount of theclaims, net of the amounts expected to be collected by thedisposal of collateral or as a result of the execution of guarantees.
For claims to debtors who are not currently bankrupt, but arelikely to become bankrupt, a reserve is provided based on theamount considered necessary based on an overall solvency
assessment of the amount of claims net of the amounts expected
to be collected by the disposal of collateral or as a result of theexecution of guarantees.
For other claims, a reserve is provided based on the Bank’s
historical loan-loss experience.
All claims are assessed by the Business Section (at thebranches and the related head office divisions) based on the
Bank’s internal rules for the self-assessment of asset quality. The
Corporate Audit Department, which is independent of theBusiness Section, subsequently conducts audits of suchassessments, and a reserve is provided based on the audit results.
The reserves of the consolidated subsidiaries are provided forgeneral claims at an amount based on the actual historical rate ofloan losses and for specific claims (from potentially bankrupt
customers, etc.) at an estimate of the amounts deemed
uncollectible based on the respective assessments.
For collateralized or guaranteed claims from debtors who arelegally or substantially bankrupt, the amounts of the claims
deemed uncollectible in excess of the estimated value of thecollateral or guarantees have been written off in aggregate
amounts of ¥66,542 million and ¥120,119 million as of March 31,
2004 and 2003, respectively.

(h) Reserve for devaluation of investment securities
A reserve for the devaluation of investment securities is provided
at the amount deemed necessary to cover estimated possible
losses on investments which the Bank and its consolidated
subsidiaries may incur in the future.
(i) Reserve for employees’ retirement benefits
Reserve for Employees’ Retirement Benefits of the Bank and it’ssubsidiaries is provided for the amount deemed necessary, basedon estimated pension benefits obligations and pension plan
assets at the fiscal year end, to cover required retirement benefits
for eligible employees.
Prior service cost are deferred and amortized using the straightline method over certain years (10 years) within the averageremaining service period of the eligible employees.
Unrealized actuarial losses are deferred and amortized using
the straight-line method over certain years (10 years) within the
average remaining service period of the eligible employees.
On December 19, 2003, the Bank received the approval from the
Minister of Health, Labor and Welfare for exemption from future
retirement benefit obligations with respect to the entrusted
portion of the employee pension fund, in accordance with theimplementation of the “Defined benefit enterprise pension planlaw.” As a result, the Bank applied the temporary treatment
stipulated in Article 47-2 “Practical Guidelines of Accounting for
Retirement Benefits (Interim Report)” (JICPA’s Accounting
Committee Report No. 13), and derecognized retirement benefit
liabilities on the entrusted portion and plan assets equivalent tothe amount be returned on the day of approval. Consequently,
other income increased ¥6,085 million. The amount of expected
return of plan assets (minimum legal reserves) was ¥25,201
million at March 31, 2004.
(j) Reserve for other contingent losses
The Bank makes provisions for contingent liabilities not coveredby other reserves in an amount deemed necessary based on
estimated losses in the future.
(k) Land revaluation reserve
In accordance with the Law concerning the Revaluation of Land,
the Bank revalued the land held for its operations on March 31,
1998. The net unrealized gain is presented in shareholders’ equity
net of the applicable income taxes as land revaluation reserve, netof taxes.
(l) Leases
Finance leases other than those which transfer the ownership ofthe leased property to the Bank and its consolidated subsidiaries
are accounted for as operating leases.

21

(m) Hedging(a) Hedging against interest rate changes
As for the hedge accounting method applied to hedging
transactions for interest rate risk arising from financial assets
and liabilities, the Bank applies deferred hedge accounting.
In the fiscal year ended March 31, 2003, the Bank applied thetemporary treatment stipulated in the “Treatment for
Accounting and Auditing of Application of Accounting Standard
for Financial Instruments in Banking Industry” (JICPA Industry
Audit Committee Report No. 24) to the “macro hedge,” which is
the management of interest rate risk arising from large-volumetransactions in loans, deposits and other interest earning
assets and interest-bearing liabilities as a whole using
derivatives.
A portion of deferred hedge losses, which was previously
under the macro hedge, is no longer subject to hedge
accounting. The deferred hedge losses and gains related tohedging instruments to which the Bank discontinued theapplication of hedge accounting or applied fair value hedge
accounting as a result of the change mentioned above arerecognized as “Interest income” or “Interest expenses” from thefiscal year ended March 31, 2004 according to their maturity.
Gross amounts of deferred hedge losses on “macro hedge” atMarch 31, 2004 was ¥6,324 million.
(b) Hedging against currency fluctuations
The Bank applies deferred hedge accounting stipulated in thebasic provisions of JICPA Industry Audit Committee Report No.
25 to currency swap and foreign exchange swap transactions
executed for the purpose of lending or borrowing funds in
different currencies. Pursuant to JICPA Industry Audit
Committee Report No. 25, the Bank assesses the effectivenessof currency swap and foreign exchange swap transactions
executed for the purpose of offsetting the risk of changes incurrency exchange rates by verifying that there are foreign
currency monetary claims and debts corresponding to theforeign-currency positions.
Some of the assets and liabilities are applied exceptional
treatment for interest rate swaps. Some of the liabilities of
consolidated subsidiaries are applied exceptional treatment forinterest rate swaps.

(o) Net income per share
The computation of net income per share of common stock isbased on the weighted average number of shares outstanding
during each year.

(n) Consumption tax
Consumption tax is excluded from transactions reported by the
Bank and its consolidated subsidiaries. However, non-deductible
consumption tax on premises and equipment is included in the
expenses for the term of its occurrence.

Note: Securities as of March 31, 2003 include investments in unconsolidated subsidiaries of ¥122 million.

(p) Statements of cash flows
Cash and cash equivalents in the statements of cash flows
represent cash and due from banks in the consolidated balance
sheets, excluding deposits with banks other than the Bank ofJapan as well as the time deposits of certain consolidated
subsidiaries.
Millions of Yen
March 31,

Cash and Due from Banks
Deposits with Banks Other thanthe Bank of Japan
Time Deposits of the Consolidated Subsidiaries
Cash and Cash Equivalents

2004

2003

¥184,550¥204,796(39,761)(50)¥144,739(32,691)(70)¥172,035

4. Trading Assets
Millions of Yen
March 31,

Trading Securities
Trading Securities-Related Financial Derivatives
Trading-Related Financial Derivatives
Other Trading Assets
Total

2004

2003

¥ 4,684
6
24
9,999¥14,714¥ 2,925—
7
8,499¥11,431

5. Securities
Millions of Yen
March 31,

Japanese Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Corporate Stocks
Other Securities
Total

2004

2003

¥ 688,533 ¥ 663,045
297,564
284,950
318,946
275,707
188,289
127,086
762,253
719,428¥2,255,587 ¥2,070,219

6. Bills Discounted
Bills discounted are accounted for as financial transactions inaccordance with JICPA Industry Audit Committee Report No. 24.
The Bank has rights to sell or pledge bank acceptances bought,
commercial bills discounted, documentary bills and foreignexchanges bought without restrictions. The face value at March
31, 2004 and 2003 totaled ¥59,063 million and ¥65,916 million,
respectively.

22

7. Pledged Assets

9. Borrowed Money

Assets pledged as collateral at March 31, 2004 and 2003 were as
follows:

Borrowed money at March 31, 2004 and 2003 included
subordinated borrowings of ¥57,000 million and ¥57,000 million,
respectively.

Millions of Yen
March 31,

Pledged Assets:
Securities
Liabilities Covered by Pledged Assets:
Deposits
Payables under Securities
Lending Transactions

2004

2003

¥293,516¥221,965

22,165

43,120

153,381

81,661

10. Non-Performing Loans
In accordance with the disclosure requirements under the Rules
for Bank Accounting in Japan, the balance of loans and bills
discounted at March 31, 2004 and 2003 included the following
non-performing loans:
Millions of Yen

In addition to the above, securities amounting to ¥58,107 millionand ¥57,976 million at book value were pledged as collateral inconnection with exchange settlements and futures transactions asof March 31, 2004 and 2003, respectively.
One consolidated subsidiary had pledged its lease receivables
amounting to ¥4,850 million and ¥5,436 million as collateral forborrowed money of ¥3,981 million and ¥4,196 million as of March
31, 2004 and 2003, respectively.
Lease deposits as of March 31, 2004 and 2003 of ¥4,376 millionand ¥5,063 million, respectively, have been included in premises
and equipment. Initial margins of futures transactions as of March
31, 2004 and 2003 of ¥160 million and ¥150 million, respectively,
have been included in other assets.

