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 and adjacent areas, Joyo Bank will contribute to socialand 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 70th Anniversary Commemorative Events
5 Business Highlights (non-consolidated basis)
6 Management Philosophy, Management Policy
8 Tackling Management Tasks
16 Corporate Social Responsibility (CSR)
21 Consolidated Balance Sheets
22 Consolidated Statements of Income/Consolidated Statements of Capital Surplus andRetained Earnings
23 Consolidated Statements of Cash Flows

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

FINANCIAL HIGHLIGHTS
Consolidated
THE JOYO BANK, LTD. and Consolidated Subsidiaries
Millions of Yen
Years Ended March 31

Thousands of
U.S. Dollars

2005

2004

2005

For the Year Ended
Total Income
Total Expenses
Income before Income Taxes and Minority Interests
Net Income¥ 173,271
127,71245,55926,198¥ 179,882
139,752
40,12923,675$ 1,613,483
1,189,236
424,247
243,954

At the Year End
Total Assets
Deposits
Loans and Bills Discounted
Securities
Shareholders’ Equity
Capital Ratio¥7,347,520
6,182,549
4,333,198
2,430,935
437,31711.75%¥7,056,646
6,160,255
4,320,503
2,255,587
408,131
11.39%$68,419,039
57,570,994
40,350,113
22,636,516
4,072,233¥213,397(160,154)(5,969)47,276
192,016¥ 163,061(177,924)(12,412)(27,296)
144,739$ 1,987,124(1,491,335)(55,586)
440,232
1,788,029

For the Year Ended
Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Used in Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at End of Year

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 ¥107.39 to US$1.00 on March 31, 2005.

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

Thousands of
U.S. Dollars

2005

2004

2005

For the Year Ended
Total Income
Total Expenses
Income before Income Taxes
Net Income¥ 151,464
107,705
43,75926,123¥ 158,045
118,868
39,17622,820$ 1,410,419
1,002,936
407,483
243,255

At the Year End
Total Assets
Deposits
Loans and Bills Discounted
Securities
Shareholders’ Equity¥7,330,713
6,197,265
4,375,901
2,430,824
436,836¥7,042,842
6,173,791
4,363,963
2,255,553
407,745$68,262,537
57,708,032
40,747,759
22,635,480
4,067,754

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 ¥107.39 to US$1.00 on March 31, 2005.

1

MESSAGE FROM THE PRESIDENT

trusts and pension insurance, and in May of this year webegan offering securities brokerage services. While we
progress with our “mortgage loan full-term preferred interest
rate campaign” as a way to meet the financing needs ofindividual customers, we have also enhanced our consultation reception system. Three “Loan Plazas” in Ibaraki
Prefecture are currently open on Sundays.
We are also making progress with our plans for adding
to our relationship banking capabilities by strengthening
small to medium-sized businesses and also contributing to
the revitalization of local economies. Efforts under this project include the enhancement of our new business andventure support and our business management consultation
functions, as well as increased support for business revitalization. In addition to actively responding to financing needs,

Kunio Onizawa
President

we have supported the diversification of ways in which we
can assist our customers with financing by acting as thelead manager for private bond placements and loan syndi-

Striving to be a comprehensive supplier of highquality financial services to support the reality ofregional and business development and bountiful
household finances.

cations. Also, we have actively worked toward enhancing allof our financial services, including supporting new businesses and ventures, matching businesses, M&A, and IPOs.
We also have received very favorable feedback regarding
our business matching meetings for the agricultural produc-

In order to meet a variety of needs…

tion and food processing, restaurant and retail industries,

The competitive environment has become significantly moreheld in February and June.

intense as a new financial framework is constructed, one
which includes the introduction of deposit insurance caps

Preparing for a new growth stage

and new regulations for banks’ capital ratios, and progress

As the business environment continues to experience dra-with of deregulation has resulted in banks greatly expanding

matic changes, starting in April of this year, we initiated ourthe scope of their business activities, resulting in the reorga-“9th medium-term management plan” ending March 31,

nization of financial institutions and the emergence of other2008. In the previous medium-term management plan, Joyo

industry businesses into the financial sector.

Bank aimed to transform itself into a comprehensive supplier

In response, we implemented a variety of measuresof high-quality financial services and work to improve ourduring 2004, the final year of our “8th medium-term man-financial structure and operating efficiency, as well as toagement plan” (FY2002–FY2004) in order to ensure that westrengthen our management system. In the current medium-

maintain strong trust-based relationships with our customers

term management plan, we will use this financial structure as

and shareholders.

a base to leap toward a new growth stage and to continue

To be able to provide a wide range of responses towith our aim to be a comprehensive provider of high-quality

diversifying asset management needs, we have been adding

financial services to support the reality of regional and busi-

to the types of products we handle, such as investment

ness development and bountiful household finances.

2

Looking at the growth of the financial services industry, we
aim to strengthen the relationship between our group com-

Stability, Cooperation, Partnership with the Home
Regionpanies and to provide comprehensive and market-leading

Our mission as a regional bank is to contribute to thefinancial services.

regional community and economy by providing smooth andAmidst this drive we have focused our efforts on thecontinuous financial services. This will be invariable, regard-

idea of putting the customer first and ensuring that compli-

less of the changes that occur in the business environment,

ance facilities are sufficient. By focusing on improving ourand embodies our management philosophy of “Stability,

services to customers, we have the greatest understanding

Cooperation, Partnership with the Home Region.” As aof our customers’ needs, and using this sensitivity we will bemember of the community, we will continue to be one withable to improve the level of satisfaction among our cus-

the community and contribute to the development of the

tomers. As a financial services company that has built its

local region.

foundations on the principle of trust, we are working to

In July this year, we commemorated the 70th anniver-

ensure a solid compliance function, placing this issue as oursary of the founding of the Bank. This great milestone is ahighest priority above all others.

manifestation of the support and patronage of our local

To achieve our plan, we have focused on three fundamental goals.

customers and our shareholders. We have set our 70th year
as a new starting line, and will renew our commitment to ourOur first fundamental goal is enhancing our profitability.

original principle of “Stability, Cooperation, Partnership with

By increasing our profitability, we will be able to make new

the Home Region” as we work towards being a comprehen-

investments and offer customers even better products andsive supplier of high-quality financial services. The customer

services. Also, in order to prepare ourselves for the uncer-

is the starting point of any financial services business.

tainties of the future in these times of intense environmental

Moving forward, we will strenuously work toward our philos-

changes, we also recognize the need to strengthen our

ophy of keeping our focus on the customer and, as a finan-internal reserves. To ensure that we can offer our customers

cial institution, all of us here will work toward achieving ana safe, reliable service and be able to meet the expectations

even higher level of customer satisfaction.

of shareholders, we will continue to work toward maintaininga healthy and profitable financial position.

Thank you,

To improve our profitability, it is vital that we employ acertain amount of risk and invest in promising sectors, thus
working towards “improving operations management” byimproving risk management functions and the cost management structure. And in order to gain a higher level of trustfrom our customers, we also are working to improve security

Kunio Onizawa
President

throughout all our financial products and services.
It is the “personnel” and their unified actions as an“organization” that supports the quality and competitivenessof financial services. Our third fundamental goal is to focus on
personnel development and improve personnel expertise
while also improving our strength as an organization.

3

70TH ANNIVERSARY COMMEMORATIVE EVENTSIt has been 70 years since Bank was founded on July
30, 1935, through a merger between Tokiwa Bank
(based in Mito City) and Gojyu Bank (in TsuchiuraCity). This great milestone is a manifestation of the
support and patronage of our local customers andour shareholders all of us here at the bank wish to
thank you. We will set our 70th year as a new starting line from which we will spring forward into the
future. And as a way to express our thanks to ourcustomers, we are holding several commemorative
events.

Major Commemorative Events
Emergency Medical Service Activities
As a part of our efforts to contribute to the local community, we are sponsoring an “emergency response seminar” for Bank employees so they can provide appropriate
emergency care for the ill and injured in the event of anatural disaster or accident. We also are encouraging
Bank employees to attend the “Emergency Medical
Personnel Developmental Course” and acquire the“Emergency Medical Personnel Certification” offered by
the Red Cross of Japan.
Crime-Preventing Personal Alarms
As part of our efforts to contribute to the creation of a
local community where we can live safely, we donatedcrime preventing personal alarms to newly enrolled 1styear elementary school students. We plan to continue
this project into the future.
“Joyo Loan Pass”
We initiated our new service, “Joyo Loan Pass” for individual customers. This pass contains the user’s credit
limit and is issued to certain mortgage loan customers
that have met specific criteria.
Joyo Corporate Internet Banking “JWEB OFFICE”“JWEB OFFICE” is a new service for our corporate andsole proprietorship customers. This low-cost, highly
convenient service allows customers to conduct balance
inquiries, transfers, etc., via the internet.
4“Financial Seminar for High School Students”
We are sponsoring seminars oriented towards local highschool students. The objective of the seminars is to help
the students learn before they go out on their own about“saving,” “using,” “borrowing” and other banking services, as well as the importance of a household budget
and personal financial planning that focuses on their lives
ahead.
Environmentally-Friendly Lending, “Joyo Eco SelectLoans”
These are lending products with “the environment” as atheme that respond to a variety of financing needs andoffer preferred interest rates as a way to support customers who conduct environmentally-conscious
management.
“Joyo Business Exchanges”
We are sponsoring “Joyo Business Exchanges,” whichhave a manufacturing theme and are aimed at the further
revitalization of the local economy.
Various companies involved in manufacturing will
participate in this event and it will serve as a place for
information exchange, company PR, technical consulting,and the chance for interaction between many customers.

BUSINESS HIGHLIGHTS (NON-CONSOLIDATED BASIS)
Revenues and Earnings
Business profit increased by ¥1.7 billion (3.6%) year-onyear to a total of ¥49 billion (US$456 million). This wasdue to the continued strength of profits from lending andcommission revenues as well as from a reduction in
expenses and provision for possible loan losses.
Furthermore, our core business profit, which is anindicator of our base profitability, increased ¥4.6 billion(9.6%) to ¥52.6 billion (US$490 million).
Gross business profit saw a year-on-year increase of¥11.6 billion (38.8%) to ¥41.5 billion (US$386 million).
This was due to a reduction in the amount of bad debt
disposal.
Net income for the term increased by ¥3.3 billion(14.4%) year-on-year to ¥26.1 billion (US$243 million).
*Core business profit is the amount derived by adding gains and losses
made from government bond trading and the amounts transferred toreserves for possible loan losses to business profits.

Deposits, Loans and Securities
Deposits for the term increased by ¥23.4 billion to aterm-end balance of ¥6,197.2 billion (US$57,707 million).
Of this amount, time deposits decreased by ¥97.8 billion
to a term-end total of ¥2,641.6 billion (US$24,598 million), but other deposits increased by ¥121.3 billion for aterm-end balance of ¥3,555.6 billion (US$33,109 million).
As we look to respond aggressively to the diversifying
asset management needs of our customers, we havegreatly increased our balance of assets in custody(investment trusts, public bonds, etc.) and the level ofpension insurance handled within our bank.
Loans for the term increased by ¥11.9 billion to aterm-end balance of ¥4,375.9 billion (US$40,748 million).
Of this amount, individual loans, mainly mortgage loans,increased by ¥38.8 billion to ¥931.3 billion (US$8,672
million). As we sought to respond to the needs of ourcustomers, loans to small and medium-sized businesses
also increased by ¥0.6 billion to ¥1,927.5 billion(US$17,949 million).
Securities increased during the term by ¥175.2 billion
to ¥2,430.8 billion (US$22,635 million). As a result of
focusing on interest yielding investments, available-forsale securities, including overseas bonds, increased by¥41.7 billion to ¥804.0 billion (US$7,487 million).