8. Commitments and Contingent Liabilities
Overdraft facilities and line-of-credit contracts are agreements
which, subject to compliance with the contractual conditions,pledge to provide clients with funds up to a fixed limit upon
submission of a loan application to the Bank. The unused amountrelated to such facilities/contracts stood at ¥1,351,491 million and¥1,185,160 million at March 31, 2004 and 2003, respectively. Of thisamount, facilities/contracts which expires within one year or which
are unconditionally cancelable at any time, totaled ¥1,180,478
million and ¥1,141,403 million at March 31, 2004 and 2003,
respectively.
Most of these agreements will expire without the clients’ having
utilized the financial resources available to them, and the amountof the nonexecuted financing will not necessarily impact on the
Bank or its consolidated subsidiaries’ future cash flows. Most ofthese facilities/contracts contain a clause which allows the Bankor its consolidated subsidiaries to reject a loan application or to
reduce the upper limit requested in view of changing financial
conditions, credit maintenance and other reasonable concerns.
When necessary, the Bank will demand collateral such as realestate or marketable securities at the date on which an agreement
is entered into. In addition, after facilities/contracts are set forth
the Bank will regularly assess the business status of the clients,
based on predetermined internal procedures and, when prudent,
will revise the agreements or reformulate their policies tomaintain creditworthiness.

March 31,

Loans in Bankruptcy and Dishonored Bills
Delinquent Loans
Loans Past Due with Respect to Interest
Payments for More than Three Months
Restructured Loans
Total

2004

2003

7,877
112,437¥ 11,492
131,763

1,513
81,131¥202,959

2,500
117,490¥263,246¥

Note: The above amounts are stated before the deduction of the reserve for possible
loan losses.

11. Employees’ Retirement Benefits(a) Outline of current retirement benefit system
The Bank and its consolidated subsidiaries have adopted defined
employees’ retirement benefit plans, i.e., the employees’ welfare
pension fund supplemented by the employees’ public pension
system and lump-sum retirement benefits. In addition, extra
benefits may be paid on a case-by-case basis. The Bank has
established a employees’ retirement benefit trust. As of the end of
the year under audit, the Bank and 10 consolidated subsidiaries
had adopted a lump-sum retirement benefit system. In addition, aunion pension fund for the above-mentioned employees’ welfare
pension system was established by the Bank and its consolidated
subsidiaries.
The Bank received approval from the Minister of Health, Laborand Welfare for exemption from future retirement benefit
obligations with respect to entrusted portion of employees
pension fund at December 19, 2003.

23

(b) The following tables set forth the changes in the net retirement
benefit obligation, the plan assets and the funded status of the
Bank and its consolidated subsidiaries at March 31, 2004 and2003:
Millions of Yen
2004

2003

Retirement Benefit Obligation¥(57,047) ¥(93,461)
Fair Value of Plan Assets
44,83153,521
Unfunded Retirement Benefit Obligation (12,216) (39,939)
Unrecognized Net Retirement Benefit
Obligation at Transition——
Unrealized Actuarial Loss
7,754
33,161
Unrecognized Prior Service Cost—
(1,806)Net Retirement Benefit Obligation(4,461)(8,584)
Prepaid Pension Cost
2,503—
Reserve for Employees’ Retirement Benefits ¥ (6,964) ¥ (8,584)
Notes: 1. The government-sponsored portion of the benefits under the welfare
pension plans has been included in the amounts of March 31, 2003.
2. The Bank applied the temporary treatments stipulated in Article 47-2 of“Practical Guidelines of Accounting for Retirement Benefits (Interim
Report)” (JICPA’s Accounting Committee Report No. 13), and derecognizedretirement benefit liabilities on the entrusted portion and plan assets
equivalent to the amount be returned on the day of approval. The amountof expected return of plan assets (minimum legal reserve) was ¥25,201
million at March 31, 2004.

12. Deferred Tax Assets
Millions of Yen
March 31,

Deferred Tax Assets:
Reserve for Possible Loan Losses
Net Operating Loss Carry Forwards
Devaluation of Securities
Reserve for Employees’ Retirement Benefits
Other
Valuation Allowance
Total(c) Expenses for retirement benefits of the Bank and its
consolidated subsidiaries included the following components
for the years ended March 31, 2004 and 2003:

2003¥ 40,320
26,333
5,541
10,424
17,243(1,318)¥ 98,545¥ 62,963
14,624
12,613
11,341
15,790(2,167)¥115,165

Deferred Tax Liabilities:
Unrealized Gain on Available-for-Sale Securities ¥(37,016)
Retirement Benefit Trust(9,495)
Reversal of Reserve for Possible Loan Losses
after Elimination of Debt and Credit
(22)
Other
(7)
Total
(46,542)
Net Deferred Tax Assets¥ 52,003¥ (12,197)(9,493)(28)(806)(22,525)¥ 92,640

13. Deposits
Millions of Yen

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

2004

March 31,

Current Deposits
Time Deposits
Negotiable Certificates of Deposit
Other
Total

2004

2003

¥3,101,361 ¥2,924,635
2,733,813 2,824,600
98,301
98,395
226,777
233,687¥6,160,255 ¥6,081,317

Millions of Yen

Service Cost
Interest Cost
Expected Return on Plan Assets
Amortization:
Amortization of Prior Service Cost
Amortization of Unrealized Actuarial Loss
Total Retirement Benefits Expenses
Gains on Return of the Entrusted Portion of
Employee Pension Fund
Total

2004

2003

¥2,316
1,721(774)¥2,552
1,923(1,439)

(135)
3,022
6,150

(202)
2,063
4,896

(6,085)¥ 64—¥4,896

Note: Retirement benefit expenses of consolidated subsidiaries which are calculated
by simplified method have been included in “service cost” referred to above.

(d) The assumptions used in accounting for the defined benefit
plans for the years ended March 31, 2004 and 2003 were as
follows:
2004

2003

Discount Rate
2.0%
2.5%
Expected Rate of Return on Plan Assets
3.5%
4.5%
Periodical Allocation of EstimatedRetirement Amount
Straight-Line Method
Amortization Period of Prior Service Cost
10 years 10 years
Amortization Period of Actuarial Difference
10 years 10 years

24

14. Trading Liabilities
Millions of Yen
March 31,

2004

2003

Trading-Related Financial Derivatives¥3¥1

15. Shareholders’ Equity
In accordance with the Banking Law of Japan, the Bank has provided alegal reserve by appropriation of retained earnings, which is included inretained earnings. The Banking Law of Japan provides that an amountequivalent to at least 20% of the amount to be disbursed as
distributions of earnings be appropriated to the legal reserve until the
total of such reserve and the capital surplus equals 100% of thecommon stock.

The Code provides that neither additional paid-in capital nor thelegal reserve had been available for dividends, but both might be used
to reduce or eliminate a deficit by resolution of the shareholders or
may be transferred to common stock by resolution of the Board of
Directors. On October 1, 2001, an amendment (the “Amendment”) to
the Code became effective. The Amendment provides that if the total
amount of capital surplus and the legal reserve exceeds 100% of thecommon stock, the excess may be distributed to the shareholders
either as a return of capital or as dividends subject to the approval of
the shareholders. In addition, the Amendment eliminates the statedpar value of the Bank’s outstanding shares, which resulted in all
outstanding shares having no par value as of October 1, 2001. The
Amendment also provides that all share issuances after September 30,
2001 will be of shares with no par value. Prior to the date on which theAmendment came into effect, the Bank’s shares had a par value of ¥50.

16. Trading Revenue
Millions of Yen
March 31,

2004

2003

Revenue from Trading Securities
Revenue from Trading-Related Financial Derivatives
Other Trading Revenue
Total

¥159
3
18
¥181

¥173
9
27
¥210

17. Interest on Borrowings and Rediscounts
Millions of Yen
March 31,

2004

2003

Call Money and Bills Sold
Securities Lending Transactions
Borrowings
Total

¥ 588
1,499
1,370
¥3,457

¥ 569
1,240
1,603
¥3,412Millions of Yen

Provision for Possible Loan Losses
Losses on Disposal of Premises and Equipment
Other
Total

(a) Segment information by type of business
Segment information by type of business for the years ended
March 31, 2004 and 2003 are summarized as follows:
Millions of Yen
March 31, 2004

Banking
Operations

Leasing

Other

Total

Eliminations Consolidated

Ordinary Income:Ordinary Income
from External
Customers¥ 147,127 ¥16,620 ¥ 5,429 ¥ 169,176 ¥— ¥ 169,176
Ordinary Income
from Internal
Transactions
429 2,214
5,218
7,862
(7,862)—
Total
Ordinary Expenses

147,556 18,834 10,648
117,658 18,183 10,612

177,039
146,453(7,862)(7,950)169,176
138,503

Ordinary Income(Loss), Net¥ 29,898 ¥ 651 ¥36 ¥ 30,586 ¥(87) ¥ 30,673
Assets¥7,045,794 ¥51,253 ¥29,269 ¥7,126,316 ¥(69,670) ¥7,056,646
Depreciation
2,621 13,132
112
15,865(0)
15,865
Capital Expenditures
3,118 14,660
76
17,854—
17,854
Millions of Yen
March 31, 2003

Banking
Operations

Ordinary Income:Ordinary Income
from External
Customers
Ordinary Income
from Internal
Transactions¥ 146,381 ¥15,914 ¥ 3,384

Total
Ordinary Expenses

Leasing

Other

Total

Eliminations Consolidated¥ 165,681 ¥—¥ 165,681

699

2,202

4,217

7,118

(7,118)—147,080
135,092

18,117
17,168

7,602
8,748

172,800
161,010(7,118)(9,468)

165,681
151,541

Ordinary Income(Loss), Net¥ 11,987 ¥ 948 ¥ (1,146) ¥ 11,789 ¥ (2,349) ¥ 14,139
Assets¥6,784,263 ¥49,897 ¥31,937 ¥6,866,098 ¥(73,431) ¥6,792,667
Depreciation
2,776 12,680
5
15,462(0)
15,461
Capital Expenditures
2,623 15,788
1
18,412—
18,412
Notes: 1. Operating classification is classified according to the contents of anenterprise of consolidated subsidiaries. In addition; “other” is guarantee
business etc.

18. Other Expenses
March 31,

20. Segment Information

2004¥ 9,957
1,249
34,426¥45,633

2003

337
601
55,570¥56,509

2. It replaced with the net sales and the operating income of a non-financial
company, and ordinary income and ordinary expenses are indicated,
respectively.

¥

Note: For the year ended March 31, 2004 and 2003, “Other Expenses – Other” included write off claims of ¥12,372 million and ¥16,707 million, and write off stocksof ¥521 million and ¥13,035 million, respectively.

(b) Geographic segment information
Segment information by geographic area has not been disclosed
since over 90% of the total consolidated assets of the Bank andconsolidated subsidiaries are in Japan.
(c) Ordinary income from foreign operations
Segment information related to the Bank’s foreign operations forthe year ended March 31, 2004 are as follows:

19. Accumulated Depreciation of Premises andEquipment
Accumulated depreciation of premises and equipment at March
31, 2004 and 2003 amounted to ¥144,481 million and ¥143,439
million, respectively.

Millions of Yen
2004

Ordinary Income from Foreign Operations (A)Ordinary Income (B)(A)/(B)¥ 20,030
169,176
11.84%

25

Segment information related to the Bank’s foreign operations forthe year ended March 31, 2003 has not been disclosed since theincome generated from foreign operations is considered immaterial to the Bank’s total consolidated income.

(b) Marketable debt securities held to maturity
Millions of Yen
March 31, 2004

Book
Value

Japanese Government
Bonds
¥
—
Japanese Local
Government Bonds
11,822
Corporate Bonds
11,649Other
12,300Total¥35,771

21. Leases(a) Finance leases
Finance leases, as lessee, at March 31, 2004 and 2003 aresummarized as follows:

Market
Value

¥

2004

2003

Equipment
Accumulated Depreciation
Total

¥9
(4)
¥4

¥20
(12)
¥ 7

Lease Payments Receivable for Finance Leases:
Within One Year
Over One Year
Total

¥1
2
¥4

¥ 3
4
¥ 7

Total lease payments received and depreciation under financeleases for the year ended March 31, 2004 were ¥3 million and ¥3
million, respectively.
Finance leases, as lessor, at March 31, 2004 and 2003 aresummarized as follows:
Millions of Yen
March 31,

2004

2003

Equipment
Other
Accumulated Depreciation
Total¥62,201
5,047(31,101)¥36,148¥60,823
5,222(30,646)¥35,399

Lease Payments Receivable for Finance Leases:
Within One Year
Over One Year
Total

¥12,549
29,581¥42,130¥12,270
29,110¥41,381(b) Operating leases
Future minimum lease payments for operating leases at March 31,
2004 were ¥123 million, of which ¥36 million was due within one year.

22. Securities Information
The information includes trading account securities andcommercial paper in trading assets; trust beneficiary rights incommercial paper and other debt purchased and investments inother assets in addition to securities.
(a) Securities held for trading purposes
Millions of Yen

26¥

Unrealized
Unrealized
Gain (Gross) Loss (Gross)

—

¥

1,270
99
452
¥1,822

—

¥—

1,270
128
452
¥1,850—28—¥28Millions of Yen
March 31, 2003

Book
Value

Japanese Government
Bonds
¥
—
Japanese Local
Government Bonds
18,489Corporate Bonds
8,418
Other
27,149Total¥54,057

MarketValue¥

Unrealized
Gain (Net)—20,7568,471
28,145¥57,373¥

Unrealized
Unrealized
Gain (Gross) Loss (Gross)

—

¥

2,267
53
995
¥3,316

—

¥—

2,267
112
995
¥3,375—59—¥59(c) Marketable available-for-sale securities
Millions of Yen
March 31, 2004

Cost

Book
Value

Unrealized
Gain (Net)

Unrealized
Unrealized
Gain (Gross) Loss (Gross)

Equity Securities¥ 113,114 ¥ 184,131 ¥71,016 ¥ 72,695
Debt Securities:
Japanese
Government Bonds
693,048
688,533 (4,515)
2,194Japanese Local
Government Bonds
276,982285,7428,760
9,733
Corporate Bonds
306,728
307,297
568
2,505
Other
735,177
751,152 15,975
16,712
Total¥2,125,052 ¥2,216,857 ¥91,805 ¥103,841¥ 1,678

6,710
973
1,936
737
¥12,036

Millions of Yen

Total lease payments received and depreciation under financeleases for the year ended March 31, 2004 were ¥13,571 million and¥11,600 million, respectively.

Carrying Value
Holding Gains Charged to Income—

13,092
11,74912,752¥37,594

Millions of Yen
March 31,

Unrealized
Gain (Net)

2004

2003

¥14,6837¥11,424
8

March 31, 2003

Cost

Book
Value

Unrealized
Gain (Net)

Equity Securities¥ 122,824 ¥ 122,389 ¥ (434)
Debt Securities:
Japanese
Government Bonds
658,996
663,045
4,049
Japanese Local
Government Bonds
251,202
266,461 15,258
Corporate Bonds
262,924
267,2884,364
Other
685,457
692,478
7,021
Total¥1,981,405 ¥2,011,663 ¥30,258

Unrealized
Unrealized
Gain (Gross) Loss (Gross)¥15,590¥16,024

7,344

3,295

15,2584,430
9,810¥52,434—
66
2,789¥22,176

Notes: 1. Market value is based on the market prices at the fiscal year end.
2. Pursuant to “Practical Guidelines for Accounting for Financial Instruments”(JICPA Accounting Committee Report No. 14, amended on July 3, 2001), theBank consider that the market price of the securities at the fiscal year end,
decline 30% or lower than original cost a significant decline, considering
the recoverability, devaluate the securities and recognize the loss. As of
March 31, 2004 and 2003, the Bank devaluated the available-for-sale securities which have market price, recognized as a loss of ¥349 million and¥12,817 million, respectively.