Furthermore, as we have paid attention to liquidity as partof the preparations for the start of deposit insurance
caps, our balance of government bonds increased by¥134.1 billion to ¥822.6 billion (US$7,660 million).
Assets in custody saw steady increases in investment
trusts, government bonds designated for individual
investors, and pension insurance. Total assets in custodyincreased year-on-year by ¥228.6 billion (51.2%) to¥674.6 billion (US$6,282 million).
Mortgage loans continue to be strong and increasedby ¥53.5 billion (7.4%) year-on-year to ¥772.5 billion(US$7,193 million). Consumer loans increased by ¥9.9
billion (3.1%) to ¥325.7 billion (US$3,033 million).

Capital Ratio
The capital ratio is one of the most important indicators indetermining the health and stability of banking operations.
On a consolidated basis (including consolidated subsidiaries) the Bank’s capital was 11.75%, and on a nonconsolidated basis it was 11.63%, indicating that we
continue to maintain a high level in this area.
It should be noted that the level required for banks
complying to domestic standards is 4% or greater.

Consolidated Accounts
The Bank currently has ten consolidated subsidiaries.
Total income for the year decreased by ¥6.6 billion to¥173.2 billion (US$1,613 million). Total expenses
decreased by ¥12.0 billion to ¥127.7 billion (US$1,189
million). As a result of above, net income was ¥26.1 billion(US$243 million).
Cash and cash equivalents increased by ¥47.2 billion
during the term to ¥192.0 billion (US$1,788 million) at theterm-end. This was a mixed result of a ¥213.3 billion
increase from operating activities, mainly due to increases
in deposits and call money and a ¥160.1 billion decrease
from investing activities in securities operations as well asa ¥5.9 billion decrease from financing activities due to theacquisition of own shares and dividend payments.

5

MANAGEMENT PHILOSOPHY, MANAGEMENT POLICY—9th Medium-Term Management Plan, Regionally-Based Financing Promotion Program—Management Philosophy“Stability, Cooperation, Partnership with the Home Region”
As a community-based financial institution, we think and act based on what we can do for our customers and ourcommunity.
With a management philosophy of “Stability, Cooperation, Partnership with the Home Region,” we will continue tocontribute to the development of the local society and economy by being diligent in our sales activities, conduct
healthy, stable operations, and be consistent in providing our local customers with high-quality, comprehensive financial services. We believe that staying true to our primary business of offering financial services is the best way for us tocontribute to the regional community.
In the idea of “putting the customer first,” by providing high-quality financial services that meet the needs of ourcustomers, we hope to maintain a high level of customer satisfaction as well as improve our health, profitability, andcorporate value.

Management Policy
9th Medium-Term Management Plan “Leaping toward a new growth stage”
The competitive environment has become significantly more intense as a new financial framework is constructed, one
which includes the introduction of new regulations for capital ratios, progress with deregulation has resulted in banks
greatly expanding the scope of their business activities, resulting in the reorganization of financial institutions and theemergence of other industry businesses into the financial sector. In response, in April 2005 we drafted and initiatedour 9th medium-term management plan” which will help us improve the level of trust we receive from our customers
and shareholders, as well as to create an even firmer business foundation.

Plan Duration
April 1, 2005 – March 31, 2008 (3 years)

Our
Goal

To be a high-quality, comprehensive financial services provider

Through our 9th medium-term management plan, our goal is to be a comprehensive supplier of high-quality financial
services to support the reality of regional and business development and bountiful household finances.
• Understanding of our customers’ needs, and acting on these sensitively.
(Increasing customer satisfaction)• Increasing profitability and stability, and achieving increased shareholder value.
(Raising shareholder satisfaction)• Work toward individual growth and improve organizational vitality(Raising employee satisfaction)

6

Basic Goals

Regionally-Based Financing Promotion Program

In order to achieve sustained growth, improve enterprisevalue, and become a high-quality comprehensive financial
services provider, we have set three fundamental goals:
Improved profitability (by increasing gross profits);
improved operations management; and increased organizational vitality.
Also, as a financial service with a foundation built on
trust, we are working hard to improve security throughout
all our financial operations and to consolidate our compliance capabilities.

The local economy is the founding element of a regionalbank, and our mission is to contribute to the development of the local society and economy by providing the
local community with smooth financial services.
Maintaining this awareness, as a follow-up to the
FY2003–FY2004 plans for adding to our relationshipbanking capabilities, for FY2005–FY2006, we will use our“Regionally-Based Financing Promotion Program” tocontribute to the revitalization of the local economy.

Major Projects
Improved Profitability (Increased Gross Profits)
To ensure we provide a service that is trustworthy in theeyes of our customers and that we are able to live up to
the expectations of our shareholders, we must maintain astable and profitable financial position. We will work
towards improving profitability (increasing gross profits)
by focusing on local small to medium-sized businesses
and individual customers as our targets for increased
lending and asset deposit sales activities, and by expanding the scope of our business.
Improved Operations Management
As part of our efforts to increase our profitability, we willtake on appropriate levels of risk and invest in promising
sectors, and at the same time work toward “improving
operations management” by efforts that include strengthening our risk management functions and cost management structures.
Furthermore, to gain an even greater level of trustfrom our customers, we are working to ensure thoroughcompliance and improving security throughout our financial products and services. We also are working to standardize our main systems and improve the efficiency of
our system infrastructure.
Increased Organizational Vitality
It is a bank’s personnel, and their unified actions as anorganization, that supports the quality and competitiveness of financial services. In addition to focusing on personnel development and improving personnel expertise,
we focus on placing personnel in their optimal posts as away to establish a personnel structure that promotes
business expansion. By increasing organizational vitality
we will increase our ability to conduct sales activities.

Enhanced Support for Ventures and New
Businesses
In addition to strengthening our relationships with industries, academic institutions, and local governments, wewill provide information that will contribute to the creationand development of new businesses and provide appropriate support based on the level of growth of each company. We will help with the development of venturebusinesses and our customers’ new businesses ourmeans of assisting with further revitalization of the economy in the home region.
Enhanced Management Consulting and Support
We will strengthen our consulting and information provision functions, and use our group capabilities to provide
optimal financial products and solutions in response to
the various issues our customers face, such as businessrestructuring. Also, we will enhance our support for ourcustomers’ businesses by matching businesses andholding seminars.
Business Restructuring-Related Efforts
In addition to our efforts in supporting business improvement, by strengthening coordination between our
Company Management Support Office and our branches,
we also are working to enhance business improvement
and business restructuring support offered to our customers by taking advantage of various business rehabilitation laws such as those regarding the corporate
rehabilitation fund and the rehabilitation support financing
system.

7

TACKLING MANAGEMENT TASKS
Asset Soundness
Results of Processing Non-Performing Loans in
FY2004
We have calculated write-offs and reserve amounts for
non-performing loans based on results from selfassessment and according to established rules on writeoffs and provision of reserves. The total credit costs for
non-performing loans processed in FY2004 totaled ¥10.1
billion (US$94 million).
The total credit costs for non-performing loans
processed in FY2004 is lower than equivalent amount forthe previous year, due to the fact that, while we recorded
sufficient reserves to address reductions in real estatecollateral values as a result of deteriorating businessconditions of our customers or declines in land values,
we actively moved forward with support for our businessrestructuring, leading to improvements in borrowers’
creditworthiness.

March 31

Write-off of claims
Net provision for specific reserve
Provision for specific foreign borrowers
Losses on bulk sale of loans
Provision for other contingent losses
Other
Total

2005

Millions of Yen
2004 Change

8,032 10,824 (2,792)— 7,601 (7,601)
—
—
—
1,442
610
832
225
86
139
481
22
459
10,181 19,144 (8,963)

Reserve for Possible Loan Losses
For debtors deemed to be in a state of bankruptcy andquasi-bankruptcy based on self-assessment, we
deducted the value of collateral amounts from the loan
amounts. After that, we provided reserves in an amountof 100% of the amount of claims thought to be unrecoverable. Furthermore, for debtors who are at risk, we took
into consideration the percentage of debtors who wentbankrupt and processed reserves to the value of 74.02%
for claims at risk of being unrecoverable. As a result,compared to the ¥46.5 billion total of non-performing
loans for which there is a risk of no recovery, we have8

provided reserves for bad debts totaling ¥34.5 billion(US$321 million), a reserve ratio of 74.22%.
Claims deemed to be unrecoverable or valueless(¥46.4 billion) based on self-assessment have been executed on a “partial direct write-offs” basis and have been
deducted within the balance sheet.
For the general reserve for bad debts, we have conducted an appropriate reserve provision following theguidelines of the Financial Inspection Manual prepared by
the Financial Services Agency. For debtors requiring
attention, we have divided these into three categories toinclude debtors requiring management, and have provided reserves after consideration of the historical default
ratio of each category.
Moving forward, we will continue to improve our credit
risk management system, and conduct appropriate writeoffs and provide reserves, and work toward improving thehealth and stability of our assets.
Reserve Based on Self-Assessment

March 31, 2005

Claims of balance (i)Claims secured
by collateral (ii)Claims with uncertain
collectibility (A)=(i)-(ii)Specific reserve (B)Reserve ratio (B)/(A)Billions of Yen
Potentially Substantially
Legallybankrupt
bankrupt
bankrupt
borrowers borrowers borrowers

Total

97.4

11.9

4.4

113.7

51.2

11.8

4.4

67.5

46.2
0
34.2
0
74.02% 100.00%

0
46.5
0
34.5
100.00% 74.22%

Reserve for Possible Loan Losses
March 312005

General loan loss reserve
Specific reserve
Reserve for specific foreign borrowers
Reserve for possible loan losses
Reserve for assistance to specific borrowers
Reserve for possible losses on sale of loans
Reserve for other contingent losses

21.7
34.5
—
56.3
—
—
0.3

Billions of Yen
2004 Change

30.9
31.8
—
62.7
—
—
0.1

(9.1)
2.6
—
(6.4)
—
—
0.1

Enhanced Managerial and Financial Support for
Businesses
To increase the quality of assets, not only must weaggressively proceed with the disposal of non-performing
loans, but also strengthen our efforts to resolve problemson the debtor side such as declining performance resulting from changes in the economic climate or industrial
structure and declining financial positions resulting fromfalling asset values. This is the vital role we are expected
to fulfill in the revitalization and development of the local
economy and it is something that the entire bank is working towards.
Specifically, the “Company Management Support
Office” (19 people) has closely cooperated with ourbranch staff to provide management analysis, advice on
improvement strategies, support for the drafting of operational reform plans and, where necessary, support basedon external partnerships such as the Small to MediumEnterprise Rehabilitation Support Association. Throughthese activities, we are working toward supporting thecorporate rehabilitation and operational improvement ofour corporate customers.
As a result of these activities, in FY2004 we were able
to raise the credit ratings (rankings based on financial
position of the customer) of nearly 300 debtors.
Beginning in FY2005, we will look to further enhancethese support activities through our action program
concerning the promotion of regionally-based financing,which is a follow up to our action program concerning theenhancement of relationship banking. Through this program, we will continue to focus our strengths on therevitalization of the local economy.
Disclosure of the Bank’s Assets
We continue to view the improvement of asset quality asa major management issue and in addition to working
toward the disposal of non-performing loans and increasing the health of our assets, we endeavor to provide
disclosure of all information.