(d) Total sales of marketable available-for-sale securities
Millions of Yen

Total Marketable Available-for-Sale
Securities Sold
Gains
Losses2004

2003¥336,457
7,242
2,313

¥566,389
7,861
2,350

(e) Major components and balance sheet amounts of nonmarketable securities
Millions of Yen
Book Value
March 31,

Non-Marketable Debt Securities Held to Maturity:
Trust Beneficiary Rights
Non-Marketable Available-for-Sale Securities:
Unlisted Equity Securities

2004

2003

¥41,453¥10,000

4,158

4,574

(f) Projected redemption amounts of marketable available-forsale securities with maturity dates and marketable debt
securities being held to maturity
Millions of Yen
March 31, 2004

Debt Securities:
Japanese
Government Bonds
Japanese Local
Government Bonds
Corporate Bonds
OthersTotal

One Yearor Less

One toFive Years

Five toTen Years

More than
Ten Years¥ 66,648 ¥ 313,277 ¥157,473 ¥151,133
10,889220,203 66,471—
31,099165,396 104,276
18,17399,012
393,421 118,163 150,291¥207,650 ¥1,092,298 ¥446,386 ¥319,598
Millions of Yen

March 31, 2003

Debt Securities:
Japanese
Government Bonds
Japanese Local
Government Bonds
Corporate Bonds
OthersTotal

One Yearor Less

One toFive Years

Five toTen Years

More than
Ten Years¥ 78,446¥298,091¥135,373¥151,135

839
33,316
96,589¥209,190

128,826
160,109367,873¥954,900

155,285
62,143
118,537¥471,339—
20,138
114,501¥285,774(g) Unrealized gain on available-for-sale securities
Millions of Yen
March 31,

Unrealized Gain:
Available-for-Sale Securities
Other Money Held in Trust
Deferred Tax Liabilities
Net Unrealized Gains on
Available-for-Sale Securities
Minority Interests
Unrealized Gains on Available-for-Sale Securities

2004

2003

¥91,805—
37,016¥30,258—
12,19754,78919¥54,770

18,061(4)¥18,066

23. Derivatives(1) Transactions[1] The Bank conducts derivative transactions related tofluctuations in interest rates, currency exchanges and bondprices, which are classified into hedging and non-hedging
purposes.
One of the Bank's consolidated subsidiaries engages ininterest-related derivative transactions.
[2] Policies: The Bank enters into derivative transactions to: (1)meet customer needs for the hedging of risks involved influctuations in foreign exchanges and interest rates; (2)mitigate risks involved in the Bank's operations in thecontext of efficiently managing its overall assets andliabilities, and; (3) hedge individual transactions of theBank. For trading in derivatives for the purpose of increasing
earnings over a short-term period, the Bank has set certain
position limits and loss-cut rules.
The above mentioned consolidated subsidiary follows
trading policies similar to those of the Bank.
[3] Purposes: The Bank conducts derivatives transactions inaccordance with the above-mentioned policies. The Bank
employs hedge accounting in some of its derivatives
transactions.
a. Methods of hedge accounting
The Bank has adopted ordinary treatment for deferredhedges and extraordinary treatment for interest-rate
swaps.
b. Policies and implementation of hedging transactions
The Bank uses hedging transactions to mitigate its exposure
to interest rate risk, risk involving fluctuations in foreignexchange rates and stock prices, and credit risk, in
accordance with its internal rules (Rules on Transactions
under Hedge Accounting) based on the Preliminary Practical
Guidelines on Accounting for Financial Instruments.
During the reporting term, hedge accounting has been
applied to the following financial instruments and assets
and liabilities hedged:
Hedging instruments: Interest-rate swaps, currency
swaps and foreign exchange swaps
Assets and liabilities hedged:(Yen-denominated) Loans and bills discounted,
deposits, and borrowed money(Foreign-currency denominated) Bonds and deposits
c. Assessment of hedging effectivenessThe effectiveness of hedging was assessed in accordancewith the Regulations on Hedge Accounting. As for hedging
against interest rate changes by means of offsetting
fluctuations in fair value arising from changes in interest
rates, the Bank assesses the hedge effectiveness bycorrelating a group of hedged items (i.e. loans) withhedging instruments (such as interest rate swaps)
classified by remaining maturity bucket. As for cash flow
hedges, the Bank assesses the effectiveness of suchhedges in fixing cash flows by verifying the correlation
between the hedged items and hedging instruments. As
for hedging foreign exchange fluctuations, the Bank

27

assesses the effectiveness of utilizing currency andexchange swap transactions as hedging instruments
through confirmation of the fact that there exists a
sufficient balance of hedging instruments in the form of
foreign exchanges, corresponding to the hedged items in
the form of monetary claims and obligations denominatedin foreign currencies.
In addition, the Bank confirmed that its hedging
methods for its special treatment of interest-rate swaps
met the required criteria.
[4] Nature of Risks: Derivative transactions involve market risk
and credit risk. Market risk refers to the risk of losses fromfluctuations in interest rates and currency exchanges, etc.
Credit risk is the risk that a position cannot be settled
according to the original contract terms due to thebankruptcy or insolvency of the counterparty.
[5] Risk Management System: The Board of Directors is
responsible for determining policies on the basis of inhouse regulations on risk management, taking due accountof the maximum transaction volumes, the maximum
allowable loss amounts, and loss-cutting rules on derivativetransactions, which are reported to the Board on a regularbasis. For credit risk management, the current exposure
method is applied for risk control, by setting credit lines bycounterparty.
Regarding the organizational structure, the Bank clearly
segregates back-office work from front-office work.
Furthermore, the Bank has established middle-officesections to ensure that the system of checks and balances
works effectively.
[6] Supplementary Explanation of Quantitative Information: The
contract amounts presented are the notional contract
amounts or the principal for calculation purpose.
Accordingly, they do not represent the actual market risk
exposure relating to all derivative positions.

28(2) Interest-Rate Derivatives

At March 31, 2004

Millions of Yen
Contract Amounts
MarketUnrealized

Total

Value

Gain (Loss)

—
—

¥—
—

¥—
—

—
—

—
—

—
—

—
—

—
—

—
—

1,460

20

20

1,460

(0)

(0)

—

—

—

—
—

—
—

—
—

200
200
—

(1)
1
¥20

1
(0)
¥21

Transactions Listed on Exchanges:
Interest-Rate Futures:
Sold¥—
Bought—Interest-Rate Options:
Sold—
Bought—Over-the-Counter Transactions:
Forward Rate Agreements:
Sold—
Bought—Interest-Rate Swaps:
Receivable Fixed/
Payable Floating
1,550
Receivable Floating/
Payable Fixed
1,550
Receivable Floating/
Payable Floating—
Interest-Rate Options:
Sold—
Bought—Other:
Sold
200
Bought200
Total—

Over 1 Year¥

At March 31, 2003

Millions of Yen
Contract Amounts
MarketUnrealized

Total

Gain (Loss)

Transactions Listed on Exchanges:
Interest-Rate Futures:Sold¥ —Bought—Interest-Rate Options:
Sold—
Bought—Over-the-Counter Transactions:
Forward Rate Agreements:
Sold—
Bought—Interest-Rate Swaps:
Receivable Fixed/
Payable Floating
300
Receivable Floating/
Payable Fixed
300
Receivable Floating/
Payable Floating—
Interest-Rate Options:
Sold—
Bought—Other:
Sold
170
Bought—
Total—

Over 1 Year

Value

(3) Currency Derivatives

At March 31, 2004

¥ —
—

¥—
—

¥—
—

—
—

—
—

—
—

—
—

—
—

—
—

300

7

7

300

(1)

(1)

—

—

—

—
—

—
—

—
—

—
—
—

(0)
—
¥ 5

(0)
—
¥ 5

2. Calculation of market value
The market value of transactions listed on exchanges has been calculatedon the basis of the closing prices on the Tokyo International Financial
Futures Exchange, etc. The market value of over-the-counter transactions
has been calculated at their discounted current value or by utilizing calculation models for options prices.

Unrealized

Total

Over 1 Year

Value

Gain (Loss)

¥

—
—

¥ —
—

¥ —
—

—
—

—
—

—
—

18,244

37

37

—
—

23
(26)

23
(26)

—
—

(429)
433

148
(44)

—
—

—
—

—
—

—

¥ 40

¥139

Listed:Currency Futures:
Sold¥—
Bought—Currency Swaps:
Sold—
Bought—Over-the-Counter Transactions:
Currency Swaps
18,244
Forward Foreign
Exchange Contracts:
Sold
1,467
Bought1,751
Currency Options:Sold34,325
Bought34,325
Others:Sold—
Bought—Total

Notes: 1. The above derivatives are valued at market and unrealized gain (loss) is
accounted for in the consolidated statements of income. Derivatives towhich hedge accounting is applied have not been included in the abovetable.

Millions of Yen
Contract Amounts
Market

At March 31, 2003

Over-the-Counter Transactions:
Currency Swaps
Forward Foreign
Exchange Contracts
Currency Options
Others
Total

¥

—

¥

Millions of Yen
Contract Amounts
MarketUnrealized

Total

Over 1 Year

Value

Gain (Loss)

¥—

¥—

¥—

¥—

—
—
—

—
—
—

—
—

—
—
—

¥—

¥—

¥—

¥—

Notes: 1. The transactions in this table have been revalued at the market rate prevailing on the balance sheet date, and have been accounted for in the consolidated statements of income. Derivatives which qualify as hedges have been
excluded from this table.
2. Calculation of market valueMarket value is calculated at discount present value, etc.
3. Based on the notification (issued on April 10, 2000 by the Japanese Instituteof Certified Public Accountants) entitled “Provisional Accounting Proceduresfor Banks Continuing to Apply the New Foreign Currency AccountingStandards,” currency swaps accounted for on an accrual basis have been
excluded from this table. The contract amounts of the currency swaps
accounted for on an accrued basis as of March 31, 2003 are presented asfollows:

At March 31, 2003

Contract
Amounts

Millions of Yen
MarketValue

Unrealized
Gain (Loss)

Currency Swaps¥197,081

¥337

¥337

29

Similarly, the above schedule excludes those transactions related
to foreign currencies, such as forward foreign exchange contracts
and currency options, which have been revalued at the market
rates prevailing at the closing date of the year, and for which gain
(loss) after revaluation has been credited (or debited) to incomein the consolidated statements of income.
The schedule also excludes transactions pertaining to thoseforeign currency monetary assets and liabilities reflected in the
consolidated balance sheets and certain assets and liabilities
which have been eliminated in consolidation.
The contract value or notional principal amounts of foreign
currency-related derivatives which have been revalued as of March
31, 2003 are presented as follows:
Millions of Yen
March 31, 2003

Contract Amounts

Listed:Currency Futures
Currency Options
Unlisted:
Forward Foreign Exchange Contracts:
Sold
BoughtCurrency Options:
Sold
BoughtOthers

¥

—
—

1,544
1,473
68,43668,436—(4) Stock Derivatives
Not applicable as of March 31, 2004 and 2003.

(5) Bond Derivatives
At March 31, 2004

Listed:Bond Futures:
Sold
BoughtBond Future Options:
Sold
BoughtOver-the-Counter Transactions:
Bond Option:
Sold
BoughtOthers:Sold
BoughtTotal

Millions of Yen
Contract Amounts
MarketTotal Over 1 Year
Value

¥500
—

¥—
—

¥ 6
—

¥ 6
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—

—

¥ 6

¥ 6

Not applicable as of March 31, 2003.

(6) Commodity Derivatives
Not applicable as of March 31, 2004 and 2003.

(7) Credit Derivatives
Not applicable as of March 31, 2004 and 2003.

30

Unrealized
Gain (Loss)Report of Independent Certified Public Accountants

31

F

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Non-Consolidated Balance Sheets
THE JOYO BANK, LTD.
Thousands of
U.S. Dollars (Note 2)

Millions of Yen
March 31,

AssetsCash and Due from Banks
Call Loans and Bills Purchased
Commercial Paper and Other Debt Purchased
Trading Assets (Note 4)
Securities (Notes 5 and 6)
Loans and Bills Discounted (Notes 7, 8 and 9)
Foreign Exchange (Note 10)
Other Assets (Note 11)
Premises and Equipment (Note 12)
Deferred Tax Assets (Note 13)
Customers’ Liabilities for Acceptances and Guarantees
Reserve for Possible Loan Losses
Reserve for Devaluation of Investment Securities
Total Assets
Liabilities and Shareholders’ Equity
Liabilities:
Deposits (Note 14)
Call Money and Bills Sold
Payables under Securities Lending Transactions
Trading Liabilities (Note 15)
Borrowed Money
Foreign Exchange (Note 10)
Corporate Bonds
Due to Trust Account
Other Liabilities (Note 16)
Reserve for Employees’ Retirement Benefits
Reserve for Other Contingent Losses
Deferred Tax Liabilities for Land Revaluation (Note 13)
Acceptances and Guarantees
Total Liabilities
Shareholders’ Equity:
Common Stock (Note 26):
Authorized — 2,180,515 thousand shares
Issued — 865,231 thousand shares
Capital Surplus
Legal Reserve
Voluntary Reserve
Retained Earnings
Land Revaluation Reserve, Net of Taxes
Unrealized Gain on Available-for-Sale Securities
Less, Treasury Stock at Cost
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
See accompanying notes to non-consolidated financial statements.

32

2004

2003

2004

2003

¥ 184,160
9,555
42,421
14,7142,255,553
4,363,963
1,561
48,97585,64047,652
51,612(62,788)(180)¥7,042,842¥ 204,327—
10,042
11,4312,070,023
4,274,410
2,706
40,08387,80788,992
57,700(67,077)(205)¥6,780,242$ 1,742,454
90,405
401,371
139,218
21,341,214
41,290,216
14,769463,383
810,294450,865
488,333(594,077)(1,703)$66,636,786$ 1,933,267—
95,013
108,155
19,585,798
40,442,899
25,603379,250
830,797
842,009545,936(634,657)(1,939)$64,152,161¥6,173,790
107,795
153,3813
86,000197
15,00014
31,662
6,672
143
8,822
51,612
6,635,096¥6,091,865
29,78881,661
1
86,051
252
15,00030
39,591
8,421
117
9,105
57,7006,419,587$58,414,135
1,019,916
1,451,234
28
813,700
1,863
141,924132
299,574
63,1281,353
83,470488,333
62,778,843$57,638,991
281,843772,6469
814,182
2,384
141,924283
374,595
79,676
1,107
86,148545,936
60,739,776

85,11358,57455,317
123,432
28,01813,05954,768(10,536)
407,745¥7,042,842

85,11358,57455,317
120,432
12,031
13,48318,066(2,361)
360,655¥6,780,242

805,307554,205
523,389
1,167,868
265,096
123,559
518,194(99,687)
3,857,933$66,636,786

805,307554,205
523,389
1,139,483
113,832
127,571
170,933(22,338)
3,412,385$64,152,161

F

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Non-Consolidated Statements of Income
THE JOYO BANK, LTD.
Thousands of
U.S. Dollars (Note 2)

Millions of Yen
Years Ended March 31,

IncomeInterest Income:Interest on Loans and Discounts
Interest and Dividends on Securities
Other Interest Income
Fees and Commissions (Note 17)
Trading Revenue (Note 18)
Other Operating Income (Note 19)
Other Income (Note 20)
Total Income
Expenses
Interest Expenses:
Interest on Deposits
Interest on Borrowings and Rediscounts (Note 21)
Other Interest Expenses
Fees and Commissions (Note 22)
Other Operating Expenses (Note 23)
General and Administrative Expenses
Other Expenses (Note 25)
Total Expenses
Income before Income Taxes
Income Taxes:
Current
Deferred (Note 13)
Net Income

2004

2003

2004

2003

¥ 84,930
31,365567
18,594181
4,727
17,676
158,044¥ 88,330
29,815541
16,463210
7,607
11,264
154,234$ 803,576
296,764
5,364
175,929
1,712
44,725167,243
1,495,354$ 835,746
282,098
5,118
155,766
1,986
71,974
106,575
1,459,305

2,766
3,456
4,993
6,343
2,550
74,511
24,242
118,868
39,176

3,819
3,412
6,874
5,312
1,695
75,13939,755136,010
18,223

26,17032,69947,24160,01524,127
704,995
229,368
1,124,685
370,668

36,13332,28365,03950,26016,037710,937
376,147
1,286,876
172,419102
16,254¥ 22,820

1,673
8,163
¥ 8,386965
153,789$ 215,914

15,82977,23579,345Yen

Per Share
Net Income
Cash Dividends Applicable to the Year$

U.S. Dollars (Note 2)¥27.05
5.00

¥9.71
5.00

$0.2550.047$0.091
0.047

See accompanying notes to non-consolidated financial statements.