Risk-Monitored Claims Following the Banking Law
For risk-monitored claims subject to mandatory disclosure under the Banking Law, the Bank classified nonperforming loans as “loans in bankruptcy and dishonored
bills,” “delinquent loans,” “loans past due with respect tointerest payments for more than three months,” and“restructured loans,” based on asset self-assessment.
As a result of efforts to organize and reduce riskmonitored loans through the collection of non-performing
loans, the removal of loans from the balance sheet,and the improvement of debtor business performancedue to rehabilitation support, the disclosed amount ofrisk-monitored loans was reduced to ¥173.6 billion(US$1,617 million), a year-on-year reduction of ¥26.0
billion. Furthermore, we maintained a high coverage ratioof 75.97%.
Risk-Monitored Assets under the Banking Law(Non-consolidated)
March 31

2005

Billions of Yen
2004 Change

Loans in bankruptcy and dishonored bills
4.3
7.6
Delinquent loans
109.0 110.1
Loans past due with respect to interest
payments for more than three months
1.6
1.1
Restructured loans
58.5
80.7
Total (a)173.6 199.7
Loans and bills discounted (b)4,375.9 4,363.9
Ratio of risk-monitored assets toloans outstanding (a)/(b)3.96% 4.57%
Portion covered by collateraland guarantees (c)131.9 155.4
Coverage ratio (c)/(a)75.97% 77.82%(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

2005

(3.3)
(1.0)
0.4
(22.1)(26.0)
11.9(0.61)%(23.5)(1.84)%

Billions of Yen
2004 Change

4.5
111.0

7.8
112.4

(3.3)
(1.3)

1.9
58.9
176.5

1.5
81.1
202.9

0.4
(22.2)(26.4)

9

Claims Disclosed in Accordance with the Financial
Revitalization Law
Disclosure of the results of an asset assessments isrequired under the Financial Revitalization Law. The Bank
regards non-performing loans determined through asset
self-assessment to be “loans in bankruptcy and quasibankruptcy” as “bankrupt claims and the equivalent,”delinquent loans as “risk debt,” loans past due withrespect to interest payments of more than three months
and restructured loans as “claims requiring monitoring.”
For FY2004, as a result of our progress with credit
improvement based on business management support
and the final disposal of non-performing loans, claims fordisclosure, which excludes “normal” assets, decreased
year-on-year by ¥26.0 billion (3.92%) to ¥174.0 billion(US$1,620 million) and the percentage of balances
represented by these loans decreased by 0.60
percentage points.
Furthermore, the ¥0.4 billion differential between the¥174.0 billion in claims for disclosure, which excludes“normal” assets, and the ¥173.6 billion in claims for
mandatory disclosure in accordance with Banking Law
represents non-loan claims including customers’ liabilities
for acceptances and guarantees, unearned interest,
foreign exchange, and suspense payments.

10

Problem Assets under the Financial Revitalization Law
March 312005

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
2004 Change

16.3
27.2 (10.9)
97.5
90.9
6.6
60.3
81.9 (21.7)
174.0 200.0 (26.0)
4,257.8 4,220.1
37.6
4,431.8 4,420.1
11.7
3.92% 4.52% (0.60%)

Coverage Status at Fiscal 2004 Year-End

March 31, 2005

Problem assets (a)Assets secured bycollateral andguarantees (b)Reserve for possible
loan losses (c)Coverage ratio{(b)+(c)}/(a)Billions of Yen
Bankrupt andquasi-bankrupt Doubtful Substandard
assetsassets
loans
Total

16.3

97.5

60.3

174.0

16.2

51.2

20.8

88.4

0

34.2

9.7

43.9

100.00%87.65%

50.66%

76.00%

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

Normal Borrowers

Problem Assets
under Financial
Revitalization Law
Bankrupt andQuasi-Bankrupt
Assets 16.3

Legally
Bankrupt 4.4
Substantially
Bankrupt 11.9

Doubtful Assets
97.5

Risk-Monitored
Assets underthe Banking Law
Loans in Bankruptcy andDishonored Bills 4.3

Delinquent Loans
109.0

Substandard Loans
60.3

Loans Past Due with Respect
to Interest Payments forMore than Three Months 1.6
Restructured Loans 58.5

Subtotal 174.0

Subtotal 173.6

Normal Loans
4,257.8

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 acceptanceand 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

Policies Regarding Capital
In order to improve our capital ratio, we are proceedingwith the acquisition of our own shares. At last year’s
regular general shareholders’ meeting, a resolution was
passed to change the articles of incorporation regarding
the acquisition of our own shares by way of a resolutionof the board of directors only. In FY2004, we acquired
3.7 million shares at ¥1,653 million. Shares acquired via
the stock market, based on a total accumulation since
FY2002, amount to 33.854 million shares at ¥11,746
million (US$109 million). All shares are retained astreasury stock.

Addressing the Start of Deposit Insurance Caps
Deposit insurance caps were implemented in April 2005.
“Deposit insurance caps” refers to a system where, in theevent that a financial institution falls into a state of bankruptcy and becomes unable to refund deposits, theprincipal deposit and subsequent interest up to a value of¥10 million will be returned to each depositor institution
by way of the Deposit Insurance Corporation of Japan.
In addition to improving products and services as wellas banking performance, we will continue to provide
timely and appropriate disclosure of management related
and other relevant information to ensure that our customers can feel secure when using our banking services.

Furthermore, we will begin offering “Settlement
Accounts (non-interest bearing ordinary deposit accounts
for payment settlements)”* beginning March 1, 2005.
* Settlement accounts are deposit accounts that meet theconditions of being “non-interest bearing, for payment on
demand, and providing a settlement service.” Deposit
accounts that meet these conditions are insured for their fullvalue.

The Deposit Insurance System
What is the deposit insurance system and the Deposit
Insurance Corporation of Japan?
The “deposit insurance system” is a system in which
insurance premiums are collected in accordance with the
Deposit Insurance Law from private financial institutions(financial institutions enrolled in the deposit insurance
system) and these premiums are used as funds to protect depositors in the event of a bankruptcy at an enrolled
financial institution where it becomes unable to refund
deposits.
Management of the deposit insurance system isconducted by the Deposit Insurance Corporation ofJapan, which was established under joint capitalizationby the government, the Bank of Japan, and private financial institutions.
What is the scope of protection offered by the deposit
insurance system?

The Deposit Insurance System
Products eligible for deposit
insurance

Products not eligible for deposit
insurance

Settlement deposits (checking accounts, ordinaryaccounts that do not accrue interest)

Fully insured

Interest-bearing ordinary deposits, time deposits,
installment deposits, deposits at notice, savings
deposits, monetary trusts with guaranteed principal
recovery, financial debentures (debentures
deposited in the Bank’s custody only)

Up to ¥10 million of the principal deposit andsubsequent interest will be returned to each depositorof each institution. (*)

Foreign deposits, negotiable certificates of deposit,
monetary trusts without guaranteed principal
recovery, financial debentures (other than thosementioned above)

Not eligible for insurance protection (Refundedbased on the financial situation of the failed financial
institution. In some cases, the amount may bepartially reduced.)(*) Principal amounts over ¥10 million and said interest refunded based on the financial situation of the failed financial institution. In some case, the amount may be partially reduced.

12

Risk Management
While the industry has grown due to deregulation and theadvancement of financial technology, the risks carried by
Banks continue to diversify and become ever more complicated. In this environment, we are working to meet thehighly advanced and various needs of our customers,
and we also have placed emphasis on the subject of “riskmanagement” to ensure the maintenance and improvement of healthy operations which is one of the most vital
issues facing management.
The Risk Management System
In our fundamental rules regarding risk management wehave outlined our fundamental thinking and management
procedures including policies regarding risk management, organizational structure, and responsibilities.
In business management, the departments that carryrisks when conducting transactions (marketing departments) and the departments that internally manage theresults of transactions (business administration departments) are separated, thus creating an organizational

structure that allows for mutual checks and balances.
The various risks that are incurred during banking operations are managed by specific risk management departments depending on the type of risk.
We also have established a risk management supervision department, which supervises the management
systems for all risks, and is responsible for holding meetings of the Risk Management Committee, which is anorgan for the examination of Bank-wide solutions torisks. The department also provides regular reports on
the overall status of risks to the board of directors.
Additionally, internal auditing staff verify that risk
management is functioning appropriately and effectively
in each risk management related department, thereby
increasing the effectiveness of the system.
Furthermore, during risk control, we operate a system
in which we first draft a plan, which is then tested. Wethen check the results of the test, and incorporate new
findings in the system before fullscale implementation.
(This system conforms to the conception of the Deming
Cycle.)

Risk Management System
Auditing by Corporate
Auditors

External Auditing

Risk Management
Departments• Risk Management
Committee• ALM Committee• Information Management
Committee

Board of Directors

Risk Management
Supervision Dept.

Management Strategy
Risk
Credit Risk
Market Risk

Business Promotion
Departments

Liquidity Risk
Customers
FinancialMarkets

Operational Risk

Executive Officer
Committee

Administrative Risk
Verification of suitability
and validity of the risk
management system

System Risk

Internal Auditing Dept.

Event Risk

Legal Risk

Administrative
Control Departments

Reputational Risk

13

Consolidated Risk Management
Not only do we individually manage the various diversifying and increasingly complicated risks that must be
assumed by a bank, we also statistically quantify thevarying risks and manage them as consolidated risks todetermine whether or not the burden is too large for ouroperational capacity.
Furthermore, every six months, we review our allocation of risk capital (the allowable amount of funds subject
to the various categories of risk) to the extent allowed on
the basis of the Bank’s owned capital. This allows us toensure healthy operations while allowing us to work
toward improving profitability and the efficient utilization ofcapital.
Credit Risk Management
Credit risk is the risk of not receiving principal or loan
payments as promised on loans due to a decline in thecredit situation of the debtor. This is seen as one of themost serious risks undertaken within banking operations.
In order to prevent the occurrence of non-performing
loans and increase the health of our assets, we pour all
our efforts into credit risk management.
• Credit Risk Management System
We have separated inspection departments frommarketing departments, and constantly work towardmaking inspections stricter while also focusing on
credit management before due date to prevent thestatus of a claim from deteriorating.
During self-assessments, which evaluate the healthof our loans, we employ a system where we conduct
an initial assessment at branch level. The head office
department in charge of credit screening (Department
of Inspections) checks this (the secondary assessment)
and then the asset auditing department (Corporate
Audit Division) audits the results. Based on theseresults, the Bank provides appropriate reserves andwrites down problem loans based on the assessments.

14

The Bank has adopted a basic credit screening
procedure to speed up the process of the decision
making and to ensure implementation of risk management. At the same time, we are building an asset selfassessment system capable of responding effectively
to each change in the borrower’s business performance or in the fair-market value of the collateral.
The Bank has also adopted an automated scoring
system for small loans to unify credit screening standards and improve efficiency.
• Quantification of Credit Risk Management
We quantify credit risk on the basis of individual borrowers’ corporate rating, which represents the financial conditions and quantitative evaluation. The size ofthe credit risk is recognized in terms of the normal
credit risk based on the average default ratio in thepast and additional credit risk caused by external
factors such as a substantial deterioration in Japan’s
economy as a whole.
• Loan Portfolio Management
We approach the entire loan assets as a portfolio andconduct credit risk management from a macro perspective. Based on quantitative data, we regularly
monitor credit risk exposure to avoid overconcentration on specific industries or corporations.
By diversifying our credit provisions, we strive to
reduce the amount of credit risk, which allows us to
improve our profitability and risk-taking capabilities.

Market Risk Management
Market risk refers to fluctuation in revenues caused byinterest rate changes, foreign exchange rate fluctuations,changes in the demand for funds, etc. within the financial
industry. Assets such as loans and securities and liabilities such as deposits are constantly influenced by suchchanges.
We manage all assets and liabilities (deposits, loans,securities, and others) comprehensively based on ALM:
asset and liability management, to manage market risks.
• Market Risk Management System
The Market Business Group has separated front andback office departments, and established middleoffice risk management sections to create a system ofmutual checks and balances.
• Market Risk Control
The scale of risks involved in assets and liabilities(deposits, loans, securities) go through a multifaceted
analysis — gap analysis, basis point value (BPV),
simulation of interest fluctuation, and Value at Risk
(VaR) — in order to clarify the state of risks and conduct asset allocation effectively and implement risk
control measures.
The Bank engages in financial derivative transactions to meet the diverse needs of its customers andhedge its own risks arising from interest fluctuations.
For the risks associated with financial derivatives, inaddition to conducting daily market price management and BPV analyses to accurately grasp the size
and nature of the risk, we also manage risk appropriately by establishing limits according to objectives.
Operational Risk Management
Operational risk is the risk of damages due improper
administration resulting in accidents or improprieties.
To avoid problems with customers, we provide guidance and training for quick and accurate clerical processing and also work to prevent accidents by reinforcing
internal audits.