Non-Consolidated Statements of Retained Earnings
THE JOYO BANK, LTD.

Thousands of
U.S. Dollars (Note 2)

Millions of Yen
Years Ended March 31,

Retained Earnings
Balance at Beginning of YearNet Income
Reversal of Reserve for Losses by the Calamity
Reversal of Reserve for Employees’ Retirement Bonuses
Reversal of Reserve for Retirement of Treasury Stock
Reversal of Land Revaluation Reserve
Reversal of Voluntary Reserve
Appropriations:
Cash Dividends (Note 27)
Transfer to Voluntary Reserve
Balance at End of Year

2004

2003

2004

2003

¥12,031
22,820———421—¥(27,809)
8,386
40
175
4,424
1,138
30,000$113,832
215,914
—
—
—
3,983
—

$(263,118)
79,345378
1,655
41,858
10,767
283,848(4,254)(3,000)¥28,018(4,322)—¥ 12,031(40,249)(28,384)$265,096(40,893)—$ 113,832

See accompanying notes to non-consolidated financial statements.

33

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Notes to Non-Consolidated Financial Statements
THE JOYO BANK, LTD.

The Joyo Bank Ltd. (the “Bank”) maintains its accounting records
and prepares its non-consolidated financial statements inaccordance with accounting principles and practices generally
accepted and applied in Japan, the Commercial Code of Japan and
the Banking Law of Japan and the Rules for Bank Accounting
issued by the Ministry of Finance, which are different in material
respects as to the application and disclosure requirements ofInternational Financial Reporting Standards. The accompanying
non-consolidated financial statements have been compiled fromthe non-consolidated financial statements filed with the Prime
Minister as required by the Banking Law and the Securities andExchange Law of Japan.
For the convenience of readers outside Japan, certain items
presented in the original non-consolidated financial statements
have been reclassified and rearranged to conform to the current
year’s presentation.

amount considered necessary based on an overall solvency
assessment of the amount of claims net of the amounts expected
to be collected by the disposal of collateral or as a result of theexecution of guarantees.
For other claims, a reserve is provided based on the Bank’s
historical loan-loss experience.
All claims are assessed by the Business Section (at thebranches and the related head office divisions) based on the
Bank’s internal rules for the self-assessment of asset quality. The
Corporate Audit Department, which is independent of theBusiness Section, subsequently conducts audits of suchassessments, and a reserve is provided based on the audit results.
For collateralized or guaranteed claims from debtors who arelegally or substantially bankrupt, the amounts of the claims
deemed uncollectible in excess of the estimated value of thecollateral or guarantees have been written off in aggregate
amounts of ¥62,731 million and ¥117,888 million as of March 31,
2004 and 2003, respectively.

2. Japanese Yen and U.S. Dollar Amounts

4. Trading Assets

1. Basis of Presentation

As permitted by the Securities and Exchange Law, amounts of lessthan one million yen have been rounded off. As a result, the totals
shown in the accompanying financial statements (both in yen and
U.S. dollars) do not necessarily agree with the sums of theindividual amounts. Solely for the convenience of the reader, theU.S. dollar amounts represent a translation of Japanese yenamounts at ¥105.69 = US$1.00, the exchange rate prevailing on
March 31, 2004.

3. Significant Accounting Policies(a) Securities
Securities have been accounted for by the following methods:
Marketable debt securities held to maturity are stated at amortizedcost by the moving-average cost method. Stocks in subsidiaries arestated at cost by the moving-average cost method.
Other available-for-sale securities of which market prices areavailable are stated at fair value based on their market prices, etc. at
the fiscal year-end, whereas those of which fair value is not available
are stated at cost or amortized cost by the moving-average cost
method.
Unrealized gain or loss on available-for-sale securities (net of therelated tax effect) have been reported as a component ofshareholders’ equity.
(b) Reserve for possible loan losses
The reserve for possible loan losses of the Bank is provided, as
detailed below, in accordance with the internal rules for providing
reserves for possible loan losses:
For claims to debtors who are legally bankrupt (as a result ofbankruptcy, special liquidation, etc.) or who are substantiallybankrupt, a reserve is provided based on the amount of theclaims, net of the amounts expected to be collected by thedisposal of collateral or as a result of the execution of guarantees.
For claims to debtors who are not currently bankrupt, but arelikely to become bankrupt, a reserve is provided based on the34

Millions of Yen
March 31,

Trading Securities
Trading Securities-Related
Financial Derivatives
Trading-Related Financial Derivatives
Other Trading Assets
Total

2004

2003

¥ 4,684¥ 2,925

6
24
9,999¥14,714—
7
8,499¥11,431

5. Securities
Millions of Yen
March 31,

Japanese Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Corporate Stocks
Other Securities
Total

2004

2003

¥ 688,533 ¥ 663,045
297,564
284,950
318,946
275,707
188,255
126,891
762,253
719,428¥2,255,553 ¥2,070,023

F

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C

I

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6. Pledged Assets

Millions of Yen

Pledged Assets:
Securities
Liabilities Covered by Pledged Assets:
Deposits
Payables under Securities
Lending Transactions

S

E

C

T

I

O

N

8. Loans and Bills Discounted

Assets pledged as collateral at March 31, 2004 and 2003 were as
follows:
March 31,

L

2004

2003

¥293,516¥221,965

22,165

43,120

153,381

81,661

In addition to the above, securities amounting to ¥58,107 millionand ¥57,976 million at book value were pledged as collateral inconnection with exchange settlements and futures transactions as ofMarch 31, 2004 and 2003, respectively.

Millions of Yen
March 31,

Loans on Notes
Loans on Deeds
Overdrafts
Bills Discounted
Total

2004

2003

¥ 626,720 ¥ 673,395
3,167,240 2,992,908
510,764
541,872
59,237
66,233¥4,363,963 ¥4,274,410

9. Non-Performing Loans
In accordance with the disclosure requirements under the Rules
for Bank Accounting in Japan, the balance of loans and bills
discounted at March 31, 2004 and 2003 included the following
non-performing loans:
Millions of Yen

7. Commitments and Contingent Liabilities
Overdraft facilities and line-of-credit contracts are agreements
which, subject to compliance with the contractual conditions,pledge to provide clients with funds up to a fixed limit upon
submission of a loan application to the Bank.
The unused amount related to such facilities/contracts stood at¥1,181,118 million and ¥1,139,170 million at March 31, 2004 and2003, respectively. Of this amount, facilities/contracts which
expires within one year or which are unconditionally cancelable atany time totaled ¥1,176,706 million and ¥1,135,082 million atMarch 31, 2004 and 2003, respectively.
Most of these agreements will expire without the clients’ having
utilized the financial resources available to them, and the amountof the nonexecuted financing will not necessarily impact on the
Bank’s future cash flows. Most of these facilities/contracts containa clause which allows the Bank to reject a loan application or to
reduce the upper limit requested in view of changing financial
conditions, credit maintenance and other reasonable concerns.
When necessary, the Bank may demand collateral such as realestate or marketable securities at the date an agreement isentered into. In addition, after facilities/contracts are set forth, theBank will regularly assess the business status of the clients basedon predetermined internal procedures and, when prudent, willrevise the agreements and reformulate new policies to maintaincreditworthiness.

March 31,

Loans in Bankruptcy and Dishonored Bills
Delinquent Loans
Loans Past Due with Respect to Interest
Payments for More than Three Months
Restructured Loans
Total

2004

2003

7,685
110,125¥ 17,318
128,184

1,184
80,764¥199,759

2,110
115,616¥263,230¥

Note: The above amounts are stated before the deduction of the reserve for possible
loan losses.

10. Foreign Exchange
Millions of Yen
March 31,

2004

2003

Assets:Due from Foreign Banks
Foreign Exchange Bills Bought
Foreign Exchange Bills Receivable
Total

¥ 576
107
876
¥1,561

¥ 808
186
1,711
¥2,706

Liabilities:
Foreign Exchange Bills Sold
Foreign Exchange Bills Payable
Total

¥ 177
20
¥ 197

¥ 252
—
¥ 252

35

F

I

N

A

N

C

I

A

11. Other Assets

L

S

E

C

Millions of Yen
2004

¥

119
204
12,417160
11,541
6,412
18,120¥48,9752003¥ 2,522236
12,051150
4
7,787
17,331¥40,083

12. Premises and Equipment

Land, Buildings and Equipment
Construction in Progress
Leasehold Guarantees and Deposits
Total
Less Accumulated Depreciation
Net Book Value

Current Deposits
Ordinary Deposits
Savings Deposits
Deposits at NoticeTime Deposits
Installment Savings
Negotiable Certificates of Deposit
Other
Total

2004

2003

¥156,608
105
6,067
162,781
77,141¥ 85,640¥158,034
1,153
6,800
165,987
78,180¥ 87,807

13. Deferred Tax Assets
Millions of Yen
2004

2003

Deferred Tax Assets:
Excess Reserve for Possible Loss on Loans
Accumulated Deficit
Reserve for Employees’ Retirement Benefits
Devaluation of Securities
Other
Valuation Allowance
Total¥ 37,834
25,455
10,336
5,474
15,347(291)¥ 94,157¥ 60,914
12,824
11,292
12,544
13,894—¥111,470

Deferred Tax Liabilities:
Unrealized Gain on
Available-for-Sale Securities
Retirement Benefit Trust
Other
Total
Net Deferred Tax Assets¥(37,001)(9,495)(7)(46,504)¥ 47,652¥ (12,200)(9,493)(784)(22,478)¥ 88,992

36

N

2004

2003

¥ 126,670 ¥ 124,257
2,871,208 2,700,969
73,68776,99033,541
25,126
2,739,503 2,829,835
20
24
102,381
100,975
226,777
233,687¥6,173,790 ¥6,091,865

15. Trading Liabilities
Millions of Yen
March 31,

2004

2003

Trading-Related Financial Derivatives¥3¥1

16. Other Liabilities
Millions of Yen
March 31,

March 31,O

Millions of Yen
March 31,

Millions of Yen
March 31,I

14. Deposits

March 31,

Domestic Exchange Settlement
Account—Debit
Prepaid Expenses
Accrued Income
Connection with Future Transactions
Derivatives
Loss on Deferred Hedge Accounting
Other
Total

T

Domestic Exchange Settlement
Account—Credit
Accrued Taxes
Accrued Expenses
Unearned Income
Employees’ Deposits
Allowance for Supplement to Benefits
Margins of Futures Transactions
Derivatives
Deferred Hedge Accounting Liabilities
Other
Total

2004

¥ 2,020
137
7,245
3,580
1,635
0
7
6,118
1,731
9,185
¥31,662

2003

¥

616
1,787
7,718
3,810
1,654
0
—
13,292—
10,710¥39,591

F

I

N

A

N

C

I

A

17. Fees and Commissions (Income)

L

S

E

C

T

Exchange Settlement
Other Fees and Commissions
Trust Fees
Total

O

N

22. Fees and Commissions (Expenses)
Millions of Yen

March 31,

I

2004

2003

¥ 7,665
10,89831¥18,594¥ 7,7448,688
31¥16,463

Millions of Yen
March 31,

2004

2003

Exchange Settlement
Other Fees and Commissions
Total¥1,4884,854¥6,343¥1,5553,756¥5,312

23. Other Operating Expenses

18. Trading Revenue

Millions of Yen
Millions of Yen

March 31,

2004

2003

Revenue from Trading Securities
Revenue from Trading-Related
Financial Derivatives
Other Trading Revenue
Total

¥159

¥173

3
18
¥181

9
27
¥210

March 31,

2004

2003

Loss on Sales of Bonds
Amortization Bond Issuance Expenses
Financial Derivative Expenses
Total¥1,906—644¥2,550¥ 1,666
28—¥1,69524. Leases(a) Finance Leases
Finance leases at March 31, 2004 and 2003 were as follows:

19. Other Operating Income
Millions of Yen

Millions of Yen

March 31,

2004

2003

March 31,

2004

2003

Gain on Foreign Exchange Transactions
Gain on Sales of Bonds
Gain on Financial Derivatives
Other
Total

¥1,8032,862
60
1¥4,727¥1,4196,185—
2¥7,607Equipment
Other
Accumulated Depreciation
Total¥7,371
1,115(4,479)¥4,007¥6,391
1,124(3,859)¥3,656

Lease Payments Receivable for Finance Leases:
Within One Year
Over One Year
Total

¥1,4992,507¥4,007¥1,371
2,285¥3,656

20. Other Income
Millions of Yen
March 31,

Gain on Sales of Stocks and Other Securities
Other Current Revenues
Other
Total

2004

2003

¥ 4,379
2,809
10,488¥17,676¥ 1,680
2,430
7,154¥11,264

Total lease payments received and depreciation under financeleases for the year ended March 31, 2004 were ¥1,558 million and¥1,558 million, respectively.
(b) Operating Leases
Future minimum lease payments for operating leases at March 31,
2004 were ¥123 million, of which ¥36 million was due within one year.

21. Interest on Borrowings
Millions of Yen
March 31,

2004

2003

Call Money
Borrowings
Total

¥ 588
1,369
¥1,957¥ 569
1,603¥2,172

37

F

I

N

A

N

C

I

A

L

25. Other Expenses

Provision for Possible Loss on Loans
Provision for Loss on
Sales of Loans and Other
Write-offs of Claims
Loss on Devaluation of Stocks andOther Securities
Loss on Sales of Stocks
Loss on Disposal of Premises
and Equipment
Other
Total

E

C

T

I

O

N

27. Dividends and Interim Dividends
Millions of Yen

March 31,S

2004

¥ 9,318

2003

¥

—

86
10,824435
17,100431
357

13,027
754

1,210
2,013
¥24,242601
7,837¥39,755

The Bank may pay dividends twice a year. Annual dividends may
be paid to shareholders of record as of March 31 and are reflectedin the non-consolidated statements of operations and retained
earnings when duly approved and paid. In addition, the Bank may
pay interim dividends to shareholders of record as of September
30.

28. Subsequent EventAppropriation of Retained Earnings
The following appropriations of retained earnings were approved
at a general shareholders’ meeting held on June 29, 2004:
Millions of Yen

26. Shareholders’ Equity
In accordance with the Banking Law of Japan, the Bank has provided
a legal reserve by appropriation of retained earnings, which is included in retained earnings. The Banking Law of Japan provides that an
amount equivalent to at least 20% of the amount to be disbursed as
distributions of earnings be appropriated to the legal reserve until
the total of such reserve and the capital surplus equals 100% of thecommon stock.
The Code provides that neither additional paid-in capital nor thelegal reserve had been available for dividends, but both might beused to reduce or eliminate a deficit by resolution of the shareholders or may be transferred to common stock by resolution of theBoard of Directors. On October 1, 2001, an amendment (the“Amendment”) to the Code became effective. The Amendment provides that if the total amount of capital surplus and the legal reserve
exceeds 100% of the common stock, the excess may be distributed tothe shareholders either as a return of capital or as dividends subject
to the approval of the shareholders. In addition, the Amendment
eliminates the stated par value of the Bank’s outstanding shares,
which resulted in all outstanding shares having no par value as of
October 1, 2001. The Amendment also provides that all shareissuances after September 30, 2001 will be of shares with no parvalue. Prior to the date on which the Amendment came into effect,
the Bank’s shares had a par value of ¥50.
There were no changes in the common stock and capital surplus
accounts for the two years ended March 31, 2004 and 2003.