System Risk Management
The Bank’s computer systems store customer transaction and other information and the realization of systemrisk could result in causing great harm to banking
customers.
We have implemented measures basic guidelines
regarding information security and to promote tight security and protection.
• Management of Customer Information
In view of the importance of retained information, we
drafted our “Rules Regarding the Management of Vital
Information,” which clarifies our fundamental policies
regarding our information management system, conduct standards, roles, and responsibilities.
Furthermore, in conjunction with the full implementation of the “Law Concerning the Protection ofPrivate Information,” we have enhanced our information management system and improved security forbuilding access and building management in order tocontrol access by external parties. In addition, we
have varied the access privileges to customers
depending on the type of information and limitedaccess to the locations where information is stored.
Fundamentally we have banned the removal of
information from the premises and have enforced
transmission of faxes by internal lines in order tocreate a system that prevents information from being
leaked externally due to inappropriate actions oradministrative errors. We plan to evaluate thesemeasures as necessary.
• Backup Systems
In addition to establishing a remote backup center toensure that customers feel at ease when conducting
transactions, even during emergency situations, sucha large-scale earthquake, we have drawn up detailed
a contingency plans that specify emergency contact
information and other business procedures.

15

CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate GovernanceFundamental Approach
In order to gain a greater level of trust from ourcustomers, the local region, and our shareholders, we
believe it vital that we conduct efficient sound management that is transparent and based on the ideal of strict
compliance. Always aware of the importance of a corporate philosophy, we have established five fundamental
principles and are working for the continuous strengthening and improvement of corporate governance.
Progress in Policy Implementation
With respect to the functions of decision-making andsupervision by the management, the Bank’s Board of
Directors meets twice a month: it comprises 11 directors,
with no external directors. The Executive Officer
Committee meets at least once a month to deliberate anddecide on important operational matters.
We employ the conventional system auditing conducted by statutory auditors (called “corporate auditors”)
and three of the five auditors are external auditors. Each
auditor attends important meetings such as board of
directors’ meetings and Executive Officer Committee
meetings and use business and asset status inspections,which are based on the auditing policies and plans

General Meetingof Shareholders

Decision-making/
Management
supervision
Board of Directors

outlined at board of corporate auditors meetings (inprinciple, meeting once a month), to fulfill the audit
duties by directors.
To determine the major themes for management
audits, special committees (compliance committee,
general budget committee, ALM committee, sound asset
committee, and information management committee) areestablished and decisions are made by these committees. All examinations and matters resolved are reported
to the board of directors.

The Joyo Bank Corporate Philosophy
The Bank’s Corporate Social Responsibly (CSR) andPublic Mission
Always keep in mind the Bank’s CSR and public mission,and establish greater trust through sound and open
business management
Compliance
Comply with the legal and social code and executehonest and open business activities
Fight Against Crime
Ensure that the Bank has no relationship with organizedcrimeInternal Control Department
Operating execution
Executive Officer
Committee

Business Section

Retail Banking Business Group
Corporate Banking Business Group

Corporate Auditors

Credit Risk Management Group

Board of Corporate
Auditors

Operation Systems Group
Corporate Management Section

16

Public Business Group
Market Business GroupProvide Valuable Financial Services
Contribute to the development of the local economy andsociety by providing valued financial services
Communicating with the Regional Community
Communicate with the regional community by ensuring
management transparency through adequate disclosureof corporate information

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, andmaintain the trust of customers, shareholders and otherstakeholders.
We will push ahead with efforts to improve our compliance system, by means of the measures laid out below.

• Draft a compliance program each year and ensurethat executives are fulfilling their roles in compliance.
• Create a compliance system whose ultimate supervisory organ is the board of directors and place dedicated compliance officers in each major division toundertake wide-ranging inspections to address how
division are addressing legal issues.
• Internal compliance activities should be supplemented
by outside audits to inject the required professional
knowledge and objectivity. Accordingly, the Bank will
set up a Compliance Audit Committee, consisting ofoutside professionals including a lawyer and a CPA.
The committee funding evaluates and audits the
Bank’s compliance activities. The Bank is striving
to further strengthen and improve its complianceactivities.

Our Conduct Guidelines
We will● get to know our customers and offer optimal products and services● expand business scale and grow with our customers● aim to increase our financial expertise

Policy Regarding Solicitations for Financial Products
In accordance with Article 8 of the Law Concerning the Sale of Financial Products, our solicitations for products are basedon the following policies.
1. Our appropriate solicitations for financial products are conducted by matching the products with the knowledge,
experience, and financial status of the customer.
2. To ensure that our customers make choices based on their own judgment and at their own liability, we will provide
easy-to-understand explanations so that the customer has sufficient understanding of financial products and therisks attached.
3. We assure that sales are never based on the provision of misleading or false statements or information, nor do we act
in a manner leading to any misunderstanding by our customers.
4. Our solicitations will not be conducted at times or in locations that cause inconvenience.
5. We are setting up a training system within the Bank to ensure proper solicitation to our customers.

17

Protection of Confidential Private Information
As our policy to address the Law Concerning theProtection of Private Information, which was fully enacted
on April 1, 2005, we have drafted and published a privacy
policy. Under this policy, we will designate an administrator to assume the responsibility of handling information
appropriately as well as create a system for the protection and management of private information, including
the drafting of rules and measures to ensure securemanagement.
Furthermore, we will establish a customer service
desk to receive enquiries from customers regarding
private information, to ensure we offer an appropriate
response without delay.
Privacy Policy
We are working to build on the mutual trust we have withour customers, the region, and our shareholders, stressthe importance of our social responsibility, and offer highquality financial services. For the handling of personaldata, we have established the following policy based on
our respect for all individuals, and will put all our efforts
into the protection of private information.
Financial Crime Prevention
We are putting every effort into preventing crimes involving accounts held at our banks, and to protect the financial assets of our customers. We require identification
when a new account is set up or for a large transaction.
In addition to working to prevent inappropriate transactions, when an account is used, we will cancel transactions, etc. when considered necessary and will work hard
toward crime prevention. We also have implemented
measures to prevent the use of forged cash cards.

18

Measures to Prevent Forged Cash Cards
We are taking the following steps to address the problem
of forged cash cards.
• Single day maximum limit reduced to ¥2 million• Creation of a financial crime hotline (toll free)• Passwords to be changed at ATMs
• Contact customers in the event of an abnormaltransaction involving an ATM• Issue IC cash cards• Incorporate biometric identification into ATMs (Planned
for next year)
Thus far we have implemented measures such as
front and back mirrors near the ATM/CD, covered the CDwith a panel design to constrict viewing from otherangles, and other measures to ensure security.
As additional measures, we will take steps to protect
customer assets from criminals and improve overall
security.

Contributions to the Home Region
With a management philosophy of “Stability,
Cooperation, Partnership with the Home Region,” we willcontinue to contribute to the development of the local
society and economy through our marketing activities,
conducting healthy, stable operations, and comprehensively providing our local customers with high-quality,
comprehensive financial services.
We believe staying true to offering financial services isthe best way for us to contribute to the local region, andwe are actively displaying various information related toour contributions to the region.
*1. “Region” refers to Ibaraki Prefecture and adjacent areas.
This area has the highest number of branches. We also
have branches in Fukushima, Tochigi, Chiba, and Miyagi.
2. Lending to customers outside the local region is mainly
limited to individual lending to customers in Tokyo or Osaka
who have factories or offices in the area and who have a
deep relationship with the a local business.

Lending to Local Customers
Regional Lending and SME Lending
Regional loans total ¥3,510.9 billion (US$32,693 million),
representing over 80% of all loans.
Loans to SMEs reached ¥1,927.5 billion (US$17,949
million), which was 44% of all loans. Of this amount,
lending to local SMEs was ¥1,765.5 billion (US$16,440
million). The ratio of lending to local SMEs continues tobe above 50%.
Furthermore, the total number of SME borrowers is
33,480, 98.5% of those are local SMEs.
Individual Loans
Loans to individual customers remained buoyant in partdue to steady mortgage loans, increasing to ¥931.3
billion. 99.6% of this was lending to local individuals,
which accounted for ¥928.2 billion. The percentage ofindividual loans to total loans was 21.2%, but the percentage of loans to local individuals out of all locallyprovided loans was 26.4%.
Provision of Optimal Financial Services to Local
Customers
Ibaraki Prefecture continued to hold more than a 40%
share of deposit and loan transactions.
Furthermore, 97.7% of deposits are deposits fromlocal customers, or a total of ¥6,000.2 billion (US$55,873
million), and 99.7% of assets in custody are from local
customers. In addition to an increase in investment trusts
and government bonds, pension insurance premiumsalso a showed steady increase.

Revitalization of the Local Region
Corporate Development Efforts
Bank Funding
We provide financial support to companies developing
new business areas and customers working to start a
new business via our “Joyo Investment Partnership,” the“Ibaraki Venture Business Development Partnership,” andthe “Nikko Region-Based Industry, Education, andGovernment-Partnered Investment Partnership.”
Dealing with Agri-Business
Ibaraki Prefecture is an agricultural region, and there aremany developments taking place in the farming business.
As such, we are contributing to this regional industry andthe local economy by developing and supporting individuals and corporations who work in the agricultural field.
Tie-Ups with External Institutions
While working toward partnerships with industry, universities and local governments such as at university andindustry research centers, the Foundation for the
Promotion of Small and Medium Enterprises, theDevelopment Bank of Japan, the Shoko Chukin Bank,
the Norinchukin Bank, and the Japan FinanceCorporation for Small Businesses, we work to develop
and support new business.
• Local area contributions through regional publicbodies• Underwriting government municipal bonds
We have underwritten some ¥647.0 billion (US$6,025
million) in regional bonds in Ibaraki Prefecture (total ofboth claims and loans on deeds) and we have provided asteady flow of funds to regional public bodies. Throughthis, we are able to contribute to the development ofsocial capital and invigoration of the economy.

19

Environmental Preservation“Eco Ibaraki” Charitable Trust Environmental
Conservation FundIn October 1992, along with Nihon Fire and Marine (currently Nihonkoa Insurance) and others we jointly invested¥100 million to establish the Charitable Trust “Eco
Ibaraki,” an environmental conservation fund. This fund isused to support environmental conservation projects in
Ibaraki Prefecture. Its purpose is to assist in building alifestyle that is in harmony with nature, and to contributeto the expansion and development of the local society.
After the establishment of the fund, we received many
contributions from companies and individuals who support the fund’s purpose of helping protect the environment. The balance of the fund as of March 2005 hadreached ¥166 million (US$1.5 million). In FY2004, thefund donated ¥2.4 million in grants to 21 recipients. The
fund has donated ¥33.41 million for the aggregate of 242
requests from universities and organizations.
Products Related to the Environment
To contribute to environmental preservation, we offer
environment-related financing systems (facilities funds forpollution prevention, funding to promote
environmentally-friendly products, loans representing theEnvironmental Restoration and Conservation Agency,
and an agricultural modernization fund) and products(Joyo Eco Select Loan). We participate in the “Eco Fund,”invests in companies that have outstanding records inenvironmental issues.

20

F

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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
Receivables under securities borrowing transactions
Commercial paper and other debt purchased
Trading assets (Note 4)
Money held in trust
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
Liabilities, minority interests and shareholders’ equity
Liabilities:
Deposits (Notes 7 and 13)
Call money and bills sold (Note 7)
Payables under securities lending transactions
Trading liabilities (Note 14)
Borrowed money (Note 9)
Foreign exchange
Corporate bonds
Due to trust account
Other liabilities
Reserve for employees’ retirement benefits (Note 11)
Reserve for other contingent losses
Deferred tax liabilities for land revaluation (Notes 3 and 12)
Acceptances and guarantees
Total liabilities
Minority interests
Shareholders’ equity (Note 15):
Common stock:
Authorized — 2,180,515 thousand shares
Issued —865,231 thousand shares
Capital surplus
Retained earnings
Land revaluation reserve, net of taxes (Notes 3 and 12)
Unrealized gain on available-for-sale securities
Less, treasury stock at cost
Total shareholders’ equity
Total liabilities, minority interests and shareholders’ equity

2005

2004

2005

¥ 247,082
582
25,95957,427
15,762
1,012
2,430,935
4,333,198
1,112
87,361
127,182
27,87952,185(60,022)(140)¥7,347,520¥ 184,550
9,555—
42,421
14,714—2,255,587
4,320,503
1,561
62,691
128,13152,00351,612(66,420)(266)¥7,056,646$ 2,300,793
5,427
241,731534,755
146,778
9,430
22,636,516
40,350,113
10,361
813,500
1,184,308
259,610
485,946(558,922)(1,306)$68,419,039¥6,182,549
292,968
162,303
97
93,562134
15,00017
89,422
7,044
342
9,853
52,185
6,905,481
4,722¥6,160,255
107,795
153,3813
93,601
197
15,0001445,747
6,964
143
10,01351,612
6,644,728
3,786$57,570,994
2,728,079
1,511,345
912
871,236
1,252
139,678160
832,691
65,6003,186
91,758
485,946
64,302,836
43,971

85,11358,577
227,756
14,58563,726(12,441)
437,317¥7,347,520

85,11358,574205,464
14,821
54,770(10,611)408,131¥7,056,646

792,561
545,464
2,120,832
135,816
593,413(115,853)
4,072,233$68,419,039

See accompanying notes to consolidated financial statements.

21

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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,

Income:Interest 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 of consolidated subsidiaries
Net income
Net income per share (in yen and dollars)

2005

2004

2005

¥ 83,877
34,1801,072
23,471496
3,276
26,896173,271¥ 85,062
31,376523
21,460181
4,727
36,546
179,881$ 781,060
318,287
9,983
218,564
4,624
30,509250,456
1,613,483

2,745
4,005
5,985
6,305
5,432
70,13833,099127,71245,559

2,764
3,457
5,346
5,639
2,550
74,35845,633
139,752
40,12925,56337,29655,74058,71750,583
653,121308,216
1,189,236
424,247577
17,886897¥ 26,198¥ 31.45454
15,589409¥ 23,675¥ 28.08

5,380
166,557
8,356$ 243,954$
0.293

See accompanying notes to consolidated financial statements.

Consolidated Statements of Capital Surplus and Retained Earnings
Thousands of
U.S. dollars (Note 2)

Millions of yen
Years ended March 31,

Capital surplus:
Balance at beginning of year
Gains on disposal of treasury stock
Balance at end of year
Retained earnings:
Balance at beginning of year
Net income
Increase in retained earnings due to decrease inconsolidated subsidiary
Reversal of land revaluation reserve
Appropriation:
Cash dividends
Balance at end of year
See accompanying notes to consolidated financial statements.

22

2005

2004

2005

¥ 58,574
3¥ 58,577¥ 58,574
0¥ 58,574$ 545,434
30$ 545,464¥205,464
26,198¥185,514
23,675$1,913,253
243,954

—
235

90
421

—
2,196

(4,142)¥227,756(4,237)¥205,464(38,570)$2,120,832

F

I

N

A

N

C

I

A

L

S

T

A

T

E

M

E

N

T

S

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,

2005

2004

2005

Income before income taxes and minority interests
Depreciation
Amortization of goodwill
Net decrease in reserve for possible loan losses
Net decrease in reserve for devaluation of investment securities
Net increase in reserve for other contingent losses
Net increase (decrease) in reserve for employees’ retirement benefits
Interest and dividend income
Interest expenses
Net losses related to securities transactions
Net gains on money held in trust
Foreign exchange (gains) losses, net
Losses on disposal of premises and equipment
Net increase in trading assets
Net increase in trading liabilities
Net increase in loans and bills discounted
Net increase 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 in call loans and others
Net increase in receivables under securities borrowing transactions
Net increase in call money and bills soldNet increase in payables under securities lending transactions
Net decrease in foreign exchange (assets)
Net decrease in foreign exchange (liabilities)
Net increase (decrease) in due to trust accountInterest and dividends received
Interest paid
Other, net
Subtotal
Income taxes paid
Net cash provided by operating activities¥ 45,559
16,560—(6,398)
(126)
198
80
(126,451)
12,7368,647(0)(14,295)
1,083(1,047)
94(12,694)
68,258(45,964)(39)(15,254)(6,033)(25,959)
185,173
8,921
448
(62)
2
126,689(12,563)
6,335
213,900(503)
213,397¥ 40,129
15,865(14)(4,705)(23)
25(1,743)(124,295)
11,5703,224—
38,336960(3,282)
1(87,923)
79,030(93)
283(7,049)(41,933)—
78,006
71,719
1,145
(55)
(15)
123,694(13,246)(14,499)
165,110(2,049)163,061$ 424,247
154,205—(59,578)(1,173)
1,851
748(1,177,501)
118,599
80,527(0)(133,114)
10,086(9,756)882(118,211)
635,617(428,019)(363)(142,049)(56,184)(241,731)
1,724,306
83,079
4,177
(582)
21
1,179,717(116,987)
58,9991,991,812(4,689)1,987,124

Cash flows from investing activities:
Purchases of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Increase in money held in trust
Purchases of premises and equipment
Proceeds from sales of premises and equipment
Net cash used in investing activities(884,315)
437,013304,228(1,000)(16,179)
98(160,154)(839,005)
360,567
315,962—(16,698)
1,250(177,924)(8,234,616)
4,069,405
2,832,935(9,312)(150,663)
916(1,491,335)(4,142)(0)(1,859)31(5,969)3
47,276
144,739(4,237)(0)(8,185)
10(12,412)(22)(27,296)
172,035(38,570)(1)(17,311)296(55,586)30
440,232
1,347,797—¥192,016

1¥144,739—$1,788,029

Cash flows from operating activities:

Cash flows from financing activities:
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 increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net increase in cash and cash equivalents due to increase inconsolidated subsidiaries
Cash and cash equivalents at end of year (Note 3)
See accompanying notes to consolidated financial statements.

23

F

I

N

A

N

C

I

A

L

S

T

A

T

E

M

E

N

T

S

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 the application 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.

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 ¥107.39 = US$1.00, the exchange rate
prevailing on March 31, 2005.

3. Significant Accounting Policies(a) Consolidation
The accompanying consolidated financial statements include theaccounts of the Bank and 10 significant subsidiaries.
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.
(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.
No foreign currency-denominated assets and liabilities were heldby the consolidated subsidiaries.
(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 such tradingtransactions 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.

24

No consolidated subsidiaries have engaged in trading activities
or other transactions in order to generate profit from short-term
price fluctuations.
(d) Securities
Securities other than trading 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.
Investments in securities held in money trusts whose
investment is operated solely by the Bank on behalf of thetrustors, are stated at fair value.
In line with the reclassification of investments utilizing theequity method as a result of revisions to the Securities andExchange Law (June 9, 2004; Law No. 97), the Bank’s equitymethod investments — utilizing schemes such as limitedliability investment partnerships, dormant partnerships andpartnerships under the Civil Code — have been reclassified as
marketable securities under the Securities and Exchange Law.
Effective the term ended March 31, 2005, such investments
are included in available-for-sale securities under marketablesecurities. Previously, these investments were included in otherassets. In addition, net gains on the said investments areincluded in dividends on securities under interest incomes.
Previously relevant gains and losses were included in otherinterest income and other interest expenses.
(e) Derivatives
Derivatives positions held by the Bank (not includingtransactions for trading purposes) are stated at fair value.
(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 decliningbalance method, based on the respective estimated useful 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 ¥50,720 million and ¥66,542 million as of March 31,
2005 and 2004, 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 January 1, 2005, the Bank and its consolidated subsidiaries
received approval from the Ministry of Health, Labor and Welfare
for exemption from fulfillment of retirement benefit obligations in
the future regarding the entrusted portion of the government-run
employee pension fund in accordance with implementation of the“Defined benefit enterprise pension plan law.” As of the samedate, the Bank and its consolidated subsidiaries received
approval from the Ministry of Health, Labor and Welfare for
adoption of an enterprise pension funds system.
(j) Reserve for other contingent losses
The Bank provides reserve for contingent liabilities not covered byother 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.
(m) Hedging
Hedging against interest rate changes
The deferred method of hedge accounting is applied totransactions to hedge against the interest rate risks associatedwith monetary claims and debt in accordance with the regulations
set out in the “Accounting and Auditing Treatment of AccountingStandards for Financial Instruments in the Banking Industry”(JICPA Industry Audit Committee Report No. 24).
The Bank assesses the effectiveness of such hedges in
offsetting movement of the fair value by the changes in interest
rates, by the changes classifying the hedged items (loans) and thehedging instruments (interest swaps) by their maturity. As to cash
flow hedges, the Bank assesses the effectiveness of such hedges
in fixing cash flows by verifying the correlation between thehedged items and the hedging instruments.
In addition, a portion of deferred hedge losses and gains, which
was previously under the “macro hedge,” i.e., the management ofinterest rate risk arising from large-volume transactions in loans,
deposits and other interest-earning assets, and interest-bearing
liabilities as a whole using derivatives, in accordance with theregulations set out in the “Accounting and Auditing Treatment ofPreliminary Accounting Standards for Financial Instruments in the
Banking Industry” (JICPA Industry Audit Committee Report No.
15) is no longer subject to hedge accounting effective the year
ended March 31, 2005. The deferred hedge losses and gains
related to hedge instruments to which the Bank discontinued theapplication of hedge accounting, or applied fair value hedge
accounting as a result of the change mentioned above, areperiodically charged to interest expenses or interest income
effective fiscal 2003 by maturity and notional principal of eachhedging instrument.
Deferred hedge losses under macro hedge stood at ¥4,975
million and ¥6,324 million at March 31, 2005 and 2004, respectively.
Hedging against foreign exchange fluctuation risk
The deferred method of hedge accounting is applied totransactions to hedge against the foreign exchange fluctuation
risks associated with monetary claims and liabilities denominatedin foreign currencies, in accordance with the regulations set out inthe “Accounting and Auditing Treatment of Accounting Standards
for Foreign Currency Transactions in the Banking Industry” (JICPA
Industry Audit Committee Report No. 25).
To minimize foreign exchange fluctuation risk on monetaryclaims and liabilities, the Bank engages in currency swaps, foreignexchange swaps, and similar transactions. The effectiveness ofthese transactions in the hedging of the foreign exchange risks ofmonetary claims and liabilities denominated in foreign currencies
is assessed through comparison of the foreign currency positionof the hedged monetary claims and liabilities, and the hedging
instruments.
25

(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.

7. Pledged Assets
Assets pledged as collateral at March 31, 2005 and 2004 were as
follows:
Millions of yen
March 31,(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.
(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

2005

2004

¥247,082¥184,550(55,015)(39,761)(50)(50)¥192,016 ¥144,739

4. Trading Assets

Pledged assets:
Securities
Liabilities covered by pledged assets:
Deposits
Call money
Payables under securities
lending transactions

2005

2004

¥447,698¥293,516

26,581
107,000

22,165—

162,303

153,381

In addition to the above, securities amounting to ¥59,661 millionand ¥58,107 million at book value were pledged as collateral inconnection with exchange settlements and futures transactions
as of March 31, 2005 and 2004, respectively.
One consolidated subsidiary had pledged its lease receivables
amounting to ¥5,375 million and ¥4,850 million as collateral forborrowed money of ¥4,062 million and ¥3,981 million as of March
31, 2005 and 2004, respectively.
Lease deposits as of March 31, 2005 and 2004 of ¥4,161
million and ¥4,376 million, respectively, have been included in
premises and equipment. Initial margins of futures transactions asof March 31, 2005 and 2004 of ¥160 million and ¥160 million,
respectively, have been included in other assets.