38

Retained Earnings at March 31, 2004
Appropriations:
Cash Dividends
Transfer to Voluntary Reserves
Retained Earnings Carried Forward¥28,018
2,084
20,000¥ 5,933

Report of Independent Certified Public Accountants

39Organization

THE JOYO BANK, LTD.

General Meeting of
Shareholders

Corporate Management Section
Corporate Planning Division
Publicity Office
Tokyo Sub-Headquarters

Corporate Auditors Meeting
Corporate Auditors

Corporate Administration Division
Staff Counseling Office
Affiliated Company Management Office

Board of Directors

Executive Secretariat
Corporate Audit Division
Legal Office
Audit Office

Strategic Council

Credit Risk Management Group
Credit Examination Division
Customer Management Support Office
Loan Supervision Office
Credit Supervision Division
Operation Systems GroupOperation Planning Division
Data Processing Center
Area Data Processing Center
Computer System Division
Computer System Commonage Promotion OfficeBusiness Section
Business Planning Division
Customer Counceling OfficeInternational Business Office
Overseas Representative Office (Shanghai)
Foreign Exchanges Centering Office
Retail Banking Business Group
Retail Banking Division
Custody Business Promotion OfficeCall Center
Loan Operation Centers
Consumer Finance Centers
Living and Business Consulting Center
Pension Business Promotion Center
Corporate Banking Business Group
Corporate Banking Business Division
Business Information Support Office

Head Office
Tokyo Business Div. (Tokyo Main Office)145 Branches, 25 Sub-Branches

Quick Business Center
Hokuto District Business Division
Area Corporate Business Division
Public Business Group
Government and Municipal Business DivisionMarket Business Group
Treasury and Securities DivisionMarkets and Business Administration DivisionMarkets Planning Office

As of June 29, 200440

Board of Directors and Corporate Auditors

Chairman
Toranosuke Nishino

Senior Managing Director
Yuto Kawahara

Vice Chairman
Shinichi Yamada

Managing Directors
Noboru Ehashi
Shinichi Inaba
Kunio Kurosaki
Itsuo Koibuchi
Tsutomu Toyama
Takenori Hotate

President
Isao Shibuya
Deputy President
Kunio Onizawa

Standing Corporate Auditors
Takashi Iwakami
Kyohei Tomita
Corporate Auditors
Toru Yasu
Toshihiko Kawamura
Eiichi Nemoto

As of June 29, 2004

Market Business Group and Overseas Office■ Head Office5-5, Minami-machi 2-chome, Mito,
Ibaraki 310-0021, Japan
Phone: 029-231-2151■ Market Business GroupManaging Director
Shinichi Inaba■ Markets and Business
Administration Division
7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-1741
Telefax: 03-3242-3726
General Manager
Sotaro Yamada• Operations Group (Tokyo)
Senior Manager
Osato Aizawa• Operations Group (Mito)
Senior Manager
Hideo Kashimura● Markets Planning Office7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-2631
Telefax: 03-3274-1529
General Manager
Hirohiko Sato● International Operations Office3-3, Shinhara 1-chome, Mito,
Ibaraki 310-0045, Japan
Phone: 029-255-6671
Telefax: 029-255-6522
Telex: J23278 JOYOBANK3632105 JOYOBKSwift: JOYOJPJTGeneral Manager
Hideo Kosaka■ Shanghai Representative Office(Business Planning Division)
Room 1901, Shanghai International Trade
Centre, 2201 Yan An Road (West),
Shanghai 200335 P.R. of China
Phone: 86-21-6209-0258
Telefax: 86-21-6209-0508
Chief Representative
Tetsuya Kuroha
Deputy Chief Representative
Kenji Kikuchi■ Treasury and Securities Division
7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-5245
Telefax: 03-3273-2480
General Manager
Kazuo Komuro
Deputy General Manager
Osamu Midorikawa• Investment Group
Senior Manager
Noboru Araki• Business Promotion Group
Senior Manager
Norihisa Nakamura

41

Service Network

Miyagi Pref. (1 Branch)
Mito (Head Office, International Business Office,International Operations Office)Ibaraki Pref. (Head Offices, 118 Branches,
24 Sub-Branches)
Fukushima Pref. (10 Branches)
Tochigi Pref. (5 Branches, 1 Sub-Branch)

Overseas:
Shanghai Representative Office
As of March 31, 2004

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

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

■ The Joyo Business Service Co., Ltd.

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

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

Sale of software and contract of calculation
businesses

Agent in charge of administrative work for the
Bank■ The Joyo Lease Co., Ltd.

■ The Joyo Staff Service Co., Ltd.

4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1974, Capital Stock: ¥100 million
Share of Voting Rights: 5%

4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1991, Capital Stock: ¥30 million
Share of Voting Rights: 100%

Leasing of machinery and equipment, claim
acquisition

Temporary staffing business for the Bank

■ The Joyo Credit Guarantee Co., Ltd.

■ The Joyo Industrial Research Institute,
Ltd.

4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1978, Capital Stock: ¥30 million
Share of Voting Rights: 5%5-18, Sannomaru 1-chome, Mito, Ibaraki
Established 1995, Capital Stock: ¥100 million
Share of Voting Rights: 5%

Credit guarantee of a housing loans from theBank

Consulting, investigation and research■ The Joyo Credit Co., Ltd.
4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1982, Capital Stock: ¥100 million
Share of Voting Rights: 5%

Credit card services

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

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

Management and maintenance of ATMs and
CDs■ The Joyo Total Maintenance Co., Ltd.
5-5, Minami-machi 2-chome, Mito, Ibaraki
Established 2000, Capital Stock: ¥200 million
Share of Voting Rights: 100%

Liquidation of real estate collateralized inrelation to the loans made by the Joyo Bank

As of March 31, 2004

Corporate Data

Date of Establishment

July 30, 1935

Head Office5-5, Minami-machi 2-chome, Mito, Ibaraki 310-0021, Japan
Phone: 029-231-2151
Telefax: 029-231-2193
URL: http://www.joyobank.co.jp/
http://www.joyobank.co.jp/joyobank/eng/ (English Page)

Domestic Network

Head Office, Tokyo Business Division (Tokyo Main Office),and 145 Branches, 25 Sub-branches

Overseas Network

1 Representative Office: Shanghai

Number of Employees

3,680

Stock Exchange Listing

Tokyo Stock Exchange

Paid-in Capital¥85,113 million

Number of Share Trading Units(as of March 31, 2004)

Authorized
2,180,515 thousand
Issued and Outstanding 865,231 thousand

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

25,805

Principal Shareholders

The 10 largest shareholders of the Bank and their respective
shareholdings at March 31, 2004 were as follows:
Number of Shares
Held(Thousands)

Percentage of Total
Shares Outstanding(%)

Japan Trustee Services Bank, Ltd. (Trust Account)....................................
The Bank of Tokyo-Mitsubishi, Ltd. ...........................................................
NIPPONKOA Insurance Company, Limited ..............................................
Nippon Life Insurance Company ...............................................................
The Master Trust Bank of Japan, Ltd. (Trust Account) ..............................
The Dai-ichi Mutual Life Insurance Company ............................................
Sumitomo Life Insurance Company ..........................................................
The Meiji Yasuda Mutual Life Insurance Co ...............................................
The Gunma Bank, Ltd. .................................................................................
Trust & Custody Services Bank, Ltd. (Trust Account A)..............................

51,01340,992
40,97328,52927,32917,04916,44812,287
10,4658,202

5.89 %
4.73
4.73
3.29
3.15
1.97
1.90
1.42
1.20
0.94

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

253,28929.27 %
As of March 31, 2004

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

43