Millions of yen
March 31,

Trading securities
Trading securities-related financial derivatives
Trading-related financial derivatives
Other trading assets
Total

2005

2004

¥ 2,536—
227
12,998¥15,762¥ 4,684
6
24
9,999¥14,714

5. Securities
Millions of yen
March 31,

Japanese government bonds
Japanese local government bonds
Corporate bonds
Corporate stocks
Other securities
Total

2005

2004

¥ 822,681 ¥ 688,533
282,789
297,564
330,631
318,946
190,815
188,289
804,016
762,253¥2,430,935 ¥2,255,587

Note: Securities held by the Bank under cash-collateralized securities loantransactions that the Bank has the right to freely dispose of through sell-offs orre-collateralization, amounted to ¥26,016 million as of the term-end.

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, 2005 and 2004 totaled ¥52,729 million and ¥59,063 million,
respectively.

8. Commitments and Contingent Liabilities
Overdraft facilities and line-of-credit contracts are agreements
under which, subject to compliance with the contractual
conditions, the Bank or consolidated subsidiaries pledge toprovide clients with funds up to a fixed limit upon submission of aloan application to the Bank. The unused amount related to such
facilities/contracts stood at ¥1,327,114 million and ¥1,351,491
million at March 31, 2005 and 2004, respectively. Of this amount,facilities/contracts which expires within one year or which areunconditionally cancelable at any time, totaled ¥1,250,064 millionand ¥1,180,478 million at March 31, 2005 and 2004, 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 areset forth the Bank will regularly assess the business status of theclients, based on predetermined internal procedures and, when
prudent, will revise the agreements or reformulate their policies tomaintain creditworthiness.

9. Borrowed Money
Borrowed money at March 31, 2005 and 2004 included
subordinated borrowings of ¥57,000 million and ¥57,000 million,
respectively.

26

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, 2005 and 2004 included the following
non-performing loans:
Millions of yen
March 31,

Loans in bankruptcy and dishonored bills
Delinquent loans
Loans past due with respect to interest
payments for more than 3 months
Restructured loans
Total

2005

2004

¥ 4,568
111,080¥

7,877
112,437

1,975
58,901¥176,527

1,513
81,131¥202,959

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 March 31,
2005, the Bank and 10 consolidated subsidiaries had adopted alump-sum retirement benefit system. In addition, a union pension
fund for the above-mentioned employees’ welfare pension system
was established by the Bank and its consolidated subsidiaries.
(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, 2005 and2004:
Millions of yen
March 31,Retirement benefit obligation
Fair value of plan assets
Unfunded retirement benefit obligation
Unrecognized net retirement benefit
obligation at transition
Unrealized actuarial loss
Unrecognized prior service cost
Net retirement benefit obligation
Prepaid pension costReserve for employees’ retirement benefits

2005

2004

¥(58,653)
44,406(14,247)¥(57,047)
44,831(12,216)

—
9,537
959
(3,750)3,294¥ (7,044)

—
7,754
—
(4,461)
2,503¥ (6,964)

Notes: 1. The above amounts do not include any extra benefits.
2. The consolidated subsidiaries have adopted a simplified method for the
calculation of their retirement benefit obligation.

(c) Expenses for retirement benefits of the Bank and its
consolidated subsidiaries included the following components
for the years ended March 31, 2005 and 2004:
Millions of yen
Years ended March 31,

2005

2004

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
Gains resulting from adoption of new accounting
standards for the new accounting system forenterprise pension funds
Total¥2,088989(549)¥2,316
1,721
(774)

24
1,101
3,654

(135)
3,022
6,150

—

(6,085)(74)¥3,579—64¥

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, 2005 and 2004 were as
follows:
Years ended March 31,

2005

2004

Discount rate
Expected rate of return on plan Assets
Periodical allocation of estimatedretirement amountAmortization period of prior service cost
Amortization period of actuarial difference

2.0%
3.5%

2.0%
3.5%

Straight-line method
10 years 10 years
10 years 10 years

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
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Retirement benefit trust
Reversal of reserve for possible loan losses
after elimination of debt and credit
Other
Total
Net deferred tax assets

2005

2004

¥ 33,922 ¥ 40,320
16,184
26,333
5,258
5,541
10,534
10,424
15,967
17,243(1,361)(1,318)¥ 80,505 ¥ 98,545¥(43,093)(9,495)¥(37,016)(9,495)

(24)
(22)
(12)
(7)
(52,625)(46,542)¥ 27,879 ¥ 52,003

13. Deposits
Millions of yen
March 31,

Current deposits
Time deposits
Negotiable certificates of deposit
Other
Total

2005

2004

¥3,260,011 ¥3,101,361
2,634,939 2,733,813
52,33698,301
235,261
226,777¥6,182,549 ¥6,160,255

27

14. Trading Liabilities

18. Other Expenses
Millions of yen

Millions of yen

March 31,

2005

2004

Years ended March 31,

Trading securities-related financial derivatives
Trading-related financial derivatives
Total

¥ 3
94
¥97

¥—
3
¥ 3

Provision for possible loan losses
Losses on disposal of premises and equipment
Write-offs of claims
Write down of equity shares
Losses on sale of claims
Other
Total

15. 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 the legal
reserve had been available for dividends, but both might be used toreduce or eliminate a deficit by resolution of the shareholders or may betransferred to common stock by resolution of the Board of Directors.
On October 1, 2001, an amendment (the “Amendment”) to the Codebecame 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 to the shareholders either as areturn of capital or as dividends subject to the approval of theshareholders. In addition, the Amendment eliminates the stated parvalue 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
Years ended March 31,

2005

2004

Revenue from trading securities
Revenue from trading-related financial derivatives
Other trading revenue
Total

¥351
133
11
¥496

¥159
3
18
¥181

17. Interest on Borrowings and Rediscounts
Millions of yen
Years ended March 31,

2005

2004

Call money and bills sold
Securities lending transactions
Borrowings
Total¥1,1391,458
1,408¥4,005

¥ 588
1,499
1,370
¥3,457

2005

2004

—
1,089
9,787
281
1,448
20,492¥33,098¥ 9,957
1,249
12,372521—
21,533¥45,633¥

19. Accumulated Depreciation of Premises andEquipment
Accumulated depreciation of premises and equipment at March
31, 2005 and 2004 amounted to ¥138,658 million and ¥144,481
million, respectively.

20. Segment Information(a) Segment information by type of business
Segment information by type of business for the years ended
March 31, 2005 and 2004 are summarized as follows:
Millions of yen
Year ended
March 31, 2005

Banking
operations

Leasing

Other

Total

Eliminations Consolidated

Ordinary income:Ordinary income
from externalcustomers¥ 147,482 ¥17,055 ¥ 5,292 ¥ 169,830 ¥— ¥ 169,830
Ordinary income
from internaltransactions
626 2,331
5,551
8,510
(8,510)—
Total
148,109 19,387 10,843
178,340(8,510)169,830
Ordinary expenses
106,596 18,557
9,870
135,025(8,534)
126,491
Ordinary income(loss), net¥ 41,512 ¥ 829 ¥ 972 ¥ 43,314 ¥(23) ¥ 43,338
Assets¥7,333,540 ¥51,987 ¥31,208 ¥7,416,736 ¥(69,216) ¥7,347,520
Depreciation
2,936 13,507
116
16,560(0)
16,560Capital expenditures
2,994 13,603
513
17,111—
17,111Millions of yen
Year ended
March 31, 2004

Banking
operations

Leasing

Other

Total

Eliminations Consolidated

Ordinary income:Ordinary income
from externalcustomers¥ 147,127 ¥16,620 ¥ 5,429 ¥ 169,176 ¥— ¥ 169,176
Ordinary income
from internaltransactions
429 2,214
5,218
7,862
(7,862)—
Total
147,556 18,834 10,648
177,039(7,862)
169,176
Ordinary expenses
117,658 18,183 10,612
146,453(7,950)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
Notes: 1. Operating classification is classified according to the contents of anenterprise of consolidated subsidiaries. In addition; “other” is guarantee
business etc.
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.

28

(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 years ended March 31, 2005 and 2004 are as follows:

Ordinary income from foreign operations (A)Ordinary income (B)(A)/(B)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
March 31,

Millions of yen
Years ended March 31,

22. Securities Information

2005

2004

¥ 21,126
169,830
12.43%¥ 20,030
169,176
11.84%

Carrying value
Holding gains charged to income¥15,535
10¥14,683
7

Millions of yen
March 31, 2005(a) Finance leases
Finance leases, as lessee, at March 31, 2005 and 2004 aresummarized as follows:
Millions of yen
March 31,

2005

2004

Equipment
Accumulated depreciation
Total

¥25
(8)
¥16

¥9
(4)
¥4

¥ 6
10
¥16

¥1
2
¥4

Millions of yen
2005

2004

Equipment
Other
Accumulated depreciation
Total¥63,302
4,534(31,958)¥35,877¥62,201
5,047(31,101)¥36,148

Lease payments receivable for finance leases:
Within one year
Over one year
Total

¥12,659
29,016¥41,676¥12,549
29,581¥42,130

Book
value

Japanese government
bonds
¥
—
Japanese local
government bonds
8,006
Corporate bonds
15,449Other
33,480Total¥56,936

Marketvalue¥

Unrealized
gain (net)

—

8,760
15,72033,693¥58,174

¥

—

753
270
213
¥1,237

Unrealized
gain (gross)¥

Unrealized
loss (gross)

—

¥—

753
271
213
¥1,239—10¥ 1

Unrealized
gain (gross)

Unrealized
loss (gross)

Millions of yen
March 31, 2004

Total lease payments received and depreciation under financeleases for the year ended March 31, 2005 and 2004 were ¥3
million and ¥3 million, respectively.
Finance leases, as lessor, at March 31, 2005 and 2004 aresummarized as follows:
March 31,

2004(b) Marketable debt securities held to maturity

21. Leases

Lease payments receivable for finance leases:
Within one year
Over one year
Total

2005

Book
value

Japanese government
bonds
¥
—
Japanese local
government bonds
11,822
Corporate bonds
11,649Other
12,300Total¥35,771

Marketvalue¥

Unrealized
gain (net)

—

—

¥—

1,270
128
452
¥1,850—28—¥28

Unrealized
gain (gross)

Unrealized
loss (gross)

Equity securities¥ 112,719 ¥ 186,761 ¥74,041 ¥ 75,582
Debt securities:
Japanesegovernment bonds
816,092
822,6816,589
6,964Japanese local
government bonds
266,102274,7828,679
8,716
Corporate bonds
311,418
315,181
3,763
3,783
Other
806,396820,187 13,791
15,397
Total¥2,312,730 ¥2,419,595 ¥106,865 ¥110,445¥1,541

13,092
11,74912,752¥37,594

¥

—

1,270
99
452
¥1,822¥(c) Marketable available-for-sale securities
Millions of yen
March 31, 2005

Cost

Book
value

Unrealized
gain (net)

375
36
20
1,606
¥3,580Millions of yen

Total lease payments received and depreciation under financeleases for the year ended March 31, 2005 and 2004 were¥13,761 million and ¥13,571 million, respectively.
(b) Operating leases
Future minimum lease payments for operating leases at March 31,
2005 and 2004 were ¥4 million and ¥123 million, of which ¥3 millionand ¥36 million was due within one year.

Unrealized
gain (gross)

Unrealized
loss (gross)

Equity securities¥ 113,114 ¥ 184,131 ¥71,016 ¥ 72,695
Debt securities:
Japanesegovernment 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

March 31, 2004

Cost

Book
value

Unrealized
gain (net)

6,710
973
1,936
737
¥12,036

Notes: 1. Market value is based on the market prices at the fiscal year end.

29

2. Pursuant to “Practical Guidelines for Accounting for Financial Instruments”(JICPA Accounting Committee Report No. 14, amended on July 3, 2001),
the Bank 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, 2005 and 2004, the Bank devaluated the available-for-salesecurities which have market price, recognized as a loss of ¥9 million and¥349 million, respectively.

(d) Total sales of marketable available-for-sale securities
Millions of yen
Years ended March 31,

Total marketable available-for-salesecurities sold
Gains
Losses2005

2004¥448,879
4,729
5,511

¥336,457
7,242
2,313

(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
Investments in investment partnerships

2005

2004

¥2,524¥41,453

4,053
1,316

4,158
—

(f) Schedule of redemption of available-for-sale securities
with maturity dates and debt securities being held tomaturity
Millions of yen
March 31, 2005

Debt securities:
Japanesegovernment bonds
Japanese local
government bonds
Corporate bonds
Other
Total

One yearor less

One tofive years

Five toten years

More thanten years¥111,798 ¥ 314,950 ¥209,180 ¥186,752
27,631
195,243 59,914—
62,301
157,373 94,523
16,433102,190
367,593 166,527 171,057¥303,921 ¥1,035,160 ¥530,146 ¥374,244
Millions of yen

March 31, 2004

Debt securities:
Japanesegovernment bonds
Japanese local
government bonds
Corporate bonds
Other
Total

30

One yearor less

One tofive years

Five toten years

More thanten 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(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 onavailable-for-sale securities
Minority interests
Unrealized gains on available-for-sale securities

2005

2004

¥106,865
12(43,093)¥91,805—(37,016)

63,783(57)¥ 63,726

54,789(19)¥54,770

23. Derivatives(a) 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 the context ofefficiently managing its overall assets and liabilities, and; (3)hedge individual transactions of the Bank. For trading inderivatives for the purpose of increasing earnings over a shortterm period, the Bank has set certain position limits and losscut 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 andliabilities 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) with hedging
instruments (such as interest rate swaps) classified byremaining maturity bucket. As for cash flow hedges, theBank assesses the effectiveness of such hedges in fixing
cash flows by verifying the correlation between the hedged
items and hedging instruments. As for hedging foreignexchange fluctuations, the Bank assesses the effectivenessof utilizing currency and exchange swap transactions as
hedging instruments through confirmation of the fact that
there exists a sufficient balance of hedging instruments inthe form of foreign exchanges, corresponding to thehedged items in the form of monetary claims andobligations denominated in foreign currencies.
In addition, the Bank confirmed that its hedging methods
for its special treatment of interest-rate swaps met therequired criteria.
(4) Nature of Risks: Derivative transactions involve market risk andcredit 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 the bankruptcy
or insolvency of the counterparty.
(5) Risk Management System: The Board of Directors is
responsible for determining policies on the basis of in-house
regulations on risk management, taking due account of the
maximum transaction volumes, the maximum allowable loss
amounts, and loss-cutting rules on derivative transactions,which are reported to the Board on a regular basis. For credit
risk management, the current exposure method is applied forrisk control, by setting credit lines by counterparty.
Regarding the organizational structure, the Bank clearly
segregates back-office work from front-office work.
Furthermore, the Bank has established middle-office sections
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 allderivative positions.

(b) Interest-rate derivatives

March 31, 2005

Millions of yen
Contract amounts
MarketUnrealized

Total

Over 1 year

value

gain (loss)

¥

—
—

¥ —
—

¥ —
—

—
—

—
—

—
—

—
—

—
—

—
—

6,747

223

223

6,747

(90)

(90)

—

—

—

—
—

—
—

—
—

1,101
1,101

(3)
3

19
(11)

—

¥132

¥140

Millions of yen
Contract amounts
MarketUnrealized

Total

value

gain (loss)

—
—

¥—
—

¥—
—

—
—

—
—

—
—

—
—

—
—

—
—

1,460

20

20

1,460

(0)

(0)

—

—

—

—
—

—
—

—
—

200
200

(1)
1

1
(0)

—

¥20

¥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
7,065
Receivable floating/payable fixed
7,065
Receivable floating/payable floating—
Interest-rate options:
Sold—
Bought—Other:
Sold
1,185
Bought
1,185
Total

¥

March 31, 2004—

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
Bought
200
Total

¥

—

¥

Over 1 year¥¥

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.
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.

31

(c) Currency Derivatives(d) Stock Derivatives

March 31, 2005

Unrealized

Totalgain (loss)

Over 1 year

Listed:Currency futures:
Sold
¥
— ¥
—
Bought——Currency swaps:
Sold——
Bought——Over-the-counter transactions:
Currency swaps
164,526 164,526
Forward foreignexchange contracts:
Sold
847
—
Bought686—
Currency options:Sold39,238—
Bought39,238—Other:
Sold——
Bought
—
—
Total

¥

— ¥

March 31, 2004

Listed:Currency futures:
Sold
BoughtCurrency swaps:
Sold
BoughtOver-the-counter transactions:
Currency swaps
Forward foreignexchange contracts:
Sold
BoughtCurrency options:
Sold
BoughtOther:
Sold
BoughtTotal¥

Not applicable as of March 31, 2005 and 2004.

Millions of yen
Contract amounts
Market

—

value

¥ —
—

¥ —
—

—
—

—
—

635

635

(7)
6

(7)
6

(610)
612

(93)
124

—
—

—
—

¥ 635

¥ 665

Millions of yen
Contract amounts
MarketUnrealized

Totalgain (loss)

¥ —
—

¥ —
—

—
—

—
—

—
—

—
—

18,244

18,244

37

37

1,467
1,751

—
—

23
(26)

23
(26)

34,32534,325

—
—

(429)
433

148
(44)

—
—

—
—

—
—

—
—

—

¥ 40

¥139

—

¥

value

—
—

¥

—
—

Over 1 year¥

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.

32(e) Bond Derivatives
March 31, 2005

Listed:Bond futures:
Sold
BoughtBond future options:
Sold
BoughtOver-the-counter transactions:
Bond options:
Sold
BoughtOther:
Sold
BoughtTotal

March 31, 2004

Listed:Bond futures:
Sold
BoughtBond future options:
Sold
BoughtOver-the-counter transactions:
Bond options:
Sold
BoughtOther:
Sold
BoughtTotal

Millions of yen
Contract amounts
MarketTotal Over 1 year
value

Unrealized
gain (loss)

¥200
—

¥—
—

¥ (3)
—

¥ (3)
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

¥ —

¥—

¥ (3)

¥ (3)

Millions of yen
Contract amounts
MarketTotal Over 1 year
value

Unrealized
gain (loss)

¥500
—

¥—
—

¥ 6
—

¥ 6
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

¥ —

¥—

¥ 6

¥ 6

(f) Commodity Derivatives
Not applicable as of March 31, 2005 and 2004.

(g) Credit Derivatives
Not applicable as of March 31, 2005 and 2004.

Report of Independent Certified Public Accountants

33

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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
Receivables under securities borrowing transactions
Commercial paper and other debt purchased
Trading assets (Note 4)
Money held in trust
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 soldPayables 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.

34

2005

2004

2005

¥ 246,741
582
25,95957,427
15,762
1,012
2,430,824
4,375,901
1,112
71,21784,42823,95752,185(56,302)(98)¥7,330,713¥ 184,160
9,555—
42,421
14,714—2,255,553
4,363,963
1,561
48,97585,64047,652
51,612(62,788)(180)¥7,042,842$ 2,297,625
5,427
241,731534,755
146,778
9,430
22,635,480
40,747,759
10,361
663,168
786,187
223,086
485,946(524,283)(913)$68,262,537¥6,197,265
292,968
162,303
97
86,000134
15,00017
72,106
6,742
342
8,714
52,185
6,893,877¥6,173,790
107,795
153,3813
86,000197
15,00014
31,662
6,672
143
8,822
51,612
6,635,096$57,708,032
2,728,079
1,511,345
912
800,819
1,252
139,678160
671,444
62,786
3,186
81,145
485,946
64,194,783

85,11358,57755,317
143,432
30,142
12,89863,722(12,366)
436,836¥7,330,713

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

792,561
545,464
515,105
1,335,618
280,685
120,108
593,374(115,159)
4,067,754$68,262,537

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,

Income:Interest 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
Per share (in yen and dollars):
Net income
Cash dividends applicable to the year

2005

2004

2005

¥ 83,940
34,163
1,113
20,446
496
3,276
8,027
151,464¥ 84,930
31,365567
18,594181
4,727
17,676
158,044$ 781,638
318,129
10,373
190,392
4,624
30,50974,754
1,410,419

2,748
4,005
5,868
7,085
5,432
70,515
12,049107,705
43,759

2,766
3,456
4,993
6,343
2,550
74,511
24,242
118,868
39,17625,59537,29654,65065,98350,583656,627
112,202
1,002,936
407,483

99
17,536¥ 26,123

102
16,254¥ 22,820

927
163,301$ 243,255¥31.356.00¥27.055.00$0.2920.056

See accompanying notes to non-consolidated financial statements.

Non-Consolidated Statements of Retained Earnings
Thousands of
U.S. dollars (Note 2)

Millions of yen
Years ended March 31,

Retained earnings:
Balance at beginning of year
Net income
Reversal of land revaluation reserve
Appropriations:
Cash dividends (Note 27)
Transfer to voluntary reserve
Balance at end of year

2005

2004

2005

¥28,018
26,123160¥12,031
22,820421$260,903
243,255
1,498(4,159)(20,000)¥30,142(4,254)(3,000)¥28,018(38,734)(186,237)$280,685

See accompanying notes to non-consolidated financial statements.

35

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

1. Basis of Presentation
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(the “Code”) 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 of International Financial Reporting Standards. The
accompanying non-consolidated financial statements have been
compiled from the non-consolidated financial statements filed with
the Prime Minister as required by the Banking Law and the
Securities and Exchange 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.

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 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 ¥107.39 = US$1.00, the exchange rate prevailing on
March 31, 2005.

3. Significant Accounting Policies(a) 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. Stocks in
subsidiaries are stated 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 notavailable are stated at cost or amortized cost by the movingaverage cost method.
Unrealized gain or loss on available-for-sale securities (net of therelated tax effect) have been reported as a component ofshareholders’ equity.
Investments in securities held in money trusts whose
investment is operated solely by the Bank on behalf of thetrustors, are stated at fair value.
In line with the reclassification of investments utilizing theequity method as a result of revisions to the Securities andExchange Law (June 9, 2004; Law No. 97), the Bank’s equitymethod investments — utilizing schemes such as limitedliability investment partnerships, dormant partnerships andpartnerships under the Civil Code — have been reclassified as
marketable securities under the Securities and Exchange Law.
Effective the term ended March 31, 2005, the investments inquestion are included in other securities under marketablesecurities. Previously, these investments were included in otherassets. In addition, net gains on the said investments are36

included in dividends on securities under interest incomes.
Previously relevant gains and losses were included in otherinterest income and other interest expenses.
(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 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.
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 ¥46,610 million and ¥62,731 million as of March 31,
2005 and 2004, respectively.

4. Trading Assets
Millions of yen
March 31,

Trading securities
Trading securities-related
financial derivatives
Trading-related financial derivatives
Other trading assets
Total

2005

2004

¥ 2,536¥ 4,684—
227
12,998¥15,7626
24
9,999¥14,714

5. Securities
Millions of yen
March 31,

Japanese government bonds
Japanese local government bonds
Corporate bonds
Corporate stocks
Other securities
Total

2005

2004

¥ 822,681 ¥ 688,533
282,789
297,564
330,631
318,946
190,719
188,255
804,002762,253¥2,430,824 ¥2,255,553

6. Pledged Assets

9. Non-Performing Loans

Assets pledged as collateral at March 31, 2005 and 2004 were as
follows:

In accordance with the disclosure requirements under the rules
for Bank Accounting in Japan, the balance of loans and bills
discounted at March 31, 2005 and 2004 included the following
non-performing loans:

Millions of yen
March 31,

Pledged assets:
Securities
Liabilities covered by pledged assets:
Deposits
Call money
Payables under securities
lending transactions

2005

2004

¥447,698¥293,516

26,581
107,000

22,165—

162,303

153,381Millions of yen

In addition to the above, securities amounting to ¥59,661 millionand ¥58,107 million at book value were pledged as collateral inconnection with exchange settlements and futures transactions asof March 31, 2005 and 2004, respectively.

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

2005

2004

¥ 4,351
109,089¥ 7,685
110,125

1,680
58,578¥173,699

1,184
80,764¥199,759

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

10. Foreign Exchange
Millions of yen

7. Commitments and Contingent Liabilities
Overdraft facilities and line-of-credit contracts are agreements
under which, subject to compliance with the contractual
conditions, the Bank pledges 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¥1,271,094 million and ¥1,181,118 million at March 31, 2005 and2004, respectively. Of this amount, facilities/contracts which
expires within one year or which are unconditionally cancelable atany time totaled ¥1,242,327 million and ¥1,176,706 million atMarch 31, 2005 and 2004, 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,

2005

2004

Assets:Due from foreign banks
Foreign exchange bills bought
Foreign exchange bills receivable
Total

¥ 656
41
414
¥1,112

¥ 576
107
876
¥1,561

Liabilities:
Foreign exchange bills sold
Foreign exchange bills payable
Total

¥ 127
7
¥ 134

¥ 177
20
¥ 197

8. Loans and Bills Discounted

12. Premises and Equipment

11. Other Assets
Millions of yen
March 31,

Domestic exchange settlement
account—debit
Prepaid expenses
Accrued income
Connection with future transactions
Futures transaction balance
Derivatives
Loss on deferred hedge accounting
Other
Total

Loans on notes
Loans on deeds
Overdrafts
Bills discounted
Total

2005

2004

¥ 574,851 ¥ 626,720
3,227,824 3,167,240
520,388
510,764
52,83759,237¥4,375,901 ¥4,363,963

¥

117
1,245
12,079
160
3
7,507
5,042
45,061¥71,217

2004

¥

119
204
12,417160—
11,541
6,412
18,120¥48,975

Millions of yen

Millions of yen
March 31,2005

March 31,

Land, buildings and equipment
Construction in progress
Leasehold guarantees and deposits
Total
Accumulated depreciation
Net book value

2005

2004

¥148,570 ¥156,608
0
105
5,827
6,067
154,397
162,781(69,969)(77,141)¥ 84,428 ¥ 85,640

37

13. Deferred Tax Assets

17. Fees and Commissions (Income)Millions of yen

March 31,

Deferred tax assets:
Excess reserve for possible loss on loans
Accumulated deficit
Reserve for employees’ retirement benefits
Devaluation of securities
Other
Valuation allowance
Total
Deferred tax liabilities:
Unrealized gain on
available-for-sale securities
Retirement benefit trust
Other
Total
Net deferred tax assets

2005

Millions of yen

2004¥ 31,314 ¥ 37,834
15,71225,455
10,44010,336
5,188
5,474
14,145
15,347(284)(291)¥ 76,516 ¥ 94,157¥(43,051) ¥(37,001)(9,495)(9,495)(12)(7)(52,559)(46,504)¥ 23,957 ¥ 47,652

Years ended March 31,

Exchange settlement
Other fees and commissions
Trust fees
Total

2005

2004

¥ 7,364
13,05031¥20,446¥ 7,665
10,89831¥18,594

18. Trading Revenue
Millions of yen
Years ended March 31,

2005

2004

Revenue from trading securities
Revenue from trading-related
financial derivatives
Other trading revenue
Total

¥351

¥159

133
11
¥496

3
18
¥181

19. Other Operating Income

14. Deposits

Millions of yen

Millions of yen
March 31,

Current deposits
Ordinary deposits
Savings deposits
Deposits at noticeTime deposits
Installment savings
Negotiable certificates of deposit
Other
Total

2005

2004

¥ 127,974 ¥ 126,670
3,009,953 2,871,208
66,78373,687
58,17733,5412,641,637 2,739,503
11
20
57,466102,381
235,261
226,777¥6,197,265 ¥6,173,790

15. Trading Liabilities
Millions of yen
March 31,2005

Trading securities-related financial derivatives
Trading-related financial derivatives
Total

¥ 3
94
¥97

2004

¥—
3
¥ 3

Years ended March 31,

2005

2004

Gain on foreign exchange transactions
Gain on sales of bonds
Gain on financial derivatives
Other
Total

¥ 813
1,831
630
1
¥3,276¥1,8032,862
60
1¥4,727

20. Other Income
Millions of yen
Years ended March 31,

2005

2004

Gain on sales of stocks and other securities
Other current revenues
Other
Total

¥2,8971,774
3,355¥8,027¥ 4,379
2,809
10,488¥17,676

21. Interest on Borrowings and Rediscounts
Millions of yen

16. Other Liabilities
Millions of yen
March 31,

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

38

2005

2004

¥ 1,090
596
7,701
3,568
1,670
0
—
9,778
581
47,118¥72,106¥ 2,020
137
7,245
3,580
1,635
0
7
6,118
1,731
9,185
¥31,662

Years ended March 31,

2005

2004

Call money and bills sold
Securities lending transactions
Borrowings
Total¥1,1391,458
1,408¥4,005

¥ 588
1,499
1,369
¥3,456

22. Fees and Commissions (Expenses)
Millions of yen
Years ended March 31,

2005

2004

Exchange settlement
Other fees and commissions
Total¥1,427
5,658¥7,085¥1,4884,854¥6,343

23. Other Operating Expenses

26. Shareholders’ Equity
Millions of yen

Years ended March 31,

2005

2004

Loss on sales of bonds
Financial derivative expenses
Total¥5,426
6¥5,432¥1,906644¥2,55024. Leases(a) Finance leases
Finance leases at March 31, 2005 and 2004 were as follows:
Millions of yen
March 31,

2005

2004

Equipment
Other
Accumulated depreciation
Total¥7,070667(3,847)¥3,890¥7,371
1,115(4,479)¥4,007

Lease payments receivable for finance leases:
Within one year
Over one year
Total

¥1,5732,316¥3,890¥1,4992,507¥4,007

Total lease payments received and depreciation under financeleases for the year ended March 31, 2005 and 2004 were ¥1,741
million and ¥1,558 million, respectively.
(b) Operating leases
Future minimum lease payments for operating leases at March 31,
2005 and 2004 were ¥4 million and ¥123 million, of which ¥3 millionand ¥36 million was due within one year.

25. Other Expenses
Millions of yen
Years ended March 31,

Provision for possible loss on loans
Provision for loss on
sales of loans and otherWrite-offs of claims
Loss on devaluation of stocks andother securities
Loss on sales of stocks
Loss on disposal of premises
and equipment
Other
Total

2005

¥

2004

—

¥ 9,318

225
8,032

86
10,824

274
85

431
357

976
2,453
¥12,049

1,210
2,013
¥24,242

In accordance with the Banking Law of Japan, the Bank has provided a legal reserve by appropriation of retained earnings, which isincluded 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 the common 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 the Board of
Directors. On October 1, 2001, an amendment (the “Amendment”)
to the Code became effective. The Amendment provides that if thetotal amount of capital surplus and the legal reserve exceeds 100%of the common stock, the excess may be distributed to the shareholders either as a return of capital or as dividends subject to theapproval 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 share issuances after
September 30, 2001 will be of shares with no par value. Prior to thedate 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, 2005 and 2004.

27. Dividends and Interim Dividends
The Bank may pay dividends twice a year. Annual dividends may
be paid to shareholders of record as of March 31 and arereflected in the non-consolidated statements of 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, 2005:
Millions of yen

Retained earnings at March 31, 2005
Appropriations:
Cash dividends
Transfer to voluntary reserves
Bonuses to directors and corporate auditors
Retained earnings carried forward¥30,142
2,904
20,00050¥ 7,18839

Report of Independent Certified Public Accountants

40Organization

THE JOYO BANK, LTD.
Internal Administration Group
Compliance and Risk Management Division
Compliance Office
Corporate Audit Division
General Meeting of
Shareholders

Corporate Management Section
Corporate Planning Division
Publicity Office

Board of Corporate Auditors
Corporate Auditors

Tokyo Sub-Headquarters
Corporate Administration Division
Staff Counseling Office

Board of Directors

Affiliated Company Management Office
Executive Secretariat
Credit Risk Management Group

Executive Officer Committee

Credit Management Division
Credit Examination Division
Loan Supervision Office
Company Management Support Office
Operation Systems GroupOperation Planning Division
Data Processing Center
Area Data Processing Center
Systems Commonage Promotion OfficeComputer System Division
Business 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, 2005

41

Board of Directors and Corporate Auditors

ChairmanIsao Shibuya
President
Kunio Onizawa
Deputy President
Yuto Kawahara
Senior Managing Director
Noboru Ehashi

Managing Directors
Kunio Kurosaki
Tsutomu Tohyama
Takenori Hotate
Kazuo Kuroko
Yoshiyuki Miyanaga
Mitsuo Uchida
Kazuyoshi Terakado

Corporate Auditors
Takashi Iwakami (standing)
Kyohei Tomita (standing)
Akira Yasu
Toshihiko Kawamura
Eiichi Nemoto

As of June 29, 2005

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
Tsutomu Tohyama■ Markets and Business Administration
Division
7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-1741
General Manager
Sotaro Yamada• Operations Group (Tokyo)
Senior Manager
Osato Aizawa• Operations Group (Mito)
Deputy General Manager
Hideo Kashimura● Markets Planning Office7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-2631
General Manager
Hirohiko Sato42

● International Operations Office3-3, Shinhara 1-chome, Mito,
Ibaraki 310-0045, Japan
Phone: 029-255-6671
Telex: J23278 JOYOBANK3632105 JOYOBKSwift: JOYOJPJTGeneral Manager
Hideo Kosaka■ Treasury and Securities Division
7-2, Yaesu 2-chome, Chuo-ku,
Tokyo 104-0028, Japan
Phone: 03-3273-5245
General Manager
Kazuo Komuro
Deputy General Manager
Osamu Midorikawa• Investment Group
Senior Manager
Noboru Araki• Business Promotion GroupManager
Takashi Sakuma■ 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
Chief Representative
Tetsuya Kuroha
Deputy Chief Representative
Kenji Kikuchi

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, 2005

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

Credit guarantee of a housing loans from theBank■ The Joyo Credit Co., Ltd.
4-12, Minami-machi 3-chome, Mito, Ibaraki
Established 1982, Capital Stock: ¥100 million
Share of Voting Rights: 5%■ The Joyo Industrial Research Institute,Ltd.
5-18, Sannomaru 1-chome, Mito, Ibaraki
Established 1995, Capital Stock: ¥100 million
Share of Voting Rights: 5%

Consulting, investigation and research■ 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 in relation to the loans made by the Joyo Bank

As of March 31, 2005

Credit card services

43Corporate Data

Date of Establishment

July 30, 1935

Head Office5-5, Minami-machi 2-chome, Mito, Ibaraki 310-0021, Japan
Phone: 029-231-2151
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

3,512

Stock Exchange Listing

Tokyo Stock Exchange

Paid-in Capital¥85,113 million

Number of Shares(as of March 31, 2005)

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

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

24,023

Principal Shareholders

The 10 largest shareholders of the Bank and their respective
shareholdings at March 31, 2005 were as follows:
Number of Shares
Held(Thousands)

Percentage of Total
SharesOutstanding(%)

Japan Trustee Services Bank, Ltd. (Trust Account) ..............................
The Bank of Tokyo-Mitsubishi, Ltd. .....................................................
NIPPONKOA Insurance Company, Ltd. ..............................................
The Master Trust Bank of Japan, Ltd. (Trust Account) .........................
Nippon Life Insurance Company .........................................................
The Dai-ichi Mutual Life Insurance Company .......................................
Sumitomo Life Insurance Company.....................................................
The Gunma Bank, Ltd. ........................................................................
Meiji Yasuda Life Insurance Company .................................................
State Street Bank & Trust Company 505103.........................................

42,77340,992
40,97333,33828,003
17,04916,448
10,4659,722
9,520

4.94 %
4.73
4.73
3.85
3.23
1.97
1.90
1.20
1.12
1.10

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

249,285

28.81 %
As of March 31, 2005

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

44